Applying for Medicaid to help cover nursing home costs can often feel overwhelming. With complicated eligibility rules and financial requirements, it’s easy to make mistakes that could result in a denial of coverage. Whether you’re applying for yourself or helping a loved one, understanding common missteps can save you time, money, and stress.
Here are 7 common mistakes people make when applying for Medicaid to cover long-term care in a nursing home in Indiana:
- Failing to Plan Ahead
Many families wait until a crisis occurs to consider Medicaid eligibility. This can result in financial strain and missed opportunities for proper planning. Having said that, remember that it is never too late to protect assets if you or a loved one need nursing home care. - Misunderstanding the Medicaid Five-Year Look-Back Period
The five-year look-back period penalizes the applicant for gifts that were given five years prior to the Medicaid application. Many applicants unintentionally violate this rule by gifting money or property to family members within five years of applying. If gifts have taken place within the five-year look-back period, you should seek the advice of an elder law attorney to discuss options. Some gifts are allowable and do not result in a penalty period. - Not Spending Down Assets Correctly
Applicants often spend money on non-allowable expenses instead of permissible ways like paying off debts, home improvements, or purchasing exempt assets. - Selling or Giving Away Exempt Assets
Misunderstanding what assets are exempt, such as a primary residence (under certain conditions), one vehicle, and personal belongings, can lead to unnecessary asset liquidation. - Applying Without Professional Help
Medicaid rules are complex. Without professional guidance from an elder law attorney with experience handling these types of cases, families risk making mistakes that could result in costly denials or appeals. - Missing Deadlines
Once the interview is completed with a Medicaid state worker, he or she will often send a request for additional information by mail. Failure to provide the documents requested by the deadline may result in a denial of Medicaid benefits. - Failing to Create a Qualified Income Trust, also known as a “Miller Trust”
Applicants with gross monthly income exceeding Indiana’s Special Income Level are required to make monthly deposits into a special kind of checking account called a Qualified Income Trust, or “Miller Trust”, account. Failure to properly set up and fund this account, if necessary, will result in a denial of Medicaid coverage.