Medicaid applications are denied regularly due to various reasons, from filing errors to eligibility issues. A denied Medicaid rejection can leave you facing lengthy delays to access Medicaid benefits, leaving those in need of health coverage in turmoil.
In this blog, we’ll point out the top reasons Medicaid applications are denied so you can avoid repeating the pitfalls that others make.
If your Medicaid application has been denied, you can contact our Florida elder law attorneys to get things back on track successfully.
Common Reasons Why Medicaid Applications Are Denied
Your Income Is Too High
The number one reason for a Medicaid application rejection in Florida is breaching the income limits.
As of 2022, your gross monthly income must be no more than $2,523.
A common error is to assume gross income is the same as taxable income. It’s not. Gross income includes the money that you pay to Social Security taxes, Medicare Part B premiums, and employee portions of health insurance premiums.
But just because your gross income is too high, that does not mean that you can’t plan ahead. By using different planning techniques, an applicant can redirect his or her income and qualify for Medicaid if it’s too high.
Your Assets Value Is Too High
Similarly, the asset value of the applicant must also meet the eligibility requirement.
In Florida, the asset limits are as follows:
- Countable assets for non-married applicants must be no more than $2,000.
- Married with one spouse applying: $2,000 for applicant & $137,400 for non-applicant
- Married with both spouses applying: $3,000
Read Related: Applying for Florida Medicaid: Long-Term Care Benefits for Your Elderly Parent
Missing Documentation
It’s believed that 75% of all Medicaid application rejections are down to an absence of critical documentation. The applicant reviewers are very strict, and if one document is missing it can cause an otherwise perfect application to be rejected. In some cases, the applicant may also be asked to provide additional documentation. If you don’t respond to a request for additional documentation quickly, you may also face a denial.
To ensure you have all the right documents, always double-check the checklist and ideally, work with a Florida Elder Law attorney.
Missing Information
Medicaid applications require a lot of detailed information, from tax returns to bank statements. You may face a Medicaid application denial if you leave out any critical figures or personal information.
Misunderstanding Requirements
Because Medicaid laws are so complex and most people are unfamiliar with the nuances of the application, many applicants simply misunderstand or misinterpret some of the financial requests on the Medicaid application. If you are confused, be sure to consult with a Medicaid application lawyer rather so that you can avoid costly mistakes.
Lost Mail
Medicaid applications are denied if supporting information goes missing in the mail. From the postal service to Medicaid applicant examiners, your documents will likely exchange many many hands until they end up where they need to be.
It’s advised that when sending your application and supporting documents via mail, you do so via a tracked shipment. You should also include a formal cover letter detailing the contents of your mail so that if one document goes missing during the process, you aren’t denied immediately.
You should also use binder clips and paper clips to keep your documents secure. An organized submission also has a far better chance of it staying together, ultimately saving you from long Medicaid-related delays.
Breaking Asset Transfer and Gifting Rules
Another top reason Medicaid applications are denied is that the applicant transferred, or hid their assets in a manner that broke the eligibility requirements.
Medicaid asset rules are strict. Any gifting or spending down of your assets must be done carefully, which is why most people work with Florida elder law lawyers.
Assets cannot be gifted or sold for less than fair market value, and if you break the rules, then you may face a penalty period of Medicaid ineligibility.
Because Medicaid requires a 5-year look-back period for eligibility, it’s advised that you plan far in advance. If you gift too much within that period, you will also be ineligible for Medicaid benefits which will result in a lengthy delay. Prior gifts can be undone to avoid this through careful planning, documentation, and explanation of the circumstances.
Not Replying Quick Enough
Medicaid may reply to your application, requesting additional information and documents. Usually, you’ll be required to respond within ten days from the date the letter was sent (not received).
That can leave you with a very short window to respond, which is why some people get denied. Make sure you respond immediately, rather than putting it on the to-do list. Track the delivery of your mail.
Trusts Not Funded Properly
If your income or asset levels breach the eligibility criteria, you can potentially use a Qualified Income Trust (QIT) as a workaround.
A QIT, also known as a ‘Miller Trust‘, allows the excess amount of income to be paid out directly to the nursing home from the trust. Any funds left in the QIT after the Medicaid recipient passes away get reimbursed to the State of Florida, up to the amount of benefits received.
However, if you don’t fund the trust properly, then your application can be denied. Monitoring the QIT throughout the lifetime of the Medicaid recipient is also crucial to maintaining the benefits. This sadly happens quite often to people who don’t consult with professionals.
Physician’s Statement
Medicaid applications also require a physician’s statement. This document must be completed, signed and dated correctly by a physician. If it isn’t, the Medicaid application can be denied. Applicants or filers should fully and carefully review any forms before sending them, especially if those forms are completed by others.
What to Do If Your Medicaid Application Is Denied?
If your Medicaid application is denied, you shouldn’t lose all hope just yet.
Your denial notice will inform you of how long you have to file an appeal. This can be anywhere from 30 to 90 days. You must file before the deadline, ideally in writing. You will then have an appeal hearing.
If you win, your benefits will be retroactive to the date of your eligibility. If you lose, you may have to appeal in court.
Hire an Elder Law Attorney in Riverview, FL
If you or a loved one needs assistance with your Medicaid application, our Florida Medicaid planning lawyers can help. We regularly help elderly Floridians or their adult child and welcome you for a free assessment today.
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Battaglia, Ross, Dicus & McQuaid, P.A. is U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With award-winning, experienced estate planning attorneys, they can help you plan for the future today.
