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Medicaid is referred to as the payor of last resort. Because it is a needs-based program, for the indigent, anyone applying for or receiving Medicaid must seek all potentially available assets that could be used to pay for care before the state pays on your behalf.
For long-term care benefits, a person must make a good-faith effort to gain access to and use any asset that they might have a right or claim to. If they cannot obtain, or do not know how to get the asset, they must seek legal representation and confer with the eligibility worker. If a person does not attempt to gain access to the resource, their application will likely be denied (or case being closed) until such attempt is made.
Examples of assets that must be pursued include Veteran’s Aid & Attendance benefits, any settlement or interest in any settlement, and medical benefits.
There are exceptions to this such as when the Medicaid applicant or recipient would be at risk for current or future domestic violence, if it’s beyond the person’s control, or there are multiple parties involved that are not cooperating. Further, there’s no requirement to borrow money (i.e. personal loan, credit card balance, reverse mortgage, getting money from friends).
Another variation is someone listing a home to be sold. If there is no way to exclude a property (such as if a spouse is living in the home), it must be listed for sale at fair market value. The department determines this based on the existence of the asset, not the net value. For example, if someone owns a vacant plot of land worth $50,000 and has a loan on it for $50,000, the Medicaid office will still require it to be listed for sale at or about $50,000. The seller must accept any reasonable offer.
Pursuing assets may also include what one spouse is legally entitled to in a divorce or what one could claim at the death of the other – statutory spousal share or spousal elective share.
This is a complicated area of the law and the lists and examples above are not exhaustive. Your matter will have unique attributes. Speak to an attorney that specializes in Elder Law before applying for Medicaid and before you sell or dispose of assets. An attorney can help you make an informed decision about spending assets and there may be ways to legally preserve assets.
For more information on pursuit of assets, you can visit https://sharedsystems.dhsoha.state.or.us/caf/arm/A/461-120-0330.htm and https://sharedsystems.dhsoha.state.or.us/DHSForms/Served//de2818.pdf
This article is for informational purposes only and does not constitute legal advice, nor does it establish an attorney-client relationship. For a consultation with an attorney at NW Estate Law, LLC, please visit NWEstateLaw.com, call (503) 543-1121, or email Cody@NWEstateLaw.com to schedule a meeting with Meredith Williamson about your specific case.