Episode 4: The 2023 Medicaid Disenrollment grace period transcript
Transcript: Shana Siegel, Michelle Scanlon
Welcome to Norris McLaughlin’s Aging Answers a limited podcast series discussing the key topics of elder law planning and long-term care. I’m your host, Shana Siegel, Practice Group, leader of the Elder Law Group, and member at Norris McLaughlin. In this episode, I’m joined by my colleague associate Michelle Scanlon to talk about Medicaid disenrollment and how to fix one’s eligibility.
Hi Shana. Thanks so much for having me. I’m really excited to kind of dive into this topic and, help our listeners understand more. Can you explain how the public health emergency has impacted Medicaid eligibility and terminations?
Yes. This has been really an amazing period that it, you know if you’re not highly involved in this area. A lot of people just had no idea that this was the case. But during the public health emergency, which was announced by the federal government as a result of covid and been extended many, many times over the period since Covid started, there has been a rule that Medicaid cannot terminate anyone, so it’s called continuous eligibility. So, anybody who had Medicaid and then became in would have become ineligible either as a result of inheriting money or otherwise coming into money, or even just other like more technical reasons. For becoming ineligible the Medicaid agencies have not had the ability to terminate them. And as a result, we’ve really seen the Medicaid, roles expand greatly. Because normally, you know, people come on, they come off that’s, you know, normal over a period of time, you’re eligible for a period and then you’re not eligible. Or even if it’s not a matter of eligibility, you just, you don’t do your paperwork in time, whatever, people lose their eligibility. But during this time, only people who have been added, no one has been dropped. So now we’re coming into a period where this is going to be ending soon, and so the federal government has estimated that as many as 15 million people may be dropped from the Medicaid roles. So, it’s a huge issue.
That’s a staggering number for sure. It seems like it was a definitely, a necessary thing during this crisis that we’ve never experienced before, but do we have any idea when it will end, how it will end, how the state’s gonna handle this?
Sure. So originally the concept was that it would continue through the end of the public health emergency, but as there have been so many extensions and the public health emergency has not ended. Congress had voted to decouple, meaning that they would allow Medicaid. They’d say, okay, even though we officially still have a public health emergency, we’re beyond the point where we have to apply this for Medicaid. And so, they stated that starting, In April that they would be able to start looking at eligibility again. Now that information has been shared by the state of New Jersey. However, there is a little caveat that we don’t know a hundred percent for sure because it hasn’t been signed off by CMS, the Federal Medicare Medicaid Agency, but that’s sort of our working assumption, is that normal eligibility is gonna be resuming in April and that terminations would then start in May and New Jersey has stated that they are intending to start looking at redeterminations because what happens is Medicaid, normally they look at, um, eligibility every year and they do a redetermination to say, Hey, are you still eligible? Well, they’ve been doing them, but they haven’t done anything with it, so they’ve just been collecting the data. So now they’re saying, okay, starting in April, we’re gonna have teams that are gonna start looking at all of these eligibility issues and then we’ll start to send out notices that people are gonna be terminated beginning as early as May 1st.
That seems like it’s gonna be a fast-approaching date. So, is there anything beneficiaries should be, you know, doing to ensure they don’t lose this eligibility?
Sure. So first of all, if they know that they have issues, they need to fix those right away. Because obviously there’s a huge backlog. Medicaid is not gonna be able to look at every single application, every single redetermination in the month of April. But they have already stated that they are going to start with the people who they know have issues. So that’s most likely gonna be people who have come into large amounts of money, right? So, if you fit into that category, you certainly are gonna wanna address that. So, if you have the ability to spend down, you purchase a qualified asset, put your funds into a trust. Whatever is available to you in terms of being able to fix your ineligibility and make sure that you are eligible, you should do that. Sometimes it’s little things like, you know, individuals they just got a little sloppy in making sure they were under the Medicaid amount. You know, you’ve got an account that instead of having $2000, it’s crept up. It’s up to, you know, four or $5,000. You wanna spend those funds on appropriate things or do an appropriate spend down, prior to this period. So those are all things that you should be looking at. There may be other people where there’s no way to make them eligible. They just really aren’t eligible anymore. And those individuals really need to look at what their other options are. So, they should be working with an attorney to say, okay, well am I now gonna be on Medicare? Should I get marketplace plan? Should I get, you know, a private coverage? Is there another Medicaid program? I’m not eligible in the current program, but maybe one of the other programs is eligible. As an aside, there’s a Medicaid workability. There’s some changes to those rules. So that may be an opportunity. Maybe you didn’t fit under the old workability, but maybe you will under the new. So there are a lot of things that can kind of look for in that regard.
Yeah. You kind of alluded to a little bit of some, maybe we can highlight some key situations that have happened to people that would make them prompt to look for things I know you mentioned an inheritance. Is there another kind of common situation that would be like a red flag for somebody to pay attention?
Sure. I mean, one of the common things is you had, like if you had a house and that was an allowable resource, but then the house was sold, right? So now you’ve got this, pile of money, well, that’s gonna make you ineligible unless you purchase another house that you’re gonna live in or you’re able to put it into a trust. So that might be one option. There’s also again, a lot of little things. So qualified income trust is a tool that a lot of Medicaid beneficiaries have. If they have income over the normal threshold. They’re very strict rules around a qualified income trust. And it’s very easy to just fall behind and not really follow those exactly perfectly. Well, now’s the time to really make sure that that’s all buttoned up and that you know exactly that the money is going in and out the correct way. You’re following all of the rules so that moving forward, you know, past that April deadline, you’re not gonna have those issues. Same thing with trust. You know, I have clients come to me. They are not necessarily following all of the terms of the trust. Maybe they’ve made some expenditures that are, you know, not exactly correct. That’s okay. But we need to make sure that after that deadline, we’re really following everything, that if it’s a foray trust, a first-party special needs trust, that you’re going to Medicaid for purchases that are over $5,000. That you’re meeting the sole benefit rules, all of the correct rules of the trust that hopefully, the attorney that you worked with has advised you on. If not, you certainly need to talk to somebody, so you know how to do it, and just making sure that you’re not gonna lose Medicaid for any of those reasons. Another thing that I find a lot of people forget about is the personal needs allowance. So people know that they need to stay under $2,000, but they’re looking just at the bank account and it says it’s you know $1,900. But what they forget is that there’s a personal needs allowance at the facility and that has several hundred dollars in it, maybe, or I even had a situation, this was with my own ward, where there was like almost $2,000 in that account, and I had no idea. So when we started to gather to do the redetermination, I was like, oh my goodness, we wouldn’t have been eligible this whole time. So, you know, we were able to spend it down and make sure that we, you know, were under because you have to be under 2000, including all of the included assets. So, you know, that’s a really important one. One of the other things is to get ready besides, you know, making sure to fix everything and know how to doing things the right way moving forward. Just even little things like making sure they have the right contact information because if that redetermination letter goes out to somebody wrong or it goes to an old address, or it goes to a facility you’re not at anymore, you’re not gonna find out, and then you’re gonna end up losing Medicaid for no good reason, just because you didn’t fill out the right paperwork even though you were really eligible. So, make sure that the contact information’s correct, the address is correct. and that, you know, you get everything buttoned up over the next couple of months. You, you have a window now.
Yeah. Take advantage of the window for sure. So, I’m sure this sound very scary to people and you know, sound like, you know, maybe they were receiving a benefit they weren’t really entitled to or something like that. Is there any kind of penalty or fine that anybody should be worried about? State.
No, that’s actually one of the amazing things about this period. So, normally if you have inappropriately received benefits, so if you were on Medicaid and for whatever reason, you weren’t eligible, but you were getting it for a period of months and didn’t know sometimes more than that. Medicaid can come back and they can recover. They can do an estate recovery against you for these inappropriately received benefits. And I’ve had clients, I mean, it could be hundreds of thousands of dollars because Medicaid is paid for care for a long period of time. During this period, if you were receiving benefits inappropriately, Medicaid does not have the right to come back. They cannot request money back. They cannot apply any kind of penalty, they can’t terminate you moving forward for having done that as long as it’s corrected by the deadline, which right now we’re assuming is gonna be April 1st. So, it’s really like a once-in-a-lifetime gift to be able to come forward, fix the errors, not have to worry about, you know, them coming back and saying, you know, well you got this money and you shouldn’t have. I’ve had situations where parents have had to give back money because of inappropriate use of a trust. None of that is gonna apply in this situation. So, it really behooves people to go ahead, dust out, look through the closet, see what’s there, what skeletons are there, deal with them and then fix it moving forward.
You’re right. This is a once-in-a-lifetime kind of opportunity here. Is there anything else we should be highlighting or, you know, pointing out to people regarding this?
Well, I, you know, I think it’s just important for people to think about. You may not even know that you have a problem, so it’s good to really take that look, you know, maybe you didn’t get good advice, you know, did this all on your own and you’re looking at kind of, you know, have I been using this trust right? Have I not, any of that? This is your chance to really learn how to do it right, so you’re not gonna have any problems moving forward. So don’t be afraid, just go ahead and do it. And, you know, if there’s money there, there may be a way to maintain eligibility, if not on this program, then in another one. And, you know, it’s, it’s good to plan early. So, you know, we’ve only got a few months now to kind of get this all cleared up.
Right, and what does it hurt to ask a question at this point, right? You’re not pointing something out that maybe is gonna hurt you. It’s only gonna help you now cause we can fix it or resolve the issue or find another avenue for you. So, Everyone, you know, take a look and see what’s going on and see what needs to be fixed and, uh, get yourself ready for that April 1st deadline.
Great. This has been Norris McLaughlin’s Aging Answers a limited podcast series discussing the important topics revolving around elder law planning and long-term care. I want to thank my colleague Michelle Scanlon, and you the listener for being a part of the conversation. Be sure to tune in next time for a brand-new episode. If you’d like to learn more about our work, please visit our blog page, Norris McLaughlin’s, peace of Mind, or email us at firstname.lastname@example.org.