Sun, 5 October 2008
When money is running out and the family is faced with the need to apply for Medicaid to pay for long term care the question becomes “should we do this ourselves or should we hire an elder law attorney to help?” Sometimes the hospital or the nursing home tells the family they will qualify without too much difficulty. So they try to do it themselves.
The pitfalls of going it alone are many and varied, especially since the latest round of Medicaid changes effective February, 2006 made the laws and regulations in this area much more complicated. Timing is critical. By that, I mean to say, that when you spend down assets and what assets you have at a certain point in time will have an impact on qualifying for benefits. Let me illustrate by way of example.
John and Mary were in their 80’s and living in their home, which they owned. They had other countable assets of approximately $50,000. John and Mary had done no planning for their long term care needs. John became ill in October, was admitted to the hospital and then to a nursing home for rehabilitative services. His condition was such, that he could not go home and needed to remain in the nursing home on a long term basis, at a private pay cost of $10,000 per month.
Mary was told by various personnel at the hospital and the nursing home that based on their level of assets “John would qualify for Medicaid” in January and they arranged for her to meet with a Medicaid caseworker to make an application for benefits. Being stressed out by the reality that John would not go home and uncomfortable with the complicated process she did not understand that for John to qualify she would have to spend down a portion of their assets to get below a certain dollar amount. In her case that number was $27,000. The caseworker explained this to her at the interview but, quite frankly, she was receiving so much information that she really didn’t fully understand how important that was.
She waited for medical and nursing home bills to come in. She figured she owed the money so it was as good as spent. In other words, in her mind she didn’t have $50,000. They owed $28,000 so she had $22,000 left. Not true under Medicaid rules. Until she wrote those checks, John and Mary were “overresourced”, Medicaid’s term for having too much money to qualify for benefits. If you are overresourced by even $1.00 you won’t get Medicaid for that month. You will never get Medicaid for that month.
Had she paid those bills right away John would have qualified for benefits in January. Instead, she didn’t write those checks until June, meaning John didn’t qualify for Medicaid until July. Great, so Medicaid picked up the nursing home bill in July. There was one small problem. Who was going to pay the nursing home bill for January through June? The answer was John and Mary, and at the private pay rate of $10,000 per month that was $60,000. The shame is that this didn’t need to happen.
This example illustrates the pitfalls of going it alone. The rules are quite complicated and timing is critical. You don’t want to be left with a huge nursing home bill which you can’t pay. The nursing home doesn’t really want to be in the position of suing their residents. Having a knowledgeable elder law attorney representing you can save huge dollars and huge amounts of stress.
So how did John and Mary’s problem get resolved? She hired us to negotiate with the nursing home. We were able to reduce the bill a little bit and since she only had $22,000 in liquid assets and could not afford to pay the bill now, the home agreed to take a mortgage against her home. They’ll get paid when the home is sold. Not the best end result but as good as could be expected.
Category:Medicaid -- posted at: 5:14pm EDT