Qualifying for Medicaid can be a difficult process, full of financial, legal and emotional challenges.

The advantage of qualifying for Medicaid is that it will pay practically all of the costs associated with a nursing home that accepts Medicaid. The disadvantage is that an individual who wishes to become eligible must essentially turn over most of his or her assets to others or spend the assets on the nursing care.Here are five critical issues to keep in mind with regard to qualifying for Medicaid coverage when a loved one is moving into a nursing home. 

1. Advance planning is important

Medicare generally begins to provide coverage after an individual has exhausted his or her assets (subject to certain exceptions, including those noted below).

As part of an individual's Medicaid application process, the Ohio Department of Jobs and Family Services will look back five years from the date of application to determine whether any transfers of cash or assets (other than purchases or for services) have been made to other individuals.

Amounts discovered in any such gift transfers may be considered assets that the individual can still put toward lodging and care, and could delay Medicaid coverage until those assets are exhausted.

The key is to have begun this planning process in advance of Medicaid's five-year look-back period. Since it is very difficult to know when an individual may need nursing home care, many families choose to begin that planning process long before they think it may be necessary.

2. Transferring assets has serious ramifications

Families that plan ahead and transfer an older loved one's assets will generally do so with the full intention of reserving those funds for the loved one's needs.

However, those intentions can be subject to risks. For example, transferring assets to children or grandchildren could expose them to unforeseen future creditors.

Also, a new need in the family, such as large and unforeseen expenses for medical care for a child, could impact the transferred assets.

Some individuals execute such transfers through trusts or other vehicles, but the bottom line remains that when assets are transferred, the control of those is also transferred.

3. Transferring assets to a spouse does not protect them

Assets among spouses generally are combined to determine Medicaid eligibility. So transferring assets to a spouse does not help an individual become eligible.

4. This can be a very emotional time

It is very difficult for individuals who have spent their lives accumulating wealth to turn their assets over toward the end of their lives, even to trusted family members.

This is especially true when such a situation is coupled with a change in health, as it often is for an older person. Disagreements can often lead to turmoil in families.

It is important for the sensitivities of these situations to be anticipated.

5. Some assets are exempt in determining eligibility

For example, an individual's house does not count toward the eligibility requirements if his or her spouse lives there. A vehicle can be exempt as well.

In addition, a couple's assets need not be fully exhausted. A spouse living in the community can keep additional funds to provide for his or her own support, based upon maximums and minimums in the eligibility process.  Families need to be aware of these limits.

Many nursing homes have case workers that help families through these transitions, and Jobs and Family Services representatives are also very knowledgeable.

Attorneys can be helpful in these situations to provide counsel about the timing of transfers, explain the various rules governing eligibility requirements and assist in the application process, including interviews with Jobs and Family Services representatives.

Attorneys also help prepare deeds and otherwise organize assets for transfer, and can help explain the ramifications of the various options individuals and their families may consider.

Maxwell can be reached at nmaxwell@hhmlaw.com or at (330) 744-1111.