Making Sense of Medicaid Terms
It is difficult to navigate the ins and outs of Medicaid for Long Term Care coverage. And one of the trickiest hoops to jump through is the terminology. Here is a list of definitions of terms used by attorneys and Medicaid professionals.
Medicaid vs. Medicare- Medicaid is for people with low income or low assets who need medical insurance coverage and is considered a form of government assistance. Medicaid is often needed to assist with the cost of Long Term Care. Medicare is an entitlement that most Americans qualify for after turning 65. Medicare has very limited Long Term Care benefits.*
TennCare vs. Medicaid- Medicaid is a federal program. TennCare is the State branch that administers Medicaid. So, you can use the terms Medicaid and TennCare interchangeably.
Long Term Care- There are many types of coverage under Medicaid. This glossary is meant to define terms for "Long Term Care" or the type of coverage you get when you are entering a nursing home or receiving skilled nursing care at home and you are not expected to get better.
CHOICES – TennCare calls their Long Term Care programs, CHOICES. This includes on-going nursing home care and covers individuals with disabilities and adults over the age of 65.
Home Community Based Services (HCBS)- While most people know that Medicaid will cover nursing home care if a person qualifies, not everyone knows that Medicaid will also cover in-home care. This allows elders who need skilled nursing to live at home and still get the medical care they need.
Look Back Period- The current "look back period" for Medicaid is 5 years. This means that if you apply for long term Medicaid coverage, Medicaid will look at every transfer of money or assets that you've made in the past five years to determine whether or not you gave away assets for less than fair market value. In fact, they can and will, go through your every bank statement for the last five years and look, line by line, for "disqualifying transfers." If they determine that you gave away something for less than its fair market value, you may be deemed ineligible for Medicaid benefits for a period of time. This is why it is so very important to not start making monetary gifts or transferring assets if you know that you are going to need Long Term Care.
Disqualifying Transfers- When looking back over the past five years of your finances, Medicaid will be looking for "disqualifying transfers." Any transfer of money you make for over $1,000.00, or for less than fair market value, is a disqualifying transfer. This means you cannot, for example, write checks for holiday gifts for over $1,000.00 for the five years before asking for Medicaid. You can, however, sell your car or home, or anything else you own, but it must be for fair market value.
Caregiver Child Exemption- There are some exceptions to disqualifying transfers. One is the Caregiver Child Exemption. This comes into play when a parent wants to deed their home to their child and that child has helped care for them. There are strict rules as to who can and cannot use this exemption, but when it works, it works well to allow the transfer of your home and still qualify for nursing home coverage.
Note: These definitions are a starting point to help you navigate the Medicaid system. The definitions here are boiled down to their most basic meaning to assist non-lawyers and non-Medicaid professionals with understanding the terminology. Nothing in this articles shall be construed as legal advice. If you are thinking about applying for Medicaid for Long Term Care benefits, seriously consider consulting with a qualified Medicaid planning attorney as the stakes for not navigating the system properly are very high.
About the Author
Leslie A. Starritt is the lead Medicaid Planning Attorney at Jelks Law, PLLC. Leslie has more than seven years of experience in estate planning, elder law, special needs trusts, and Medicaid Planning. As part of her practice, Leslie has cultivated the patience and skills necessary to help people transition from independent living to nursing homes and assisted living facilities. This includes a unique ability to preserve assets and apply for long-term disability coverage through Medicaid in a streamlined and efficient manner. Jelks Law is conveniently located in the heart of downtown Chattanooga and serves clients in Tennessee and Georgia.