It can make sense to close small and inactive bank accounts to make the Medicaid application process easier if you may need to apply for long-term care benefits in the future. When applying for Medicaid long-term care benefits to cover nursing home costs in Pennsylvania, the caseworker at the County Assistance Office can require you to provide up to 5 years of financial statements.
This request from the government to provide old bank statements includes both accounts that are open at the time you are
applying for benefits, as well as to those accounts that were closed within the 5-years prior to the filing of the Medicaid application. The 5-year look-back comprises the 60 months prior to the month in which an application for Medicaid long-term care benefits is filed.
The government worker reviewing the Medicaid application and bank statements is looking for asset transfers and gifts that might create a period of ineligibility for benefits, i.e., a Medicaid transfer penalty. If the necessary bank statements are not provided to the County Assistance Office, the caseworker will likely deny the Medicaid application due to “failure to provide verification.”
Most people do not save all their statements going back five years, but those at heightened risk of needing long-term care should maintain 5 years of complete financial records at any given time, including invoices and receipts for large expenditures. The Medicaid caseworker will usually request explanations for all expenditures that exceed $500 that fall within the 5-year look-back.
These days it is often possible to secure replacement statements online for free, so signing up for online access to bank accounts can often be the easiest way to have near on-demand access to these old statements. However, if the bank merges or closes, or if your agent under power of attorney (POA) does not also have online access, there can be a delay in securing the financial records necessary to have Medicaid long-term care benefits approved.
Showing up in person at the bank to request these past statements can also be a successful approach to obtaining old bank statements. However, some banks charge significant research or service fees to provide you with paper copies of old statements. It can sometimes take a while for the bank to provide these replacement statements, resulting in a delay with the Medicaid application process.
Consider closing out small and inactive accounts. Consolidation of unused bank accounts that serve no purpose eliminates the future task of gathering 5 years of old statements for each of these accounts. Having fewer bank accounts means less work, and can make it easier to apply for Medicaid long-term care benefits.
Be prepared, always maintain 5 years of statements for all financial accounts, including small accounts and those which are inactive. If you have small or inactive accounts that serve no important purpose, consider closing them to make a future Medicaid application easier. Before closing accounts or engaging in any Medicaid planning strategies, be sure to meet with an elder law attorney to secure advice for your situation.
Still overwhelmed and need help applying for Medicaid in PA?
We are here to help! The Medicaid application process can be confusing with many pitfalls. That’s why we strongly recommend hiring an experienced elder law attorney. Contact us to secure professional help applying for Medicaid and we will be happy to be your Medicaid guide.
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Disclaimer: We recommend that you have ongoing legal advice from an elder law attorney before attempting to navigate the Medicaid application process. If you wish to secure our services, please contact Gerhard & Gerhard, P.C.
