With a question like that, we hope we didn’t lose all of our readers. But if the answer to this question is “yes,” it is a significant change to DMAS’s existing policy. To explain why, we’ll need to provide a bit of context.
To be eligible for Medicaid when someone is in a nursing home, that individual must meet certain financial requirements, the most important requirement being that the individual has less than $2,000 in countable resources. However certain assets are exempt and do not count towards this $2,000 limit—most notably the individual’s home (for six months) and a car. In addition to these well-known exceptions, Medicaid also does not count the value of promissory notes that meet certain requirements. Historically this has been a great tool for elder law attorneys to use to assist individuals to qualify for Medicaid because it allows the applicant to convert what would normally be a countable resource (cash) into non-countable resources (the promissory note). They can be particularly helpful when a married person is applying for Medicaid.
This week we heard through the grapevine that DMAS is no longer treating these promissory notes as non-countable resources, but has not officially changed its policy in the Medicaid Manual. While we haven’t confirmed this to be true, we would therefore be very cautious about attempting to qualify for Medicaid using one, and encourage you to seek professional counsel before applying if you already have one. Unless you like going to court against a well-funded government bureaucracy, it’s probably not worth the trouble.