Myths About Medicaid in Maryland Elder Law Planning

When it comes to advice about Medicaid, elder law, and planning for assisted living needs, it seems that everyone has something to say. At times, the information from your friends and family is helpful, such as noting that Medicare does not pay for long-term care. Another point usually relates to Medicaid, the other public health insurance program established by the federal government that is needs-based. Eligibility rules established by Centers for Medicare and Medicaid Services (CMS) require you meet certain asset and income requirements to qualify, but you can get coverage for long-term care.

Beyond these two factors, information from those not in the legal profession tends to be less credible. There are numerous myths about Medicaid and, though people you know may be well-meaning, they can steer you in the wrong direction when you are planning for long-term care. You should trust a Maryland Medicaid lawyer for guidance, but debunking a few common myths should be useful.

The best way to qualify for Medicaid is to “spend down” your assets.

This is false because of the CMS lookback rule, in which officials will review all transfers you made within the five years prior to applying for Medicaid. If you sold something for less than fair market value or gave away assets, the presumption is that you were attempting to spend down your estate for eligibility purposes. There are penalties for these transfers, which act to disqualify you for a longer period of time. 

The government can take your home upon death if you were receiving Medicaid.

CMS has established rules for estate recovery. This enables the government to get paid back after funding your long-term care through Medicaid. The regulations prohibit officials from receiving reimbursement from your home if your spouse, a dependent, or a disabled adult lives there. As such, the government cannot force a sale and take reimbursement from the proceeds.

Adding another person’s name to the title can protect assets.

Having a co-owner on an asset does not remove the item from consideration for Medicaid eligibility purposes. CMS rules take into account any real estate, accounts, or other personal property when looking at the asset limits.

Options are limited for Medicaid asset protection planning.

There are multiple options that enable you to protect assets, including irrevocable trusts. Because you cannot make changes and lose control over the assets you place in the trust, the value is not imputed to you for purposes of Medicaid eligibility. Keep in mind that the five-year lookback period starts when you establish the irrevocable trust. You may also consider a qualified income trust, which protects income above the CMS threshold – $2,523 for 2022.

Get Legal Advice From a Baltimore County Elder Law Attorney

These myths about Medicaid and long-term care should clarify a few of the key issues. It is crucial to get legal help for planning purposes. To learn more about your options, please call (443) 352-8433 or go online to reach the Law Office of William F. Mulroney. We can set up a free consultation via phone or at our Owings Mills office.