Dr. You

This section helps you understand and manage your health insurance, Medicare. and Medicaid, ensuring you have access to care and receive the benefits you are entitled to.

Patient Story – (The story is true; the patient’s and provider’s names have been changed.)

Viola’s Victory Against Anthem Blue Cross. In 2014, Viola, a Sonoma County resident, faced a life-threatening situation when Anthem Blue Cross initially denied coverage for her urgent cancer treatments. After an MRI revealed 20 tumors in her brain and subsequent scans found tumors in her lungs, liver, and bones, Viola was hospitalized immediately.

Despite the severity of her condition, Anthem Blue Cross initially denied coverage, claiming her hospital stay didn’t meet the criteria for medical necessity. This decision was particularly shocking given that Viola and her husband, Paulo, had been Anthem members since 2008 and estimated they had paid $100,000 in premiums. The couple’s persistence and the media attention their case received played a crucial role in the resolution. After a local news report on their situation, Anthem Blue Cross agreed to cover Viola’s treatments, demonstrating the power of advocacy and public awareness in overcoming insurance denials.

Getting Immediate Assistance

If you need immediate help with insurance issues, here are some resources:

Patient Advocate Foundation (PAF): Offers free case management to help with financial, insurance, and employment-related issues for chronic, debilitating, or life-threatening illnesses.

• Phone: 1-800-532-5274
• Email: help@patientadvocate.org
• Website: http://www.patientadvocate.org

Medicare Rights Center: Helps with Medicare and Medicaid issues. 1-800-333-4114 (9:00 AM – 5:00 PM Eastern Time)

Official Medicare Information Line: General information about Medicare. 1-800-633-4227 (available 24/7)

Understanding Health Insurance Basics

Health insurance helps cover medical costs, but you will likely have out-of-pocket expenses. To estimate your total healthcare spending, add your out-of-pocket costs to your monthly premium. Here are a few key health insurance terms you should know:

• Private Health Insurance
  Coverage provided by non-governmental sources, such as employer-sponsored plans, plans purchased directly from insurance companies, or through the Health Insurance Marketplace5.
• Marketplace (Exchange)
  A service (federal or state) where people can shop for and buy private health insurance plans, often with subsidies if they qualify.
• Premium: Your monthly payment for the insurance policy.
• Deductible: The amount you pay each year before your insurance coverage starts paying. For example, if your deductible is $1,000, you pay the first $1000 of covered services. After that, your health insurance starts to pay its share.
• Co-pay: A fixed amount you pay for specific services (e.g., doctor’s visit, prescription) at the time of service.
• Coinsurance: Your share of the costs of covered health service is calculated as a percentage of the allowed amount for the service. This is in addition to your co-pay. For example, after meeting your deductible, you might pay 20% of the cost of a hospital stay, while your insurance pays the remaining 80%.Out-of-Pocket Maximum: The maximum amount you will pay out-of-pocket for covered medical expenses during a benefit year (excluding premiums).
• Out-of-Pocket Maximum
  The most you have to pay for covered services in a plan year. After you reach this amount, your insurance pays 100% for covered services.
• Network
  A group of doctors, hospitals, and other health care providers that contract with your insurance company to provide services at discounted rates. You usually pay less when using providers in your network1.
• Preauthorization (Prior Authorization)
  Approval from your health insurance company that may be required before you get a service, medication, or see a specialist to ensure it’s covered.
• Formulary
  A list of prescription drugs covered by your health plan.
• Provider
  Any person or facility that provides health care services, such as doctors, nurses, hospitals, and clinics.
• Explanation of Benefits (EOB)
  A statement from your insurance company that shows what was billed, what they paid, and what you may owe.
• Medicare is a federal health insurance program for people age 65 and older, and for certain younger people with disabilities or specific medical conditions. It has several parts:
  • Part A: Hospital insurance (covers inpatient hospital stays, skilled nursing care, hospice, and some home health care).
  • Part B: Medical insurance (covers doctor visits, outpatient care, preventive services, and some home health care).
  • Part C: Medicare Advantage (offered by private companies, combines Parts A and B, often includes Part D and extra benefits).
  • Part D: Prescription drug coverage.
• Medigap (Medicare Supplement Insurance)
  Private insurance that helps pay some costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles.
• Medicaid is a joint federal and state program that provides health coverage for people with low incomes, including children, pregnant women, elderly adults, and people with disabilities. Each state runs its Medicaid program with federal guidelines, so benefits and eligibility can vary.
• Dual Eligible
  A person who qualifies for both Medicare and Medicaid.

Additional Useful Terms

• Coordination of Benefits
  A process used when you have more than one health insurance plan to determine which plan pays first and to avoid duplicate payments1.
• TRICARE
  A health care program for military service members, retirees, and their families.
• Public Health Insurance
  Insurance provided by government programs such as Medicare, Medicaid, CHIP (Children’s Health Insurance Program), and others

Choosing a Health Insurance Plan

Follow these steps to select a plan that fits your needs:

Step 1: Understand Your Policy Details

For most insurance plans, the important rules fall into the following groups:

Doctors and Hospitals

Insurance providers enter into contracts with specific doctors, hospitals, and healthcare providers to provide care for their plan members. Your plan will likely refer to these groups as providers. In return, doctors, hospitals, and providers agree to specific reimbursement rates for the services they provide and to adhere to the plan’s terms and conditions. This group of providers is often referred to as the plan’s network.

Tip: Your insurance company may not cover the cost of visiting a provider who is not in its network, or it may pay significantly less. You are responsible for the part of the bill that the plan does not pay.

Even if your doctor is part of the plan’s network, they may still prefer to send patients to a hospital that is not part of the network. If that happens, ask if your doctor can send you to a hospital in the network. If that is not possible, you can ask the insurance company if it will approve the use of the out-of-network hospital. If no other arrangements can be made, you may need to choose a different doctor who has privileges at a hospital within your network. Your insurance company’s customer service can help you find qualified doctors who practice at in-network hospitals and treatment facilities.

Rules for Seeing Specialists

Many managed care plans will not cover the cost of seeing a specialist unless your primary care physician determines it is medically necessary and your insurance company agrees. If you see a specialist without a referral and prior authorization, you may be required to pay more for the care you receive.

Rules for Getting Expensive Services

If your doctor decides that you need to go to the hospital, have surgery, or have certain tests, your insurance company may refuse to pay for it unless it can preauthorize the treatment (approve it beforehand).

Medicines

Almost every managed care plan has a drug formulary. A formulary is a list of prescription medicines that your health plan has approved. If a drug is not on the formulary, you will probably have to pay more for it. Your insurance company can give you a list of drugs that are on the formulary. If necessary, show the list to your doctor when they write you a prescription.

Estimate your healthcare expenses for the upcoming year, including prescriptions, appointments, and other related costs. Compare high-deductible plans with lower monthly premiums to those with lower deductibles and higher premiums to determine which is more cost-effective for your situation. Consider the expenses for everyone covered by the policy.

Tip: If you choose a high-deductible plan, explore using a Health Savings Account (HSA) to set aside pre-tax money for medical expenses. Keep detailed records of all HSA transactions. For more information on HSAs, visit the U.S. Department of the Treasury website.

Step 2: Contact the insurance provider to clarify any aspects of the plan that are unclear or confusing.

• Inquire about the monthly premium, deductible, co-insurance, co-pays, and a detailed list of covered benefits.
• Review the Summary of your Benefits and Coverage (SBC) document, which provides a standardized overview of your health plan’s key features.
• Calculate Expected Annual Costs. Determine the costs of using in-network doctors and hospitals versus out-of-network providers, based on the services you anticipate needing. Verify whether deductibles, co-payments, and pharmacy expenses are applied toward the out-of-pocket maximum.
• Get your questions answered by contacting the insurance company to clarify any remaining questions or concerns before making a final decision.
• Compare Plan Performance by researching how well the plans you’re considering perform. Consult healthcare organizations like the National Committee for Quality Assurance (NCQA) and visit websites like http://www.healthchoices.org to see ratings of health plans in your area.

Step 3: Working Effectively with Your Insurance Company

You are responsible for understanding the benefits of your policy. If anything is unclear, contact your insurance representative or employer’s benefits administrator for clarification.

Step 4: Ensure You Receive Your Benefits

• Keep Accurate Contact Information: Ensure you have the correct phone number, email, and mailing address for your insurance company.
• Request Plan Documents: Request an up-to-date copy of your plan and its summary to understand how your plan works, its benefits, and the process of filing a claim.
• Communicate Clearly and Calmly: Be confident and courteous when speaking with customer service representatives. They are there to assist you. Clearly state your questions or concerns. If you encounter resistance, politely restate your request.
• Understand and Follow the Plan’s Procedures: Adhere to your health plan’s guidelines for requesting prior authorization, submitting claims, or filing appeals to avoid delays or denials.
• Escalate When Necessary: If you are unsatisfied with the customer service representative’s handling of your issue, ask to speak with a supervisor, manager, or director of customer service or member services.
• Document Everything: Follow up in writing or via email after phone conversations, summarizing key details such as dates, names of representatives, and information provided. Include your name, policy number, and any other relevant identification information.
• Seek Additional Support: Do not hesitate to ask for help from your employer’s human resources department and your healthcare provider. Your employer’s support can influence coverage decisions. Your doctor can advocate for the medical necessity of requested products or services.
• Advocate for Yourself: If needed, contact your state’s health insurance commissioner and/or your state and federally elected representatives for assistance. Inform them of your health needs and issues with your health plan. Notify your insurance company that you have sought help from these agencies.
• Stay persistent: The more you make your needs known, the more likely you will get those needs met!

Managing Insurance After a Diagnosis

After discussing treatment options with your doctor, determine which procedures require co-payments or co-insurance and their amounts. If you purchase your insurance, ensure timely premium payments.

Tips:

• Request a Case Manager: Ask to speak with a dedicated case manager each time you contact your insurance company for consistency and personalized assistance.
• Document All Interactions: Keep detailed notes of every call, including the date, representative’s name, and any instructions given. Organize records in file folders or digitally.

Understanding Doctors, Hospitals, and Specialists

In-Network Providers: Insurance providers contract with specific doctors, hospitals, and providers (called “in-network providers”) who agree to accept certain reimbursement rates and follow the plan’s rules.

Out-of-Network Providers: Your insurance company may not cover out-of-network providers or may pay significantly less, leaving you responsible for the remaining bill.

Hospital Choice: If your doctor recommends a hospital outside your network, ask if they can refer you to an in-network hospital. If that is not possible, request pre-approval from your insurance company for the out-of-network hospital.

Specialist Referrals: Many managed care plans, especially HMOs, require a referral from your primary care physician to see a specialist. Seeing a specialist without a referral may result in higher costs.

Navigating Medicines and Formularies

Drug Formulary: Most managed care plans have a drug formulary, which is a list of approved prescription medicines. If a drug is not on the formulary, you will likely pay more.

Consult the Formulary: Obtain the formulary list from your insurance company and share it with your doctor when they prescribe medication.

Organizing Your Records

Maintain organized records of all paperwork, including bills, claims, payments, phone call logs, and correspondence with doctors, employers, and the insurance company. Include dates, names, and brief notes for each interaction. If you need to submit bills, do so promptly. If you are recovering from treatment, ask a loved one or friend to help you.

Handling Claims Effectively

Keep detailed records of all submitted claims, including submission dates, status (pending or paid), and payment details, and maintain copies of all paperwork related to your treatment, diagnosis, and insurance claims, such as:

• Requests for sick leave
• Receipts
• Letters from your doctor, employer, and insurance company
• The letters you write to your doctor, employer, and insurance company.
• Bills
• Summaries of phone calls with your insurance company (date, time, person’s name)

Managing the Costs of Care

Determine co-payment and co-insurance amounts for procedures you need.
Understand the requirements for paying for treatment. Does your insurance company make the first payment? Or do you pay the bill and then get reimbursed? If you are required to submit bills to your insurance company, try to send them in as soon as you get them. If you are recovering from treatment, consider asking a loved one or friend for help.

Fighting Insurance Denials

Insurance companies often deny claims, hoping consumers will not appeal. By advocating for yourself, you demonstrate that you will pursue the coverage to which you are entitled.

Identifying a Denial

Review your insurance company’s Explanation of Benefits (EOB) to see what was paid and what you owe. A $0 payment in the insurance company portion may indicate a denial. The EOB should include “Reason Codes” explaining the lack of payment. The insurance company may also send a denial letter detailing its reasons.

Steps to Take When a Claim Is Denied

1. Review Your Plan: Verify that the benefit you are seeking is covered under your plan. Note the specific policy supporting your claim.
2. Gather Information: Collect all relevant information: the original bill (with date(s) of service and provider’s name), your EOB, your insurance card, and any denial letter.
3. Contact the Insurance Company: Call the number on the denial letter or the customer service number. The denial may be due to missing information that can be easily provided to reprocess the claim.
4. Address Potential Miscoding: Ask your doctor to review the coding and resubmit the request with more specific medical justification if miscoding is suspected.
5. Understand the Reason for Denial and Appeal Process: If the denial is not due to missing information or miscoding, determine the exact reason for the denial and how to file an appeal.
6. Seek Guidance for Appealing: Ask the insurance provider’s representative for suggestions or guidelines for appealing the denial.
7. Request an Appeal Form: If needed, request an appeal form via mail or email.
8. If necessary, get your doctor involved. Their office should have staff who can help explain why the procedure or care is needed, or medically necessary.
9. Get help wording your appeals so that they mention medical problems and do not include words that automatically trigger denials. Talk to the person who handles insurance claims at your doctor’s office. This person may be able to help you with the appeal process and provide any documentation your insurance company requires.
10. If your health insurance company denies your claim a second time, in most cases, you have the right to an external review of a claim denied by an independent third party.

Other Considerations

Preauthorization: For expensive services like hospital stays, surgeries, or certain tests, your insurance company may require preauthorization (approval beforehand).

Second Opinions: If your insurance company denies a claim based on medical necessity, consider getting a second opinion from another doctor.

State Insurance Department: Contact your state’s insurance department for assistance with appeals or complaints. A directory of state insurance departments can be found on the National Association of Insurance Commissioners (NAIC) website.

By following these steps and staying informed, you can effectively navigate the complexities of health insurance and ensure you receive the coverage you deserve.

What is Medicare?

Medicare is a federal health insurance program primarily for individuals aged 65 or older, as well as some younger people with disabilities or certain medical conditions. You can find the specific eligibility requirements on the official Medicare website: http://www.medicare.gov. Some individuals qualify for both Medicare and Medicaid, a condition known as “dual eligibility.”

Important: Medicare plans and coverage are subject to change. Always check with your local Medicare office or the Medicare website (www.medicare.gov) for the most up-to-date information regarding your specific needs and potential costs.

Medicare has four parts. Parts A, B, C, and D.

Part A (Hospital Insurance) covers a range of services primarily related to inpatient care. It includes:

Inpatient Hospital Care: Covers hospital stays when admitted on a doctor’s orders. Includes semi-private rooms, meals, general nursing, and drugs for inpatient treatments. Applies to various facilities such as acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals. Psychiatric hospital stays are also covered but limited to 190 days over a lifetime.

Skilled Nursing Facility (SNF) Care: Covers short-term stays in a Medicare-certified skilled nursing facility after a qualifying hospital stay of at least three days. Includes semi-private rooms, meals, skilled nursing care, physical and occupational therapy, medications, and medical supplies. Coverage is limited to 100 days per benefit period: the first 20 days are fully covered, while days 21–100 require a daily copayment.

Hospice Care: Includes end-of-life care for terminally ill patients with a life expectancy of six months or less. Covers pain management, symptom relief, grief counseling for families, and respite care for caregivers. Hospice services must be coordinated through a Medicare-approved provider.

Home Health Services: Covers part-time or intermittent skilled nursing care, physical therapy, occupational therapy, speech-language pathology services, and medical social services for homebound individuals. Does not cover 24-hour care at home, meal delivery, or personal care (e.g., bathing or dressing) when these are the only services needed.

Medicare Part A does not cover long-term care (custodial care), private-duty nursing, or non-medical services, such as housekeeping. Most people qualify for premium-free Part A if they or their spouse worked and paid Medicare taxes for at least 10 years

Part B (Medical Insurance)

Helps cover a wide range of medically necessary and preventive services, including:

• Doctor’s visits: Includes primary care and specialists.
• Outpatient care: Covers services received without requiring hospital admission, such as observation services, same-day surgeries, and emergency room visits.
• Diagnostic tests: Includes X-rays, MRIs, CT scans, and other imaging.
• Mental health services: Covers outpatient mental health care, including partial hospitalization programs.
• Durable medical equipment (DME): Includes wheelchairs, walkers, oxygen equipment, and other medically necessary devices.
• Ambulance services: Covers emergency transportation when other transportation could endanger your health.
• Home health care: Provides part-time skilled nursing care, physical therapy, and other services for homebound individuals.

Preventive Services: Part B emphasizes preventive care to detect or prevent illnesses early:

• Screenings: Includes cancer screenings (e.g., mammograms, colonoscopies), cardiovascular disease screenings, diabetes screenings, and more.
• Vaccinations: Covers flu shots, pneumonia vaccines, hepatitis B vaccines, and others.
• Annual wellness visit: Includes a review of your medical history, risk assessments, and a personalized prevention plan.
• Counseling: Offers services like smoking cessation counseling and nutritional therapy for certain conditions.

Outpatient Prescription Drugs: Part B covers a limited number of outpatient drugs that are typically not self-administered:

• Injectable or infused medications administered in a clinical setting (e.g., chemotherapy drugs).
• Certain drugs used with durable medical equipment (e.g., nebulizers)

Costs: Under Original Medicare Part B

• Beneficiaries usually pay 20% of the Medicare-approved amount for most covered services after meeting the annual deductible.
• Preventive services are often covered at 100% when provided by a participating provider.

Medicare Part B is essential for outpatient and preventive care needs that Part A does not cover.

Part C (Medicare Advantage) is an alternative to Original Medicare (Parts A and B). It allows you to choose private health insurance that contracts with Medicare to provide comprehensive coverage, often including additional benefits not included in Parts A and B. Here’s what it covers:

Medicare Part C plans must include:

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, and hospice care.
• Part B (Medical Insurance): Covers doctor visits, outpatient care, preventive services, and durable medical equipment.

Many Medicare Advantage plans offer extra coverage, such as:

• Prescription drugs (like Part D).
• Routine dental care, including exams, cleanings, X-rays, and dentures.
• Vision care, such as eye exams and corrective lenses.
• Hearing care, including tests and hearing aids.
• Fitness programs, such as gym memberships or discounts.
• Telehealth services and virtual provider visits.

Other Features

Plans often have a yearly limit on out-of-pocket costs for Part A and Part B services, providing financial protection. Some plans may include transportation to medical appointments or meal delivery services. Medicare Advantage plans vary by provider, so coverage details and costs depend on the specific plan chosen

Part D (Prescription Drug Coverage)

Medicare Part D helps cover the cost of prescription drugs. It is available through private insurance companies approved by Medicare. Here’s what it covers:

• Prescription Drugs: This covers both generic and brand-name medications included in a plan’s formulary (list of covered drugs). Plans must cover drugs in all therapeutic categories, including at least two drugs per category. Includes drugs in six “protected classes” that are essential for treating serious conditions: immunosuppressants, antidepressants, antipsychotics, anticonvulsants, antiretrovirals, and antineoplastics.
• Vaccines: Covers commercially available vaccines not already covered under Medicare Part B (e.g., shingles vaccine).
• Plan-Specific Formularies: Each Part D plan has a unique formulary, which may include cost-sharing tiers for different drugs. Beneficiaries should review the formulary to ensure their medications are covered.

Phases of Coverage: Part D plans have cost-sharing phases:

• Deductible Phase: Beneficiaries pay out-of-pocket until they meet the plan’s deductible.
• Initial Coverage Phase: The plan pays some drug costs, and beneficiaries pay copayments or coinsurance.
• Catastrophic Coverage: Beneficiaries pay significantly reduced medication costs after reaching the out-of-pocket maximum.

Part D can be added to Original Medicare or included as part of a Medicare Advantage plan with drug coverage (MA-PD). Costs and coverage details vary by plan.

Tip: When you enroll in Medicare, you typically get Part A automatically.

Monthly Premium: Most people do not pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working for at least 10 years (40 quarters). If you did not pay Medicare taxes for enough years, you might have a monthly premium.

As of 2025, the standard Part A premium is $505 for people who paid Medicare taxes for less than 30 quarters. The premium is $285 per month for people who paid Medicare taxes for 30-39 quarters (7.5 to 9.75 years).

Important Considerations

Network Restrictions: Many Medicare Advantage plans have networks of doctors and hospitals you must use to get the lowest costs.

Premiums and Cost-Sharing: You will likely pay a monthly premium for your Medicare Advantage plan, in addition to your Part B premium. You may also have co-payments, coinsurance, and deductibles.

Medigap Plans

Medigap policies, also called Medicare Supplement Insurance, are sold by private insurance companies to help pay some of the out-of-pocket costs that Original Medicare (Parts A and B) does not cover.

What They Cover: Medigap policies can help with:

• Co-payments
• Coinsurance
• Deductibles

Standardized Plans: Medigap plans are standardized, meaning that plans with the same letter (e.g., Plan G) offer the same basic benefits, regardless of the insurance company.

Important Considerations

• You must have Original Medicare (Parts A and B) to buy a Medigap policy.
• A Medigap policy covers only one person. If you and your spouse both want Medigap coverage, you must each buy a separate policy.
• Medigap policies sold after January 1, 2006, typically do not include prescription drug coverage. If you want drug coverage, you will need to enroll in a separate Medicare Part D plan.
• You cannot have both a Medigap policy and a Medicare Advantage plan at the same time.
• It is important to compare Medigap policies carefully, as costs and benefits can vary. Make sure the policy is identified as “Medicare Supplement Insurance.”

Joining Medicare

“Medicare and You” Handbook: The official Medicare handbook, “Medicare & You,” is a valuable resource for understanding your benefits and options. You can find it on the Medicare website: http://www.medicare.gov/publications

MyMedicare.gov: You can access personalized information about your Medicare benefits and services on the MyMedicare.gov website: http://www.mymedicare.gov/

Enrollment Periods: You can typically enroll in or make changes to your Medicare coverage during the annual enrollment period (October 15 – December 7).

Where to Get Help: Contact your doctor, State Health Department, the Department on Aging, senior centers, or other healthcare or senior organizations for assistance.

What is Medicaid?

Medicaid is a joint federal and state government program that provides healthcare coverage to certain low-income individuals and families. Medicaid is administered by each state, and eligibility requirements and covered services vary from state to state.

Who is Eligible? Generally, Medicaid covers:

• Low-income families with children
• Pregnant women
• Aged, blind, and disabled individuals
• Other individuals meeting specific income and resource requirements.

Eligibility

Medicaid eligibility is based on income and assets. States have different rules for counting income and resources. Some states have “medically needy” programs that allow individuals with high medical expenses to become eligible for Medicaid even if their income or assets exceed the standard limits. Children may be eligible for Medicaid even if their parents are not.

People who are eligible for Medicaid may also receive assistance from other federal programs, such as Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI).

To help you see if you may be eligible for a variety of federal, state, and local programs, you can use the website called BenefitsCheckUp at http://www.benefitscheckup.org.

How to Apply

Apply for Medicaid in your state to find out if you are eligible. For the most part, you should apply for Medicaid if your income is low and you match one of the eligibility groups in your state, and you or your family needs healthcare. This will allow a qualified caseworker in your state to evaluate your situation.

Important Note: Medicaid rules and eligibility requirements can be complex and vary by state. Contact your state’s Medicaid agency for the most accurate and up-to-date information.

Working with a Medicaid Case Manager

A good case manager can be a valuable resource in navigating the complexities of the Medicaid system and ensuring access to appropriate services. If you are considering hiring a case manager for yourself, a family member, or a loved one who is a Medicaid recipient, it is important to ask the right questions during the interview process.

Here are the questions you may want to ask when interviewing potential case managers:

• Experience: How long have you been a case manager? What are your qualifications and certifications?
• Caseload: How many clients are on your caseload? A smaller caseload may indicate more personalized attention.
• Location: Where do you live and work? A local case manager may be more familiar with community resources.
• Communication: How often do you contact clients and their families? How do you prefer to communicate (phone, email, in-person)? How do you communicate with service providers?
• Care Planning: Do you develop individualized care plans for your clients? How often do you review and update the care plan?
• Availability: What is the best way to contact you? What is your procedure for handling emergencies outside of regular business hours?
• Fees: How much do you charge for your services, and how are payments structured? (Note: This may vary depending on how the case manager is employed – some may be directly employed by Medicaid or an associated organization.)
• References: Can you provide references from current or former clients?

Medicaid Planning

Medicaid planning involves legally rearranging finances to help individuals become eligible for Medicaid benefits while protecting assets. These strategies can be complex, so consulting with an experienced elder law attorney is highly recommended. You can find qualified Elder Law Attorneys in your area through the National Academy of Elder Law Attorneys (NAELA) website: http://www.naela.org.

Medicaid eligibility rules and planning strategies vary significantly by state and are subject to change. The following information is for general guidance only and not a substitute for professional legal advice.

Medicaid planning aims to:

• Protect assets from being used to pay for long-term care costs.
• Preserve assets for the benefit of a healthy spouse and/or heirs.
• Ensure access to necessary medical care.

Key Concepts in Medicaid Planning

Countable Assets: These are assets that are considered when determining Medicaid eligibility. The total value of your countable assets and income must fall below certain limits to qualify.

Exempt Assets: These assets are not counted towards Medicaid eligibility limits. Each state has a list of exempt assets, which typically includes:

• Your primary residence (subject to certain equity limits, which vary by state)
• Personal belongings and household goods
• One vehicle (subject to value limits)
• Prepaid burial arrangements and certain life insurance policies.
• Retirement accounts (may or may not be fully exempt, depending on the state and type of account)

Asset Conversion: This strategy involves converting countable assets into exempt assets. For example, using savings to pay off a mortgage, making home improvements, or purchasing a prepaid burial plan.

Irrevocable Trusts: Placing assets into an irrevocable trust can protect them from being counted towards Medicaid eligibility. However, there are strict rules and potential penalties associated with transferring assets to a trust, including look-back periods. It is extremely important to consult an experienced elder law attorney to set this up appropriately, considering varying laws from state to state and year to year.

Annuities: A healthy spouse can use countable assets to purchase a single premium immediate annuity, converting a lump sum into a stream of income. This can help protect assets and ensure the healthy spouse has sufficient funds to live on.

Medicaid Planning Strategies

• Paying off the Mortgage: Using countable funds to eliminate or reduce the mortgage on your home.
• Prepaying Burial Arrangements: Setting aside funds for funeral expenses through a designated burial trust or contract.
• Making Home Improvements: Investing in necessary repairs or modifications to make your home more accessible and safer.
• Purchasing a Vehicle: Utilizing countable assets to acquire a new or reliable vehicle.
• Establishing an Irrevocable Trust: Transferring assets into an irrevocable trust to protect them for the benefit of future beneficiaries.
• Spousal Annuities: A healthy spouse purchases an annuity to convert assets into an income stream.

Medicaid Planning Risks and Considerations

Look-Back Period: Medicaid agencies review financial records for a specified period (the “look-back period”) preceding the application date. Transfers of countable assets made during this period for less than fair market value can result in a penalty period of ineligibility. The look-back period is generally 60 months for transfers to irrevocable trusts and 36 months for other asset transfers; however, consult an attorney or caseworker for confirmation regarding the specific type of transaction.

Estate Recovery: After a Medicaid recipient passes away, the state may seek to recover the cost of benefits paid from their estate. This can include placing a lien on the recipient’s home.

Transfer Penalties: Giving away or selling assets for less than their fair market value can trigger a penalty period during which you will be ineligible for Medicaid. The penalty period is determined by dividing the value of the transferred assets by the average monthly cost of nursing home care in your state.

Changing Laws: Medicaid laws and regulations are subject to change; therefore, it is essential to stay informed and seek expert advice.

Seeking Professional Guidance

Medicaid planning is a complex area of law, and it is essential to consult with an experienced elder law attorney who is familiar with the specific rules in your state. An attorney can help you develop a customized plan that protects your assets while ensuring eligibility for Medicaid benefits. Remember to verify all information with official sources, such as your state’s Medicaid agency and the Social Security Administration, as rules and regulations are subject to change.