Applying For Long Term Care
Medicaid: Can You Do It On Your Own?


Ethan R. Okura

Medicaid was created in 1965 as Title XIX of the Social Security Act, alongside Medicare, which was Title XVIII of the Act, under President Lyndon B. Johnson. Medicaid is a joint federal-state program that pays for medical costs for those with limited resources. It also provides some health care benefits that are not covered by Medicare, such as long term care services in nursing homes.

Medicaid laws are very complicated and hard to research thoroughly. There are Federal statutes and regulations, Hawaii State statutes and Hawaii Administrative Rules, the Hawaii State Plan (an agreement between Hawaii and the Federal Government describing how Hawaii implements Medicaid), federal guidance from the Centers for Medicare and Medicaid Services (CMS), and policies established by the State Department of Human Services. Some of these policies are written in a policy manual that the Medicaid eligibility workers have access to; some of these policies are not written down anywhere—they are just decisions made and changed from time-to-time by State employees on how to interpret the various Medicaid laws.

Unfortunately, these policies can change frequently, even if the written law hasn’t changed at all, and sometimes the policy is in direct conflict with what the written law says! Therefore, the only way to know exactly what will work and what will not, is to have recent and continuous experience in applying for Medicaid, and communicating regularly with the policy makers to have an accurate sense of what their current thinking is on all of the issues that can come up in a Medicaid application.

Almost all of our Medicaid workers here in Hawaii are really wonderful, nice people who do their best to help Medicaid applicants get the health care that they need. However, they generally aren’t lawyers, and yet they are expected to understand vast amounts of information and legal rules without having adequate resources or training to know all of the complicated details.

Also, even when they do know the relevant law, your Medicaid eligibility worker (unless they also happen to be a lawyer) isn’t allowed to give any legal advice to applicants. There are some situations where the best thing for you to do might be to take your home out of your revocable trust, or to transfer ownership of your home to a family member, or maybe the best thing in your situation is to sell your home to help pay for some of the cost of your care, while still legally saving a large portion of the sales proceeds for your family members or friends. Unfortunately, the Medicaid worker won’t be able to properly advise you.

Often, someone in need will apply for Medicaid and be denied for some technicality that they weren’t aware of. On occasion, they will get a denial letter even though they should have been approved under the law. We have had new clients come to our office for help after they have applied on their own and been denied three separate times over a two-year period. There were technical issues with their application and the status of their home residence not qualifying as an exempt asset. These issues were quite simple for us to fix, and we quickly got the client qualified for Medicaid. However, the previous two years’ worth of nursing home costs incurred by the client were not reimbursable by Medicaid, and by the time they came to us, it was too late to appeal their prior Medicaid application denials.

There was another client who came to Okura & Associates after they had tried submitting an application for Medicaid with the assistance of a well-respected, top-notch Honolulu law firm that, apparently, didn’t have much experience with Medicaid qualification. This other law firm spent a year trying to help the client to get qualified. They racked up over $80,000 of legal fees in hourly billing during that year! When they finally came to us, we were able to solve the client’s problem and get the client qualified for long term care Medicaid within two months, all for a pre-set, reasonable flat rate legal fee.

A final example is of one unfortunate client who sought legal advice, got his parents approved for long term care Medicaid with the help of a lawyer, and then the client’s father lived for 10 years in the nursing home. Medicaid put a lien on the family home amounting to over $1,000,000. This client could have qualified as an exempt caregiver child and could have completely avoided the lien on their home just by having the father sign over the home to him. (Warning: This won’t work in every situation.) However, their lawyer didn’t even suggest it, the family didn’t know they should have done it, and the client ended up losing the home to the State.
The conclusion: Sometimes you can apply for Medicaid on your own and it might be ok. But before you do so, you should consult with a qualified lawyer, who is experienced in Medicaid law. In next month’s article, I’ll write about how you would go about applying for long term care Medicaid on your own and the actual steps in the process that you would need to take.