Medicaid, a federal and state program that provides health coverage benefits to many people, including senior citizens, covers basic health care costs and long-term care – care provided in nursing homes and assisted living facilities.
Many seniors rely on their Medicaid benefits for their long-term care. The prospect of having a Medicaid application denied can induce anxiety, as the loss of these benefits can be financially devastating.
Senior Planning Services, experts in the Medicaid process, detail ten Medicaid denial reasons your loved one’s application may be turned down and steps to take to ensure it doesn’t happen.
1. Incomplete Application or Documents
If you’ve ever applied for anything through a government agency, you’ve heard the refrain, ‘Make sure to bring all your paperwork!’. That’s certainly true for the Medicaid application, which requires the submission of extensive documentation.
Aside from providing proof of age, identity, marital status and citizenship, there are numerous financial documents necessary, including:
- Bank statements
- Investment account statements
- Life insurance policy information
- Asset and other property information
- Tax returns
- Retirement income information
These required documents for the Medicaid application are used to determine financial eligibility and ensure you are not denied Medicaid. They are an essential part of the process; don’t leave home without them!
For a full checklist of required documentation, please refer to our downloadable Medicaid document checklist.
2. Failing To Respond In A Timely Manner
Once the application is filed, make sure to be on top of your mailbox. When Medicaid has questions, they send a letter requiring a response within a specific deadline, which always begins from when they send it, not from when you receive it. Sometimes Medicaid will permit extensions if you miss the deadline, but that will delay receiving benefits, so best to avoid it if you can.
3. Excessive Resources
A component of the Medicaid application includes listing all your assets. Some assets are exempt from this list; for instance, if you live with others, your home and one vehicle per home are exempt. It’s important to understand what your state Medicaid program considers “countable” resources before applying. For example, a large inheritance or investment are non-exempt resources and may disqualify a senior.
4. Filing Too Early
Timing is critical when it comes to Medicaid applications. If you apply too early, you may be denied Medicaid. For instance, if you attempt to qualify before you have spent down your assets, you may not be financially eligible for Medicaid. Medicaid eligibility is based on your financial status at the time you submitted your application, so even if your circumstances change shortly after applying, it won’t make a difference to the reason for your Medicaid denial.
5. Filing Too Late
On the flip side, waiting too long can also result in lost coverage. Medicaid only provides three months of retroactive coverage from the month you file the application, provided you were eligible during those three months. Any costs incurred prior to that date, no matter how legitimate or costly, may not be covered.
6. Medicaid Penalty Periods
If you plan on applying for Medicaid for a senior within the next five years, make sure that whatever they do, they do not gift money to family or friends during that time. Medicaid does not allow the transfer of assets for less than the fair market value during the 5 years prior to eligibility. Should a transfer of assets be uncovered, a penalty will be imposed. This penalty is a span of time of ineligibility for Medicaid benefits correlating to the amount of monies that were gifted.
7. Income Trust Isn’t Properly Funded
In certain states, often referred to as income cap states, a senior whose income exceeds the eligibility limit needs to establish a qualified income trust (QIT) account to qualify for long-term care Medicaid. All money over the income cap must be redirected through the trust, otherwise, the application may be denied.
Additionally, setting up the fund isn’t enough. Another common Medicaid denial reason is not remaining compliant by properly funding the trust each month. If the trust is underfunded, inconsistently funded, or not used at all, Medicaid will treat the excess income as countable, resulting in a denial of benefits.
8. Not Clinically Eligible
To be deemed clinically eligible, the individual Medicaid applicant must need help with at least three ADLs (activities of daily living – basic, routine activities that people generally perform without assistance. These include eating, dressing, bathing, toileting, walking and continence) and clinically requires assistance in the community/an assisted living facility.
If the applicant doesn’t need assistance with a minimum of three ADLs, you may not qualify.
9. Not Financially Eligible
An applicant must meet the Medicaid resource and income limits and guidelines set by their state. Resources and income above the state limits may disqualify the applicant.
Medicaid state guidelines may change from year to year depending on legislation, so it is important to regularly check updated limits or engage the services of a Medicaid planning specialist who can guide you with this.
10. Medicaid Erred
Even if you’ve followed the Medicaid guidelines to the tee, it’s still possible that Medicaid goofed. If, based on your research, you feel the application was wrongly denied, by all means, contest it. Once you can prove it was Medicaid’s mistake, your loved one will receive their benefits.
What to Do When Denied Medicaid: 3 Ways to Challenge the Decision
If you have been denied Medicaid, you can take comfort in the fact that you are not an anomaly. An OIG report found that as many as one in eight Medicaid applications are denied. However, there are steps you can take to challenge the decision. Knowing the reason why you were denied Medicaid is the first step in working out how to approach the situation. Understanding what to do when Medicaid is denied is the next step and can help you gain the coverage you or your loved one needs.
Depending on the reason for the denied Medicaid, there are three main ways to respond:
- 1. Request a reversal
- 2. Re-apply
- 3. Appeal the decision
1. Request a Reversal
If you’ve been denied Medicaid due to missing documentation or an error in the application, the quickest way forward is to request a reversal from your caseworker. As long as you can quickly supply accurate supporting paperwork, a reversal request could result in a fast approval without having to re-apply.
2. Re-Apply
If your situation has changed or the Medicaid denial reason was due to poor timing or eligibility issues, then re-applying is the way to go. Maybe you filed for your elderly family member too early or didn’t set up a QIT. If you were denied Medicaid and can’t afford insurance, re-applying at the correct time or with the appropriate financial requirements can make all the difference.
3. Appeal the Decision
When the denial is due to a disputed issue or you believe a mistake was made, you have the right to file an appeal.
How to appeal a Medicaid denial:
- Submit a request for a hearing within your state’s deadline, usually 30-90 days after receiving the denial.
- Prepare supporting evidence, including financial records and medical documentation.
Appealing a Medicaid denial is the more time-consuming route, but is essential for applicants who meet the eligibility criteria and want their case independently reviewed.
From Medicaid Denial to Approval with Senior Planning Services
Applying for Medicaid can be complicated and often stressful. Understanding common Medicaid denial reasons and working out why your application was turned down, is the first step in strategizing what to do when denied Medicaid. At Senior Planning Services, our experts have helped thousands of seniors simplify the Medicaid application process and gain the coverage they need. Contact us to discover how we can minimize the stress and optimize your chances of eligibility.
FAQs About Medicaid Denial:
If you get denied for Medicaid, can you apply again?
Yes, if you get denied for Medicaid, you can re-apply. In fact, often people re-apply for Medicaid after fixing issues that led to the denial, such as missing documents, incorrect income information, or changes in financial or medical status. Make sure to carefully review the denial letter to understand the reason, so your next application is stronger.
How soon can you apply for Medicaid after being denied?
You can apply for Medicaid again after being denied, as soon as your circumstances change or you’ve addressed the issue that caused the denial. There’s no mandatory waiting period, so if you were denied due to missing paperwork or temporary income spikes, you can re-apply immediately after resolving those issues.
How often can you apply for Medicaid after being denied?
There’s no limit to how often you can apply for Medicaid after being denied. You can submit a new application each time your eligibility changes or you have new information to support your case. However, it’s important to be thorough and accurate with each submission to avoid repeated denials.
Why am I not qualified for senior Medicaid?
You might not qualify for senior Medicaid if your income or assets exceed the program’s limits, or if you don’t meet other requirements such as citizenship status or level of medical need. See above for more common Medicaid denial reasons. Medicaid eligibility rules vary by state, so it’s helpful to consult with a local Medicaid office or senior planning expert to understand your specific situation.
What to do if Medicaid is denied for a nursing home?
If Medicaid is denied for nursing home care, first request a written explanation and consider filing an appeal. Often, denials are due to incomplete paperwork or asset limits. See above for more details. You may need to re-apply after addressing the issues, such as spending down excess assets or correcting errors in the application. Speak with a Medicaid senior planning expert to ensure your application meets all eligibility requirements.
