Can Medicare Deny Me Because I Have a 401(k)?

It is highly unlikely that Medicare would deny your home health benefits solely because of a 401(k), because Medicare is an entitlement program, not a needs-based program.

The real reason for the denial is likely related to something else. Here’s a breakdown to help you understand what may be happening and how you can appeal the decision.

1. Medicare vs. Medicaid: The Key Difference

This is the most common point of confusion.

• Medicare: This is a federal health insurance program primarily for people 65 or older, and for some younger people with certain disabilities. It is an entitlement program. This means that once you have paid into the system through your payroll taxes, your eligibility for benefits is not based on your income or financial assets, like a 401(k).
• Medicaid: This is a joint federal and state program that helps with medical costs for people with limited income and resources. It is generally a needs-based program. Your income and assets (including a 401(k) or other retirement accounts) are heavily scrutinized to determine if you are financially eligible.

Because you have no insurance and are fully homebound, you may have applied for home health care benefits that fall under the rules of Medicaid. Or the denial may be based on a different aspect of Medicare’s criteria.

2. The Real Reasons for a Medicare Home Health Denial

Medicare’s denial of home health care is almost never about your assets. It’s almost always about one or more of the following criteria:

• You are not “homebound” according to Medicare’s definition: This is the most common reason for denial. To be considered homebound, you must meet two criteria:

1. You must either need the help of a person or a medical device (like a cane, walker, or wheelchair) to leave your home, OR your doctor believes that leaving your home is medically unsafe for you.
    
2. And leaving your home must require a “considerable and taxing effort.” Occasional, short trips (like to the doctor, for religious services, or to get a haircut) are usually allowed and don’t affect your homebound status.
    

• The care is not “medically necessary”: Medicare will only cover skilled nursing or therapy services (like physical therapy or speech therapy) that are ordered by a doctor and are required for your condition. They do not cover “custodial care” like help with bathing or dressing if that is the only service you need.
• The care is not intermittent: Medicare usually doesn’t cover continuous, 24-hour-a-day care. The services must be part time or intermittent.
• The provider is not certified: The home health agency providing your care must be Medicare-certified.

3. How to Appeal a Medicare Denial

You have the right to appeal any Medicare decision you disagree with, and the success rate for appeals can be very high. This is what you should do:

1. Review the denial notice: The first step is to carefully read the denial letter (or Medicare Summary Notice, or MSN) you received. It will state the specific reason for the denial. This is where you will likely find the real reason, which will probably not mention your 401(k).

2. Gather supporting documentation: Your appeal will be much stronger with a letter from your doctor. Ask your doctor to write a detailed letter explaining why you meet the “homebound” criteria and why the home health services are medically necessary for your condition.

3. Start the appeal process: The denial notice will have instructions on how to file your first appeal, which is called a redetermination.

• You can often use the back of the MSN to write your appeal.
• Clearly state why you believe the decision was wrong, referencing the specific criteria (like homebound status) and including your doctor’s letter and any other relevant medical records.

4. Seek help: You don’t have to do this alone.

• Call 1-800-MEDICARE: This is the official helpline for all things Medicare. They can answer questions about your specific case.
• Contact your State Health Insurance Assistance Program (SHIP): SHIP provides free, unbiased counseling on Medicare issues. A SHIP counselor can help you understand the denial and guide you through the entire appeals process, step by step.

In summary, the 401(k) is almost certainly not the reason for your denial. The denial is based on Medicare’s specific eligibility rules for home health care. You have a strong case for an appeal, especially if your doctor can provide clear documentation of your homebound status and medical necessity. Don’t give up — take action immediately, as there are strict deadlines for appeals.