Medicaid is very complex and very confusing. As a result, it is difficult to obtain accurate information, leading to an abundance of misinformation. Fortunately, it is easy to clear up many of the most common misconceptions.
One of the most common Medicaid myths is that the government or nursing home will take the home of the person on Medicaid. This is mostly incorrect. A single person is allowed a house, but that house will be subject to estate recovery upon the person's death, meaning the government may put a lien on the property so that their expenses can be recouped. A married couple can also exempt a house. Estate recovery still needs to be considered in that case, however, because, in the event of the death of the spouse who remains at home, the person in the nursing home will be in the same position as the single person described above.
Another common myth is that a person will not qualify for Medicaid if they have made any substantial asset transfers in the last 5 years. There is a 5 year lookback period for Medicaid, but this does not necessarily mean a person will have to wait 5 years from the transfer date to qualify. Instead, there may be a penalty period where Medicaid will not pay, but it is often much less than 5 years. This, of course, is dependent upon when the transfer occurred and how much was transferred.
Many people also believe they will receive substandard care if they are in a Medicaid bed at a nursing home. This is absolutely not true. People in Medicaid beds receive the same care as people in private pay beds. In fact, the nurses and CNAs that are responsible for the day to day care of people in nursing homes usually do not know how each individual patient is paying because the beds are typically mixed together. Depending on the facility, a Medicaid bed could be in the same area as a private pay bed.
Perhaps the most common Medicaid myth of all is that it is not needed. People often think that because they have saved up a substantial amount of money they will be able to afford to pay privately for their long-term care. The reality is a lifetime of saving is often not enough. Currently, long-term care costs approximately $7500 per month.
That is $90,000 a year. This cost is constantly increasing. Relying upon private pay usually results in a person spending all the money they have and then having to apply for Medicaid.
Medicaid is incredibly complex and complicated. It is difficult to learn and traverse these rules while trying to make emotionally loaded decisions about a loved one. It is always better to plan ahead for any potential Medicaid issues. Doing this can save a substantial amount of the money that you have worked for your entire life. Everyone wants to be able to pass the things they worked hard for on to their loved ones. Preplanning can allow you to do that while still qualifying for Medicaid when you need it. This is a specialized area, however, and it is important to speak to a qualified elder law attorney about these issues.