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.
Thank you for any advice or info on this.
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.
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,
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.
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.
STRESSED IN TX. 2011
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?
Of course your mother wasn't trying to hide assets, but the rules apply just the same.
Did you provide assistance to your mother while you were receiving these "gifts"?
I think you really need an elder law attorney to assist with the application.
The POA docuent spells out how you may act on behalf of your mother. It has not impact on taxes or eligibilty for any particular government program. The document gives you authority to give away gift money on you mother's behalf. But that has no bearing on whether the recipients of the gifts owed taxes on what they received. It has no bearing on whether giving that money away will result in penalties if she goes on Medicaid.
I don't think the issue here is whether you had the authority to act on your mother's behalf. You did. The question is about the consequences of giving away money within 5 years of applying for Medicaid. The consequences would be the same whether Mother personally did the giving or authorized someone else to do the giving.
It sounds like she gave you money but then you gave some it back. Whew! That doesn't sound like fun to reconstruct.
Please do yourself and your mother a favor. Consult an elder law attorney practicing in your mother's county.
What I think you are dealing with is that TXHHS is determining whether a transfer penalty applies & figuring out the amount. I'm assuming you're in TX, correct? My answer is based on that. I've gone thru Medicaid applications in TX and if you go back you can read a some of what we went through in this post back at the beginning in my answers to DoggGrrl last year. TX has a short time frame in which to get whatever documents back so you really have to either be able to be very OCD on paperwork and have the documents to do that with OR get an elder care attorney who does Medicaid application/review. For us, my MIL was already vetted for Medicaid in another state so we still had those documents and my mom kept all paperwork on so it was there somewhere...timeconsuming but do-able.
Imho in order to satisfy the review and not have a transfer penalty, you need to find the receipts that do a match-up to the $ transferred. For example, on a single page you have a check for $1988 from your account, then below it a check for $ 1988 from mom's account to you and then below that the receipt or statement from the dentist for $1988. Then on page 2 the reverse of each checks (to show they were processed and when) and the remainder of the dentist statement if it didn't fit. This validates the $ spent and therefore no transfer penalty of the $ 1988.00 can be done. If you have this on a couple of big ticket items that is good as it establishes a pattern of spending by you with your mom. If you do this & then you just don't have the papertrail for smaller amounts, HHS kinda will accept your word as the big checks are there for them to use to validate a prior history. Understand? If you don't have all this, then you need an attorney to do for you.
Texas transfer penalty is about $ 148 a day. So imho you kinda have to figure out what amount is; whether it is enough to be worth the time for you to document it; if you have the documentation to do that and the sense of humor to follow thru.
If you are thinking HHS won't find out about $ spent inappropriately, I wouldn't count on that. All of their financial info and asset info and insurance stuff is just keystrokes away from being found out. You signed off on that in the application.
My mom's attorney, who we saw before she went into IL and way before NH, told us that Texas has one of the lowest NH reinbursement rates and highest initial denial rates because HHS has the software programs to be very detailed and that we would need to as equally detailed and then some if we ever applied. True!
Also keep in mind, that once she gets on Medicaid, the state does an annual review. So about a year from now, you or whomever is on record as her rep, will get a multipage form from HHS that will require 3 months of bank statements and information on her assets, etc that has to be returned in like 10 days. So if you don't have a notebook with all in it, you need to get one done and keep it current.
Good luck and keep a sense of humor....
I live on the EC. I arrived at the NH in 02/12 just a few minutes before my mother arrived via ambulance from the hospital.I was with the business manager in her office just starting the application. I stepped out to calm my mother (she was terrified),she has always said she would rather live under a tree than go to an NH. I then went back into the office and sat opposite the manager while she "filled" out the application. I had on my person in 2 folders (I later found in June) to completely fill out the app.except the last four months of bank statements, which I downloaded for her. I had her 2011 1040A, 1099R's (OPM), 1099-INT for her Whole Life insurance, her whole life policy from 1990,2011 Annual Statement of Policy Status, POA, Advance Directive,etc. Whenever I would visit my mother I always brought these documents with me, just in case someone would require them.In the first week of April I called the NH business office direct line to inquire how long this application process usually takes.I spoke with a new business manager (the original one had been promoted), she asked me my mother''s name and when she was admitted. She stated that her file wasn't "handy", but it could take some time there was even another resident there that has been waiting since 10/2011 for benefits approval. I just thought typical bureaucracy-they move like pond water.
Let's move forward to Tues.afternoon 6/29. I get a call from a DHS case manager stating that she needed all the above documents faxed to her as they were going to decided on my mother's app. on Friday 6/1.She said that all she had was an incomplete application and bank statements 2/12 to 10/11. I was shocked. When I asked her when she rec'd the app. she said on 4/17, coincidentally just after I made the call to the business office at the NH in early April.On June 1st, the case manager from DHS called and said my mother's app. was denied because she was over resourced, her cash value of her whole life policy was worth over $3,000. I know virtually nothing about insurance, just every year I would get annual statement, I would see the cash value of it and just assumed it would be thrown on top of the $5,000 face value when my mother expired (my mom didn't even know she had one). The original manager ( now regional manager) never asked for any 1099's, although I recall telling her I had her 2011 tax return filled out by my CPA and when I stood up with the folder and opened it to show it to her she stood up and met me half way around the desk and said all I need to see is her adjusted gross income, she just pulled up the 1040A far enough to see it on the bottom right hand corner of the form. On the opposite of the folder,clearly visible were her 1099's. She never asked for them.The only times I went to her side of the desk was to log on to bank website to get the statements and when she "finished" the app. she asked me come to around sign "here and here" which I found out later was pages 19 & 20 of the app.
OK, on Mon.6/4, Tues. 6/5, Wed. 6/6. in a panic I call the NH business office and leave voice messages asking to please call me back.The following Mon.6/11 the new manager calls me back coincidentally when the original manager (now regional business manager) was there.First thing I asked the original manager was why the app. wasn't submitted until mid-April, she replied that I told her that "I had to go back to my home state to get some document in order for her to complete the form and she gave up on me sending this document and just sent the app.to DHS". No phone call to remind me of this mysterious document she needed while.I was in TX and at the NH for ten days before returning home. If there was a document she needed there was nothing I couldn't haven't rec'd at the NH via fax with a simple phone call or I couldn't have pulled off of my netbook. Insurance, Funeral Home, VA, my CPA, the VA (my mom's a WWII vet) any place that I would have had to call have a copy of my POA. I believe that every entity that I have had to deal with for my mother in Texas has a copy of my POA. I asked them if they would fax me a copy of what they submitted to DHS. They told me it might take a couple of days-well it did. When I did receive it (this is first time I actually had seen the entire form), it looked like swiss cheese. No SSN, no annuity claim #"s, no joint checking acct.#, no military service # (although she had the dates of my mother's service), a third-grader could have done a better job. All the info she needed was with me in her office in February. Legally, yes, those are my signatures and they are not liable in any way for "assisting" me in filling it out.
I feel like such a bonehead for not asking to review it before signing it. If I had, I would have seen on page one there was no SSN and that would have cued me to keep on going through the whole app. Never again, will I sign anything until I review it, I don't care how long they have to hold their water.
Needless to say, I got the insurance cash value check and spent it down on things my mom needed,such as wheelchair, over the bed table, nothing frivolous.
Of course, next they wanted me to do was set up a repayment plan to them for $20,000. They offered to negotiate (dictate) a repayment plan. I said hold on, I want to have the ombudsman or some sort of advocate to help with the negotiating. Prior to me negotiating, I would continue to send in the co-pay and a good faith check for $125 as good faith prior to settling on a set plan which I sent them a notarized letter with the checks stating such. The next thing I know I get in the mail is a promissory note to sign that I will pay $125/mo.In the time between me sending the good faith check and them sending me the promissory note I contacted LegalZoom and spoke to a lawyer in Dallas, although she isn't an elder care lawyer she can interpret legalese (for $14.95/mo.or $129/yr. an LZ lawyer will review up to 10 pages of document and have a 1/2 hr.conversation/per day as long as they have slots open, they make it clear that I have lawyer/client privilege but they are not my attorney). Money well spent.I have spoken with her for at least 8 hours at 1/2 hr./day. She looked at both my POA and the NH admission agreement and said that I am not personally liable and my mother is the debtor and to let them know that my mother will pay $60/mo.as repayment.
Well, "corporate" for the NH did the math taking into account that my mother is 94y/o and said no dice. On Friday 8/17, I received a 30-day Discharge Notice because of non payment. I filed an appeal.
Since the end of June and now I have had fairly frequent contact with the ombudsman and she got me legal-aid,also, my re-app.was certified retroactive to 7/1/12. I told the business manager that I was appealing the involuntary discharge and she said that wouldn't affect my mother being d/c'd from the NH on the date set forth in the d/c notice.Both the DHS case manager and lawyer's paralegal says they can't d/c her while the appeal is in process. I wonder who's right?
Since June both business managers have how shall I say prevaricated on more than one occasion. So, I googled the legality of tape recording telephone conversations.There are 38 states that are one-party states.Meaning as long as at least one-party (meaning me) is directly has knowledge that the conversation is being recorded I don't have to let the other party know. Well, Texas and my state are both one-party states, so I invested in small digital recorder. The recorded conversations can't be used for litigation. If push comes to shove I can e-mail the conversation to them and maybe put a stop to the he-said-she-said.
I don't know, maybe this OCD and constant stress has made me paranoid.I even went to the bank today and inquired about my situation and how I can get copies of checks. I have a feeling that NH corporation is going put the bug into DHS ear regarding my gift from my mother.I have already started downloading statements just in case I receive something with 10-day drop dead time. I don't know how much info they would want, hopefully, Igloo, they just want to know about the large transfers and checks. Your right, trying to reconstruct a 5-year look back would be quite the challenge (akin to me memorizing the tax code or becoming a professor of organic chemistry). I have always had CRS, now, coupled with me developing severed OCD.
Another thing that is a thorn in my craw is that the NH will send me an invoice to pay for that medicaid covers along with ancillary services,such as my mother's phone bill. The LZ lawyer advised to insist that the phone company or any other ancillary service bill me separately because if I pay any part of a catch-all invoice I'll be on the hook for the entire debt.She said they can be quite clever and mercenary and to expect, regardless of what happens they will turn me over to a collection agency, but also gave me sound advice on how to stop them.
Also, thanks for the heads up re: DHS will be requiring info after about a year. I am going to copy every cleared check, etc. that anything to with my mother.Also, I'm going to find out what DHS would require for a 5-year look back. So far I have approximated that if they want every nickel and dime, they are going to have at least 300 pages of statements. Life is wonderful, ain't it?
If a Medicaid (not Medicare) recipient has a community spouse (i.e., a spouse not in a facility but still living in the community) there are rules about how much of their assets or her income can be retained for the spouse.
If your mother is on Medicaid she cannot have more than $2,000 in her account. So if she had more than $5,000 she had to spend that down. She CANNOT give the money away. So I'm very confused about where SIL comes in ... Did she steal the money? Did Mom try to give it to her?
Yes, when one spouse is on Medicaid the other spouse may be allocated some money each month out of the Medicaid spouse's income. For example, if a Medicaid recipient gets $1000 SS per month, all of that money (less a small allowance) goes to the NH. But if the recipient has an eligible spouse, then part of that money can go to the spouse. So, for example, $880 would go to the spouse and $120 would go to the NH. (This doesn't happen if the spouse is working and can support himself, or if the spouse has a pension/SS that is above a certain level. The spouse has to be eligible.)
Meet with the Medicaid representative. Ask questions until you understand the complicated situation. Know what your responsibilities are. (For example, someone will have to fill out a renewal application annually, and that will include information about your Dad's living expenses.) Take someone else with you to the appointment, to take notes.