Matthew M. Wallace is an attorney and CPA with the law firm of Matthew M. Wallace, PC, in Port Huron. Mr. Wallace wrote a great article about the myths of medicaid in the Times Herald. He can be reached (810) 985-4320. Below is a summary of the article.
Planning Matters: Busting myths about Medicaid
There are many misconceptions about Medicaid and Medicaid eligibility. Medicaid laws are complex and confusing. I do not recommend that you try to plan for Medicaid by yourself. One mistake may cost you thousands of dollars and may result in months of Medicaid ineligibility. It is important to get good legal counsel from a knowledgeable legal specialist.
"I don’t need Medicaid; I have Medicare."
The truth: Medicare is a federal catastrophic major medical insurance program primarily for hospitalization. Medicare does not pay for long-term custodial care.
Medicaid is a state and federal funded and state-run assistance program.
For seniors, Medicaid is primarily for long-term care in Medicaid qualifying nursing homes, and in certain circumstances, long-term care outside of a nursing home.
"If I or my spouse go into a nursing home, the state will take my home away."
The truth: Your home is an exempt asset if it is owned by you or you and your spouse and can stay an exempt asset during your entire nursing home stay.
The home must be used and titled properly. A home that is not titled or used properly is not exempt and is available for nursing home expenses. There are other exempt assets in addition to the home and include one automobile, certain pre-paid funeral arrangements and certain life insurance policies.
Misconception 3: "If I give assets away, I have to wait 60 months to qualify for Medicaid."
The truth: The Department of Human Services looks back 60 months for transfers that are "divestments." If your transfer is not a divestment, it is ignored, even if it is made the day before you apply for Medicaid, and even if it is thousands of dollars.
To determine the number of months your divestment disqualifies you for Medicaid benefits after your Medicaid application is approved, you divide the amount of the divestment by the penalty divisor, which is $6,191 in 2008.
For example, a $20,000 divestment will disqualify you from receiving benefits for about 3.2 months after your application is approved.
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