Top 10 Medicaid Myths

The Medicaid program is our country’s largest health and long-term care insurer, covering one in six Americans, including two-thirds of nursing home residents and one in five persons under 65 with chronic disabilities. A look at the facts about Medicaid uncovers many common misconceptions about the program that are simply myths. Today, we will take a look at and dispel some of myths about exactly who qualifies for Medicaid, what coverage it provides, and how you can plan for long-term care for yourself or for a loved one.

  • Myth #1: “Medicare will cover my nursing home expenses.” It is important to understand that Medicare, the public health insurance system for seniors over 65 and disabled adults, does not pay one penny for long-term care. Medicare only pays for medical care delivered by doctors and hospitals, and in certain cases short-term rehabilitation which might take place in a nursing home.   Medicare covers, at most, 100 days of short-term rehabilitation, and does not cover help with activities of daily life, such as eating and bathing, that the aged can need for years. Please read our blog post, “Ask the Expert: Medicare’s 100-Day Rule vs. Long-Term Care” for more details.
  • Myth #2: “Medicaid is for poor people.” Medicaid does serve as a program for millions of low-income Americans, but it also benefits many middle class seniors, primarily by covering the catastrophic costs of nursing-homes so families don’t have to deplete the assets it took a lifetime for them to earn. Please read our blog post, “Medicaid is NOT just for Poor People” for more details.
  • Myth #3: “Medicaid Planning is Not Ethical” If you or a loved one become a client of the Farr Law Firm, you may rest assured that everything that we do is absolutely, unquestionably, 100% legal and ethical.  Attorneys in general have the highest ethical rules of any profession, and as a member of NAELA and a Certified Elder Law Attorney, we and our Elder Law colleagues subscribe to the NAELA Aspirational Standards for the Practice of Elder Law, which articulate ethical standards that raise the level of practice above the floor established by the basic rules of professional conduct. See http://www.naela.org/pdffiles/AspirationalStandards.pdf. Read more on our website about Why Medicaid Planning is Ethical.
  • Myth #4: “I have to dispose of all my resources to get Medicaid.” While in general a Medicaid applicant can have no more than $2,000 in assets to in order to qualify, there are many assets that don’t count toward this limit, and with good legal representation you do NOT have to go broke in order to get Medicaid — a married couple can legally and ethically protect all of their assets and a single person can legally and ethically protect 40% to 70% of their assets and still get Medicaid.
  • Myth #5: To qualify for Medicaid, you should transfer your money to your children. By transferring assets within five years of needing benefits, you may disqualify yourself from receiving Medicaid benefits.  For example, if you give your house worth $450,000 to your children, this gift will result in a 58 month penalty (period of ineligibility for Medicaid) in Fairfax, Virginia and the rest of Northern Virginia and an almost 76 month penalty in the Fredericksburg, Virginia and the Rest of the State. Please read our blog post, “Should I Give My Home to My Children” for more details.
  • Myth #6: “Once I am in a nursing home it is too late to start Medicaid Planning.” Medicaid planning can be started while you are still able to make legal and financial decisions, or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney, even if you are already in a nursing home or receiving other long-term care assistance.  In fact, the majority of our Life Care Planning and Medicaid Asset Protection clients come to us when nursing home care is already in place or is imminent. 
  • Myth # 7: “If my assets are owned by a Revocable Living Trust, they are protected from nursing homes.” A Revocable Living Trust (RLT) generally provides for the creator of the trust (and, if applicable, the creator’s spouse) to have full use of the trust income and principal for life. On the death of the creator, the assets may continue to be held in trust (or may be distributed) for the benefit of the named beneficiaries, such as the grantor’s children. The major benefits of the RLT are protection from probate and incapacity. Although an RLT does a terrific job of avoiding probate, what most people don’t realize is that an RLT does not protect your assets from creditors or from the expenses of long-term care. The Living Trust PlusTM maintains much of the flexibility of a revocable living trust, but protects your assets from the expenses and difficulties of probate PLUS the expenses of long-term care while you’re alive, PLUS lawsuits and a multitude of other financial risks during your lifetime. If you’re a client or potential client who would like more information about the Living Trust PlusTM, visit https://www.farrlawfirm.com/seminars/ to register for one of our upcoming Living Trust PlusTM informational seminars.
  • Myth # 8: “I will get better care if I private pay.” It is illegal to treat Medicaid patients differently than private pay patients and it is illegal to discriminate against Medicaid patients. There may be no “Medicaid wing” and no public identification of a “Medicaid bed.” Typically, the staff does not know which patient is a Medicaid recipient.   In actuality, the nursing home residents who get the best care are those who have done Medicaid Asset Protection, because a loving family member can then use those protected assets to provide a higher level of care for the nursing home resident.  In fact, Elder Law, including Medicaid Planning and Medicaid Asset Protection, is all about preserving dignity and quality of life for Elders.
  • Myth #9: “The rules that applied to my friend will also apply to me.” Medicaid rules change frequently, and the rules also vary from state to state. There may also be facts about the friend’s situation that the client does not know, and these facts may result in implementing different strategies than those that apply to the client’s situation.
  • Myth #10: “I don’t need any help.” Medicaid laws are the most complex and confusing laws in existence, and impossible to understand without highly experienced legal assistance. Without proper planning and legal advice from an experienced elder law attorney, many people spend much more than they should on long-term care, and unnecessarily jeopardize their future care and well-being, as well as the security of their family. Please read the Medicaid Complexity page on our Website for more details.

Nursing homes in Northern Virginia cost $9,000-$12,000 a month, which can be catastrophic for most families. Do you have a loved one who is in a nursing home or nearing the need for nursing home care? Or are you simply looking to plan ahead in the event nursing home care is needed in the future?   Life Care Planning and Medicaid Asset Protection is the process of protecting your assets from having to be spent down in connection with entry into a nursing home, while also helping ensure that you or your loved one get the best possible care and maintain the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home. Learn more at The Fairfax and Fredericksburg Elder Law Firm of Evan H. Farr, P.C. website. Call 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg to make an appointment for an introductory consultation.

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