Should You Prepare a Medicaid Application Yourself?

Medicaid is the single largest health care provider in the United States, covering more than 75 million individuals, including 7.2 million seniors. The program is also Americans’ primary source of long-term care coverage.

Jointly financed by the federal government and states and administered by states according to federal guidelines, Medicaid provides benefits not normally covered by Medicare, such as nursing home care.

To qualify for Medicaid, you must meet specific criteria in your state. The application process can be complicated, especially if you are applying for long-term care benefits. Hiring a local elder law attorney for assistance can help on numerous fronts.

Medicaid and Long-Term Care

Medicaid provides health care coverage for individuals who do not have insurance or whose insurance does not cover what they need. Many people rely on Medicaid to pay for long-term services and support (LTSS), which assists them with bathing, eating, dressing, and other activities of daily living (ADLs).

Those who are aging or have a disability or chronic illness might require these services. They may be able to access them in institutional settings like assisted living facilities and nursing homes, at home, or in community-based settings like adult daycare.

Care lasting longer than three months is considered long-term care. For men, the average duration of long-term care is 2.2 years; for women, it’s 3.7 years.

Someone turning 65 today has an almost 70 percent chance of needing long-term care in their remaining years. One study found that, in 2023, the median annual cost of long-term care services ranged from $64,000 per year (assisted living) to $117,000 per year (nursing home). Many seniors cannot afford these costs.

Medicaid is the primary source of coverage for these services, which Medicare and private health insurance typically do not cover. State Medicaid programs must pay for LTSS delivered in nursing homes but can opt out of covering home and community-based services.

Among Medicaid enrollees, those aged 65 and older are most likely to use Medicaid for institutional care (e.g., a nursing home). Older adults needing this type of care who can’t afford it can also spend down their money to meet state eligibility requirements.

Medicaid Eligibility

Eligibility for Medicaid varies widely by state, but is primarily based on age, disability status, and asset and income levels. In most states, an individual must have no more than $2,000 in assets ($3,000 for a couple). States also have rules about which asset and income sources are “countable,” or included, when determining Medicaid financial eligibility.

In addition, you must be a resident of the state in which you are receiving Medicaid and a U.S. citizen or a qualified non-citizen.

Three categories of people may be eligible for Medicaid:

• Seniors (age 65+) who meet asset and income limits
• Those under age 65 who have a qualifying disability and limited assets and income
• Supplemental Security Income (SSI) recipients

Individuals seeking Medicaid long-term care coverage must meet other requirements, too. For example, they may need to get a statement from a medical provider about their inability to perform ADLs.

Factors to Consider When Applying for Medicaid Long-Term Care

No state requires that an attorney assist with a Medicaid application. But the highly complex rules — particularly those related to Medicaid long-term care — might be best handled by an elder law attorney.

Most people under age 65 and not in need of long-term care can probably apply on their own without assistance. Matters get more nuanced for applicants seeking Medicaid for long-term care.

Medicaid long-term care can be broken down into two categories:

• Nursing home Medicaid, or “institutional Medicaid” – Medicaid that pays for long-term care in a nursing home only.
• Home and community-based Medicaid – Medicaid that pays for long-term care in a person’s home or community under regular state Medicaid or a state waiver program.

Whether you should apply for Medicaid by yourself or hire help can depend in part on answers to these questions:

• Are you applying for nursing home Medicaid or Medicaid for home and community-based services (HCBS)?
• What is your financial situation?
• Will you need to spend down your assets to qualify for Medicaid?
• Do you have time for the application process?

Again, eligibility for any type of Medicaid long-term care is dependent on meeting financial criteria and a medical need for care. These requirements are specific to the state, the Medicaid program, and the applicant’s age. As a result, there are literally hundreds of different sets of rules across the country to qualify for Medicaid long-term care services.

Not only do states weigh an applicant’s finances differently when assessing Medicaid eligibility, but they also assess medical (i.e., functional) criteria differently.

A person needing ongoing skilled nursing care or who has dementia will likely qualify in any state. Short of these conditions, many state Medicaid programs connect eligibility to the number of ADLs a person requires assistance with. A “nursing home level of care” is required in most states. However, states have different standards for this level of care and the definitions they use can be difficult to understand.

Yet another wrinkle to applying for Medicaid benefits is the possibility of facing a waiting list. Because nursing home Medicaid is considered an entitlement, eligible applicants are guaranteed to receive institutional long-term care.

Medicaid HCBS waiver programs, though, have limited spots and therefore are subject to waiting lists. According to one survey, around 700,000 people on Medicaid HCBS are on waiting lists lasting an average of 36 months.

How an Elder Law Attorney Can Help

Long-term care needs can arise suddenly, making it crucial to obtain Medicaid as quickly as possible. But applying for benefits can be overwhelming and time-consuming.

Some of the supporting documents you may need for an application include financial statements, Social Security income and deductions, income verification letters, and tax forms.

Applicants are also subject to a five-year look-back period. This means Medicaid will scrutinize any transfers of money or property you’ve made within the past five years. If you’ve given money or property away to meet Medicaid’s asset limits, you could face a penalty. Look-back violations may prevent you from qualifying for Medicaid for months or years.

A state Medicaid agency usually has 45 days to approve or deny an application. But violating the look-back period or not providing documentation on time can result in delays. If you receive a denial, you may have to start your application all over again.

Even if an applicant successfully secures Medicaid benefits, the issue of Medicaid estate recovery looms large: Once a recipient passes away, the government can go after their estate to recoup the costs of care that Medicaid paid. The state may have a claim to the recipient’s home, savings, and other assets.

An elder law attorney can assess your ability to qualify for Medicaid, help you complete an application, and implement certain strategies to protect your assets.

Hiring someone to assist with Medicaid planning may also help you avoid the potential costs of application delays and denials. Long-term care services can easily run thousands of dollars per month. The sooner an applicant gets on Medicaid, the sooner they can obtain long-term care coverage.