My grandmother entered a nursing home after a fall in November of 2019. At the time, the only asset she had was her home, SS check and pension check. She was able to qualify for Medicaid once the home was put up for sale. When she qualified for Medicaid, I was advised to ensure that all her income went toward her care. She had two large credit card balances. Long story short... the home didn't sell until October of 2020. Now that the home has sold, she is on private pay until bank account drops below the $2000 cap and she is able to qualify for Medicaid again. She is now being sued for one of the credit card debts. Since she is on private pay, do I pay off the credit card debt or will that come back in the 5 year review when she applies for Medicaid again? The financial aspect of long term care is so incredibly complicated!! I want to take care of my grandmother's finances in the best manner possible (I am her POA) but I don't want to do anything that will be detrimental to her qualifying for Medicaid when the time comes again.
Your grandmother's bills have to be paid. The nursing home is not her only bill. This is what I told my father's Medicaid caseworker when the nursing home was applying him for Medicaid. That he had outstanding bills and credit card debt which I paid. It wasn't even paid off because he owed more than he had.
His Medicaid caseworker told me very different information then the nursing home did. The nursing home insisted that they're bill took precedence over all others and that they were the only bill that mattered. Medicaid was far less insistent. Talk to your grandmother's Medicaid caseworker.
https://www.nolo.com/legal-encyclopedia/safe-ways-spend-down-your-assets-qualify-medicaid.html
What you can do is call the Credit Card Co and explain things and tell them that you are paying for her care and are willing to pay half of the bill of what your Grandmother owes and they will probably accept it.
Don't mention the sell of her home to the Credit card people.
You can pay off:
Accrued Debt. One can pay off accrued debt, such as personal and vehicle loans, mortgages and credit card balances.
Medical Devices. One can purchase medical devices that are not covered by insurance, like dentures, eyeglasses, and hearing aids.
Home Modifications/ One can make home reparations and modifications to improve access and safety, as well as build on to their existing home, such as adding a first floor bedroom or bathroom.
Vehicle Repairs. Vehicle repairs, such as replacing the battery, getting an engine tune-up, or replacing old tires are also a way to spend down assets, as is selling an existing car at fair market value and purchasing a new one.
Life Care Agreements. One can create a formal life care agreement, often referred to as personal care agreement. This type of agreement is generally between an elderly care recipient and a relative or close family friend. It allows the care recipient to spend down their excess assets while receiving needed care. It is vital this type of contract is drafted properly and that pay is reasonable for the area in which one lives. If it isn’t, one could be in violation of Medicaid’s look-back period.
Annuities. One can purchase an annuity, which in simple terms, is a lump sum of cash converted into a monthly income stream for the Medicaid applicant or their spouse. The payments can be for a set period shorter than one’s life expectancy or equal to the beneficiary’s life expectancy.
Irrevocable Funeral Trusts. One can purchase to purchase an irrevocable funeral trust, which can only be used for the expenses of a funeral and burial. In general, up to $15,000 per spouse can be placed in a funeral trust. However, this amount varies by state.
Great answer MsRandall.
Good Luck
While Medicaid is a federal program, it is regulated by the states.
Any senior facility worth its weight, will go over your long-term care insurance policy and dissect it for you. Personally, I would have 3 different facilities review it, Once you and they know what you are dealing with, they will also start looking for ways to keep your grandmother in the facility after her funds run out, thus getting her Medicaid. If they don't do this, find yourself another facility. Otherwise, your grandmother can be and will be kicked out of the facility.
Medicaid was never intended to be an entitlement for every citizen. You don’t pay into it like Social Security and Medicare. It’s taxpayer funded.