My mother is 88 years old and still living in her own home. She wants to continue to give monetary gifts at Christmas but is worried about the "look back" law. How much can she give that is considered reasonable so children won't have to pay back if she will need to qualify for Medicaid in the next 5 years.
Here's my situation: my mother has been in a NH since Jan 2011. My brother and I started working with an eldercare lawyer from before she went in. She went in directly from home (no hospital stay) and has been paying the NH private pay since day one. She has enough money to last her until sometime next year. The lawyer transferred the deed of her house to my brother under "Caretake Child Exemption" (he's lived there and taken care of her his entire adult life). Her money went to paying the taxes, utilities and upkeep for six months; everything is now being paid for by my brother, as it's now his house. I'm DPOA and have been in charge of her finances. I've prepaid for a funeral with an irrevocable trust, sent her to the dentist and podiatrist in the first few months (she's now no longer in any shape to leave the facility unless it's an emergency), bought new clothes, bought her a new wheelchair, etc. There's really nothing else to spend her money down on except the NH monthly rent. I'm not really looking to use any of her funds for anything but her care. Except....
Every year my mother would give myself, my brother & my husband $100 each for our birthdays, Christmas and our anniversary. There are no grandchildren or nieces/nephews. This is the first Christmas she will be in a NH instead of at home. I'm just wondering if anyone else has had an experience with Medicaid questioning Christmas and birthday gifts, etc while the patient is in the spend-down period. These gifts have been given every year for decades; is it best to stop that tradition now that she's in a NH? Is this the sort of thing that Medicaid will make us pay back? The lawyer we're dealing with prefers to answer any questions during an appointment, not on the phone. Quite frankly, I'm getting sick of the whole thing and want to return to living my own life. If absolutely necessary I'll get another lawyer but, for a question like this one I think I'll hold off.
So, have any of you out there had any experience with the whole Christmas/birthday gift during spend-down thing?
Thanks in advance,
Sunny
I've done Medicaid application for my mom & helped my DH with his mom's for 2 different states. My MIL was a financial terrorist, no real assets and an ocean of debt. For my mom, she used it for her IL, home health care when she was still in her home and for repairs on her home. She's mid 90's and really if they live long enough and go into a NH they will just flat run out of $. Instead of XMAS for the grandkids you might think about (if they don't already have) buying funeral and burial policy (irrevocable NCV), a small term life insurance. Get them new glasses, do dental care (spotty on Medicaid), high quality hearing aids, walkers. Podiatry work - yes they get visits in the NH but the care is cursory at best. If they have a home, prepay for utilities, cable, insurance, repairs. Do whatever is needed to make their home more access friendly for them like a ramp and grab bars. Everything must be for their care or their homesteaded property. Medicaid look back is 5 years. The state can go thru 5 years of bank records & also require receipts to any item that pique’s their interest.
With my mom’s application we had a glitch with $ 1400 ck for auto repair to Jim Smith instead of Jim Smith Auto Repair. HHS asked if it was gifting. Found the receipt and faxed it. Another problem was her $1,000 face value term life insurance! It was old from the 60’s when policies were 20 – 30 pages, so you had to read through it for the word term. The Medicaid worker doesn’t have time for level of detail so couldn’t check whole or term but could check information not provided. So I get a letter requesting this info asap. I got a stockbroker, who holds TX insurance license, to do a letter that the policy was term and faxed it to HHS.
If it had been a whole policy with a cash surrender, she would have had to cash it out. Had a couple of other issues. My point is, the Medicaid application is being scrutinized. My MIL had to justify a series of $200+ checks made out to the home health worker (state paid) - what she was doing was giving her a check to go an cash to get spending $$ and to buy liquor. She didn't use the business office to go and cash a check as they only would do one up to $ 50 and they certainly weren't going to pick her up vodka. Again the application is being looked at and not in a quick way. You sign off for the state to access any bank where they have had or have $. This is all tied to their SS# and is just a couple of keystrokes to do.
Medicaid gets to the heart of the issue of who should pay for long-term care -- the public through the tax-supported Medicaid program, or users of long-term care through their personal resources, including those remaining after their death.
Medicaid is supposed to available only to those with very limited resources over a 5 yr period who qualify both financially and medically for LTC. The spend-down
needs to be about their needs and for their care.
The $300 isn't worth the possible Medicaid flagging so I think we'll forgo any Christmas gifts this year (and ever). I'm worried now, though: will all the Christmas, birthday and anniversary gifts in the past five years cause the Medicaid caseworker to question them? I feel like the Albert Brooks movie "Defending Your Life". It looks like I'll be defending my mother's life (her financial life, anyway) of the past five years. I'll get through it somehow, but I know it'll be a pain in the a**. Actually, a lawyer will be doing the app for us. It's $2500, but if it saves me one ounce of angst, it'll be well worth it.
Yes, that was me asking about the life insurance. I spent the summer combing every paper in my mother's house and I'm convinced she didn't have a policy. MDH had some conversations with my late dad over the years and remembers him saying he didn't believe in them. That alone convinced me, as my dad pretty much made all the financial decisions in the family.
Thanks again for your help.
Thanks for the compliment, the whole Medicaid/Medicare process is just so hard to manuver through and most of the time it is done under total duress. I think alot people end up taking care of their elderly because they just cannot figure out how to do it. Now some folk do want to be their caregiver and have the ability to do it properly, great for them. But this site is constantly filled with ? & concerns of those who are doing caregiving to the detriment of their own physical & mental health & finances. I did certificate of review & federal grant compliance in the 80's, so I kinda have a feel for what the federal mindset is (or isn't LMAO). That's why I post on this site. If you're wealthy, you've done living trusts and the family is used to working with attorneys, brokers, etc and know how to maximize $. If you're really poor, you are already in the system with food stamps, section 8, etc. It's the rest of us that will not have a way to pay for LTC that we or our parents need.
Back to your ?, for me, the ? would be is $ 300 (100 X 3) in gifting worth the risk of the Medicaid application being flagged for further review. If that happens you will have to scurry around to get information as the reviewer has to find something to justify the review time. Now $ 300 in "gifting" would probably be a small amount of penalty period.But you need to find out if her states penalty % period is based on a MONTHLY basis rather than a DAILY rate at whatever your states NH average monthly rate is. If it's a monthly based penalty - you are kinda getting royally screwed if the gifting is small. So if penalized 1 mo & the avg rate is 5K, you might have to private pay the 5K whether the gift was 300 or 3K. Royally screwed.
What Medicaid is looking for IMHO in the application is a "pattern of spending". For "medicaid pending" there are 2 reviews:
Phase 1 is the review admissions does from the nursing home - they usually give you a check off list of 20-30 items they want you to give to them (the NH) that they in turn bundle with their payment due statement and submit to the state. Now for my mom, no one from the NH asked me about any of the paperwork,BUT they did pay attention to what her resources were to the penny and billed for that amount less personal needs $. The NH paperwork & moms paperwork went to state processing which is phase 2 of Medicaid review.
For my MIL, the NH admissions gal was overly zealous in her review - she kept asking for things that IMHO were not needed (like information on her deceased husband from the 70's). What was irritating about this was she had been accepted for NH Medicaid in another state, so she was vetted, income was 800 and nothing had changed. So my DH sent a RRM to the NH administrator stating that they/NH had been provided all items on NH medicaid application list and all requests for additional specific documentation needed to come from state Medicaid. Now my MIL was pretty ill & infirm, my gut feeling (and I could be totally wrong on this) was that the NH was stalling submitting her application so that she would not be accepted into Medicaid and die so that the family would get stuck in dealing with the NH bill or dealing with it as a claim (class 1) in probate. Keep in mind, the NH knows everything about the applicant's finances, so they knew that mom would pay out an insurance policy upon death. As it turned out, MIL was in the NH maybe 10 weeks then went to the hospital 3 weeks then into a hospice facility for about a week then died. My SIL went and did the follow up with the Medicaid application -really dogged it during the weeks in the hospital- and got Medicaid approval letter after she died. NH sent a bill for 12K within days of her going into hospice. I cannot tell you how much my BIL enjoyed sending NH a letter telling them that it needed to be billed to Medicaid. Now alot of people just don't have the time or tenacity to deal with the minutia of stuff that Medicaid requires, so NH cost becomes a debt of the estate if they die or a lein on the NH resident's home or NH goes after family for $.
Like you, my mom went from 3+ years of IL to the NH with no Medicare paid previous hospitalization. So for the last 3 years before she went into the NH, her pattern of spending was pretty well set. Medicaid reviewed 3 years for her, although they can go back 5 years. The ? I got from Phase 2 review were all about checks made that stuck out from the pattern and not made out to an entity (utilities, insurance, assessor, HEB, Target) and had a comma in them. My thought is that the Medicaid contractor has a forensic accounting program that scrubs for amounts of 1K and over. $ 300 is small but do you really need to risk it?
Unless they are poor and have been that for a long time and get SS & a straightforward retirement or annuity, the review is going to find something that requires a response (and that justifies the workers time, the state contractor). With states facing financial short-falls, not approving Medicaid applications is an easy way to save $. With my mom's the phase 2 review ?'s had to be responded to within a couple of days with the items requested submitted in person or faxed. Fortunately I wasn't working that week so I got on it. If I hadn't, her application would go into noncompliance for 30 days, then after that be rejected.
If that happens the NH can require private pay, this happened with one of my mom's friends. Family had to do a quick and low sale of the home as they had no resources to pay 7K a month of the NH, the man got put in a board & care home
which was not ideal but all the family could afford to do.
Both mom's were/are in TX. About 62 percent of NH residents in Texas are paid for by Medicaid, according to the Texas Department of Aging and Disability Services.Texas ranks 46th in Medicaid reimbursement rates. So you can see the incentive to get the family to do private pay rather than Medicaid. Good luck.
remember that for Medicaid all the regulations are state specific even though it is a federal program. Most states have the max monthly total asset of 2K. Over that you need to start to “spend down” the money.
“Spend down” – means get assets (excluding homestead & car) under the state’s Medicaid asset ceiling. They can buy funeral and burial policy, life insurance (these need to be irrevocable NCV-no cash value). Glasses, dental care (spotty on Medicaid),higher quality hearing aids, higher quality walkers. If they have a home, prepay for utilities, cable, insurance, repairs. No $ gifted to others. Everything must be for their care or their property. Medicaid look back is 5 years. The state can go thru 5 years of bank records & also require receipts to any item that pique’s their interest.
If he doesn't have a funeral/burial done, that easily can use up almost all of the $ depending on what's what if you wanted to do that instead of donating to science.
Look to see if there are any expenses related to the donation, you don't want any surprises there. If you wanted to have some sort of memorial service for him at a funeral home, you could spend his $ on that also. Whatever it needs to be no cash value and irrevocable. The FH know what to do for compliance on this.
If he doesn't have done the below IMHO you should have the following done:
- Durable Power of Attorney (not just POA)
- Medical Power of Attorney
- Living Will &/or Advance Directives
- Declaration of Guardian in Event of Incapacity
- HIPAA Waiver
- Will or a Living Trust
I'm a firm believer in having an elder care attorney take care of all this. It will not be expensive as most is done by the paralegals. You do want to go in prepared with what the information is for the documents (e.g. the residence located at 123 ABC street, aka parcel #5678; Ann Smith, wife of John Smith, with the info on all the births, deaths & prior marriages) as well as valid ID for the elder. If the decisions have been already made, this should all simple, straightforward paperwork. Should take 1 - 2 hrs for intake & then 1 hr a couple of days later for the signatures to be done.If dad has assets, then all this should be paid from his assets. This also is important if you ever get challenged. If you pay for all, and you benefit, then other family could go to court to find it a coerced document. Use part of the 6K for this.
This will not be expensive and you have someone to work with you when you have to go thru probate later on. If dad can't physically get to the law office, find an attorney who has a practice that will come to you all.
What is his monthly income?
For example, say it is $ 980.00 month total including what is taken out for Medicare monthly premium (You need to find the paperwork that the SS adminstration sends out in Jan, it will be a single sheet mailing & not in an envelope OR you can go on-line for it.) and he also gets $ 500 a month in a retirement annuity. So his total assets are $ 1,480.00. His state's ceiling is $ 2,020.00. So if he has 6K in the bank you need to spend down to $ 5,460.00. I'd spend $ 5,560.00 so you know that you are definetly under the asset ceiling.
Dental care could easily eat this all up in 1 or 2 visits. Buy easy on & off clothing for him - remember everything in the NH goes through heavy duty wash so clothing breaks down and needs to be replaced often. He will have $ 60.00 a month for personal expenses but if he has to pay for cable or a phone at the NH those two items and a hair cut will easily eat up the $ 60 a month. Some NH let you administer the $ 60, others require it goes into a trust fund @ the NH. Try to get it so that you administer it - what often happens is if dad needs to move to another NH or goes to a free-standing hospice facility and the $ stays behind and you have to chase it down and the check has to come from their home office, yada, yada and more wait.
? - when you say "rents his home" do you mean he pays rent for where he lives now OR does he have a home that he rents out and makes income from.? Huge difference. If he pays rent, no problem & no worries as there is no asset. If he own the property and rents out and gets income from the property, this is a whole big bucket of issues. Which is it?
With elders living over 100 now a days, one never knows what will be the time line 5 years from now. So I need to be ready just in case with a lot of xerox copies of bills. For awhile I was needing to reimburse myself for caregiving bills that were pulled from my own checking account so those costs were a biggee.
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