Last week we were discussing the Community Spouse Resource Allowance (CSRA) and how to calculate it. I also explained that a mistake in determining that number can be quite costly. Here’s how.
Using my example from last week, let’s say husband, Joe is in the nursing home and wife, Mary has calculated the CSRA amount that she can keep to be $100,000. But, if that amount should really be $90,000, she still has to spend down another $10,000 but she doesn’t know it yet.
Mary then applies for Medicaid. Because most of the county Boards of Social Services, which process the applications, are understaffed and overworked, it could take months for them to actually review Joe’s application. In some counties it takes months just to get an application assigned to a caseworker.
That means that for months no one will be looking at what Mary submitted. If it take 6 months till the caseworker calculates the CSRA and informs Mary that she is wrong and has to spend down another $10,000, Mary cannot turn the clock back and change what she has done. Once she spends down the extra $10,000, Joe will eligible in the 7th month but – and here is the critical piece of information – she has permanently lost Medicaid for those first 6 months.
Think about that. So the inevitable question I get when I explain this to people is, “what happens then?” The answer is that Mary must pay the nursing home at their private pay rate for those 6 months. At $10,000 to $12,000 per month that could cost her a total of $60,000 to $72,000, leaving her with as little as $18,000 left for her own needs.
A very expensive mistake indeed and why it is so critical to get the proper advice and not try to “do it yourself”.