“What is Medicaid?” It is one of the most common questions we get. The short answer: Medicaid is a program that provides low-cost healthcare services for applicants who meet the necessary qualifications. The covered services will vary depending on the recipient’s state of residence, and whether they live at-home, in the community, or in an institutionalized setting such as a nursing home.
More broadly, Medicaid was created in 1965 under Title XIX of the Social Security Act. It is a federal program, but it is administered jointly or cooperatively at the state level. The states receive federal funding to subsidize costs, but each state has its own rules and regulations for administration of the program(s), qualifications, and covered services. However, the states’ regulations cannot be more restrictive than the Federal guidelines, which leads to some interesting results. Let us take New Jersey and Pennsylvania as an example. Although they are both beholden to the same basic criteria, they have very different rules regarding eligibility, covered services, the total countable assets that an applicant can keep, how an applicant’s monthly income will be counted, impoverishment protections afforded to a non-Medicaid spouse, and more.
Medicaid is an excellent program in that it provides recipients with essential healthcare services for a cost that is adjusted to match each recipient’s income. In other words, once an individual is approved for and receiving Medicaid benefits, they will typically be required to turn over their monthly income, whatever that may be, less certain deductions available for their benefit and for the benefit of a non-Medicaid spouse.
Examples of covered services in New Jersey include but are not limited to, long term services and supports (in-home healthcare aide, personal care, home-delivered meals, care management, room and board in a nursing home, etc.), dental, doctor and specialist visits, hospitalization, lab tests and X-rays, mental health services, eyeglasses, prescriptions, and rehabilitative care.
The services provided through Medicaid can be instrumental in allowing a recipient to continue to live in their own home or with family, instead of requiring institutionalized care. However, if institutionalized care is necessary, having access to Medicaid benefits can sometimes afford a recipient and their family a greater degree of choice because the average cost of skilled nursing care in New Jersey is about $130,549.55 per year, according to an independent survey of all nursing facilities in New Jersey. See NJ Medicaid Communication No. 20-05. Of course, there is a catch.
Medicaid is a “means-based” program, meaning that eligibility is not granted by default upon reaching a certain age or some other general condition. Instead, participation is conditioned upon proving, to the state’s satisfaction, that an applicant is in fact eligible. At the most basic level there are two criteria to be established; an applicant must have a medical need and they must have total countable assets below the statutory threshold. It sounds simple but the reality is much different. The basic elements of eligibility will be expanded upon in Part 2 of this series.
The application process can be extensive, time-consuming, and stressful for an applicant and their family. Medicaid has a five-year lookback period. This means that the financial history of the applicant and their spouse, including all cash withdrawals, deposits, transfers, gifts, checks issued, and payments made, from all accounts held within the past 60 months, regardless of whether the accounts are individually or jointly owned, and whether the accounts are currently open or closed, will be reviewed by a caseworker and subjected to requests for verification of all of the above.
The application process often becomes a tennis match where information is requested by the applicant’s caseworker and once provided, will often lead to additional requests. The requests are often attached to a deadline of about 10 days. A failure to provide sufficient verification within the allotted time will typically lead to a denial of the application. The verifications will typically have to be obtained directly from the source, such as a health insurance company, bank, life insurance company, or other service provider. Even when the requested information is provided, sometimes a caseworker will incorrectly penalize an applicant or wrongfully deny an application on other grounds. In these cases, an appeal before an administrative law judge is often necessary. This complexity is further compounded by the fact that the application and supporting evidence are often assessed based on the county’s own unofficial unwritten rules or policies.
Medicaid is an extremely beneficial financial resource for many, but an application and the related disclosures should not be made until the applicant has a thorough understanding of what is required. There are many strategies that can be utilized to protect an applicant’s assets for their own benefit or for the benefit of a loved one, prior to filing for benefits. Further, there are very specific requirements governing the provision of supporting evidence and disclosures. We would advise a possible applicant to carefully consider their options and to consult with an elder law attorney who is experienced with Medicaid as a whole and in the specific county in which the application is to be filed.