The Affordable Care Act has changed many Medicaid eligibility rules since it took effect at the start of 2014; however, the changes do not affect everyone involved with the program. In the past, anyone applying would be subject to an asset test to see how much the applicant had in cash or other countable assets. Now, those asset tests are no longer needed for many people. For those under the age of 65 and who are not disabled or blind, income is the qualifying factor. This is why so many people have been able to qualify for Medicaid recently; however, for those 65 and older, or those who are disabled or blind, the asset test still applies.
In Missouri, limits for assets are very low. In order to qualify for the state Medicaid program, or MO HealthNet, one elderly or disabled person applying alone could have only $1,000 in countable assets for 2013. The limit is raised to $2,000 for an applicant applying on the basis of blindness. For couples, those numbers would be doubled to $2,000 and $4,000 respectively. The income is also restricted to 85 percent of the federal poverty level for elderly or disabled people and 100 percent for those who are blind.
If you are planning to apply for Medicaid and your assets exceed the limit your first instinct may be to give away assets in order to qualify; however, that tactic will not work because Medicaid has rules written into it that penalize you for doing that. Giving away your assets is known as an asset transfer. When you apply for MO HealthNet there will be a “look-back” period where your finances and assets will be scrutinized for any asset transfers during the look-back period. Those taking a look at your application can go back as much as five years, which can be a problem for those who have suddenly found they need to apply for Medicaid. If you gave a cash gift to a friend as a birthday present four years ago, for example, that could be misconstrued as an asset transfer rather than a plain old gift. That simple gift could make you ineligible for Medicaid services and benefits.
If you are concerned that you have too many assets to qualify for MO HealthNet, do not give anything away until you talk to an estate planning or elder law attorney. Not only could you be giving away things that you shouldn’t, you might also give away things that you don’t have to give away because they aren’t countable assets or because they are subject to an exemption that lets your spouse keep them. To avoid running into the problem altogether, planning ahead is the key. Consult with your estate planning attorney now to find out how you can incorporate Medicaid planning into your overall estate plan.