When a senior applies for Medicaid, they must provide bank statements as part of the application process. This is because Medicaid has financial eligibility requirements and the applicant must provide supporting documentation of their income and assets. See state-specific requirements.
Medicaid agencies do not have independent access to a Medicaid recipient’s personal financial statements. However, states often use an Asset Verification System (AVS) to electronically verify one’s assets. AVS can be used to check account balances, as well as check for accounts that were closed during the Look-Back Period. For long-term care Medicaid, there is a 60-month “look back” during which the Medicaid agency scrutinizes all past asset transfers immediately preceding one’s application. This is done to ensure no assets were gifted or sold for less than fair market value. Violating the Look-Back Period, knowingly or unknowingly, results in a Penalty Period of Medicaid ineligibility. Because of the Look-Back Rule, the Medicaid agency may ask for financial statements (checking, savings, IRA, etc.) up to 60-months immediately preceding one’s application date.
Once determined eligible for Medicaid, annual redeterminations are done to ensure a Medicaid recipient still meets the financial eligibility requirements. However, a Medicaid agency can ask for bank statements at any time, not just annually. Furthermore, it is the responsibility of the Medicaid recipient to maintain financial eligibility and if one’s financial circ*mstances change, they need to notify the Medicaid agency (generally within 10 days). For example, if one receives an inheritance, it will likely push them over Medicaid’s asset limit, and it is the responsibility of the Medicaid recipient to report it. This is very important, as Medicaid has no tolerance for persons who take advantage of the system. If it is discovered that a Medicaid recipient’s financial circ*mstances have changed, and they no longer meet the requirements, Medicaid eligibility may not just be withdrawn. Medicaid will likely demand repayment of the services and / or benefits for which they paid during the timeframe in which the individual was technically no longer financially eligible.
