Every year, thousands of applicants for Medicaid in Alabama are either denied or receive penalties for failing to provide adequate information in their application for benefits as requested by Medicaid. More often that not, the failure to provide information is not a refusal to comply with Medicaid’s rules but rather the result of a history of inadequate record keeping and poor planning. Even if you believe it may be many years before you or a loved one may require skilled nursing home care and/or Medicaid benefits, it is never too early to begin collecting documents and pertinent information.

It is essential to maintain bank statements dating back five years prior to when you apply for Medicaid benefits. All bank statements that contain the applicant and/or the spouse’s name, even if the account is closed, must be included. First of month bank balances exceeding $2,000 necessitate copies of cancelled checks. Saving bank statements and cancelled checks will not only ease the process of collecting information for a Medicaid application, it can also save money in the long run. Neglecting to save bank statements and cancelled checks can cost the Medicaid applicant up to $3,000 as the family scrambles to pay the bank exorbitant sums just to receive copies of documents that could have been saved all along, free of charge.

An additional tip: save receipts! Maintaining a record of basic living expenses that are paid in cash is vital to any Medicaid application. A cash purchase log is also an invaluable tool in preparing a Medicaid application. It is highly encouraged that such a record be kept in anticipation of the day in which a Medicaid application is completed, even if that may be years away. A log should include dates, amounts, the purpose of the purchase, to whom the money was paid, and the source of the money (checking account, personal savings account, or a monthly check).

One of the most crucial items to save is proof of your gross monthly income from any and all sources. This may include Social security benefits, VA benefits, civil service, private pensions, wages or other earned income, or rental income. Future applicants should keep Social Security and Medicare cards. In addition, letters of guardianship, conservatorship, and/or power of attorney are important documents to file away. Trusts, mortgages, loans, and promissory notes that indicate the account balance should be set aside for the Medicaid application. If the applicant is a widow or widower, a copy of the probated will for the deceased spouse is required. Also, if the applicant inherited property via the will of someone other than a deceased spouse, a copy of that will is also required. Pre-arranged burial contracts with an itemized list of charges for the burial items of the applicant and the living spouse, as well as proof the ownership of the burial plots (if applicable) are important documents to keep.

Documentation of insurance policies of all types is required. All proof if insurance policies should include the policy premium amount, frequency of payment, and who pays the premium. A copy of a cancelled check or bank statement indicating an automatic bank draft is needed for the last portion. Verification of the following types of insurance are policies are requested by Medicaid: life, burial, vault, casket, nursing home or long term care, Medicare supplement, Medicare Part D, RX Cards, hospital, cancer, and cash policies.

Tag receipts and/or title papers on relevant forms of property is required. This may include but is not limited to automobiles, mobile homes, boats, and recreational vehicles owned by the applicant or the applicant’s spouse at the time of application and during the five-year look back period. Deeds on property in which the applicant or his/her spouse has any ownership interest or has had in the last five years are requested. Medicaid requires the acquisition deed as well as any transfer deeds, which can include a quit claim deed or a warranty deed. Current statements for all mutual funds, stocks, bonds, IRA’s, 401-K’s, CD’s, and savings bonds are required by Medicaid. If the applicant has ever been divorces, a copy of the divorce document is needed.

Try to resist the urge to shred. Avoid throwing away documents that may be important to your future Medicaid application. If you decide to purge your home of unneeded clutter, find a safe place for the Medicaid application file and be sure the hands of disposal stay far away from it. The instant gratification of throwing away a stack of seemingly unimportant documents is not worth the headache that “cleaning up” can create. Applying for Medicaid benefits is a difficult task in itself. Do not make it even harder by discarding relevant information.

This column is one in a series of articles concerning Medicaid eligibility issues. Marlan Golden is an intern with Healthcare Compensation Solutions. Contributing author Thera Herring is a Medicaid Eligibility Consultant with Healthcare Compensation Solutions. The employees of HCS are not attorneys. The information contained in this article is presented as a public service.  The information is provided for educational purposes only and should not be misconstrued as legal advice. Readers who have additional questions concerning the interpretation or application of the law are encouraged to seek experienced legal counsel.   HCS is a private consulting firm that specializes in all areas of Alabama Medicaid Reimbursement and is comprised of a team of retired eligibility employees who bring over a century of combined years of experience in Medicaid eligibility, Social Security, Veterans’ Affairs, and the Department of Human Resources. Please feel free to send in a personal experience regarding Medicaid issues to: HCS, Attn: Senior Solutions, P.O. Box 240515, Montgomery, AL, 36124.