The top 5 things to know about Medicaid and VA pension
Navigating Medicaid or Veterans Pension can be a complex process. Here are five key points to keep in mind -- and how a professional can help.Posted — Updated
Planning for long-term care can be an intimidating process, especially when it comes to decoding the specifics of resources like Medicaid and Veterans Pension. Working with the help of an experienced elder law planning attorney allows people to prepare for the future and save time, money and stress.
For those considering Medicaid and VA Pension, there are a few key things to keep in mind beforehand.
One of the first questions that come up with Medicaid and VA Pension is how to know whether or not you or a loved one is eligible.
"Both Medicaid and VA pension are needs-based programs. They're looking at your net worth and your income, and you have to meet certain thresholds before you qualify for these benefits. For Medicaid, you meet certain medical and monetary criteria, and for the VA, you have to meet certain military criteria in addition to the medical and monetary pieces," said Lauren Maxie, an attorney and partner at NC Planning, an estate planning firm in Raleigh.
While VA Pension is a monthly amount given to recipients, certain types of Medicaid make up whatever the gap an individual can't afford is in their cost of care.
A common worry for those considering Medicaid is what will happen to their assets after they no longer need Medicaid. According to Maxie, proactive planning can help prevent or reduce any asset seizures.
"You can do some proactive planning to 'save the house,' but there's a lot of misinformation out there. Medicaid won't sell the house out from underneath your spouse. After the passing of the person that received the Medicaid, the state of North Carolina comes in and tries to essentially recoup the cost of what they've paid for, so Medicaid becomes a creditor of their estate after their passing," said Maxie. "Through that process, they can potentially foreclose on the house, and that's where they hear these stories about Medicaid taking the house. With proactive planning, there are some very simple tools to avoid that."
For Maxie, one of the major misconceptions about these programs is that after you've applied once and been turned down, you can't qualify again. If your life circumstances change, however, you may meet requirements you hadn't met before.
"I was working with a lovely gentleman, and his care needs were increasing, but he didn't know how he was going to pay for it. We started talking about Veterans Pension, because he served our country and he's entitled to that, and he said, 'Oh, well I called the VA a year or so ago, and I was told I don't qualify, so I kind of have had written it off,'" said Maxie. "He was never told how and when he would qualify, so his income was just a little too high at that time to benefit from it. By the time I had met him, his level of need and net worth had dropped, and he missed out on thousands and thousands of dollars just because he waited so long to ask again."
Building a relationship with an elder law planning attorney can help people realize exactly when they meet eligibility requirements, so they don't miss out on funds that might be sorely needed.
For some people planning on receiving Medicaid or VA Pension, they may inadvertently disqualify themselves or prolong their waiting period.
"Very commonly, I'll see people give the house to the kids, and then two or three years later they need Medicaid. Medicaid has what's called the lookback period, where they look at the past five or three years, depending on the type of Medicaid that you're qualifying for — they will take a fine-tooth comb through your records and see if you gifted anything away for less than fair market value," said Maxie. "The house is a non-countable resource on Medicaid if you have the intent to return home, but if you transfer it to the kids, it could cause a sanction — which presents many complications upon qualifying for benefits.
"If you sell the house and turn it into cash in your name, then you have taken the house — which was a non-countable resource and turned it into cash — which is a countable resource and needs to be spent down before qualifying."
Depending on the value of income or gifts, individuals will have to wait for a certain period of months before Medicaid kicks in after a sanction has been imposed due to gifting. While this won't necessarily disqualify you, it will prevent aid from being applied for a number of months, which can put a financial strain on families and individuals.
For information on Medicaid and VA pension eligibility, the official government websites offer more information. Still, deciphering the eligibility requirements can be difficult — and an experienced elder law attorney can ensure you're taking full advantage of what you're entitled to.
"The information is out there, but I still recommend sitting down with an elder law attorney, because there's so much misinformation and people that are trying to scare you into doing something they don't really need. Professionals spend years and years looking at and studying this stuff," said Maxie. "Frankly, one of the reasons I love this practice is it's not a one-and-done conversation. I get to really know my clients and know their family and hear about how people are doing. As things change in your life, then your long-term plan is going to change, too."
Copyright 2022 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.