When a senior applies for Medicaid, he / she must provide bank statements as part of the application process. This is because Medicaid has financial eligibility requirements and the applicant must provide supporting documentation of their income and assets. As of 2022, generally speaking, an elderly applicant applying for long-term care is limited to $2,523 / month in income and $2,000 in assets. (To see financial eligibility requirements by state, as well as assets that are not counted towards the asset limit, click here).
Once approved for Medicaid, it is the responsibility of the Medicaid recipient to maintain financial eligibility. This means notifying the Medicaid agency if one’s financial circ*mstances change. For example, if one receives an inheritance, it will likely put him / her over Medicaid’s asset limit, and it is the responsibility of the Medicaid recipient to report it. This is very important, as Medicaid has no tolerance for persons who take advantage of the system. If it is discovered that a Medicaid recipient’s financial circ*mstances have changed, and they no longer meet the requirements, Medicaid eligibility will not just be withdrawn. Medicaid will also likely demand repayment of the services and / or benefits for which they paid during the timeframe in which the individual was technically no longer financially eligible.
While Medicaid agencies do not have independent access to a Medicaid recipient’s financial statements, Medicaid does an annual update to make sure a Medicaid recipient still meets the financial eligibility requirements. Furthermore, a Medicaid agency can ask for bank statements at any time, not just on an annual basis.
An important note: For long-term care Medicaid, there is a 60-month look back period (30-months in California). This is the length of time in which Medicaid “looks back” on all past asset transfers to ensure no assets were gifted or sold for less than fair market value. Violating this look back period, knowingly or unknowing, can result in a period of Medicaid eligibility. Because of this look back period, the agency that governs the state’s Medicaid program will ask for financial statements (checking, savings, IRA, etc.) for 60-months immediately preceeding to one’s application date. (Again, 30-months in California).
