Author Topic: MediCAL (Elderly NOT ACA) disqualification, spend-down, and re-apply???  (Read 811 times)

ObviouslyNotAGolfer

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My mom died last month of Covid-19. She jointly owned a house with my dad, who is in a nursing home. His mind is still OK for the most part (very forgetful at times), but he will probably never be able to live alone again.

I want to sell his house (through DPOA) because it is becoming a financial drain. There is not a lot to be gained from the sale for a variety of reasons after all debts and such are paid. No, I will not rent it out. It's a complex situation and I'm not going into all the details here (I do have a good lawyer who I will continue discussing the options with).

I am scares shitless of him becoming disqualified for Medi-CAL because it is paying for his nursing home. If they decide to kick him to the curb, then I'm world-class screwed. I cannot house and care for him. I expended a great amount of time and energy getting my dad and mom on Medi-CAL and failed, failed, failed, until I found a great social worker at the hospital my dad was in. I understand that these applications are a lot easier if someone from a hospital or SNF pushes it through.

From what I understand, he will get kicked off Medi-CAL in a pico-second when funds from the sale of the house hit his account. I understand that this is the case with elderly MediCAL, but the rules are completely different for ACA.

I don't want to go risk him being permanently disqualified from MediCAL because some obscure spend-down rule was inadertently violated or something. However, my dad can't be the first person in this situation, and I don't want to walk away from the sum I/we are likely to get from sale of the house.

I have read that the spend-down rules are pretty broad and that you can even "take a vacation" with the funds. I don't see the point of trying to sell the house if all it means is that we have to pay it all back to the nursing home.

My lawyer is good, but I'm thinking I need to find a specialist in this--someone who eats, breathes, and lives MediCAL.

Any thoughts on how difficult all of this will be--to do the spend-down properly, and re-apply? Has anyone ever done it anywhere (but especially in California)???

Thanks.




« Last Edit: March 23, 2021, 02:23:59 PM by ObviouslyNotAGolfer »

yachi

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My neighbor's children had to sell his house because it was his last asset left before Medicaid would cover his nursing home stay.  This is because the house counts as an asset if the person in the nursing home is not intending/able to return home.  His wife had predated him in death.  The children ended up selling to a "we buy houses" guy, and I think the guy got it for a steal.  At least, the public information shows it to have been a steal.

My dad was executor of an estate for a nursing home patient who held a mortgage note on her daughter's house.  The daughter would pay the mortgage to the mother.  We initially thought the nursing home patient would need to sell the mortgage note to someone (it being an asset after all), but a lawyer confirmed that the periodic payment received was low enough that it would be allowed while still qualifying for Medicaid.


This has good information: https://www.medicaidplanningassistance.org/can-medicaid-take-my-home/

Some key things:
Typically the house needs to be sold before Medicaid (Medi-cal for Californians I guess...) will cover long tern nursing home stays, because it's an asset.
An exception is made for a community spouse (your mother) to remain in the house -that's what happened here.
The house should have been put in your mother's name to protect it from Medicaid making an estate recovery claim. - This might have allowed it to pass to you instead of your dad upon your mom's death.
One can spend down the extra assets by paying for the cost of their long-term care, other options include purchasing an irrevocable funeral trust and / or an income annuity

ObviouslyNotAGolfer

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Thanks very much. It's all so freaking confusing, I just feel like walking away. I would if it would not screw my dad. I never co-signed anything with them, my name is not on any deed or anything, my mom had no will, I am not named as an executor. I'm just trying to help my dad and recover some of the endless funds I expended trying to keep them alive and happy over the last few years.

Anyway, I noticed at the bottom of the webpage you linked to about Medicaid planners. Do you know anything about those? Seems like a good idea, and likely a lot cheaper than what my lawyer is charging me!


« Last Edit: March 23, 2021, 03:24:52 PM by ObviouslyNotAGolfer »

reeshau

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The house should have been put in your mother's name to protect it from Medicaid making an estate recovery claim. - This might have allowed it to pass to you instead of your dad upon your mom's death.
One can spend down the extra assets by paying for the cost of their long-term care, other options include purchasing an irrevocable funeral trust and / or an income annuity

My Mom is going through this with my stepdad; they just completed the spend-down, and he qualified for Medicaid in Minnesota.  My mom, for personal reasons, did not make the common choice to legally divorce my stepdad to separate assets.  In their case, when my mom passes the state will have a lien on the house and claw back any proceeds to pay for the care.  I do not know if a lien goes in place on his entering the program, or if something happens on her death.  But you may want to check the county clerk's records for an existing lien on the house.

I agree this is a very specialized area of law, and of course varies by state.  My Mom has worked with a remote specialist attorney and social worker throughout.  (They are in a rural area; not enough clients to support such a practice locally)  This is their first-time around; they were on private pay until this, as part of the spend down.  So unfortunately I can't speak to re-qualification.  I bring up my point to say it might already be accounted for.

ixtap

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Have you reached out to the social worker who helped you qualify in the first place?

jim555

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I would let the social worker at the nursing home deal with it.  You are not on the hook.  They can't discharge a patient into the street.  I wouldn't sign anything, if bills go unpaid they are a write off and not your responsibility.  They will place liens on the house and sell it for estate recovery.  Selling the house will temporarily make one ineligible until the funds have been drawn down to the under the line, which is like $2,000.  The funds can't be given away as there is a look back period for transfers of property.  Really no point to the sale and it makes things more complex.   Certain things like pre paid funerals are allowed and not counted as resources.  Best advice is to get a good lawyer and hash things out.

SimpleCycle

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My wife's grandmother went through Medicaid spend down involving her house sale.  A lawyer guided my MIL and FIL through the process and ensured they were not violating any rules.  Her house was sold and the proceeds were used to pay for her nursing home care.  It turned out that she passed away before the proceeds were fully spent down, and the remainder went to her heirs.

There are complicated rules that vary by state on when a house is and is not a countable asset.  If Medicaid determines that the house is a countable asset, it disqualifies him whether or not you sell it.  This essentially forces you to sell.

I agree with you that you need a specialized lawyer.  They generally are called "elder care attorneys" and they do live and breathe this stuff.

Best of luck - it's a complicated process but it can be managed with the right help.

SimpleCycle

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Bumping in case the morning crew has any insights.

yachi

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Thanks very much. It's all so freaking confusing, I just feel like walking away. I would if it would not screw my dad. I never co-signed anything with them, my name is not on any deed or anything, my mom had no will, I am not named as an executor. I'm just trying to help my dad and recover some of the endless funds I expended trying to keep them alive and happy over the last few years.

Anyway, I noticed at the bottom of the webpage you linked to about Medicaid planners. Do you know anything about those? Seems like a good idea, and likely a lot cheaper than what my lawyer is charging me!

I haven't worked with Medicaid planners.  The legal help my dad was getting would have come from a family friend. 


wenchsenior

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Thanks very much. It's all so freaking confusing, I just feel like walking away. I would if it would not screw my dad. I never co-signed anything with them, my name is not on any deed or anything, my mom had no will, I am not named as an executor. I'm just trying to help my dad and recover some of the endless funds I expended trying to keep them alive and happy over the last few years.

Anyway, I noticed at the bottom of the webpage you linked to about Medicaid planners. Do you know anything about those? Seems like a good idea, and likely a lot cheaper than what my lawyer is charging me!

I haven't worked with Medicaid planners.  The legal help my dad was getting would have come from a family friend.

My mother and aunts worked with state Medicaid planners to deal with care for their parents (no savings, small income, small paid off house).  Depending on the state and its general level of support for poor and elderly, I expect you would get a range of competence and help, but in WI, which has fairly good social support, they got all the help they needed to go through spend down and get their parents into LTC/nursing homes.  (Here in TX, I'd probably NOT trust the system and get an elder care attorney).  The situation was, my grandfather had to go into a nursing home, but my grandmother was still living in the house. The house was put under lien by the state with the provision that my grandmother could live there until she required LTC.  My grandfather died in the nursing home, and shortly thereafter my grandmother had to go into the nursing home until she died some years later. The state took the proceeds of the house sale and Medicaid paid for everything, but there were a couple of points where a sudden influx of cash assets threatened to cause Medicaid to lapse for my grandmother, and my mother/aunts had to scramble to very quickly spend down that cash (under the appropriate spending rules, which are strict).

One thing I should note: state employees whose job it is to guide the Medicaid applicants are NOT interested in preserving the estate, so if you want to do that, assuming it is even possible, you most definitely need an elder care attorney.  For instance, we found out several years after the whole process went down that the family definitely qualified to transfer ownership of the grandparents' house to one of the daughters (my mother, who did in fact meet the conditions of live-in-caregiver), and in that case, Medicaid would STILL have paid for both grandparents' LTC, but the small amount of assets from the home sale would have passed to the new owner (my mother).

State guidance vs. attorney depends on how complex the situation is, what kind of state you live in, and what your goals for the estate are.
« Last Edit: March 26, 2021, 10:01:44 AM by wenchsenior »

ObviouslyNotAGolfer

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Re: MediCAL (Elderly NOT ACA) disqualification, spend-down, and re-apply???
« Reply #10 on: March 26, 2021, 02:49:47 PM »
Thanks wenchsenior. That last paragraph of yours is indeed where it's at.

I am weighing how much I might be able to get out of the house for myself and my dad (perfectly content to watch TV and eat snacks at this point of his life) VS the cost in time, trouble, and $$$$ (lawyer and other fees). I never expected to get much if anything out of that house (with all the attached issues), so I am at peace with whatever happens as long as it does not entail my dad getting kicked out, or me getting accused of mishandling funds, the estate or whatever.

My parents were horrible at managing their money and they retired too early. This is partly why I am here. Sometimes the most instructive examples are the bad ones!
« Last Edit: March 26, 2021, 02:52:08 PM by ObviouslyNotAGolfer »

Cassie

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Re: MediCAL (Elderly NOT ACA) disqualification, spend-down, and re-apply???
« Reply #11 on: March 30, 2021, 11:15:52 PM »
My friend’s parents in Texas consulted a lawyer and when her mom went into a nursing home most of the assets were protected and she inherited a nice sum when her dad died.

 

Wow, a phone plan for fifteen bucks!