Home Health Care & Understanding Medicaid Qualifications

MedicaidWhen the time comes to seek help caring for a loved one Medicaid is one of many options to help offset the cost of care.  But before you apply to Medicaid you will be required to go through the Medicaid qualification process to prove financial eligibility.

There are several important things to understand in advance of the qualification process including:

  1. You or your loved one can’t have too much income or assets in their name(s).
  2. You will be required to prove financial need
  3. The process will include a 5 year “Look Back” period.

The Five Year “Look Back”

The 5 year “Look Back” period means that any money spent in the five years prior to the Medicaid application must be accounted for as having been used for “verifiable goods and services.” The 5 year “Look Back” period is there to prevent people from transferring assets to a family member and then claiming they are destitute.  The idea is to prevent fraud and insure Medicaid funds are there for those that actually need them. If you can’t formally and legally establish that the money spent was for acceptable purposes, there is a penalty, often equal to the value of the amount spent but unsubstantiated.

Common Mistakes

The most common mistake is to spend down the assets by hiring a private companion/aide to help the loved one in need until the funds run out. The catch is that if the private aide is not properly set up as an employee with taxes withheld then the money spent on them will NOT count against the spend down when you go to apply for Medicaid. Now, the money is gone and you still may not qualify for Medicaid.

Often that mistake involves the hiring of people working under the table or whom are not legally entitled to work in the US.  In those circumstances they can’t give you proof of employment for obvious reasons.  So now you are stuck with no money and can’t get qualified for Medicaid because they penalize you for the amount you spent on home care but couldn’t properly substantiate.

At this point, if you can’t take care of your loved one yourself, you are forced to pay for the facility (or extended home care) out of your own pocket until the penalty has been satisfied.  That could amount to hundreds of thousands of dollars over time and most folks can’t handle that.

Planning for Medicaid

If you are considering home health care for your loved one it is important, for the reasons mentioned above, to hire a home health agency right from the start and allow the agency to handle the details of employment, ensure proper documentation and establish the legitimacy of expenditure so that the 5 year “Look Back” period can be legally satisfied.   A legitimate agency can and will provide you with qualifying verification on the amount spent, thus greatly smoothing out the qualification process.

If you’re in our service area and would like more details on planning for the qualification process through the proper use of home health care for your loved one, give us a call at 908-359-4663 or drop us an email.

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