medicaidMedicaid is a joint federal-state program that is best known for funding nursing home care for “impoverished” seniors.

Let’s focus for a moment on the “impoverished” part. To be eligible for Medicaid, a senior can have only limited assets – but some assets are excluded from the calculation.  The government will look back at 5 years’ worth of transactions in determining if the senior is truly qualified.  If the government decides the transactions were improper or that the senior has too many assets, then it may assess a penalty or deny the application.


That’s why getting good legal advice before trying to qualify a senior for Medicaid is so important.

Here’s the top 3 Medicaid mistakes:

  1. Selling the homestead.   Medicaid rules allow the senior to keep the homestead and still qualify for Medicaid.  The senior may also be able to pass ownership of the home to a family member so it won’t be subject to Medicaid estate recovery.
  2. Gifting assets or money. The $14,000.00 per year per person gift exclusion is for the gift tax laws and has nothing to do with Medicaid. Gifts made within the 5 year period before the Medicaid application may disqualify the senior from receiving Medicaid for a period of time. There are exceptions, but they are limited.
  3. Not reviewing beneficiary designations. If the senior is the designated beneficiary  under a will, life insurance policy or retirement account, and receives the asset,  then the senior’s Medicaid benefits may be suspended.  Again, there may be an exception that applies.

Medicaid rules are complex. You need legal advice from an Elder Law attorney to navigate your way through the system.

Hammerle Finley Law Firm.  Give us a call.  We can help.