Common Misconceptions about Medicaid

by | Insurance / Medicare, Legal

Essential insights for families about Medicaid. 

Understanding how Medicaid may be able to help our aging parents who need 24/7 nursing care can be so confusing especially since every state runs the program a little differently.

How do you get down to the level of income and savings to qualify?
Who can help you with your application and who shouldn’t?
Why is it good to have a qualified professional help you?
What can you do while you’re “Medicaid Pending” waiting to be approved?

Those are just some of the questions that Kim and Mike Barnes of Parenting Aging Parents tackle with the help of Keith Leuty and VeeCee Spear of partnering sponsor Barnett & Leuty, PC in Austin, Texas. They dispel common misconceptions and provide crucial insights into the application process, potential pitfalls, and the importance of seeking reliable advice.

00:00 Introduction to Medicaid and Its Importance
00:22 Understanding Medicaid Basics
01:54 Common Misconceptions About Medicaid
03:12 Challenges in the Medicaid Application Process
05:07 Navigating Medicaid Rejections
06:35 Advice from Non-Professionals: A Warning
07:47 Medicaid Pending Process: What It Means
08:56 Financial Responsibilities During Medicaid Pending
11:02 Eviction Concerns and Facility Responsibilities
13:12 Advice for Families Seeking Medicaid Assistance
14:15 Importance of Seeking Professional Guidance

For more information about how to qualify for Medicaid, check out this interview: “How Do I Qualify for Medicaid”

Read the full transcript

Transcript of Interview: “Debunking Common Misconceptions about Medicaid”

Mike Barnes: There are so many questions about Medicaid, and I think there are so many misconceptions as well because we’re not sure exactly what to do if we want to get our parents involved. 

Kim Barnes: What are the steps? When do you start? All of that, and who can help you, exactly? Today, we’re bringing in Keith Leuty and VeeCee Spear from Barnett and Leuty Law Firm. Thanks so much for being with us. We are going to turn to you to help us understand. We have learned so much just as we’ve been going through, but it is a tricky, complicated process, and something that most of us have never done before. So, let’s start with VeeCee or Keith with just a brief overview of what Medicaid is and its role in the care for aging parents, potentially in nursing care.

Keith Leuty: Sure. Medicaid is a program funded 60% by the federal government and 40% by each state. Each state has its own version of Medicaid. The purpose of Medicaid is to help people who have reached a level of care where they need 24-hour care—typically higher than the assisted living level of care—afford it. As you might imagine, the cost of 24-hour care is quite high, and people, especially those living on a retirement budget, can really struggle to come up with the funds to pay for that level of care. Over the years that we’ve been working and helping people with Medicaid, VeeCee and I have noticed many things, and there’s a lot of information out there that isn’t quite accurate. Hopefully, in this segment today, we can clear some of those things up.

Kim Barnes: VeeCee, what are you seeing out there that doesn’t seem like the right process? And first, let’s share your many years of experience with Medicaid policy.

VeeCee Spear: I worked for the State of Texas for 20 years in the Medicaid Program and have been retired and working for attorneys for the past 14 years. The Medicaid for Nursing Home program is a very complicated program with many rules, so it’s somewhat difficult to understand. But it’s very positively impacting our families who meet those requirements.

Kim Barnes: Because it’s so difficult to understand, is that the reason why you have to be careful about the advice that you get?

VeeCee Spear: Oh, absolutely. Many people think that they have to spend all their money before they meet the requirements, but that’s not the case at all. It helps for them to come even long before they need help, so we can make a plan with them. That way, we know what their requirements are, and they also know what the rules provide for them to be able to get the benefits when they need them.

Kim Barnes: So what are the problems that you’re seeing out there?

VeeCee Spear: Some of the number one problems are people listening to others who aren’t professionals giving them advice, telling them they have to be broke to qualify for Medicaid. That’s one of the main problems. If they don’t come and find out they don’t have to be broke, they may start selling all their assets to continue to make those installments every month to care for their family members.

Mike Barnes: Why is the application process so difficult and confusing? 

Kim Barnes: Because technically, I could do it myself with my mom or have my mom help, but it’s very easy to not get it right, isn’t that correct?

VeeCee Spear: Absolutely. I’ve worked in other Medicaid programs, but their rules are much simpler than in long-term care. Of course, it’s a big budget item, but it has very definite rules. They’re usually a pleasant surprise when people find out what the actual rules are and that they don’t have to be broke to qualify.

Kim Barnes: Now, Keith, if I apply for Medicaid or help my mom apply for Medicaid and things come back and it’s not a simple process, what do you see when that happens? If I get rejected, what should I do?

Keith Leuty: There are many people who try to navigate the deep waters themselves, and you’re certainly free to attempt that. We’ve seen people actually successfully do it. But you’re right; there are a lot of things that can trip you up. When Medicaid is not happy with what you’ve submitted, they’ll send you a rejection letter or something along those lines, and it doesn’t contain a whole lot of information that you can use to diagnose and figure out what to do differently. I’ve talked to many clients over the years who’ve tried this and then tried to contact Medicaid to ask why their application was rejected. The standard response—and I completely understand why they would give this response—is, “We can’t give you legal advice.” So there’s a sort of stalemate where people are saying, “We’ll give you what you need if you’ll tell us what you need,” and Medicaid is saying, “It’s all in the rules; we can’t help interpret them for you.”

Mike Barnes: When a person or a company offers advice to help, what are the red flags we should watch out for?

Keith Leuty: We hear a lot of stories about people whose loved ones go into a skilled nursing facility to receive high levels of care. Sometimes, the individuals who work there, who I’m sure are well-meaning, will offer some level of expertise and say, “Oh, we can help you through the Medicaid process.” Unfortunately, VeeCee and I have seen many times that the advice given in those situations is way off course. It’s not to criticize the people who do this wonderful job for others, but if they’re not specifically trained, if they’re not attorneys, elder law attorneys, or financial planners, their advice, though well-meaning, can really be misleading. As VeeCee mentioned before, people start being told that they need to sell off all their assets or something like that, so it’s very tricky. You have to be very careful, like with anything, that the people you’re getting advice from actually do this on a regular basis.

Kim Barnes: We hear a lot of times in our community, people talking about how “Mom is Medicaid pending.” What does that mean?

VeeCee Spear: That means there is an application pending to Medicaid for approval. Unfortunately, it’s not a fast process sometimes. Another benefit of working with us is that I do status checks on them frequently to see if they’re mired down somewhere. The rules say each application must be processed within 45 days to meet the federal and state guidelines, but that doesn’t happen very often.

Kim Barnes: So, even though it says that, it really doesn’t happen within 45 days generally?

VeeCee Spear: Oh no, no.

Kim Barnes: And who’s paying in the interim? Is that something that the family has to cover?

VeeCee Spear: When they’re Medicaid pending, I calculate what their monthly payment would be on Medicaid, which involves how much income they have coming in and the deductions they get to take off. That’s what the state requires for them to be paying for their care because it’s not a free program. Whatever income they have is payable to the facility, and that’s what they start out paying while they’re Medicaid pending. When the Medicaid application is completed, the paperwork comes back and pays the facility the difference between their payment and what the cost of care actually is.

Kim Barnes: So, they backdate it, if you will, from when the application was filed. 

Mike Barnes: During that process, do they have to worry about being evicted or losing their spot in the long-term facility?

Keith Leuty: They should not have to worry about that. What they’re required to do when they’re Medicaid pending is to pay what they can, as Medicaid is a “pay what you can” program. The facility should wait for the Medicaid process to be complete and then get the back check. However, we do hear stories from time to time about a few facilities that may not understand they have to wait for that big check to come. Sometimes, they tell families, “No, you need to pay the full amount while you’re waiting for the reimbursement from Medicaid.” We take calls about that from time to time, and we tell families, “No, you pay your contribution amount; the facility is supposed to wait.” In some cases, the facility might say, “We disagree, so we’re going to give you a 30-day notice of eviction.” But that’s also not something they can do, and we typically handle that. It’s distressing because of the level of anxiety it can cause a family if they suddenly think their loved one is going to get kicked out when they’re actually doing what they’re supposed to be doing.

VeeCee Spear: Recently, we had a facility that wanted to get all of their money upfront. That’s not how it works. We had a family that was told they had to pay the full price and then file for Medicaid to pay them back. Well, that doesn’t happen. The facility isn’t licensed with Medicaid, and Medicaid is never going to reimburse them because they don’t have a Medicaid contract. The facility is responsible, and if the family pays the amount, the facility has the money and owes it back to the family.

Keith Leuty: We’ve seen facilities that have changed hands, been bought by someone else, and then they say, “Well, you didn’t give the money to us; you gave it to the other facility that used to be here.” They end up doing dreadful things to the family’s finances. If someone says, “I want to go to this one because it’s closer to home, so I’ll just pay the full price,” it just doesn’t work out well, and they never get their money back.

Kim Barnes: What’s your biggest piece of advice for people who have a loved one needing long-term, 24/7 nursing care?

Keith Leuty: Here’s my best advice: I’ve got a pretty good mechanic who works on my car when it needs to be worked on. I don’t go to my mechanic if my elbow hurts; I go to my doctor. Just be careful who you’re taking advice from. There’s a lot of bad information out there on the internet and within the elder care community. There are people out there who know how the rules work and how they’re supposed to work. Typically, those would be attorneys or financial planners—people who do this every day. So, if you hear something, consider the source. Don’t always assume what you’re hearing is correct. The right information is out there, and there are a lot of good people who will sit down and explain it and take the time to ensure you understand what the actual rules are in your state and what your options are. If you take the wrong advice and start selling off all your stuff, it’s gone. You can’t get it back.

Kim Barnes: We see this in the community all the time, where somebody will have a loved one in skilled nursing, and the skilled nursing facility will offer to assist them. That’s a concern, right?

Keith Leuty: Yes, that’s a big concern for a couple of reasons. First, if the facility is the designated payee—meaning they’re the ones supposed to be getting the Medicaid check—for them to offer advice regarding the Medicaid process is a massive conflict of interest. Also, to my knowledge, I’ve never met anyone who works at the facility who also has a license to practice law. So, if you’re giving legal advice without a license to practice law, you’re stepping out of your lane.

Mike Barnes: It just seems like wherever you are in the process—application, waiting period, or eviction process—find a good attorney in whatever state you’re in and get the right advice.

Keith Leuty: Absolutely, absolutely. Different states adopt different parts of the SSI rules and federal guidelines. Don’t listen to someone in another state tell you what their rules are like, because that’s not Texas. Texas rules are very different.

Kim Barnes: Yes, every state’s got its own rules just to make things more complicated, right?

Keith Leuty: Yes, yes.

Mike Barnes: Well, Keith and VeeCee, thank you so much for all your advice and for hopefully clearing some things up about Medicaid.

Kim Barnes: Yes, I think there is often a lot of confusion. Sometimes, I find that the more I learn, the more questions I have.

Mike Barnes: Thank you both. I think the biggest thing we learn from this is to get good advice. Like Keith said, you’re not going to go to the wrong type of expert to get the expert advice. You want the expert in that field.

Kim Barnes: Even when people are very well-meaning and want to help, they may or may not be the right person for the job.

Mike Barnes: Exactly. If you have any other topics you’d like us to discuss, please let us know. Parenting Aging Parents.

*This transcript is auto-generated. Please excuse any typos or mistakes.

Related Posts

What you need to know about estate planning

What you need to know about estate planning

Who needs an estate plan? Everyone.You may think your parents don't have a big enough estate to worry about estate ...
Medicaid: Can your aging parent qualify?

Medicaid: Can your aging parent qualify?

Medicaid eligibility varies by situation and by state and can be difficult to know who qualifies. It’s often confused with Medicare but Medicaid is based on income and finances.
Having a plan for long term care for aging parents

Having a plan for long term care for aging parents

It’s so important to have a plan for how and where our aging parents will live as they get older. There are so many decisions and they’re much easier to make when it’s not a crisis situation.