by Yehoshua Sopher
Turning 65 should be a celebration.
Instead, many low-income Maryland seniors wake up to a rude surprise: Their Medicaid
health insurance suddenly stops being handled through the Maryland Health
Connection (MHC) website. MHC is hard enough to navigate. Now, you are taken to
the benefits website (formerly myMDThink). The seamless, automated system you’ve
used for years disappears overnight.
Seniors automatically lose Medicaid
coverage on their 65th birthday. At 65, everything moves to benefits.maryland.gov,
a completely different portal with different rules, different documentation,
and a much stricter income calculation. Many seniors lose coverage for long
periods of time simply because they didn’t know this transition happens. It’s a
terrible “birthday present,” and it catches people off guard every year. You
are automatically removed on your birthday from Medicaid and have to figure out
how to get it back.
Another shock is that Medicaid
eligibility becomes month?to?month after age 65. A single month of higher
income – even by a small amount – can cause a temporary loss of coverage.
Seniors who were used to annual renewals suddenly find themselves in a system
that recalculates everything every month.
Medicaid Gets Harder, Not Easier
Before 65, income is calculated
annually, and the system is forgiving. After 65:
·
Income is counted monthly, not annually.
·
Social Security, pensions, and RMDs (Required Minimum
Distributions, which are required at retirement) suddenly matter and count as
income.
·
1099?R forms are often misinterpreted as income even
when they’re rollovers.
·
Caseworkers frequently deny seniors coverage incorrectly.
·
The application process becomes more documentation-heavy.
I recently reviewed a case where a
client’s gross employment income was reported instead of taking expenses into
account. Maryland uses a special calculation that reduces this amount
significantly, but the caseworker applied the wrong formula. Mistakes like this
are common – and cause people to think they are not eligible for benefits.
After a grueling appeal, I secured a client in over $1000 of retroactive
benefits.
Spend?Down: The Hidden Pathway to
Medicaid Eligibility
Many seniors are surprised to learn
that being “over income” doesn’t always mean they’re ineligible for Medicaid.
Maryland actually has two different spend?down pathways, and they serve very
different purposes.
The first type is the one most
seniors need: If your income is slightly too high for regular Medicaid,
Maryland allows you to “spend down” the excess through medical bills,
prescriptions, home?care costs, or other health?related expenses. Once those
costs exceed your excess income, you qualify for Medicaid for that month. It
works almost like a deductible, and most people have never heard of it.
The second type applies only to
nursing home Medicaid, and the rules are far stricter. To qualify for long?term
care Medicaid, a person must meet the requirements of a nursing?home level of
care, have income below the cost of care, and have very limited assets. This is
where families hear about five?year lookbacks, penalties, and sometimes,
irrevocable trusts. These tools are not about regular Medicaid – they are used
only in the context of nursing?home eligibility, where the financial rules are
much tighter.
Most seniors living at home only
need the regular spend?down, not the nursing?home version. But because the two
programs share the same name, families often confuse them and assume they’re
ineligible when they’re not.
Property Tax Credit: Simple Before
65, Complicated After
These Medicaid changes at 65 are
the first “birthday surprise” Maryland seniors face. But there’s a second one
that catches just as many people off guard – and it has nothing to do with
Medicaid. It’s the Maryland property tax credit. This is an income?based tax
credit available to many homeowners, with a higher bar for eligibility than
Medicaid. It becomes harder to qualify for after age 65 even though nothing
else in a senior’s life has changed.
Before 65, the property tax credit
is straightforward. Gross household income must be under $60,000. There is a
very simple calculation, and many homeowners qualify.
You’d expect the credit to get
easier as people age – but Maryland actually tightens the rules after 65. The
formula becomes more complex, additional factors may be considered, and credit
can shrink or disappear. Many seniors who qualified for years suddenly don’t.
Hopefully, this article will alert
seniors to these changes. Forewarned is forearmed.
*
* *
Update: In the last issue, I wrote about
the United Explorer card (UnitedExplorerCard.com/fly2). Note they offer three free months
of Instacart and $10 for each month. So, use your card first and then
your spouse’s.
Yehoshua
Sopher founded Elicit to guide individuals and families in
accessing benefits they are entitled to. You can reach him
at elicit.yehoshua@gmail.com or 410-205-9668.
