Applying for Medicaid: Cost and Services

In last week’s article, I wrote about non-attorney Medicaid application companies. Medicaid is a health payment plan for needy individuals. Medicaid will assist with paying for many of the costs associated with long-term care, such as care in a nursing home, in an assisted living residence, or at home. Long-term care can be expensive, in excess of $15,000 a month or approximately $200,000 a year.

The Medicaid Act is a complex law. Applying for Medicaid benefits can be labor-intensive, a process that often takes months and involves the filing of thousands of documents with the county board of social services. I know the work that goes into a Medicaid application because I have helped thousands of clients apply for Medicaid benefits.

Recently, companies have come into being that help individuals apply for Medicaid benefits for a fee. Nursing homes often refer a resident’s family to these companies. At times, the “referral” can be extremely aggressive. In my opinion, there is a close relationship between these companies and the nursing home in which the family member resides given the gusto with which the staff of the nursing home make the “referral.”

Family members often want to use these companies to make the nursing home staff happy, so the nursing home will continue to care for their family member. Last week’s article discussed how a nursing home MUST continue to care for the family member and how the nursing home cannot discharge the family member without finding another facility that will accept the family member and care for the family member—something I have never seen happen in my twenty-five-year elder law career.

Another issue is cost. People tend to think that a lawyer is expensive, and that a non-attorney will be cheaper. I cannot speak for every attorney, but I charge between $6,500 and $8,500 to save a client a portion of their estate from the ravages of long-term care (often saving tens of thousand to hundreds of thousands of dollars) and apply for Medicaid benefits from start to finish. In my experience, these companies charge $9,000 to apply (only) for Medicaid; in other words, the companies charge more than I charge and provide fewer services.

Unlike an attorney, these companies cannot plan to save any of the resident’s money. (Assuming the companies wanted to save the resident any money, which I doubt given the fact that the nursing home referred the family to the company.) A non-attorney cannot give any legal advice to an individual without committing a crime—and nearly any advice regarding how to qualify for Medicaid (for instance, you should pay for a prepaid funeral) would be legal advice. So, these families are paying more to these companies for fewer services.

These companies tell family members that the family can sit back and relax, and the company will do all the work—telling the family that the company will obtain the resident’s financial statements, Social Security card, birth certificate, etc. In many cases, this is a gross overpromise.

Many nursing home residents lack mental capacity, so the resident cannot legally name the company as the resident’s power of attorney agent. If a family member has a power of attorney from the resident, the family member who is the power of attorney agent cannot assign his “power” to the company unless the power of attorney document specifically permits the assignment of power, and most power of attorney documents do not permit such an assignment. Moreover, even if the document did, many banks would balk at honoring such an assignment.

Applying for Medicaid is a lot of work. I understand that. Wanting to avoid all of that work and wanting someone who knows what they are doing to oversee the Medicaid application is completely understandable. But when a company is telling you that they can obtain a family member’s personal financial documents and personal records, you should question that statement. Could someone obtain your financial records? Could someone obtain your birth certificate? No. There are privacy laws that banks and other institutions diligently enforce. It is hard enough for you to get your own information. A company calling a bank saying they want reams of your financial information would certainly raise red flags with the banks.