---

---

---

1. Is Medicaid an entitlement program like Social Security that I paid into for years? No. Medicaid is a State and Federal program that is needs based. Applicants meet income and asset requirements to become eligible. 2. Why do I have to keep records on expenditures prior to applying for Medicaid? Medicaid’s “look back” period is currently 3 years. Medicaid requires bank and brokerage statements, along with checks, to see how funds were used during the 3 year “look back” period. If money was gifted or transferred, Medicaid will impose a penalty. Beginning 3/1/2009, another month is added to the “look back” period until 3/1/2011 when the “look back” period will be 5 years (60 months) If the claimant cannot provide statements and checks, the family must request these items from the financial institution. This can be expensive. 3. If I take my parent(s) into my home and care for them, is it acceptable to take their income to cover household expenses? Before you provide caretaker services to your family member, be sure there is a legally enforceable contract/agreement in place. The contract/agreement must specify the services provided and cost of each service item. Caretakers must also keep daily logs detailing services and hours worked. Medicaid requires a physician’s statement documenting the need for caretaker services. This statement and the contract/agreement should be in place before services are provided and paid. Payments made to caretakers should be by check made to the order of the caretaker. Put dates of service in the “memo” section. Without proper documentation, funds paid for caretaker services can be viewed as a transfer of assets. Medicaid can impose a penalty. 4. What does it mean to “incur a penalty for transfer of assets”? Medicaid takes all the documentation provided for the “look back” period and reviews it for transfers. They are looking for expenditures where compensation cannot be documented. Gifts and cash check (where no receipt is available) are tallied. The total is divided by the average cost of nursing care in Alabama to give the number of months the penalty will run. The “penalty” is that Medicaid will not pay the room and board charges for the claimant. Other covered services are paid, but not the substantial room and board charges. The penalty begins when the claimant is otherwise eligible (except for the transferred funds). The penalty can run into the future. 5. Can I “fix” a penalty before going to Medicaid? The return of transferred funds prior to making application will negate the transfer. The returned funds are a countable resource. 6. What is the difference between Medicare and Medicaid? Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities, and any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant). Medicare is a Federal program. There are no income or assets requirements for Medicare. Part A Medicare (hospital insurance) is free, if you sign up when offered. You can pay a premium for Parts B (medical insurance) and D (prescription drug program). Medicare can pay for a limited stay in a skilled nursing facility, if certain requirements are met. Medicaid is funded by State and Federal funds. Medicaid is needs based-claimants must meet income and asset standards. There is no premium for Medicaid. Medicaid pays for skilled nursing care as long as needs based requirements are met. 7. Is it better for the Medicaid claimant to enter the skilled nursing facility from the hospital or home? When a claimant enters a skilled nursing facility from the hospital on Medicare rehab days, Medicare can pay for up to 100 days-as long as the patient requires rehab services. The first 20 days Medicare pays for the skilled nursing care and drugs. From day 21 through 100, there is a co-pay. Medicaid will pay the co-pay when the claimant is determined eligible. Unless there has been a hospital stay during a current benefit period, a claimant entering a skilled nursing home from home (or assisted living) enters as a private pay patient. So, yes, it is better to enter from the hospital on Medicare rehab days. Medicaid has 45 days to process an application. Sometimes it takes even longer than that. 8. What if claimant’s income exceeds the current limit? If the claimant has income in excess of the current Medicaid limit, the claimant can set up a Qualifying Income Trust (QIT) account and have income deposited into the account. Medicaid will disregard income placed into the QIT as long as the entire pension or income check has been deposited. In other words, you could not put part of the income into a QIT and have it disregarded. Medicaid will disregard funds deposited into the QIT in the initial eligibility step. Total income is used to determine the claimant’s “cost of care”-amount owed each month from the claimant’s income as their share of the nursing home bill. Information on the QIT can be found at the Alabama Medicaid Agency website. See Links. 9. What happens if assets exceed Medicaid’s limit? The claimant can pay private pay at the nursing home until funds are spent down to the Medicaid limit. Or, the excess funds can be placed into a Medicaid Qualifying Trust, such as the Alabama Family Trust. See Links. Funds cannot be gifted to another. 10. What happens when there is a couple and one member goes into a skilled nursing home and the other remains in the community? Spousal Impoverishment rules apply. The community spouse is allowed protected assets. The assets assigned to the institutionalized spouse must be spent down or placed into a Medicaid Qualifying Trust. Couple assets are determined at the date of institutionalization-when the claimant left home to go into a hospital or skilled nursing facility. The home where the community spouse lives and one car are excluded. See Links for additional information on Spousal Impoverishment rules. 11. Is Medicaid the same in every state? Even though Medicaid is mostly federally funded, each state can determine which optional programs they will provide. States have the option to request exceptions from the Social Security Act that affects their Medicaid policy. If the claimant lives in another state, it is prudent to contact the Medicaid agency in that state for their eligibility rules. See Links for other state’s websites.