Hello,
Im exploring Medicaid and its many intricacies as my mother is 77 and starting to decline and will need help soon. she has some assets, not alot, roughly 100k. so medicaid would help us but will take all the assets. An alternative I ran across is to have her move in with me, I charge her rent (probably what a studio in a senior apartment would cost) and she pays us to take care of her assisted needs. You have to keep detailed records of these expenses and research to protect and prove your case so you file a 1099 for yourself as the employee. In my area that is typically 1000 bucks a month for rent and review of salary for caregiver in my area is anywhere from 25k-30k per year. in this way some of the liquid assets can legally move from her to us. Also exploring the idea of getting her a new car to run her to appointments and such as medicaid allows the exemption of 1 primary vehicle and here in texas the vehicle is exempt from recovery upon her passing. Medicaid lookback period is 5 years for gifting of amounts and the penalty I found states " As of September 1, 2023, the penalty for transferring assets for long-term care Medicaid in Texas is calculated using a transfer of assets divisor of $242.13 per day. This divisor is the average daily cost of long-term care in Texas. To calculate the penalty period, the total value of the transferred assets is divided by the daily rate. The penalty period is the number of days Medicaid will not cover nursing home costs. For example, if the amount transferred is $72,330, the penalty period would be roughly 10 months. " This is my current scheme to keep the relatively low amount of assets in the family but also make her eligible for medicaid programs in the future. Please tell me what you think
It is also important that "shared living costs" is used and not rental, as rental has tax repercussions.
All these things leads me to tell you that it's off to an attorney for the two of you; that's ONE way to start spending down.
Do know your mother would have to qualify for Medicaid and sleep disorder and mild mobility problems won't do that.
Igloo, below, is one of the most knowledgeable--perhaps THE most knowledgeable--on Forum on this subject, so read her carefully.
Best of luck.
Now some will say that getting mother into care as self paying with an agreement with an ALF that DOES take Medicaid is a much preferrable situation.
I am curious why your mother is currently having so many problems with health at 77. Can you tell me?
- No 1099. You are NOT contract labor. You are household employee paid by mom; so taxable income, Form 1040 & maybe SE taxes paid. To be CL you need to be a legit biz or have others you do caregiving for as clients & get paid via 1099 in addition to mom. IRS Topic #756.
- Rental income needs Schedule E IRS reporting.
- 1K FMV rent in an apt will not be comperables for use of a room maybe with shared bath in a private home.
None of these are DIY. It’s elder law and CPA work to do correctly.
- LTC Medicaid has BOTH medical AND financial “at need” requirement. Folks get all fixated on $ part HOWEVER medical is equally important and may be way more difficult to establish for an elder living at home. Your Mom must be assessed to be at need for skilled nursing care and documented in depth in her health care charts on this. Doctors note will not be sufficient. A mom who has some issues w/ADLs, dementia, medication management, heart condition, diabetes will not necessarily be “medically at need” sufficiently for SNF care. If mom not assessed medically “at need” does not matter she’s financially impoverished for financial “at need” for TX LTC Medicaid, as won’t be eligible. Reread what Geaton posted too!
Please realize majority enter NH via post hospitalization discharge for rehab. Both hospital & rehab paid by MediCARE as health insurance benefits. & as MediCARE pays more than State daily room&board LTC Medicaid day rate NH is happy. NH rehabilitation patient w/Medicare paying 100% first 20/21 days & 50% up to 100 days if progressing. If cannot return home, segueway from rehab PATIENT to long term custodial care RESIDENT. Custodial is private pay, LTC insurance or LTC Medicaid if eligible.
Typical scenario: 84 yr old dad falls; breaks a hip; EMS takes him to ER; fully hospitalized w/surgery; discharged to rehab at SNF; then abt rehab Day 18, dad determined not be progressing by rehab team - which enters data to CMS in real time; CMS issues rehab terminated notice to patient & facility Day 20; NH has health care charts, so easily determine IF Dad “at need” for skilled care or lower level of care; Day 20/21, NH admissions & SW ask POA / family what they plan on doing and how it will be paid. If ltc Medicaid, date application filed starts Day 1 on LTC Medicaid process.
For LTC Medicaid, TX nonexempt asset max 2K, income max $2829. NH will have document list State requires for lookback. NH can decide whether or NOT they will take a resident as “Medicaid Pending”; imho dependent on health chart & document list info & if Medicaid bed open at the facility. NH can require financial responsibility document signed off on. TX NH do LTC Medicaid SOC aka Share of Cost requirements starting date LTC Medicaid filed, which means ALL monthly income (eg SSA$) required as SOC payment to NH less only $75.00. $75 is TX PNA personal needs allowance and once dealing with LTC Medicaid, will be only $ mom will ever have for her direct use. Fwiw twice a mo NH in-house beauty shoppe & cable will use entire PNA $. Fully expect NH to lean to be representative payee for SSA & other monthly income.
If gifting / transfers found, will surface abt month 3 in the process.
NH gets notified too.
Mom will owe weeks of private pay rate to NH less SOC.
If you fail to pay her bill and sign off p.p. contract, they will find a way to have her moved out. Remember Mom is impoverished so no $. Will be your purse to solve.
As an aside on this, as you were thinking abt mom buying a new car which y’all keep till beyond death, all costs on car - in her name- is 100% yours once LTC Medicaid filed. Exempt only while she’s alive. Becomes nonexempt asset of her estate after death. If sold while alive, becomes a fresh spend down unless BBV is under $2K as 2K is asset max. TX has a value limit on cars and homes to be exempt assets.
LSS not simple & why elder law attorneys are used.
Regarding Transfer penalty, it could work like this:
Let’s say Mom gets $2100 SSA a mo as her only income. Mom in Dec 2020 - abt 3.5 yrs ago - had 100K in EOY bank statements. Mom pays $1500 a month rent in a city with $2500 COL avg. Mom has a severe stroke March 2024, placed into an NH April 1, 2024. POA files for LTC Medicaid that day as mom has only $1800 in the bank. For this Mom every month before the NH, she had a shortfall of $400. $400 x abt 3.5 years = abt 17K. Caseworker rounds it up to 20K that could be accounted for in normal living costs. The 20K obstensibly comes from that 100K in assets she had 12/21. HOWEVER Where is the other 80K?? POA will have abt 30 days to provide this info in detail to the caseworker. If not, it means a penalty of 330 Days starting 4/1/24 placed onto her LTC eligibility. (80K divided by $242.13) Her NH pp rate is $350 a day / $10,850 mo. This mom pays NH her SS$ but still owes the NH $8750.00 per month if she is to continue to live there as LTC Medicaid will not have her eligible till Wed., February 26, 2026 / 330 Days. NH will not let her remain there indefinitely. NH will turn bill over to collections to go after whomever they can. Transfer penalty, when it goes bad, is serious stuff.
Personally if I was starting out in all this with a 77 yr old mom, I’d get an assessment independently done on her asap. If it comes in that she is absolutely a hard pass No Way on being at need for skilled care in a NH, that means she will have to start using her 100K & her monthly income to self pay for Assisted Living. The TX AL waiver are - in my experience- 100&1% illusionary to make use of nowadays. AL will be private pay. And you contact SHIP to figure out what health insurance coverage she is best off with for where she lives in the her State and her drug needs as she can switch into a different insurance plan if she moves into an AL as it counts as significant change in living status.
Now if she’s totally ok for medically at need for a NH, find one you like that has LTC Medicaid beds and get her into it as private pay to start. Spend down maybe 10K to update her legal, buy new easy care wardrobe, lots of shoes, extra eyeglasses and hearing aids. Maybe 10/20K dental if she can sit still for this. By Christmas she will be easily close to being impoverished enough to do LTC Medicaid filing in 2025 and all legit. 100K as the only asset to me isn’t enough $ in the horrendously expensive costs of care world to do all the stuff to deal with trying to get around eligibility requirements. This not even taking in account all the drama and work and emotion of caring for someone who needs skilled nursing care in your home will entail to both you & your spouse.
So, your elder could be very advanced in age, and have very advanced dementia and still not medically qualify for Medicaid. I had this dilemma with my nearly 101-yr old Aunt who had dementia for about 12 years. She was not ill in any way, and could walk with a walker, assisted or with a belt. Although I loved her a lot (she helped raise me for 18 years) in no way would I ever want to live with her during most of her last years. She sundowned, shadowed, was paranoid, dark and negative, had no filter so said unbelievable things about people in front of others (beyond cringeworthy), was incontinent, etc. But if I wanted to transition her into a facility at that point, she would only qualify for MC, because my Aunt was still able to get up out of a chair or bed (which is how she fell and broke her hip).
I personally do not recommend planning on being your Mom's 24/7 caregiver, at least in the future as her conditions decline. In your profile you said "we" which I assume is your spouse. Living with a declining parent is very hard on marriages and finances.
Also, you didn't mention is you are your Mom's PoA, which would be absolutely necessary if you're going to be managing her affairs and hoping to make decisions for her. In my family, 77 is young. My one Aunt passed at nearly 100 not qualifying for Medicaid. Her sister, my other Aunt for whom I am PoA, just turned 105 and is mobile with most of her mind and would not qualify for Medicaid. My Mom will be 95 this week and lives next door to me. She is mobile and lives semi-independently with my help and would not now qualify for Medicaid. The only elder who does qualify is my MIL who is in a LTC facility on Medicaid because she cannot walk and had enough memory impairment that she couldn't take care of herself (so she started in AL but then went straight into LTC when she stopped getting out of bed and walking).
It's good that you are thinking about the future, but it is even more unpredictable than you can ever imagine. Your best plan would be to know how your Mom would be able to afford a facility (AL or MC) if you and your spouse burned out or where overwhelmed by her care needs -- which is a very high probability.
You may want to consider consulting with a Medicaid Planner for your home state, as well as an elder law or estate planning attorney.