Mom can't get Medicaid help. Do I abandon her and force Medicaid?

Ok about why faxing & certified needed. I've found the Medicaid caseworkers want to get the elder accepted BUT they have very specific list of what has to be provided. The initial caseworker doesn't have any options to overlook an item. You have to provide whatever or clearly show a document for them to place in the file to show compliance in the Medicaid application process. That is what the fax transmission report (about $2.00 a page @ fedEx office) or the certified RRM does (about $ 7.00 at uspo) does. Caseworker has a document to place in moms file & keeps the application active & compliant.

The initial caseworker does not have the training or ability to evaluate trusts, annuities, mineral interests, etc. That is all high cotton finance and beyond their almost minimum wage job. It seems that those all get kicked to a higher level of review by a regional caseworker who has some degree of accountancy training. and either you have to be somewhat savvy or have an elder or experienced with Medicaid estate attorney deal with this level. At NH costing 5K -10K a month, the cost of good legal is worth it at whatever the price.

For my mom (TX), her Medicaid app was over 100 pages of documents. Within this was her old life insurance policy. Now the old ones (from the 1960's) are dz of pages. Caseworker doesn't have time or training to evaluate whether it's term (so no cash value) or whole life (with cash value so therefore an asset to be spent down), so caseworker sent me a request ( really a demand ) that clarification on this had to be provided & ASAP (like within a couple of days) or moms application would be declined for noncompliance. I got a broker (I live in another state too) who held a TX insurance license to do a letter stating that moms life insurance policy was term NCV within a day & I faxed it over to caseworker. Problem solved but really it was sheer luck that I have a relationship with a broker who can do this & I'm OCD enough to have all of moms paperwork at the ready. I went through hurricane Katrina and ever since have been very OCD on anything insurance, taxes, deed of trust, etc. Really moms Medicaid application & renewal stuff was /is a cakewalk compared to dealing with FEMA & SBA. Although I am anticipating quite the challenge once I have to deal with MERP as mom still has her home.

But I digress, let us know what you find out as we all learn from each other.

? For you - who sold mom the annuity & who did the trust? How old was mom at the time? Was she cognitive & capable at the time? Can you work back the paperwork to see what commissions & fees have been paid to date? Was it a family member who sold it to mom? Was trust done as part of setting up the annuity?

Mark - ok here's the plan of attack I would suggest & why.
- getting in the fog of whether the annuity is worth 5k or 50k doesn't matter. Arguing about what actuarial table is used doesnt matter. This level of minutia will only be a mouse maze chase in the Medicaid application system. Mom needs to get it liquidated totally in some way and spent down. And you need todo whatever to show the state, you are doing what you can to get this done. Everything needs to be done by certified mail with the return registered receipt from the post office & or faxed from a fed ex office site so you get a printed fax transmission report. More on why in another post....

- this long weekend gather up moms paperwork. you need to clearly read both the annuity document & the revocable trust. So what type of annuity is it? Immediate or deferred? within the policy does it allow for surrender and under what terms? If it all seems ununderstandable (lol) ask someone else to read it.
Now most of the time a deferred has a surrender allowed but you will take a huge hit (the amt from the policy will be set BUT it's the surrender fees & other related charges that will also be costly & could be from 1/10 - 1/3 of the policy). An immediate may not allow for a surrender but a can allow for a commutation.

I think commutation have to have a before a judge hearing to be done? Usually immediate annuities with commutation option are done like for minors or adults who get a settlement from an accident, so they have diminished ability or unable to do as they are minors, so the commutation hearing is a way to help ensure that the cash out is in the best interest of the annuitant. Read the policy to see if it allows for either surrender or commutation this weekend. You have to know which one as that will determine what happens next to do liquidation.

- on Monday contact your state dept of insurance to find out what the regulations are for surrender or commutation of the type of annuity mom owns. Annuities are an insurance product and have to be sold by someone who holds an insurance license for your state. There likely is a state employee in dept of insurance who is the consumer affairs point person & going to be able to be quite informative in all this. You want them to be your BFF and you need to take notes and be calm & focused when speaking with them.

- hmmm, so peachtree wouldn't take it? Well that means Wentworth won't either since they are owned by the same holding company. But there could be other players licensed in your state to do this (a commutation). Ask your new BFF in state dept of insurance as to what other companies are licensed to do commutation in your state if that's what moms policy allows for.

You know mom may be fortunate that peachtree wouldn't as they are not in the consumers best interest. Just google peachtree wentworth reviews. Not pretty. It could well be that they do not hold Montana license so they couldn't do it anyways or the judges in Montana take the commutation hearings to rake companies like peach over the coals and reduce their fees.

- about the trust, if it's only asset is the annuity, then the trust will defund. Trust will need to cease to exist. Speak with all the trustees, etc on this so that everbody is all ku-ba-ya on this. If you are acting for the settelor (mom), you may need for another family member or the attorney to deal with the defund. You or whomever is moms DPOA will need to work with an experienced elder or estate attorney to deal with this. There probably is a somewhat short list for your state as not a huge population, so start googling to find names. This site has a drop down list of them, I'd suggest you start there.

What a great web site with soooo many caring people in similar situations.
So sad to have to deal with all the stress for a Loved one, God Bless You All!!

Thanks Igloo572! You seem to have a lot of knowledge! Did you get a chance to read what I added yesterday?
I'm thinking of getting a elderly lawyers advice. I'm just lost with NO answer from state of Montana during the holidays and paperwork that got dropped on someone desk for two important weeks. The 11th hour is here in 6 days!
Happy Holidays and God Bless you for your Help!!

Would it be different if the payments were not going to a trust, but to mom directly, so it was simply income instead of an asset? Can it be converted to a burial fund? Just ideas to ask an estate planner or eldercare attorney.

I would contact an Elder care attorney who understands your state's Medicaid regulations .

To clarify, this is an annuity in payout-life-time w/10 yr certain-the 10 yrs is up in Mar 2015. The owner of the annuity is my moms Rev Trst (No other trust assets exist)-the state says the value of the annuity is her remaining life expectancy from now-or 90.4 yrs which puts it over $2k limit. Annuity co. provided letter saying there are no underlying assets-it's just an income stream of $68/month-no assets to value once it's in payout. We tried to sell the remaining payments to Peachtree but they declined to make an offer due to the small income payment and only 3 payments to the 10 yrs Certain. We asked the annuity co if we could commutate the remaining payments but there is no commutation option for this contract. It's only value is the income stream, So the argument with the State is the way they are valuing this asset. The annuity co says no value and the state says my mom will live to 90.4. We would like to assign the annuity to the State but have not gotten any response regarding how to accomplish this. Stuck between a rock and a hard place.

Igloo, I was hoping you'd come to the rescue here. Thanks for the further information on Miller Trusts.

I'm going to guess that the asset that is the annuity is what is keeping her from qualifying for medicaid. You have to liquidate the annuity. Did you send a letter on this to the insurance company? If not, you or whomever is moms DPOA needs to do this ASAP and send certified mail with return registered receipt @ uspo.

Annuity likely will have a costly surrender charge & fees associated with doing this. Could be as high as 1/3 of it if allowed in your state. But there is no choice as it is an asset that will prevent her from Medicaid. You can contact your state dept of insurance to help expedite this (annuities are an insurance product no matter what the "advisor" described it as). You or your mom has to do whatever to be compliant for Medicaid - you have to do all the work needed to provide what the state needs. State bring "aware" is not the problem, state needs to see that some specific deliberate action has been taken in writing.

About the Miller trust, I bet she can't use the annuity to be included in a Miller. I base this on guessing that the annuity cannot ever be Medicaid compliant in the was it was issued. It never can have the state as the beneficiary or have it structured to what the state requires for fees, etc. Miller works well for monthly guaranteed income like from SS, state, federal or civil service retirement type of monthly income streams.

About the certified mailings, if you do this and once you get the RRM card back you make a copy and fax this over to the Medicaid caseworker to show you are doing what you can to liquidate her assets.

They have to be impoverished for Medicaid. No way around that. Her AL will bill someone - probably you if you in anyway signed your name paperwork for your mom. You need to come to an agreement with the facility. No they won't kick mawmaw to the curb, but they can request APS to get the state to do an emergency ward of the state action. Once that is done, mom & all things mom is under state control. Everything gets liquidated & spent. You have no say anymore. It is not pretty & beyond awful for the elder. And the AL will still likely bill you for all the charges before state got appointed. Not to sound harsh, but you have to deal with this & prod the insurance company to get the surrender done

Out of curiosity, who sold the annuity to your mom & what commission have they been paid out so far? Bet it's a nice little bundle.

This is a bit confusing. Your mom is in Assisted living, privately paying for that out of SS, pension and savings? And now the savings are gone? You applied for Medicaid and they've denied her, due to the annuity?

Does the assisted living place accept Medicaid? Will they keep her there as "Medicaid pending"?

Have you consulted a Medicaid savvy elder care attorney? There is something called a Miller Trust that can be used to keep excess funds from putting her over the Medicaid limit, subject to recovery by Medicaid later on. Or can the Annuity be cashed in to fund her private pay for a few more months?

Let us know if the above is correct and I'm sure you'll get some more helpful answers.