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Spouse or Partner Caregiver Forum
Can someone help me understand purposely going on Medicaid
At the advice of this forum, my husband and I met with an Elder Care Attorney. My husband has a recent dx of dementia, possibly Alzheimer's, and are waiting 6 months to see a neuropsych for testing. DH does not have many symptoms yet and can perform ADL and drive. Most people would not know he has dementia. He is still in denial.
We are fortunate to have Long Term Care insurance, but our policy only covers 4 years of memory care expense.
The attorney explained that I need to plan so that 5 years before my LTC runs out, I would change to Medicaid. This would involve gifting all our savings to relatives who would then pay for our expenses. The relatives could not give us actual money. The most money we could have would be $130,000. The reason for doing this would be to safeguard our savings and my husband could be taken care of (by Medicaid) and there would still be savings left for me.
Is there anyone here who can explain this better to me? What would stop the relatives we gifted our money to from using it for themselves (other than we would pick people we trust)? Can I have $130,000 and DH also have $130,000? I didn't understand the concept and was so upset that I wasn't able to absorb anything else. The attorney said he would be sending a letter to us explaining everything we talked about.
I am so upset and hope that if I understand how it works better, I may feel less upset. Thank you.
That sounds like a great question , I'd have trouble swallowing it too- the 5 year gift look back I get BUT what if the relative you trusted died, had a legal judgement against them , married a creep or developed Alzheimers themselves etc.
I'd wait for the letter, it may be the lawyer covering the bases to present EVERY option.
And good for you getting started now while you have time to digest every option. So much better than a no choice, go to court ,finances in a mess situation some folks find them in.
And while not a lot of CELAs out there , you can talk to another -- it's important you have one who can explain things in a way that make sense in a logical way.
Does your state offer Miller trusts? Jo C wrote a great reply about them in some thread recently ..
Here is the thread with the Miller trust info
Something to consider about Medicaid care....many facilities will not accept Medicaid so your choices will be fewer.
Also, 4 years in a MC facility covered by LTC is a pretty long time. Your husband will likely be at home for an extended time and placement might not ever be needed.
I'm glad to hear I am not the only person who finds the advice we received today questionable. I am looking up other elder law attorneys in my area and will make another appointment.
I have no idea how many years are typical for a stay in Memory Care, so it is helpful to hear that 4 years would be considered a long time and the majority of the time DH will be able to stay at home.
Thank you everyone who replied, and if anyone else has comments or suggestions, please add to what has already been said. I really don't know what I would have done without this message board, which has helped me in many ways already and I am still very new.
I consulted two CELAs and, yes, gifting some money to a relative or relatives is one option that was brought up. I do believe it is a common strategy. Trusts are another option. The attorney was not saying to gift all the money but part of the money could be handled that way. Trusts were also discussed. A combination of gifting/trust was also discussed. There are, of course, negatives to gifting money. It would have to be to someone trustworthy. Also, a legal agreement would be put in place with the person or persons the money was gifted to for protection and could cover items such as if the person were to die or become incompetent themselves. If the money is gifted to more than one person jointly, there can be restrictions/safeguards placed on the account that one could not withdraw on his/her own, etc.
So, yes, there are risks with this type of approach but it is not uncommon. The attorney should have discussed the risks and benefits with you and other options. It is not the only option, so if you are not comfortable, do not do it.
Not touching the giving money away question with a 10 foot pole. Too many pitfalls.
A married couple does not have to go on Medicaid at the same time. If only one needs care, then only one applies. The other spouse is known as a community spouse. The community spouse gets to keep the house, car, usually their own income, sometimes their own IRAs or 401ks, and a certain amount of cash. Everything else is to be used for the spouse needing care before Medicaid will accept them.
The cash is the $130,000 you mention. That number depends on what state you live in. For example, the number the non Medicaid spouse could keep in my state is around $110,000. In some states the non Medicaid spouse only gets to keep $24,000. In some states, the non Medicaid spouse’s IRA/401K counts toward the amount of money to be kept or used for the spouse’s care
The spouse applying for the Medicaid can only have a very limited amount of cash - as in $2000. Anything above that is to be used for their care. With the exception that certain assets can be transferred to the community spouse before the application is submitted. Varies by the state of course. This includes a certain amount of monthly income of the person needing care if the community spouse’s monthly income is below a certain threshold, I think that threshold is around $2600 in my state. The rest of the income of the spouse needing care must be paid to the facility and Medicaid pays the balance.
If you are both applying for Medicaid, then neither of you gets to keep much cash at all. I think each would get to keep $2000.
I also not sure that a person receiving LTC insurance payments would qualify for Medicaid. Unless that LTC payment amount and the persons own income totaled to less than the facility cost. So I do not understand the lawyer telling you to apply for Medicaid while your LTC will continue paying for 5 years.
Hello Ellsie, it is good that you are going to get a second opinion - and do get it from a Certified Elder Law Attorney. "Certified" indicates a significant set of standards and knowledge an attorney would need to obtain that certification. Pretty much any attorney can call themselves an Elder Law Attorney; but one cannot do that if Certified.
It would be very helpful to know what state you live in.
You mention you have a Long Term Care Insurance Policy that pays benefits for four years - for a LTC Policy, that is actually a very long time. Be SURE to keep your payments up and some Members have all their insurance payments on autopay to ensure they never miss a payment which can cause policy cancellation, especially as one ages as LTC would rather drop clients than to ever have to pay out.
Your husband appears to be very high functioning and appears to be in the early stages of his dementia which indicates he may well be able to live at home for quite a long time yet. Sometimes, it can be years until a person needs Memory Care, lengths of time for need of facility care varies greatly and of course all persons with dementia are diffierent. Some stay at home and do not ever need to enter care; others do. No way to tell in advance, so one plans as best can which is what you are trying to do which is such a very good idea; good for you!
As for Memory Care, it is important to know what facilities in your area actually have a MC Unit and then call them and ask if they accept Medicaid - it is common for many if not most of the Memory Care Units to not accept Medicaid and to be private pay only. This is important and one can keep up over time re-checking. Sometimes Long Term Care Policies also will pay for help in the home to one degree or another when a person fits certain criteria.
Though it may be no problem in your thinking, the idea of shifting financial assets to other persons would be for me, an "iffy" sort of concern. Think of the possibilites of loss and getting entangled in a huge legal mess trying to get your money back if the other person becomes incapacitated or dies - AND - another big concern is that we live in a very litigious society - people sue at the drop of an opportunity. IF a person holding your money gets sued, then your money is sitting there ripe for the taking.
Yes; you too can be sued and that of course is something you will want to think about. It is about risk versus benefits. I do feel concern on this front as your husband is still driving - I would absolutely want the dementia specialist to determine whether your husband is still safe to drive AND if so, to have him/her document that in the patient's record so that if anything happens, it will not be that you were hiding the dementia issues. When sued, medical records are subpoenaed
Since Medicaid has a five year "look back period," you would have to hide your money with other people over five years BEFORE applying for Medicaid as Medicaid in most states has a five year period of looking back to see how assets were handled. If they see anything untoward, the penalties are high including not being able to get Medicaid for a lengthy period of time.
In many states, and I am not sure of yours as we do not know your state, the amount of spousal savings able to be kept by the well spouse not applying for Medicaid is often, $137,400. In many states, any income from a pension, IRA, Social Security or other retirement income in ONLY the non-applicant spouse's name is not counted by Medicaid; only the applicant spouse's is counted in those states. Your CELA can inform you of your states setting on this.
Also, in many states, if the applicant spouse qualifies for his/her spend down to meet Medicaid criteria, but the applicant's income is too high to qualify for Medicaid but not high enough to pay for the cost of facility care, there is something called a, "Miller Trust," also known as a "Qualifying Income Trust." In this, only the applicant spouses income (NOT the non-applicant spouse's income), is placed into a Trust that has been set up that is specific for this purpose and only this purpose. When the bill for the care facility is received each month, a check is written from the Trust to the care facility and then Medicaid makes up the shortfall that is not covered.
It is a lot to take in and as mentioned, this is state specific. There is also a concern about what is ethical and what is safest for the non-applicant spouse. Good to get that other CELA input and see what is the best fit for you and your husband.
Do let us know how things are going and what you decide; it is a complex position but you are doing a very good job of it all and getting all your medical and legal ducks in a row before they all start quacking and feathers begin to fly.
I would think long and hard about moving money around, or "hiding" it from Medicaid. Do everything above board - states are smart enough to see through all different types of shenanigans.
I have been very outspoken about my opinion on long term care is this country (US), and it leaves a lot to be desired. The simple explanation is that we are on our own until we are nearly broke, then Medicaid will begin paying for my wife's care.
Many, many, many rules. Most states will prevent the "community spouse" from becoming impoverished by the ill spouse's need for care. My case is unique, as I am significantly younger than my wife, and bleeding down my savings to $130K or so makes for a serious blow to my retirement plans.
I have received all kinds of advice (outside this board), that has been borderline insane. I have been told to give away money, or divorce my wife, or separate from her, or spend lots of money on things I don't need, etc.
Just nope. Gee whiz.
It makes more sense to see a Certified Elder Law Attorney (CELA) and a financial advisor. This is what I have done. My plan is simple: Keep my dear wife home and care for her as long as I can. If memory care becomes necessary, I will pay for it, using funds in the sequence my financial advisor has recommended. I will also update my CELA at that time and find out when (or if) we should even apply for Medicaid. If so, it will be above board, with no shell games.
As much as I complain and moan about the cost of care, there is a moral hazard here. I have chosen to (painfully) just pay for care, and apply to the state for help when (or if) I really need it.
Just my two cents.
Unfortunately, there are some lawyers out there that hold “seminars” for older folks claiming to help them qualify for Medicaid and keep all their hard earned money. Don’t listen to them. They make money off these seminars and potential clients and they are NOT certified elder care attorneys.
Also, read and understand all the fine print with you’re LTC insurance. Does it specifically say it covers memory care? Some only cover care at the “skilled nursing care”, nursing home level.
Memory care is considered more custodial care. If unsure, I would call your LTC carrier and have them explain how they handle memory care vs skilled care. Just some suggestions. I would not “gift” anything to anybody. Hope this helps.
I have an appointment with another certified elder law attorney. I live in Ohio.
My husband was told by the neurologist he could drive to places he knows (grocery store, work out facility). I will ask her about adding something to the notes that say that. I do all the driving when we are together.
Regarding the 4 years of nursing home care, our policy allows for 4 years for each of us and I can give him some of my years if desired, so I could give up 2 of my years so he could have 6 years, but then I would only have 2. That is a decision I hope not to have to make. I pay all the bills as soon as they arrive, but perhaps it would be a good idea to make the LTC policy payments automatically as you suggest.
I am looking forward to hearing from the other attorney.
Once again, it is so nice to have a place filled with people who know what I am going through. It is sad that we are all in similar situations, but I am grateful for group.
Agency on Aging 2022 Information Re Long Term Care Medicaid Eligibility for Ohio:
Just a thank-you to Jo C. I found good information at this address for other states, too. Including mine.
When we visited with a CELA last year, we were told that we could set up a trust to protect our assets, but then we would be completely dependent on whoever we chose to be the trustees. Also, we were told that it would cost $10K (approximately) to set up. We decided to forego it.
However, we were able to use this attorney to create a DPOA for us, which did give me some peace of mind.
I just don't know what will happen and have to believe that my spouse (now 83) will probably pass before I will. It would leave me with little to live on if we had to pay for MC for years. I feel absolutely awful that I am betting on my spouse not to make it. Has anyone else been or still is in this situation?
When I was young and working in a Social Security office ca. 1975, a distinguished gentleman in a good tweed suit came in to report he had divorced his wife. He was a retired Professor of Economics whose wife had to go to a NH. The stocks and bonds were gone, the house was gone, and he was able to keep only enough of his pension to live in a studio apartment and eat ALPO. It was to avoid such "Medicaid Divorces" that the Spousal Impoverishment Act was passed. Now the spouse who is not eligible for Medicaid can keep their income, a house and car, and some financial assets.
Some people give money away rather than pay it for NH care, but Medicaid has a 5-year "lookback" so the money will still count as an asset if it was given away within 5 years. There are better ways to finance NH care IMO.
The attorney was very clear that these rules do pertain to memory care facilities that accept Medicaid. It could be that "Intermediate Care Facility for Individuals with Intellectual Disabilities" does refer to people in memory care since they do have intellectual disabilities.