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In my post last week, I told you about a son who called.  His mom had been paying for care for almost 2 years at an assisted living facility (ALF).  Thinking he was ready to apply for Medicaid benefits, he called our office for help.  His mom, however, still owned real estate worth approximately $1.5M.  So why did he think she was ready for Medicaid? He explained to me that 2 years earlier, his brother had been handling his mother’s care and finances and arranged for her move to the ALF.  When his brother said that they needed to pay for 2 years and then Mom could qualify for Medicaid, he didn’t question it.  He also didn’t look at the admissions agreement that his brother signed on his mom’s behalf. The mistake he made was actually a quite common one.  The facility’s policy - as is the case with a majority of ALFs - is that a resident must pay for the cost of care at the private pay rate (much higher than the Medicaid rate) for a minimum of 2 years before the facility will make a Medicaid slot available to her.  People wrongly interpret that to mean “if we pay for 2 years then we will get Medicaid. This

In this week’s post I will tell you about a call we received recently, similar to ones we have had many times over the years - although not in some time.  Son called stating that Mom was close to completing a 2 year private pay requirement at a local assisted living facility.   He said he needed help applying for Medicaid. As I have written about the past few weeks, you never want to wait until you are almost completely spent down to prepare for Medicaid because it leaves no margin for error.  I thought that was going to be concern here.  But then he told me that his mom still had assets.  She had several real estate properties to her name totaling well in excess of $1.5 million.  What she didn’t have much more of was liquid assets to pay for the cost of care.   So why did he think she could qualify for Medicaid?  I’ll tell you more next week.

The Medicaid Spend Down Scramble - Part 2 In my blog post last week, I wrote about the rushed process of spending down assets to achieve Medicaid eligibility for one spouse without severely impoverishing the other non-Medicaid “community spouse”.  While maximizing what that spouse can keep - what is known as exempt assets” - is one consideration, there is an equally important second consideration - avoiding a Medicaid penalty. That’s because any Medicaid penalty - determined by calculating transfers for less than fair value during the 5 year look back period leading up to the Medicaid application - is only assessed once the application has been filed and all other Medicaid requirements have been met.  This means that even if we are able to maximize what the community spouse can keep as exempt or non-countable assets, a lengthy penalty will necessitate  using those same funds to cover the cost of care during the time frame of the penalty.    In the end, it may leave the community spouse with next to nothing should the penalty be of any length and the cost of long term care at the private pay rate - which is much greater than the Medicaid rate - be $15,000 per month or

The Medicaid Spend Down Scramble - Part 3 In my blog post for this week, I finish the topic of the spend down process before Medicaid and why it is so important to the financial well being of the healthy non-Medicaid spouse.   As I explained last week, maximizing what that spouse, known as the Community Spouse, can keep is really half of the equation.  Avoiding penalties, however, is the other half. That’s because a penalty means an additional period of time the Communtiy Spouse must pay for the ill spouse’s care.  That time period begins only after the Medicaid application is filed, all documentation has been provided in the course of the application process and the application has been approved with the penalty as determined by Medicaid.  Of course, that means the Community Spouse must pay for the care out of the assets he or she keeps as part of the Community Spouse Resource Allowance (CSRA). So, if the health spouse keeps 1/2 of the assets but only up to a maximum of $154,140 but then has to pay for care for another 2 or 6 or 12 months or longer - the exact time frame being dependent on the length of the penalty period - that

I have written in past blog posts about Medicaid’s 5 year look back and the need to be familiar with the transactions that Medicaid will be reviewing.  We still, however, receive many calls where a quick spend down to Medicaid is necessary. In the case of a married couple where only one spouse is applying for benefits, the spend down is especially important to the healthy spouse.  Determining the amount that spouse can keep under the community spouse resource allowance (CSRA) is one part of the process.  Countable assets are divided in half and the healthy spouse can keep 1/2 of the assets but only up to a certain maximum amount ($154,140 in 2024). In addition to countable assets, the healthy spouse can keep exempt assets such as a home (if either spouse is living in it) and one car.  There is no limit to the value of these assets which leads to opportunities to maximize what the healthy spouse can keep, an important consideration since we never know how long that spouse may live or what his/her needs may be. The potential of a Medicaid penalty, however, is another important piece to the equation.  A significant penalty which is effectively tacked on to an expected Medicaid start

In this week’s post I will review the updated numbers for 2024 for the VA program that provides a benefit to wartime veterans and their spouses.  Known as the VA Aid and Attendance program, this benefit provides a special pension to eligible applicants who need long term care. The maximum pension amount is tied to the same cost of living adjustment as Social Security, which for 2024 is 3.2%. For a single veteran with no dependents the maximum pension one can receive goes up to $2300 per month.  For a married veteran the maximum for 2024 will be $2727.  For a widowed spouse who needs care the 2024 maximum will be $1478 per month. The Aid and Attendance program is a needs based benefit.  This means that to be eligible one must meet a financial test.  Different than Medicaid, the VA uses a net worth test.  It calculates the applicant’s (in the case of a married couple both spouse’s) annual income and adds that to the countable assets.  This is known as the net worth.  For 2024 the net worth must be no more than $155,356 to qualify for this benefit. Existing VA A&A recipients should have received a letter from the VA informing them of the new amount they will