Filing for Medicaid benefits is a complicated process. Medicaid is a federal and state health payment plan for needy individuals. In order to be eligible for Medicaid benefits, an applicant must have an extremely limited amount of assets (typically, less than $2,000) and insufficient income with which to pay for her care.
Long-term care involves care in a nursing home or an assisted living residence or care at home when the person is receiving the services of a home health aide. Long-term care can last a long time, sometimes years. And long-term care can cost a lot of money. Care in a nursing home costs about $15,000 a month, meaning three years of care could cost in excess of $600,000. Care in an assisted living residence can cost in excess of $12,000 a month, and a home health aide can cost $8,000 a month.
Most people cannot afford these costs. Private health insurance does not pay for long-term care. Medicare does not pay for long-term care. Medicaid, on the other hand, does pay for long-term care, so even though Medicaid is a welfare program, when faced with the prospect of privately paying for long-term care, many people seek to qualify for Medicaid benefits.
In New Jersey, an application for Medicaid benefits is filed with the county board of social services (CBoSS) for the county in which the person lives. Filing an application for Medicaid benefits is essentially a five-year forensic accounting. There are a number of other personal documents the applicant must submit with her application—her birth certificate, social security card, state of monthly income, etc.—but the five years’ worth of financial statements is the largest part of the application.
The CBoSS asks for five years’ worth of financial statements for every financial account the person has owned. The CBoSS is looking to see if the applicant has made any uncompensated transfer of assets in the five years immediately preceding the date of application. This five-year period and the forensic accounting of this five-year period is what is commonly known as the “five-year lookback.”
There is a law that says an application for Medicaid benefits should be processed in forty-five days. I have filed a great many applications for Medicaid benefits—some for clients with few financial accounts, some with a great many—and rarely has the CBoSS processed an application in forty-five days. During good times, an application can take anywhere from four to six months to process. Examining five years’ worth of financial statements always generates questions from the CBoSS worker for the applicant, and the back-and-forth between the applicant and the CBoSS takes time to resolve.
In the past two years, however, numerous counties have taken more than nine months to process an application. Oftentimes, a case worker for the county is not even assigned to the case until six months after the application was filed. This delay in processing applications invariably inures to the benefit of the county and State. For instance, let us assume you applied for Medicaid, and you were unaware of a small asset that put you over the $2,000 asset limit for Medicaid eligibility. When the county informs you nine months after you applied for benefits and denies your application, you will owe the nursing home $135,000 for the past nine months.
I recently met with the Monmouth County officials (a county commissioner, the county administrator, county counsel) responsible for administering the Medicaid program. The told me to give them sixty days to fix the problem. It is my hope that they will and that this issue can be resolved without the need for me to file a federal lawsuit to compel the State to hire more workers.
Many employers (including government employers) are having a tough time hiring workers. I understand that. But receiving Medicaid benefits on a timely basis is in certain instances, quite literally, a question of life and death—receiving the care you need when you are a frail, elderly individual is critical.
A Medicaid application is not simply a stack of forms and financial records. Filing too early or too late can create complications that affect eligibility, benefits, and planning opportunities. In many cases, timing is every bit as important as the information contained in the application itself.