Some of you may remember my dad from another post. He kept going into rehab, going home, falling, breaking something, going to hospital, repeat. He is now permanently in a nursing home. I have a POA.
The nursing home has made the assumption, based on various records they asked me to provide, that my Dad will qualify for Medicaid (MassHealth in MA where we're located). I have a phone interview with Medicaid intake Tuesday to fill out the application over the phone and learn what documents I have to gather. I learned about the 5 year look back period.
This all happened Thursday when I learned the previous MassHealth application was rejected because it wasn't for a long term care facility (it was to stay in the community). So I have to start over and the nursing home is getting a bit antsy as he's been there for several months (he went in under Medicare for rehab and was converted to long term care when his Medicare ran out).
I called my financial planner Friday to see if he knew anything about Medicaid as there are a few issues I need to figure out in order to avoid a coverage penalty or denial. He wanted to get an attorney involved. I could have gone directly to an attorney, I figured an elder financial planner would have a cheaper hourly rate but I think he lacks those skills. More on that below.
1. Over the past few months, my dad transferred a total of $8000 to my checking account so I could handle all his bills and purchase things for him, (including cigarettes). He had a medical requirement for a recliner at the nursing home which he had to purchase himself, so I purchased that from those transferred funds. He would like a mini-fridge for his room now.
I saved receipts for all of this, but there are many many times in the past he has transferred me money either to pay me back for going to buy him cigarettes (often $400-500) or for bringing him cash so he could pay his aide (no receipts or records and she only accepted cash).
To the best of my research findings, spend-down would cover the recliner and mini-fridge, but since transferring funds looks like a gift to Medicaid, I'm not sure how to address that situation.
2. Spend down. I have the rest of the funds he transferred to me. I don't know if I should just transfer the remainder back. I read that this varies from state to state but couldn't find anything specific to MA.
He also has about $9000 in another bank account. Can I use that to buy things for his nursing home room? Do they need to be medically necessary things, or can they be things to help improve his quality of life like a better TV than the tiny one provided he can't see.
I'm going to cancel his life insurance policy (since he can't afford the $68 monthly premium once on medicaid) and pre-pay for his funeral (which was what the $7500 life insurance policy was to cover anyway)
Can I pre-pay his cell phone bill for several years? He won't be able to pay his cell phone bill once medicaid kicks in and a that's a must have.
He also has a car worth about $5K I need to sell. That will happen after the medicaid application. I'm not sure how to mange the $$$ I get for his car. There are no other assets or spouse.
While I wish I had time to consult a professional (does spend down apply to their fees? I don't have thousands to pay an attorney out of my own pocket) I need to try to figure this out the best I can because I doubt I will have answers from a professional on Monday and the application interview is Tuesday.
Thanks for any suggestions.
He has an insurance policy worth $7500.
He has $9000 in one bank, how much in the other?
A car, book value. Maybe have a dealer give you an estimate in
writing. (a car is an exempt asset)
No house
Retirement fund, like CDs, IRAs, investments...if he has them u need
to know how much.
Social Security and any pension.
You will then be asked to supply 5 yrs of bank statements, both
accounts. You will be given a list of things you need to supply. I would take the Statement with the 8k transfer and put a note on it that the money was transferred to your account to pay Dads expenses for him. Receipts upon request. Do not say anything about the $400/$500 here and there let them question it. They may pull statements randomly. Do not transfer any money to your account or back to Dads at this point. Should have never been done in the first place. Never co-mingle money. Checks should have been written off of Dads acct.
Do not cancel his life insurance. If it has cash value, then Medicaid would expect it cashed for his care. Does the policy say its for funeral expenses? I think you need to ask if that policy needs to be cashed in at all because of the amount. If not, I may pay that $68 to continue it.
The 9k will need to be spent down. You can hire a lawyer using Dads money.
The car is an exempt asset so you don't need to sell it if its going to cause problems. Just garage it.
Not sure how much Medicaid allows for funerals. I was able to use Moms insurance cash in to prepay her funeral which was about 10k.* I was told after I cashed in moms, that's face value was 7k, that I may not have had to cash it in.
If Dad has 9k you need to spend down, you can use his money to hire a lawyer. If you find that the 7500 needs to be cashed in, then find out how much the Medicaid allows for funeral trusts. Take the cash in and what you can of the 9k and prepay Dads funeral. In my State you are allowed 2k in assets. So u need to know what ur State allows then subtract that from the amount left and that is what you need to spend down in 90 days from date of application.
I applied for Mom in April. She paid privately for May and June. June I confirmed that she was spent down and caseworker had all the info and her Medicaid started July 1st.
If you find out his life insurance does not have to be cashed in, if he has enough to pay for a months care at the NH, then ask if you can pay it towards spend down. You should be able to call his Medicaid caseworker with any questions.
*Moms 7k policy only had a cash in value of maybe 2k. It was a Prudential policy with dividends. Over the years the dividends had amounted to 8k.
Insurance is term (I think, I have to make calls tomorrow). No assets at all other than those I mentioned.
I realize NOW the funds never should have been transfered to me, but at the time had no idea there might be future implications. It was simply the easiest way for me to do things for him.
What did they say on abt his life insurance? Fwiw ime Medicaid tends to tell everyone they need to cash in policies, which I think they do as it’s flat easier than having an exempt asset to denote every year on the renewals. Imo Do not cancel the life insurance just yet as there no way to ever get a new policy now.
- If the policy is term, it has no value for Medicaid. Again NO VALUE. Term does not pay till after death, so does not count till then. If you are the beneficiary of it, that is $ to you outside of probate. So outside of any Medicaid estate recovery. If it’s term and you or others are the beneficiary, it is worth you paying it’s $68 a mo on a policy. Imo.
- if it’s whole life, those have a cash value and Medicaid expects them to be cashed in full with the $ used in a spend down.
- if it’s a GUL type of life insurance, it may have a smaller cash value with term (after death) policy still in place till it hits its age limit. So he takes the cash value and spends it down but policy stays in force. You or the beneficiary pay the premiums.
You have to clearly find out what type of life insurance it is. The status on life insurance is a question every renewal too…
On the 8K and other $ transfers, I think Medicaid will do a transfer inquiry on it. You will need to have a paper trail that makes sense that all the $ could be reasonable spent by you for his needs. Find receipt on the chair type of stuff & it will be ok. What doesn’t fly is that he’s got checks written out to ABC mortgage or to State Farm insurance with homeowners policy #12345 notated on the check or to BMW Acceptance Corp and he does NOT own a house or a car. That’s gonna bring outright peals of laughter from the caseworker as it’s obviously dads $ paying for your stuff and a transfer penalty placed onto his application.
It’s not unusual to have inquiries on cks over $200 that are written to a persons name as it looks like “gifting”. If you have this, try to show a pattern of spending…. Like every 45 days it’s $400 as it’s cigarettes & booze & lottery tickets that you go and get for him about every 45 days…. a pattern that can help explain where $ went over & over again
Medicaid does not expect dad to live on air. It just needs to be reasonable with some documentation for his situation.
There was someone on this forum recently who’s mom lived with them but mom wrote checks several times a year to daughters mortgage co, for roofing & plumbing work, for utilities, also tax assessor. (The mom had sold her home within 5 yr lookback so had $). Mom paid in full on these too, not a % share & with the acct # and property address on her checks. Basically the mom was keeping her daughters household afloat, which is fine & her choice to do. But they could not expect Medicaid to find this ok. LSS mom got a transfer penalty as was just beyond too egregious to work for Medicaid. The daughter ended up taking her mom out of the NH, where she was there as Medicaid Pending abt 4 months & back into her home again. NH sent the mom a big private pay bill which they will try to ignore. The situation with your dad isn’t anything like this…. It will be ok.
On his car, it needs to get sold at FMV which is blue book value. If it has issues so way below that, you kinda need to get a fresh valuation from used car lot. The $ is income the month sold and becomes an asset month afterwards. You kinda need to have a plan at the ready as to what to do for a legit spend on from car sale $ & do it entirely with in the month, so he starts his month ok for Medicaid at under $2K and ends it ok at under 2K. Otherwise he has too much $ for Medicaid and goes back to be private pay and reapplies (horrors!) or gets suspended (better but still a bit of a buttrash) till he’s once again impoverished.
I’ve got to ask, Who did the incorrect application filing? You or someone at the NH?
If you find your chasing your tail in trying to sell it and at whatever Medicaid wants, you can garage or tarp that puppy and let it sit.