Applying for Medicaid assistance to help pay for long-term care can be a daunting task. There are numerous rules and regulations that often present significant problems for individuals who are attempting to obtain Medicaid. Many people refer to these as “traps”. One of the most common problems, or traps, is the failure to adhere to Medicaid’s first moment rule.
According to the New Jersey Medicaid regulations, an individual must own less than $2,000 of resources in order to become eligible for Medicaid. The applicable New Jersey Medicaid regulations specifically state that the resources of that individual must be worth no more than $2,000 as of the first moment of the first day of each month.
The first moment of the first day of each month is really the last day of the previous month. If a person owns assets worth $2,100 as of the last day of the previous month, then he or she will not be eligible for Medicaid for the entire following month.
There is a New Jersey Medicaid regulation that provides that changes in the amount of resources during the month will not affect Medicaid eligibility. Therefore, if a person owns $1,900 of resources as of the last day of the month but then receives $2,000 of income during the first week of the following month, then he or she will still be eligible for Medicaid for the entire month, even though they may now have approximately $4,000 in the bank. As long as the funds in the accounts are spent down to less than $2,000 by the end of the month, he or she will qualify for Medicaid. Please keep in mind that resources include not only funds in the bank but also other assets that can be converted to cash, including any money held in a personal needs account at a facility.