Asking For a Government Handout Is No Fun

By Terry Douglas, Maryland Elder Law Attorney

Douglas Law Office

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Asking For a Government Handout Is No Fun

Imagine a husband being discharged from a hospital and the wife becoming overwhelmed trying to care for him at home, 24 hours a day. She chooses to enter him into a nursing home so that she doesn't die from caregiver stress.

Families are shocked when they learn that a nursing home bill is over $8,000 a month. The good news is that Medicaid can pay that nursing home bill for those eligible; and the bad news, Medicaid can pay the nursing home bill. Why is this a double-edged sword?

For some, the Medicaid applications process is a breeze. For the rest, it's a nightmare.

Medicaid (referred to as Medical Assistance in Maryland) will require five years (60 months) of your financial records. This includes the wife's account and the husband's accounts, from banks, financial investments, and tax records.

Typically, the agency will review quarterly banks statements (January, April, July, and October) for every year. The agency has the authority to request every bank statement for the past five years and to ask you about the source of a deposit and withdrawal usually over $1,000. You may even be asked to supply a copy of the checks from three, four or five years ago and asked how you spent your money.

Moreover, if you have closed an account within the five years of your Medicaid application, you'll have to contact that bank to get your statements and a letter verifying that the account was closed and has a zero balance.

So, why would someone put themselves through this process? For the end resultfor the government to cover the $8,000 month bill, which is $96,000 per year. After 2.5 years, the cost would be $240,000. If you can keep your house and maybe half your life savings, and get the government to pay out a quarter of a million dollars, it may be worth the headache.

Just be aware that when you ask the government for assistance, the government will pry into your business. For some applicants, they feel that the government is invading their privacy by questioning every transaction about how they spent their hard earned money prior to a loved one becoming ill. What about gifts for graduations and birthdays? A vacation? A new car? Applicants have commented that this process is a delay tactic and abusive.

Do you need to hire an attorney to complete a Medicaid application. No. You can prepare your own application and do all the follow-up. You can even have the nursing home complete it for you. Anyone can fill in the boxes.

A Medicaid application looks fairly simple on its face. However, it is a long process. Once you apply, you will receive a Form 1052, requesting additional information. After you respond to that, you can get another 1052 and yet another. Oftentimes, you are being asked to supply the same information over and over. Or, you'll be asked a new question because the entire file was not reviewed the first time around.

If your plate is full and you don't want the extra burden, then, invest in someone to do it for you.

When you meet with an elder law attorney, they will discuss spend-down strategies and legal options for saving as much as your assets as well as submit a complete application package.

Keep in mind that each Medicaid case is different and each Medicaid office may have different policies and procedures.

The alternative to keeping your privacy is to pay your nursing home bill with your life savings. Even then, if you run out of money, you may have to apply for Medicaid after all.