When having a conversation about long term care and qualifying for Medicaid, every so often the topic turns to paying a family member to care for Mom or Dad. Is it a permitted Medicaid spend down?
In many cases the discussion occurs after the services have already been provided – often for years. When I explain the Medicaid spend down requirements, the child wonders whether he/she could have been paid for the services performed for Mom or Dad. If so, can we go back now and calculate that amount and “pay” the child now for past services?
The answer to that is an emphatic “no”. Services performed at the time for which no payment was made are presumed to have been made “out of love or kindness”, what families do for each other each day. No payment was contemplated nor is any expected. Medicaid views any “payments” to be gifts or what it calls transfer for less than fair value. A Medicaid penalty will result.
But, what about an agreement going forward? Can families enter into contractual agreements in which the parent pays the child for care? If properly drafted and reasonable payments are made, I have always considered family caregiver agreements to be OK to use. A recent decision handed down by a New Jersey judge, however, makes me rethink the effectiveness of these family arrangements. Next week I’ll explain.