It’s a pretty common question: “How do I apply for Medicaid?”

And it’s actually fairly simply to apply for Medicaid. PA residents essentially just need to fill out an application and send it to their county assistance office.

While it’s a long form, it’s pretty straightforward. The question really isn’t “How do I apply for Medicaid?” It’s “How do I qualify for Medicaid?”

Qualifying for Medicaid

Medicaid is a combined state and federal assistant program that gives medical care to people who otherwise can’t afford it.

To apply for Medicaid, PA residents can’t have financial resources that are higher than $2,400 (this includes cash, savings and checking accounts, stocks, bonds, retirement accounts and real estate other than your primary residence.)

You might think “Fine, I’ll just transfer all my money to my kids right before I apply.” Not so fast.

If you made that sort of transfer within five years before your application, the government considers those assets available resources, which could impact your eligibility for Medicaid.

There are some resources that Medicaid doesn’t count, such as your car, clothing, household goods and appliances, and jewelry. Other non-countable assets include pre-paid funeral and burial expenses, a life insurance policy with a cash value that’s less than $1,500 and term life insurance.

And some asset transfers won’t trigger a penalty: transfers to a spouse, a disabled child, or a trust fund set up for a disabled loved one.

Pennsylvania’s Department of Health and Human Services requires anyone who applies for Medicaid to disclose any financial transactions from the previous five years, a length of time typically referred to as the “Medicaid look back period.”

Spending down

So how do you fall below the Medicaid income threshold while still protecting your estate? It takes proper planning.

One of the most common misconceptions involved with Medicaid planning is that moving to a nursing home means losing your home.

But that isn’t the case. The nursing home, like any business, wants to get paid, either by the resident or through Medicare. Proper Medicaid planning can make that happen.

Let’s say your mother needed the type of long term care that only a nursing home would provide. She has $300,000 in the bank but was hoping to leave some money for her family and apply for Medicaid to pay for nursing care.

If your mom transferred the $300,000 to you or another family member, Medicaid would bar her from the program for 30 months (one month for every $10,000 over the limit.)

This might seem overwhelming, but there is a solution. Your mom could transfer half that money to you, so that the penalty phase would be cut in half.

Meanwhile, she uses the other half to purchase an annuity. The money from the annuity would pay for the nursing home until the penalty phase was concluded, and your mom still gets to leave some money to her loved ones.

Are you wondering how to apply for Medicaid? PA residents should consult with an elder law attorney, who can help you figure out the best way to protect your assets.

When it comes to Medicaid planning, people in Bucks County have long turned to Gummer Elder Law, where we’re adept on coming up with ways to protect your health and the long-term financial wellbeing of you and your family. Contact us today to learn more.