Medicaid has been your safety net. It has helped you afford healthcare and long-term support services, allowing you to live the way you want to and age with dignity.
But what happens if your Medicaid is canceled? Could you lose your benefits?
You fear that you’ll be stuck and won’t know what to do.
In this article, we’ll explain the common reasons for medicaid cancellation for seniors and what you’ll need to do to maintain your eligibility.
6 Reasons for Medicaid Cancellation for Seniors
#1: Failing To Renew on Time
Medicaid requires periodic renewal, usually once every 12 months, and is mailed to you in a yellow envelope.
Most states require Medicaid recipients to renew their coverage periodically by submitting updated documents, including:
- Proof of income
- Proof of residency
- Identification
- Household details
Due to the complexity of the paperwork, you or your loved one may not be able to submit the renewal forms on time. Some people may never receive the renewal notice in the first place due to outdated contact information or mailing delays.
It happens more often than you would think. New data from the Kaiser Family Foundation reveals that nearly 70% of people who have been dropped from Medicaid lost coverage due to procedural reasons.
If you miss the renewal deadline or don’t return the required paperwork, your coverage may lapse or be canceled.
Legacy Navigation can work with you to ensure that you qualify for Medicaid services and stay qualified for services.
Our team consists of Medicaid consultants who are certified in Medicaid planning. We safeguard the Medicaid application and renewal process, helping you to complete the required paperwork accurately and promptly.
Contact us today to learn more about our clinical care team and holistic senior care planning.
#1: State of Residence
Each state has its own rules and guidelines that determine how much you will receive to help cover costs.
Variations in factors per state include:
- Who qualifies
- What services are covered
- Limits on funding for hours
For example, the Oregon Health Plan 1115 waiver can negotiate the cost of care with a memory care facility for a senior who qualifies and resides there. After assessing the applicant, Medicaid will come up with a daily reimbursement rate for the facility.
Idaho’s Aged and Disabled (AD) Waiver covers costs for seniors who are receiving in-home care. They may have a share of the cost, depending on their income and care level. For instance, if the cost of a caregiver is $35-$45 an hour, the applicant may be required to pay $1-$2 an hour as a copay.
If you’re unsure about your state’s qualifications and guidelines, our expert Certified Medicaid Planners™ at Legacy Navigation can help explain the rules, give you a clearer understanding of your options, and help you set up a financial plan.
#2: Receiving Additional Income That Puts You Over the Income Threshold
Some states have expanded their Medicaid programs to cover all people with household incomes below a certain level; other states have not. Whether you qualify for Medicaid coverage depends partly on whether your state has expanded its program.
Qualification for Medicaid is based on income, household size, disability, family status, and other factors; however, eligibility rules differ between states.
In states that have expanded Medicaid coverage, you can qualify based on your income alone. If your household income is below 133% of the federal poverty level (FPL), you may qualify. A few states use a different income limit. Be sure to check if your state has expanded Medicaid, and if you qualify based on your household income.
Many states have a countable asset limit for Medicaid of around $2,000 for an individual, but the specific limit varies by state and eligibility group. Some common countable assets include:
- Checking and savings accounts
- CDs and Money Market accounts
- Stocks, bonds, and mutual funds
- Additional real estate and vehicles (including boats and RVs)
- Land contracts, promissory notes, and annuities with value on the secondary market
Exceeding the countable asset limit can make you ineligible and may become a reason for a Medicaid cancellation for seniors.
#3: Change of Residence
Medicaid is a state-run program, and every state manages its Medicaid programs differently. While you might qualify for Medicaid coverage in one state, there’s a chance that if you move to another state, you may lose your coverage.
Benefits do not transfer automatically from one state to another. You must close your case in your current state and reapply in your new one.
To minimize a coverage gap, you’ll want to research the rules in your new state and apply as soon as you establish residency. Professional Medicaid planners can be an invaluable resource as they are knowledgeable about state Medicaid plans and waivers.
Legacy Navigation, specializing in Medicaid planning for seniors, can assist you in gathering information, restructuring finances (if necessary), and preparing application paperwork for your new state.
#4: Failing To Provide the Required Information
When you apply for Medicaid, you may need to provide several forms of information or documentation, but what is required depends on your state. Your state Medicaid agency may ask for:
- Your name and date of birth
- Your social security number (SSN)
- Your monthly payment amounts for rent, mortgage, or utilities
- Proof of marital status
- Proof of citizenship or immigration status
- Proof of income, like paystubs or W-2s
- A verification of what other government benefits you receive
- Information about an insurance plan your employer has offered you or an insurance plan you currently have
There may be numerous financial documents necessary as well, including:
- Bank statements
- Investment account statements
- Life insurance policy information
- Asset and other property information
- Tax returns
- Retirement income information
Failure to provide any information or documentation required may lead to Medicaid cancellation.
#5: Administrative Error
Administrative errors can result in the loss of coverage for many eligible people.
Medicaid benefits can be cancelled due to paperwork mistakes, system errors, or lost documentation. This can happen when an error is made during the initial application, annual renewal process, or with state eligibility systems.
Some errors related to paperwork and communication may include:
- Missing or lost renewal paperwork
- Failure to respond to requests for additional information in a timely manner
- Misrouted or unreceived mail due to incorrect mailing addresses on file
- Incomplete or incorrect applications with minor mistakes, such as an incorrect SSN or birthdate
Errors can occur during processing as well. These may include:
- Systematic errors can be caused by glitches or flaws in the automated eligibility systems built by contractors.
- Data matching issues can occur when an inaccurate or outdated record in a different database creates a discrepancy.
- Automated systems can make errors when counting household members, which can disqualify individuals based on a change in their household circumstances.
- State agency backlogs can prevent the information from being processed by the system’s deadline, causing coverage to be automatically terminated in some cases.
If your Medicaid cancellation seems incorrect, contact your local Medicaid office. You’ll want to seek assistance to help you contest a termination decision and navigate the renewal process.
#6: Enrolling in Another Type of Insurance
Enrollment in another full-coverage health plan, such as Medicare Advantage or private insurance, without coordination through Medicaid, may cause termination or suspension of benefits.
When you have multiple health insurance plans, the process of determining which plan pays first is called coordination of benefits (COB).
By law, Medicaid pays last. Your new full-coverage plan becomes your primary insurer and must pay its share of a claim first. After your primary insurance pays, Medicaid may cover the remaining costs, such as copayments, coinsurance, and deductibles.
If you are enrolled in Medicaid and gain new full-coverage insurance, you must follow these steps to coordinate coverage:
- Contact your state Medicaid agency and your new primary insurer to inform them of your other coverage
- Present both insurance cards to your healthcare provider when you receive medical care.
- Review your state-specific Medicaid programs for rules on managed care enrollment when you have other insurance.
If you don’t coordinate your benefits:
- Your Medicaid could be terminated or suspended.
- Processing delays and denied claims can occur with your healthcare provider.
Commonly Asked Questions About Medicaid Cancellation for Seniors
Can Medicaid Be Canceled if I Enter a Nursing Home or Assisted Living Facility?
Not necessarily. Many seniors qualify for long-term care Medicaid when entering a facility.
In fact, nearly 1 in 5 assisted living residents (18%) depend on Medicaid to pay for their daily care services. However, you may need to complete new financial assessments or applications specific to long-term care coverage.
Medicaid may stop paying for your nursing home care if you no longer meet the program’s financial or medical eligibility requirements. To continue to qualify, you must have limited income and assets, as well as a medical need for nursing home-level care.
What Should I Do if My Medicaid Coverage Is Canceled?
First, contact your local Medicaid office immediately to ask why your coverage was terminated.
If it’s less than 90 days since your coverage ended, sometimes providing missing documents or verifying updated income can quickly reinstate your benefits. Whereas, if it’s been more than 90 days, you’ll most likely need to submit a new application to see if you still qualify.
If you believe the cancellation was a mistake, you can contact your state Medicaid agency to file an appeal. You’ll want to keep all correspondence and note any deadlines for appeals or resubmission.
The planning techniques, application process, and constant communication with state agencies can be difficult for those who aren’t experienced with current Medicaid rules and eligibility requirements, or for those who just don’t have the time to devote to this extremely complicated process.
Legacy Navigation can be your authorized representative in the Medicaid process and complete the Medicaid application process for you. We’ll be here to answer any questions or concerns related to your healthcare needs and support you every step of the way.
Can Medicaid Cancel My Coverage Without Notice?
No.
Medicaid is required to provide a written notice, called a notice of action, before termination. The notice should explain:
- The reason for your cancellation
- When coverage will end
- How to appeal the decision
If you didn’t receive a notice, contact your state’s Medicaid agency as soon as possible.
Can I Appeal a Medicaid Cancellation Decision?
Yes, you have the right to appeal within a specific timeframe, which is usually 30-90 days, although the process and deadlines can vary by state.
Here are some of the steps you may need to take when making an appeal:
- Review the cancellation notice: Look for specific instructions and deadlines.
- Request a fair hearing link: Some states may have specific forms to fill out or require the request to be in writing.
- Gather your information: Be prepared to provide information such as your full name, address, and the reason you believe the cancellation was made in error.
- Attend the hearing
If you file an appeal before the effective date of the decision, your benefits may continue during the review process. You must typically file your request for appeal within 10 days of the date on the decision notice to ensure benefits continue, although deadlines can vary by state.
How Long Does It Take To Get Medicaid Reinstated After Cancellation?
Every state is different, but it typically can take 30–60 days after you reapply or correct the issue. The length it can take also depends on why it was canceled and how quickly you complete the necessary steps requested of you.
Legacy Navigation works closely with state government offices to ensure a more timely approval of your application and expedited reinstatement of Medicaid if it is canceled for any reason.
Legacy Navigation: Take the Guesswork Out of Medicaid Eligibility With Our Comprehensive Medicaid Planning Assistance for Seniors
Legacy Navigation is a team of Certified Medicaid Planners™ who specialize in helping seniors access the federal Medicaid waiver to pay for long-term care. Our services include:
- Filling out the Medicaid and Home and Community-Based Services (HCBS) waiver applications on your behalf
- Structuring your finances to extend the life of your funds and meet the eligibility requirements for a Medicaid waiver
- Providing guidance on asset management, transfers, and conversions to preserve your family’s income and protect your assets
- Educating you on your choices for establishing a Durable Power of Attorney for healthcare and finances
- And more
Our services go beyond financial planning. We can help you find and secure the services and resources you need to maintain your way of life.
Contact our Certified Medicaid Planner™ professionals at Legacy Navigation today. Let us remove the burden of long-term care planning from you and your loved ones so you don’t have to worry about anything.
