There are tricks and pitfalls when filling out a Medicaid application form that an elder law attorney can help you avoid and help accelerate the process while preserving assets

By Linda T. Cammuso

When it comes to applying for Medicaid benefits in a nursing home, the wise approach is to use an attorney to help you through the process. Applying for Medicaid is extremely complex. That may not be obvious from a quick glance at a blank application form or from hearing about others’ anecdotal experiences. In reality simple mistakes or oversights could needlessly cost you hundreds of thousands of dollars.

There are tricks and pitfalls when filling out a Medicaid application form that an elder law attorney can help you avoid and help accelerate the process while preserving assets. For example, few people know or fully understand that federal and state laws provide numerous protections for a Medicaid applicant’s spouse who still resides in the community. As a result, many couples needlessly spend hundreds of thousands of dollars of their own assets before securing Medicaid eligibility.

Some simple and effective legal and financial planning, even at the last minute, can completely avoid private spend downs for couples. The law entitles the community spouse to receive a community spouse resource allowance (CSRA), which is an amount of so-called “countable assets” the community spouse can keep. However, the rules governing what is considered a “countable asset” can be murky and extremely fact-specific.

Spouse Monthly Allowance

Spouses are also entitled to a monthly maintenance needs allowance (MMNA), which entails a range of income that the community spouse may retain on a monthly basis. Here again, the rules regarding countability of income are not always clear, causing many spouses needless anxiety prior to applying. With diligent help from qualified legal and financial professionals, it might be possible to purchase an annuity using countable (non-exempt) assets to shelter those assets while providing the community spouse an additional income stream. Couples who fail to obtain legal guidance in the Medicaid realm may also lose out on additional post-Medicaid eligibility planning opportunities.

The most common scenario that is overlooked is the community spouse predeceasing the nursing home spouse. Since most couples have so-called “reciprocal wills” that leave assets to each other, a nursing home spouse could end up with all the assets back in his/her name and lose the Medicaid benefits the couple worked so hard to secure. Single individuals also have planning opportunities, ahead of time and at the last minute, that are too often overlooked.

When long-term care services are needed for a loved one, it is not the time to be penny-wise and pound-foolish by going it alone without proper advice.

Linda T. Cammuso is a founding partner of Estate Preservation Law Offices located in Worcester, Massachusetts. She is a skilled estate planning and elder law attorney and has authored many articles on elder care and long term estate planning issues. She has appeared on Money Matters Radio and has been a speaker for various community and professional organizations.