Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, A New Jersey Medicaid Attorney
Our law firm has filed literally hundreds and hundreds of Medicaid applications over the years in virtually every county in New Jersey. Fredrick P. Niemann, Esq. is consulted each year by nearly five hundred (yes, 500!) new families looking to better understand Medicaid and the Medicaid process. Each family has his/her own questions about the laws, rules and the process for obtaining Medicaid approval. I thought it would be helpful if I listed for you the most frequently asked questions I receive from new clients navigating their way through the Medicaid process.
In New Jersey, Medicaid Applications are filed in each of the 21 County Board of Social Services. The counties maintain outreach offices in certain locations, otherwise the application must be filed at the county office.
Can Medicaid applications be filed by mail?
In some counties yes, but in most counties, no. In person appointments are required, scheduled in advance, or “wait in line” basis. Call your local County Board of Social Services for its application in-take process.
Required documentation begins with a birth certificate for the Medicaid Applicant. A marriage certificate is required if the applicant is or has been married. A death certificate or divorce decree should be provided if the marriage has been dissolved by death or divorce. In addition, five years of complete and detailed financial records are required. All counties have a Medicaid checklist of required document submissions. You can generally call and ask for one, but don’t be surprised if it never comes in the mail.
This can be a real problem. Medicaid is a bureaucracy; it’s government processing of paperwork. Often times, these items can be obtained from the Registrar of Vital Statistics or from court records. If it is absolutely impossible to obtain these records, other forms of evidence may be accepted. If you’re hitting a roadblock, then consult with an experienced NJ Medicaid application attorney or if in doubt about the completeness of your documentation to reduce the chances of denial.
Yes. A PAS must be ordered by the facility or by the family if care is being provided at home. Once received, Medicaid sends a nurse to examine the applicant to determine whether or not the care is medically necessary. New Jersey has an unwritten rule that the examination will take place within 30 days from the date the PAS is ordered. Medical eligibility is determined by a document called a “pre-admission survey”.
Absolutely. Medicaid has a computer match with the I.R. S. Medicaid will receive information concerning 1099’s sent by all financial institutions.
Actual Client Testimonial – Cindy Rygiel- Sayreville, NJ
The Hanlon Niemann law firm took my case when others wouldn’t. They worked hard to get my Mom the Medicaid Insurance that she deserved. My mom is handicapped and at only 75 years of age too young to be placed in a nursing home. Now, thanks to the hard work done by Fred and Diane, she can remain at the place she has called home for the past 4 years.. If it wasn’t for them, her time at The assisted living facility would have been limited. Both mom and I can sleep better these days and I feel like a huge weight has been lifted off of my shoulders. Thanks again, Fred and Diane!
The length of time necessary to process a Medicaid Application varies. It is dependent on the quality of the financial information being submitted. An application can be approved within 60 – 90 days. In some counties, it takes 6 months (or more) to one year. In special cases, the application must be approved in Trenton. This can take 18 months or longer. During the application process, it is not uncommon for the case worker to request duplicative information many times; information is lost, so you must keep duplicates of all documents filed in connection with your application.
Yes, but only pay a portion of the bill. Always keep health insurance premiums current. At the time of approval of the Medicaid Application, Medicaid will inform the applicant of the applicant’s future monthly share of costs. The applicant should generally pay this share to the facility while the application is pending. When the application is approved, Medicaid will pay the nursing home retroactively to the date of eligibility.
You bet it is! Medicaid demands proof of every financial transaction going back five full calendar years prior to the application. Complete and detailed records should be obtained and furnished to the County Board of Social Services. This makes the processing simpler. If records are incomplete or if a Medicaid application package is disorganized, the County Agency will insist on additional information. They will cause the application to be delayed indefinitely. A Medicaid Application takes approximately 40+ dedicated and undisturbed hours to assemble and organize. A person unfamiliar with the process will spend many times that amount of time, often in excess of 100 hours.
Yes. The cost of professional assistance (including an attorney) and law firm in preparing and filing a Medicaid Application is part of the spend down process. The legal fee paid to our office, for example, is credited toward the applicant’s eligibility. Since a person can retain only $2,000/$4,000 in resources to become Medicaid eligible, it seldom makes sense for the family to assume the responsibility for filing the application. The money will only go to the nursing home or other parties who could be paid once eligibility is established.
To qualify for Medicaid, an applicant’s non-exempt resources must be spent down to the calculated amount, and never greater than $2,000. However, with proper planning there are often ways to preserve some or all of these resources for the benefit of the family.
Similarly, for married couples, the rules are even more complex. The community spouse, (i.e. the at-home spouse) may generally keep roughly one-half of the couple’s assets up to a maximum of about $120,000. Depending upon their resources, the couple may have a substantial amount of money which needs to be spent before the nursing home spouse qualifies for Medicaid.
A person pursuing Medicaid eligibility may want to purchase a new car, pre-pay nursing home expenses, clothing, wheelchair, make home improvements, purchase household goods, consolidate debt repayment or even purchase a vacation for a spouse living at home. There are many things that can be spent down to achieve eligibility that benefit the applicant or the family if you know what to do.
A pre-paid funeral plan is often another good item to purchase during the spend down process. However, the rules regarding funerals differ so you should only deal with a funeral home knowledgeable in this type of planning.
These are, of course, not the only appropriate items for a spend-down. There are other expenses, which would also qualify. The main thing to keep in mind is that whatever goods or services are purchased must be done at fair market value. In other words, giving the money away or paying outrageous amounts for less than the real value of the services can cause Medicaid disqualification.
Also, don’t let anyone tell you that anything spent must be done solely for the benefit of the nursing home spouse. On the contrary, virtually anything that benefits the community spouse will also benefit the nursing home spouse and therefore may be an appropriate spend down item.
Finally, keep in mind that while some of the spend-down strategies will not work as well for a single person when qualifying for Medicaid, still there are other strategies that can work very well when you are dealing with a single person. Consult an experienced Medicaid planning attorney for guidance. Contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com.
Generally no. We frequently counsel clients who are under the impression that they are allowed to give away $14,000 as a gift based upon the federal gift tax rules. Federal gift and estate tax rules allow gifting of up to $14,000 per person per year without any gift tax consequence. However those gifts will result in a period of ineligibility for someone applying for Medicaid benefits. That does not mean gifting can’t be done. You just need to learn the rules.
There are ways to do some gifting; however, this must be done in strict conformance with Medicaid rules and regulations. So the answer is “yes” and “no”. Sorry.
Simply placing a child’s name on a bank account and creating a joint account does not transfer the account to your child. This is true even if the child’s name has been on those accounts for several years. The state says when you add your child’s name to an account, you are doing so for ‘convenience purposes.” Generally, the entire amount will be counted for Medicaid purposes unless it can be proven the monies in those accounts were contributed by the child. This rule applies to savings and checking accounts, credit union and share draft accounts, certificates of deposit, and other similar financial accounts.
Medicaid considers all assets in a revocable trust to be countable for Medicaid. Therefore, they are not protected and will need to be spent down. Only a qualifying Irrevocable Trust can work.
Oftentimes, people are concerned that they will have to forfeit their home to qualify for Medicaid benefits. When an individual is applying for Medicaid benefits, the home can be a non-countable resource. However, there is a federal law requiring each state to have a plan in place to recover the costs Medicaid pays for long-term care. This is called Estate Recovery. In other words, after an individual who has received Medicaid benefits passes away, it is the State’s responsibility to recover the value of Medicaid payments from the recipient’s estate, including a home.
New Jersey’s Estate Recovery Acts attempts to recover the money paid for benefits through the estate of the individual who received the benefits. For a married couple, however, this typically does not occur until both spouses have passed away. Once that happens, (or upon the death of a single Medicaid recipient) the Estate Recovery Act will lay claim to the value of the house up to the cost of benefits provided by Medicaid. Of course, estate recovery planning should not be left until the individual passes away. It should be part of an overall plan prior to application.
In future years, more individuals will be accurately diagnosed at younger ages due to the increase in productive diagnostic procedures. Alzheimer’s disease is considered to be early onset if an individual is age 55 or younger when symptoms first appear. These individuals may experience unique physical and cognitive issues due to their younger age (e.g. children still living at home, employment issues). It is critically important that if a loved one receives a diagnosis of early onset anything (ALS, Parkinson’s, Dementia, etc.) that they see me immediately. Time is the enemy. The condition will never get better. Do not wait for a crisis to occur. You have time if you act immediately.
No, not always. The five (5) years is simply a look back. If transfers occurred more than the five (5) years look back, there is no penalty. If transfers occurred during the five (5) year look back, there is a penalty. In most instances, the penalty is significantly shorter than five (5) years.
No. Medicaid Planning can be done even after someone has already entered a nursing home.
No, it’s not okay. The $14,000+ per year gifting limit is part of the federal gift tax law, not the Medicaid law. Medicaid does not permit gifts and/or any transfers within the 5 year look back period without them being subject to a penalty. On the other hand, if a gift(s) exceeds $14,000 per person, per year, this does not generally trigger any payment whatsoever of gift tax.
It simply means that a gift tax return may have to be filed. Beginning in January 2013, a person can gift $5,000,000+ (indexed for inflation) during his or her lifetime or on death in addition to the $14,000 per person per year without paying any Federal estate or gift tax.
No. A gift is not taxable income. The person receiving the gift does not declare the gift on their 1040 tax return. However, if the person receiving the gift invests the gift, they must report the investment income from the gift on their 1040.
Yes. If a person withdraws money from an IRA, it is taxable income. If a person liquidates certain Bonds, it is taxable income. If a person liquidates H Bonds, which have been converted from E or EE Bonds, it generates taxable income. If a person withdraws money from an annuity, a portion of the withdrawal is taxable income. If a person assigns an annuity, it triggers immediate income tax on the deferred income. These are a few of the many examples of events which trigger income tax. Carryover basis, step up in basis and tax on sale of home are some of the others. Good Medicaid Planning incorporates good tax planning.
Yes. The Federal Government has approved the use of certain types of trusts for Medicaid Planning purposes.
In some cases, a home is not counted as an asset for Medicaid eligibility purposes. However, for a single person it is not exempt. The home must always be considered in Medicaid Planning. Even if it is not counted as an asset for Medicaid eligibility purposes, New Jersey will file a lien on the home upon the Medicaid applicant’s death, under certain circumstances.
Yes. There is a technique known as a life estate or use and occupancy agreement. Under a life estate, or a right or use and occupancy, the parent transfers a remainder interest in the home to the children but reserves the right to live there for the rest of the parent’s life. The children cannot sell the home out from under the parent or mortgage it without the parent’s consent.
Under current New Jersey law, purchasing a qualifying Medicaid annuity may be treated as an exempt transfer of assets if properly structured. Using an annuity may but may not be a good Medicaid Planning technique. Contact Fredrick P. Niemann, Esq. at firstname.lastname@example.org or toll-free at (855) 376-5291 for the latest update on this issue.
Yes. It is always important to review Wills, Living Wills and Powers of Attorney. These documents are usually not designed for situations in which a family member will be applying for Medicaid. For example, if there is a husband and wife and the husband is entering the nursing home, the wife’s Will usually leaves her assets to the husband. This needs to be changed. It’s potentially fatal!
To learn more about Alzheimer’s and Dementia, please visit our website,
Contact Fredrick P. Niemann, Esq. on any questions concerning eligibility for NJ Medicaid or applying for Medicaid approval.
Call toll-free (855) 376-5291 or email email@example.com.
His team of experienced lawyers and paralegals have filed many hundreds of applications throughout New Jersey.