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The care provider should get an employer ID if she wants to invoice the elderly person for services. At the end of the year, the elderly person files a 1099 with the gross amount of the payments made to the care provider's employer ID. The care provider is responsible for filing timely quarterly tax returns with payments for any income tax and FICA taxes. The elderly person can probably write off the amount on the 1099 (but check with tax specialist to be sure).
Regarding Medicaid requirements and five year look backs; many times any money given to family during that five years is considered a divestment. Sometimes Medicaid doesn't look that far back, yet I've heard that sometimes they do and you will get denied.
In preparing my dad for Medicaid as he stayed in a Nursing Facility; we needed to cash out all of his life insurance policies, all of his stocks, and all of his annuities in order to spend down to the $2000 limit. This gave him enough funds to private pay for almost a year before we needed to apply for Medicaid.
With the money he cashed out, he wasn't allowed to use ANY of it for gifts unless very small. I did much research on all of this and DID hire an elder attorney to help us through the process. We needed to buy him a burial trust and prove that when I met with the Medicaid specialist.
In addition, I have a health insurance background so I made sure that I kept all my ducks in a row regarding keeping all receipts on anything spent. I found it easier to pay out of my own pocket for his health insurance premiums, in addition to anything else he might need rather than keep track of all these little spendings.
You will need to provide at least a year of bank statements so that they can see where the money is being spent.
In addition, we had purchased my dad's home on a Land Contract. I had specifically gone to the Dept. of Aging and Disability to ensure that this would not affect my dad's income and at that time they told me it wouldn't. We had a 10 year contract and made sure that we paid the entire appraised value of the house, along with 3% interest. This is important as if you pay any less than the appraised value, that too can be considered a divestment.
Well, I went to a face to face interview with a Medicaid specialist (much easier to do than to send your paperwork in); and she made it sound like my dad would have no problems getting approved. However, a week later we were told that because we were only three years into paying on the Land Contract, their "statistics" showed that my dad's life expectancy was short two years (statistics said that his life was five years and some odd days); and thus, those additional two years would be considered a divestment.
What a crazy stupid loophole as my dad is still with us. They denied my dad Medicaid and the specialist told me, "Well Medicaid isn't for everyone...") My family is just livid as we spent down everything he and my mom had saved over the years and could have come up with a much better idea had we known that this was going to happen.
I had been told over and over my Social Workers AND our attorney that the Land Contract we had shouldn't at all affect his benefits, but since this is a new ruling for Medicaid, it is was it is.
They told us that we needed to either take out a loan and buy the house out of the Land Contract (and then my dad would need to spend that down); or claim a hardship within 21 days. A hardship meant that the nursing facility where my dad was living would have to start eviction proceedings and by law, had to provide suggestions for a different place for my dad to live.
One of the questions I had for her was that all the reading I did on current Medicaid laws was that if a patient had any divestments, they would still be allowed Medicaid, but after the person passed away, the divestments would come out of the estate, or from any living relatives. She told me that they didn't do this anymore.
I asked the Medicaid professional what the places might be where my dad could live and she told me that it would probably be Assisted Living (which my dad is beyond..he needs daily care and care that Assisted Living wouldn't be able to provide.) In addition, they told me that at that point, he could apply for County Care; which doesn't pay for much and in addition, he more than likely would have to change doctors.
We had to file this hardship within 21 days and at that time there would be a meeting with the people from the nursing facility and Medicaid professionals.
Luckily, since my dad has been on private pay for so long, the nursing facility is not going to start eviction procedures. Thank goodness. This facility is not only very good to their residents; but they have never evicted anyone for lack of payment and that we should pay what we can.
We are in the process of taking out a loan to pay off the Land Contract and hopefully will not need Medicaid.
Funny, when I spoke with the Medicaid specialist, I asked why people weren't told about these laws BEFORE they applied for Medicaid and her reply was that they can't legally educate people (which is a bunch of bunk!!), yet she rattled off all these rules and regulations at me (numbers and ALL) like they were the Holy Grail once we were denied.
Again, I was livid as to how completely ludacrist the whole situation was. These are our families; our loved ones that they are doing this to and I told her how I and all kinds of other people are jumping through all of these so called hoops; spending down their last saved dimes; only to get denied; possibly getting evicted to the last place they called home; and how devastating and confusing it must be to be moved to another facility. I can imagine it would be detrimental to their health also, but the government doesn't care.
Medicaid will tell you what you can do (in a very round about way); but they won't tell you what you can do, such as being able to keep $1500 worth of assets. I ended up cashing ALL my dad's policies out and thankfully saved one check for a situation such as this one. After speaking to our financial advisor, he told me that the best thing to do was to put it in a savings account. It's like all the rules and regulations regarding approval for Medicaid are their best kept secret so that all our parents' money will be put back into the economy. Heaven forbid they give any amount to their children!!
My thoughts for some of you that haven't gotten to the nursing home phase is to purchase Continued Care Insurance for yourselves and your parents. It's a little pricey the older you get, yet much less expensive than having to pull everything you've ever saved out until you're broke. I believe there may be an age cutoff, but I'm not sure.
Had I known this though, I would have pulled out just one of my dad's life insurance policies and he could have paid for Continued Care with that, as that type of care pays for most, if not all health costs once in a nursing facility.
Although, I am hoping that I will never need the information, I am checking on the Medicaid Five Year Look Back in case my husband needs to go into a nursing home in the future. From the websites I am getting "high-roller information" but nothing that would be practical for normal, regular people. They give examples like "Chloe gave her granddaughter $25,000 to pay for her wedding" or "Boswick sold a painting worth $50,000 to his son for $10,000" or "Penelope sold her house to her son for less than market value" or Johnathon gave his godchild a car worth $35,000" or "Derek gave each of his six children $10,000 in cash for Christmas" and things like that.
Where is the advice for regular people? What is the advice for regular, normal, middle class people?
As an example, last summer I gave my son $500 to help pay for airplane tickets for his family to visit us. Does that count in a "look back"? Would he have to repay that money? What if it had been $500 a year for several years?
Our adult daughter lives with us but does not pay rent. Does that count as money that she would have to pay back if they did a Medicaid "look back"? How would they calculate that? The fair market value of renting a room in a private home? She also had/has responsibilities in caring for my husband who is disabled (that is part of the reason that she moved home). Would that make a difference in the look back for not to pay rent?
What about other things that we have paid for our daughter, such as cell phone costs or car insurance or rent money when she ran short in college?
We took out some parent loans for our daughter's college education. As we pay the loans back do those count as money for her that needs to be reported?
They also said that money donated to a church/religious organization could also count. Are they talking about a few hundred dollars a year or only when someone makes a large donation? And what do they consider "large"?
While I did contact an elder care attorney to get all of our paperwork in order it never really occurred to me to ask her these type of questions. But, I want to make sure that I have not done anything in the past nor do anything in the future that is questioned by the Medicaid Five Year Look Back.
Thanks.
Medicaid laws are a bit different for spouses and making another visit to your elder atty may be in your best interest. I'm not exactly sure how it will affect the divestment process if your daughter is living with you for free; but since she's living with you and your husband in order to help care for him, I believe that might be ok.
I was caring for my dad at the Assisted Living Place he was a resident at, but I wasn't living with him. However, your daughter may be eligible for some State Funding regarding being a caretaker that lives in your home and assists you in his care.
Many of the Medicaid laws that are written on the internet are either out of date or extremely unclear, which I believe they do on purpose. I looked for help everywhere I could considering the correct guidelines but not even the person at the Funeral Home where I purchased my dad's Funeral Trust could give me straight answers. One social worker told me that my dad could give each of his two daughters $500, but I found that it was closer to $50 in most cases. Once their in a nursing facility; all funds need to go to their care or anything that's in their best interest.
One would think that it would be in their best interest to gift someone something now and then, but I guess that's a no no. My best advice to you would be to not put anything on paper, such as writing a check, but to just give cash. Don't pull it from your savings/checking account, but start socking away some cash somewhere (maybe in a safe in your home) and not in an account in your name. If a check comes into the family, cash it and again, put it in a safe or something. DO NOT put it in a safety deposit box as when you go in to talk to a Medicaid Specialist, they will see that on your bank statement, will ask you what's in the safety deposit box, and you will have to sign something saying that they can look.
Jewelry, etc, in a safe deposit box is considered something of value, which you may have to sell and spend that value down, so clean it out as soon as you can.
Don't purchase any more CDs or annuities, stock market investments in your names any longer. And I believe you may actually be able to transfer your life insurance policies into your daughter's name, so as not having to spend them down either. If not transferring them to our daughter's name, you could also cash them out, put them in a safe, and use that money towards your husband's care when he needs it, depositing what he needs into your daughter's account and thus the check is in her name and not yours/your husbands. Please check with an very good elder atty on all of this though as if you think your husband may need further care in the next five years, you may be able to use this cash for his care until he's ready for Medicaid. In addition, if he's on disability, that will come into play also so if his pension is above $2000, they may see him as illegible.
Again, for me they only looked for the last year, so keep your paper trail to a minimum so it doesn't show up on your accounts. Use cash whenever possible, as receipts can be lost easily. I myself, being afraid of the five year look back, spent countless hours copying receipts and going through reams of printer paper and tons of computer ink, which I was told..a few would apply, but not all, as they didn't cover office supplies. They never asked for any of that..yet I went prepared anyway.
And yes, your elder attorney can go with you to the initial Medicaid Interview.
Check with an elder atty regarding transferring any life insurance policies over to your daughter's name/cashing them out now yourself and putting the cash away in a safe in your home; putting the house in your daughter's name, etc. as Medicaid will probably look at your home as an asset that you will have to sell if it's not in your daughter's name already. You can transfer the house into her name if it's before the five year cut off if she is living with you and helping to care for your husband; yet again, please check with your atty, since Medicaid laws change daily.
If there comes a time when your husband needs to go to Assisted Living, the two of you can live there with some assistance (such as County Care). Should his health continue to decline, Medicare will pay up to 120 days in a nursing facility; whereas private pay will kick in.
This is where any monthly disability, pensions, and retirement accounts will come in handy, in addition to any other funds you may have set aside.
I used much of my own money to pay for the little things my dad needed; including his health insurance premiums and told Medicaid that. They really didn't have any concern over money coming out of my account, yet more about what was coming out of my dad's for his well being. We used his account to pay out of pocket for his nursing facility stay and I supplemented it at times. They didn't seem to care if it came from another account as long as it didn't come from my dad's.
Please talk to an elder attorney that is well educated on the current Medicaid policies and the things you can and can't do regarding your hard earned money.
With that, I'll wish you luck. Hope some of my tips helped. Better health to your husband in the coming future and God Bless!!
Last edited by ourdaywillcome; 03-27-2016 at 05:33 PM..
Reason: missed something
To clarify what happened in my mother's case, she had no assets at all. She also had a foreclosure on her house 3 years prior to filing. The only thing she has is a good monthly income that would have been fine for assisted living but not for skilled nursing. Medicaid is paying the difference in her income and her cost of a skilled nursing facility. Since there was no house, no car, no life insurance policies etc. it was easy. I did have to provide proof from court that there was the foreclosure and that might have been acceptable in lieu of the 5 year look back. My guess is that if the finances are complicated then an attorney would make good sense. In my case though, I'm glad I didn't spend $8,000.
So sorry your mom had such a dire need for Medicaid. Nobody shouldn't have any assets along with a foreclosure on her home.
So glad Medicaid has jumped in for your mom.
We've been lucky and hired a very good elder atty for $200 to take our case. The last jerk we were dealing with was charging well over $275 for a half an hour session and as the bills kept rising the more questions I had, he'd charge me for a phone consultation at the cost of $300 for 20 minutes.
Dad and I were finally done with that BS and searched out a good attorney that wouldn't charge us an arm and a leg.
Fell upon this friend of mine and went for a consult. She told me she charges all her Medicaid patients a flat feel of $200.
To clarify what happened in my mother's case, she had no assets at all. She also had a foreclosure on her house 3 years prior to filing. The only thing she has is a good monthly income that would have been fine for assisted living but not for skilled nursing. Medicaid is paying the difference in her income and her cost of a skilled nursing facility. Since there was no house, no car, no life insurance policies etc. it was easy. I did have to provide proof from court that there was the foreclosure and that might have been acceptable in lieu of the 5 year look back. My guess is that if the finances are complicated then an attorney would make good sense. In my case though, I'm glad I didn't spend $8,000.
Ahhh, that may explain not having to do a five year look back.
I bet that the foreclosure records probably included other information that showed that your mother did not have any money three years ago & the years leading up to that period or else she would have paid the mortgage payments. An elder certainly would not try to hide money by giving large financial gifts to children or others & then let their home go into foreclosure.
The social workers at the facilities my inlaws moved to helped us with all paperwork and all options. Basically they told us that they could keep the house and their car and $2000 in the bank. Since we never got to the Medicaid stage I have no idea how much scrutiny would have gone down at that point.
a care giver child who does care may with a dr note keep the home. the car they could care less but add the cost.
I recently got Medicaid approved for my mother and they only looked at the most recent bank statement. We ran her money out at the skilled nursing facility until she got down to $2,000. She has a good income and Medicaid is paying the difference for the skilled facility. Prior to our application, I met with an elder law attorney who tried to charge me $8,000 and made the process seem really difficult and requiring an attorney. Thankfully, I did it myself. It took all of 2 hours and she was approved within two weeks. Way easier then what I was told and no five year look back.
Maybe this is state dependent, but I am mid-process for this for my mom is an ALF, and we mos certainly have to provide 5 years statements for every account she had, even the closed ones. It is a huge PITA and like a second job, I am hiding in closets on the phone with banks etc while at work...one example, the same bank which accepted my POA for bank statements, is also the administrator of her pension, yet the pension division operates seperately and won't send me a letter valuing her pension until I get them the ORiGINAL POA with raised seal, which I am NOT sending away. I had to ask medicaid for one extension already because it is taking forever to get all these things. I also need to provide a copy AND explanation for every check over $500 in the past 5 years.
I do not know what process you completed, unless your mom simply had no assets at all over 5 years, but your experience is not normal for the medicaid process, and you are doing a disservice if you give others the impression it is typical.
I recently got Medicaid approved for my mother and they only looked at the most recent bank statement. We ran her money out at the skilled nursing facility until she got down to $2,000. She has a good income and Medicaid is paying the difference for the skilled facility. Prior to our application, I met with an elder law attorney who tried to charge me $8,000 and made the process seem really difficult and requiring an attorney. Thankfully, I did it myself. It took all of 2 hours and she was approved within two weeks. Way easier then what I was told and no five year look back.
Quote:
Originally Posted by ocnjgirl
Maybe this is state dependent, but I am mid-process for this for my mom is an ALF, and we mos certainly have to provide 5 years statements for every account she had, even the closed ones. It is a huge PITA and like a second job, I am hiding in closets on the phone with banks etc while at work...one example, the same bank which accepted my POA for bank statements, is also the administrator of her pension, yet the pension division operates seperately and won't send me a letter valuing her pension until I get them the ORiGINAL POA with raised seal, which I am NOT sending away. I had to ask medicaid for one extension already because it is taking forever to get all these things. I also need to provide a copy AND explanation for every check over $500 in the past 5 years.
I do not know what process you completed, unless your mom simply had no assets at all over 5 years, but your experience is not normal for the medicaid process, and you are doing a disservice if you give others the impression it is typical.
ocnjgirl, thank you for your post.
It just shows the huge variation between states & people & situations . My friends & relatives had experiences much more like ocnjgirl is having than like Im walters had. While the sample of my friends & relatives was small (only about five, and I really do not know too much about a couple of them) the shortest approval time was about three months and relatives all had to provide five years of documentation for the person going on Medicaid (varied in depth).
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Help with Medicaid
