A Six Figure Medicaid Mistake (Part 5)
In my blog post this week I continue with the story of the family that tried to get Medicaid for Dad but failed. In the past several weeks I have explained that while Dad’s assets need to be under a $2000 to achieve eligibility, Mom also has an asset limit, which includes accounts and assets that many people would not even consider to be assets but which count under Medicaid rules.
In Mom’s case she had a number of life insurance policies insuring not only herself and her husband but also children and grandchildren. While the death benefit – the amount paid out when the insured dies – is not countable, some policies have cash value. That cash value is countable if Mom or Dad is the owner of the policy.
Once we obtained the policy documents we were able to determine that some of the policies were what are called “term” policies. They have no cash value but only pay a death benefit so no problem there. Others, however, did have cash value and Mom was the owner of some of those policies so the cash value counted as part of her limit – what Medicaid calls the community spouse resource allowance (CSRA).
Mom also had a number of different savings accounts with anywhere from a few hundred to a few thousand dollars in them. Some were for her grandchildren and were UTMA accounts, meaning she was the custodian on behalf of her minor grandchildren but the accounts are actually owned by her grandchildren. These were not her accounts so do not count towards her CSRA, however, we then had a different potential problem. She set up and deposited her own money into these accounts. If she made any contributions in the last 5 years, then Medicaid will calculate a penalty which is a waiting period for benefits.
Once we had all this information and documentation we were able to determine how much Mom needed to spend down to get under her CSRA number by the end of the month in order for Dad to be eligible for Medicaid beginning the following month. Most of the spend down amount in her case needed to be applied towards the bill for the past 16 months of care Dad received because of the failed attempts to get Medicaid. That couldn’t be undone. All we can do is look forward and get Medicaid as quickly as we can.
This is a lesson, however, for other families faced with a similar situation. Before deciding to handle a Medicaid application yourself or seeking assistance, be sure you or the person providing assistance knows the Medicaid statutes and rules well. This is especially important in the case of married couples. Had Mom and Dad gotten to us sooner, we could have avoided a nursing home bill totaling $150,000 which they do not have the funds to pay in full. Not the best outcome for the family or the facility.