When qualifying for long-term Medicaid, there are asset and income restrictions. In many states, the applicant cannot have more than $2,000 in assets and receive benefits. Luckily, the equity in the applicant’s home is an excluded asset, up to a certain amount. But in order to have the home’s equity excluded, must the applicant have occupied that home prior to applying for benefits? This issue was recently litigated in Texas.

Federal law, specifically 42 U.S. Code § 1396p(c)(2)(D), dictates that a state must establish procedures that allow a Medicaid applicant to receive needed care via a hardship waiver. In these cases, the applicant (or their spouse) had made a transfer during the look-back period that would otherwise incur a penalty whereas the applicant would not be eligible to receive Medicaid benefits for a certain period of time. If the applicant can show that the imposition of the penalty period would deprive the applicant of necessary medical care or the necessities of life, then the hardship waiver can be approved, allowing the applicant to get needed care immediately. Basically, the penalty period is waived if the hardship waiver is granted.

What happens if a Medicaid applicant has funds in a bank account but cannot access those funds due to their medical condition? Are those funds still a countable resource? This issue was recently litigated in Indiana.

Samuel was admitted to the nursing home in 2019. A few months thereafter, he was diagnosed as “incapacitated by senile degeneration of the brain.” In February 2020, Samuel’s representative applied for Medicaid benefits and was denied due to excess assets. Samuel twice appealed and the case was affirmed each time.