Medicaid Application Mistakes [2009-09-24]
8 Fatal Mistakes Medicaid Applicants Make Trying To Qualify For Medicaid Nursing Home Benefits In Florida
- Failure to maintain properly a Qualified Income Trust (QIT).
A QIT is necessary to hold the patients income when his gross income is more than $2,022. If you do not create such a trust and fund it during the first month for which eligibility is sought. This disqualifies the Medicaid applicant for that month.
- Making gifts to reduce a Medicaid applicants countable assets.
Making most gifts will cause Department of Children and Families to deny your Medicaid application.
- Failing to plan for the possibility that the community spouse might predecease the institutionalized spouse.
Leaving by will assets to a Medicaid beneficiary can cause him to lose Medicaid benefits. Better leave assets to a Special Needs Trust for this beneficiary.
- Relying on out-dated or poorly drafted durable powers of attorney or other estate planning documents.
Failing to include the specific authority to give gifts to a family member and to enter in to a personal service contract with the holder of the power of attorney are other mistakes. This will cause Department of Children and Families to deny the Medicaid application.
- Gifting without taking into account the transfer rules and penalties.
Any gift within 60 months of seeking Medicaid benefits will delay eligibility for Medicaid approval. Any transfer made without fair market value can become a problem.
For example, selling a home to a relative for less than fair market value can be a gift, to the extent of the difference between the fair value and the actual price paid.
- Failure to liquidate certain life insurance policies that possess cash surrender value.
If cash surrender value of your life insurance policies is more than $2,500.00, you have to liquidate these policies before applying for Medicaid benefits.
The cash surrender value of these life insurance policies will be considered part of the $2,000 asset limit for the Medicaid applicant and part of the $109,560 asset limit a community spouse can have in total countable assets.
- Failure to have the funeral contract made irrevocable.
A revocable funeral contract for more than $2,500 is considered to be a countable asset. If this causes countable assets to exceed the $2,000 Medicaid limit, Department of Children and Families will deny the Medicaid application.
- Failing to list all assets, income, and gifts within a 60 month period prior to filing the Request forAssistance for Medicaid.
This is a serious crime. There is a 60 month look back period which might include gifts that would delay eligibility for Medicaid benefits. Failing to notify Floridas Department of Children and Families within 10 days following any changes in assets or income is also a violation of law.