THE MOST MISUNDERSTOOD RULE IN MEDICAID

THE MOST MISUNDERSTOOD RULE IN MEDICAID

By: Craig Riffel, Attorney and CPA

Clients and their advisors are continually being misled or misinformed about Medicaid’s 3-year rule. Because very few attorneys regularly practice in this area of law, most do not understand the 3-year rule which results in them perpetuating the confusion. As a result, the 3-year rule is the most misunderstood rule in Medicaid planning.

Many clients and their advisors mistakenly believe the clients must have done their planning 3 years in advance. This statement is absolutely false. I hear this rule misquoted all of the time because most attorneys, accountants and other advisors do not understand Medicaid’s 3-year rule. They will commonly make the mistake of telling an individual that the individual must have done Medicaid planning either 3 years before the individual enters the nursing home or 3 years before filing a Medicaid application. THIS IS NOT THE RULE AND IS NOT TRUE. Most people have heard about the 3 year look-back rule which provides that all transactions occurring 3 years prior to the date the Medicaid application is filed will be reviewed. This rule does not mean individuals must do their planning 3 years before entering the nursing home or 3 years before applying for Medicaid. In fact, most Medicaid planning is done when the individual is entering the nursing home within a few days or a few weeks of the planning, or already in the nursing home. It is usually done within this 3 year period and very rarely depends upon assets being transferred 3 years prior to the individual entering the nursing home. Individuals are still eligible for benefits and generally qualify for benefits even if they:

(1) Have gifted property 3 years before entering the nursing home or 3 years before applying for Medicaid;
(2) Still own property and have failed to give it away 3 years before entering the nursing home, or 3 years before applying for Medicaid; or
(3) Have failed to do any Medicaid planning at least 3 years prior to entering the nursing home, or 3 years prior to applying for Medicaid.
Through proper planning, individuals can protect a substantial amount of assets even on the eve of entering the nursing home or applying for benefits.

Several of the most commonly asked questions regarding nursing home or in-home health care planning can be found on my Firm’s website atwww.westoklaw.com. For a Medicaid consultant near you go to my Firm’s website at www.westoklaw.com and click on “Medicaid Consultants Near You.” Any additional questions or inquiries can be directed to Craig Riffel at Mitchel, Gaston, Riffel, & Riffel, P.L.L.C. at 3517 W Owen K. Garriot Road, Enid, Oklahoma, 73703; (580) 234-8447, or at his email address of craig@westoklaw.com. Mitchel, Gaston, Riffel & Riffel, P.L.L.C. has offices in Enid, Fairview and Woodward, Oklahoma.