There are many misconceptions about the Medicaid program (called MassHealth in Massachusetts). It is a complex Federal/State program controlled by multiple laws and regulations. The rules vary from state to state and, most importantly, they change over time. What worked for someone else may not work for you as the rules were different in the past. Here are some misconceptions and their corrections.
- You can either purchase a burial plan or fund a burial trust/account, but you can’t do both. This is not true in Massachusetts. You can have both a pre-paid funeral and a $1500 burial account and still qualify for Medicaid. However, it is correct in New Hampshire where you can only do one or the other but not both.
- You can file the application for Medicaid and work on the spend-down afterwards. This isn’t completely true. You really should wait until the spend-down is complete before filing the application. You can get retroactive Medicaid eligibility up to three months prior to the date of application, but you cannot be eligible until the spend-down is complete, so filing early does no good. You can use unpaid medical expenses to get retroactive coverage, but nothing else counts, going backwards in time, until the money is actually spent.
- A family member who has provided care can bill for her services as part of the spend-down. You can pay a family member to provide care, but it has to be done contemporaneously with the care. You cannot do a large retroactive payment for months or years of care that have already happened. Medicaid will never approve that. If a family member is just starting to provide care, you should enter into a written agreement for payment and periodic payments should be made (weekly or bi-monthly) for all care provided.
- Gifts under $10,000 are not disqualifying transfers. All gifts, of whatever amount, made within the look-back period (five years prior to the date of application) are potentially disqualifying unless they meet one of the rare exceptions. Elders, especially those who are not well, should not make gifts to anyone without consulting an Elder Law Attorney. (The yearly tax exemption – now $14,000 – for gifts is a tax rule, not a Medicaid rule.)