The Knowns and Unknowns of Medicaid Application

Monday, June 12, 2017

knownunknown“…[A]s we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know.”
     - Former Secretary of Defense Donald Rumsfeld

One of the most difficult conversations with our elderly clients and their family members involves explaining how difficult and mysterious applying for and obtaining Medicaid coverage can be if they do so without experienced, knowledgeable counsel. Secretary Rumsfeld’s now famous (or infamous) quote comes to mind as I try to explain what it is that our firm brings to a Medicaid application.

First, the known knowns:
We know the rules. We know when and how a home will be exempt. We know how much cash a community spouse can keep. We know how to mitigate an improper transfer. We know when to apply and how to spend down. We know how to calculate a community spouse’s income allowance and we know whether the spouse in a nursing facility needs a Qualifying Income Trust. We know if a power of attorney provides authority to transfer funds into a pooled trust. We know how to avoid or negotiate estate recovery. We know which transfers are permissible. We know how and when to use special needs trusts. We know if a retirement account can be preserved for the community spouse. We know if a guardianship is necessary. We know that the nursing home won’t take your house, and we know that you will never pay Medicaid for services.

Next, the known unknowns:
We know that we don’t know if the application will be assigned to a caseworker that has just been trained and has never seen a case like yours before. We know that it is unknown whether your mother could remain in the home under your care for two years, potentially allowing for a transfer of the home to you without a penalty. We know that we cannot know how long your loved one will live in a nursing facility. The list of known unknowns is shorter than the first list. But knowing what we don’t know allows us to plan based on a variety of contingencies and potential outcomes.

Last, the unknown unknowns:
Usually, it is our clients who don’t know what they don’t know. Depending on what a nursing home employee may have misstated to you about Medicaid or what you may have read on the internet, your list of unknown unknowns could be the longest list of all.

But it is our job to make sure we have ZERO unknown unknowns. That is to say, it is our job to know what we know and we know what we don’t know. Period.

It is our custom to have a final meeting with our clients after a Medicaid application has been approved, and this is quite often the time the client finally and fully understands what I explained to them in our initial meeting. During this meeting and throughout the Medicaid application process, our attorneys and staff provide our clients and their families with peace of mind knowing that we know what we know.

- Posted by Attorney David Banas

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