Archive for the ‘Medicaid’ Category

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Nursing Home and Assisted Living Residents May Keep $250 Stimulus Payment

Wednesday, April 14th, 2010

Fredrick P. Niemann, Esq., a NJ Medicaid Lawyer

Just about everyone who gets Social Security, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or a Railroad Retirement or Veterans Administration disability pension, will receive a one-time payment from the U.S. government of $250 as part of the American Recovery and Reinvestment Act of 2009 (a/k/a the stimulus bill). The extra payment is scheduled to arrive by the end of May the same way you receive your usual benefit.

Among those receiving the one-time stimulus payment will be long-term care facility residents on Medicaid who draw Social Security benefits. (But note that SSI beneficiaries who live in a nursing home and get a monthly SSI benefit of $30 are not eligible for the payment.)

Medicaid-eligible long-term care facility residents and their families should know that the stimulus payment is not considered income and will not be counted as a resource for 10 months (including the month of receipt) in calculating benefits under Medicaid (or any other federal program or state program with some federal financing). The $250 will also not count as gross income for tax purposes. Recipients can save the payment if they want to, but they should make sure that it will not put their savings over the asset limit for any program benefits they may receive as of February 2010.

Because the $250 payment will not be counted as income, it will not put a Medicaid-eligible resident over the state’s income limit. In addition, a Medicaid nursing facility resident should not see an increase in his or her patient pay for the month the payment is received.

“This money is yours. Your home or facility is not allowed to take it to pay your bill, even if you get help from your state paying for your care,” says the National Council on Aging (NCOA) in an informational handout directed at residents of nursing homes, assisted living facilities and board and care homes.

If you have any questions, contact Fredrick P. Niemann, Esq. at 888-800-7442, or info@fnlawyerinnj.com.  He is happy to answer your inquiries.

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How a Declining Stock Market Can Cause a Long Term Care Nightmare

Monday, December 7th, 2009

Fredrick P. Niemann, Esq., a Medicaid Attorney

As the current economic crisis deepens, it is becoming increasingly clear that we are heading into uncharted waters, in so many respects.  Specifically, however, I am talking about the long term care arena.
Dad owns a home in which he lives.  Home health aides come into the home to assist Dad but as his health deteriorates, he needs increased care.  His son, John believes that Dad will very soon need to move to a nursing facility.  Now, here is where it gets interesting.

Dad took a reverse mortgage for $300,000 and he took it in a lump sum.  John’s plan was to invest the money in the market, get a decent rate of return that would help meet Dad’s expenses.  Well, we know what has happened in the past year.  The stock market has headed south.  Dad’s investment headed south too.  He lost roughly half of his investment.  That’s bad enough.  But here is the problem.  John transferred the money to an account in his name.  Not because he intended to keep it, but because it was just easier to manage the funds that way.

When he did that, however, he caused a Medicaid transfer penalty.  In New Jersey that penalty is approximately 3 and ½ years.  So what happens when Dad sells his home and uses the sale proceeds (less the amount he pays back to the bank) for his nursing home care?  He will be ineligible for Medicaid unless John transfers back the money.  Except that he doesn’t have all of it.

I know.  You’re thinking, “Will Medicaid really deny Dad’s application if John can show that the loss in value occurred in the market, and that he didn’t take the money?”  I don’t know.  Maybe, maybe not.  You see, we are living in unusual times.  Many states are struggling with budget deficits.  Medicaid is one of the biggest, if not the biggest, program for most states.  If they don’t have the money to fund these programs I can certainly see New Jersey applying the Medicaid rules as written and impose a penalty.  If Dad is ineligible for 3 and ½ years he may never live to receive Medicaid, something the government no doubt may consider when trying to balance its budget.

And just another reason why you can’t afford to be unprepared when it comes to long term care.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 888-800-7442, or email info@fnlawyerinnj.com.

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Assisted Living Care – I’m Out of Money So Now What?

Monday, December 7th, 2009

Fredrick P. Niemann, Esq., an Elder Law Attorney

Dad has been living in an assisted living facility for 3 years at a cost of $4500 per month.  He likes it there, is safe and well cared for.  There is one small problem.  He is running out of money and the family is becoming desperate.
 
Fortunately, some states have Medicaid programs that cover assisted living care but the rules can vary significantly from nursing home Medicaid. In New Jersey, for example, if income exceeds the Medicaid cap ($2022 per month in 2009) the assisted living program won’t, under any circumstances, be an option.  For those needing nursing home care, on the other hand, we have two Medicaid programs, one for those who do not exceed income limits and a second for those who do. 

The application process for Medicaid can take months or longer.  If, for example, Dad becomes eligible and applies for Medicaid beginning in February, it might take until April, or longer in some cases, for him to receive approval.  In the case of nursing home Medicaid whenever Dad is approved payments will be made on his behalf retroactive to when he first applied (assuming of course that he was eligible in that month).  Not so for assisted living Medicaid.  Approval is not retroactive.

As an elder law attorney, our focus with clients is on the financial requirements of Medicaid.  I always, however, remind clients that we can’t forget about the medical requirement.  The applicant must meet the test of medical necessity for nursing home level care as determined by a Medicaid nurse who visits the applicant.  In New Jersey, this is true even in the case of assisted living.  It bears repeating.  The assisted living Medicaid applicant must be certified as needing nursing home level care.  Fail that test and the asset and income levels are irrelevant.

So, if Dad can’t get Medicaid, what then?  If he can’t pay the bill he generally won’t be able to stay in the assisted living facility unless the family pays for his care.  Not a great result but one the family could have avoided.  Before he entered the facility a plan should have been put in place to cover the possibility that he could run out of money.  In some cases that may involve planning, determining what public benefits he can or cannot receive and when, (such as VA Aid and Attendance benefits) or negotiating a contractual modification with the assisted living residence before initial entry.

The mistake that Dad and his family made is in not looking far enough down the road and failing to sit down with someone knowledgeable about the various issues and pitfalls, such as an elder law attorney.  The lesson to be learned is that you can’t wait until the money runs out to then answer the question “What do I do now?”

For further information and advice in any elder law matter, do not hesitate to contact me at 888-800-7442, or email info@fnlawyerinnj.com.

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Married … Well Not Really – A Long Term Care Quagmire

Monday, December 7th, 2009

Fredrick P. Niemann, Esq., a New Jersey Medicaid Attorney

Jane calls us to relate the same problem that many Americans today are coping with, trying to care for aging parents.  She calls because Dad’s health is rapidly deteriorating and she fears he will need nursing home care.  I ask about Mom’s health.  Jane replies that she is healthy.  And here is the twist, where the story becomes more complicated.

Jane tells me that Mom and Dad have been separated for years, never divorced, just living separate lives under separate roofs, with separate assets.  “Dad was never easy to live with”, she tells me, “but Mom wasn’t the type to file for divorce.  It wasn’t acceptable.”  “So”, she asks me, “we can spend down Dad’s assets and then qualify him for Medicaid, right?”

“Well”, I tell her, “it is a bit more complicated than that”.  Under Medicaid rules, because they are still married, all their assets are combined for purposes of calculating how much to spend down.  Mom may have to spend some of her assets for Dad’s care even though they have been living single lives for years.  “Is there anything we can do,” Jane asks, as I hear the desperation in her voice.

Divorce is still an option, although it could be considerably more difficult if Dad doesn’t have the mental capacity to understand the legal process and consent to a divorce settlement.  There is also the matter of the State scrutinizing the divorce, especially if Mom has accumulated and wants to keep more than 50% of the combined assets.  You see, the State assumes the divorce was obtained for the purpose of qualifying for Medicaid.  If Mom keeps more than half of the assets Dad would probably be turned down for benefits.  There may also be other strategies that we have discussed for married couples that could be employed to preserve assets for Mom but, although they are married under the law, they are not really “together”.  So preserving Dad’s assets for Mom and vice versa is not the goal.

As Jane puts it, “Mom and Dad have lived separate lives for many years.  Mom has struggled to accumulate her own assets and become self sufficient.  How can I tell her that she will lose some of her hard earned money?”  An answer is not easy to give.  I do, however, have one for others who may one day be in that situation.  If any of Jane’s story sounds familiar to you, don’t wait till long term care is staring you in the face.  Plan ahead and solve the problem before it reaches crisis proportions or you’ll be faced with the dilemma that Jane and her family face.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 888-800-7442, or email info@fnlawyerinnj.com.

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Assisted Living Facility Residents Can Lose Their Homes if Their Facility Stops Participating in Medicaid

Friday, June 26th, 2009

Fredrick P. Niemann, Esq., NJ Medicaid Application Attorney

Most people want to avoid nursing home care.  Many people believe that assisted living provides them with something better: choice, control, independence, and safety in a “non-institutional, community-based setting.”  What is not widely known is that the protections for nursing home residents provided by the federal Nursing Home Reform Law do not apply to Assisted Living facility (ALF) residents, even those who are eligible for nursing home care and receive Medicaid for ALF services under a home and community-based waiver. Moreover, no separate federal legislation protects ALF residents.

Over the years, Medicaid spending for long-term care services has shifted significantly from nursing home care to home and community-based alternatives, including services in ALFs. Between 1995 and 2007, Medicaid spending on nursing home care declined from 61% to 47% of all Medicaid spending in long-term care, while Medicaid spending on home and community-based waiver programs, including ALF care, increased from 9% to 27% of Medicaid’s long-term care spending.[1] In 2002, 41 states used Medicaid to pay for assisted living services for more than 100,000 residents.[2]

Earlier this month, ALF residents in Washington State suffered a set-back in legal protection, highlighting the need for federal legislation.  In Washington State, a federal district court rejected limited state law protections for ALF residents whose facilities terminate their Medicaid participation. In contrast, residents of nursing facilities that participate in the Medicaid program have the benefit of a 1999 amendment to the federal Nursing Home Reform law, which offers broader protections to residents in identical circumstances.

Assisted Living Residents Lack Protection When their Facilities Terminate Participation in the Medicaid Program.

In 2007, ALFs in Washington State and elsewhere began voluntarily terminating their Medicaid provider agreements with the States and evicting their Medicaid residents.  Not atypical was the story of a 98-year old woman who had spent more than $300,000 of her life savings, paying privately for her stay at an ALF owned by Assisted Living Concepts. She was told that the facility would not accept Medicaid for her care and that she would have to leave, despite the fact that the facility had promised repeatedly over the nine years that she had paid privately that she could stay as a Medicaid beneficiary when her private funds ran out.[3]

Although Assisted Living Concepts, the chain that owns the woman’s ALF, evicted residents from its facilities across the country, only Washington State enacted protective legislation.  The protection for residents who were being displaced from their ALFs was limited. As enacted, the Washington legislation required ALFs to keep only residents who were receiving Medicaid at the time of their facility’s withdrawal and those who had paid privately for their stays for at least two years and who became eligible for Medicaid within 180 days of the facility’s withdrawal from the Medicaid program.[4]  The law was challenged by the Washington Health Care Association, a trade association of nursing homes and assisted living facilities. In a summary judgment decision issued this month, the federal district court in Washington State sustained the industry’s challenge and struck down the law on the grounds that it violates the Contract Clause of the United States Constitution[5]

The Court described the legal question as whether the state law was a substantial impairment to a contractual relationship and, if so, “whether the impairment is reasonable and necessary to serve an important public purpose.”[6] It found, first, that the 2008 legislation impaired facilities’ contractual relationship with the state by unilaterally invalidating the contract’s termination clause, which allowed ALFs to terminate a Medicaid contract on 30 days’ notice. Next, despite acknowledging that assisted living residents “are vulnerable elderly and/or disabled adults” for whom “forced and sudden discharge poses a significant threat to the residents’ emotional and physical well-being,” the Court held that “the drastic measure of requiring boarding homes to continue to provide services” to certain Medicaid residents “in exchange for the Medicaid rate [that the Department of Health and Social Services] DSHS decided to pay” was neither “reasonable” nor “necessary.”[7] The Court suggested that alternative legislative solutions could have served the state’s purpose “equally well without impairing the State’s own contracts.”[8]

The Washington federal court decision underscores the need for federal legislation to protect assisted living residents. Significantly, similar, but broader, federal law does protect nursing home residents in the identical situation.

Protection is Available for Nursing Home Residents when their Facilities Terminate their Medicaid Participation.

A 1999 amendment to the federal Nursing Home Reform Law – “Continuing Rights in Case of Voluntary Withdrawal from Participation”[9] – was Congress’ response to the decision of the Vencor Corporation (now known as Kindred) to terminate its nursing home Medicaid contracts and evict its Medicaid residents. The federal law allows nursing facilities to withdraw from the Medicaid program, but only prospectively.  All individuals living in a nursing facility at the time of a nursing facility’s withdrawal from the Medicaid program are protected, including those who become eligible for Medicaid at some undefined time in the future. The nursing home industry did not challenge the 1999 law. Notably, the Contract Clause, an important vehicle for challenging the Washington state law, does not apply to the federal government.

Conclusion
As assisted living becomes an increasingly prominent part of the country’s long-term care system, assisted living residents need to be adequately protected.  Congress should extend Medicaid nursing home protections to assisted living residents who use Medicaid and should consider whether additional, broader federal legislation is appropriate as well.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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Son Responsible For Mom’s Nursing Home Bill

Friday, May 29th, 2009

Fredrick P. Niemann, Esq., NJ Asset Protection Attorney

Many times the children of elderly clients ask whether they can be held responsible for Mom or Dad’s long term care costs.  My answer always was that there wasn’t anything to worry about unless you take your parents money.  That no longer appears to be the case.

A recent case in Connecticut highlights how the new Medicaid laws passed as part of the Deficit Reduction Act of 2005 are really hurting residents and nursing homes alike and now potentially also affecting other family members.  In that court case, the nursing home resident’s son signed the admission agreement on behalf of his mother.  As in most nursing home agreements Son was asked to sign as responsible party, which he did not do.  Nevertheless, Nursing Home advised him verbally that he was the responsible party.

Son then applied for Medicaid benefits on behalf of Mom.  Son did not, however, follow through on the application process in a timely manner.  He failed to provide all the information and documentation that the State needed and he did not spend down Mom’s assets quickly enough, delaying the application’s approval.  As a result, months of benefits were lost, never to be regained, benefits that Nursing Home would have received.

Nursing Home sued Son on a breach of contract claim.  It claimed that Son undertook an obligation on Mom’s behalf, when he signed the admission agreement, to promptly pursue Medicaid benefits.  Son, in response, argued that he never signed the agreement so there was no contractual obligation on his part.  The court sided with Nursing Home, finding that an oral contract was created between the two parties and that Son violated it by not conscientiously following through.

A good result for the nursing home, right?  Well, not really, when you account for the time and money it took Nursing Home to get the judgment.  It then has to collect on that judgment, assuming Son doesn’t appeal the decision, which will cause the matter to drag on even further.  And it certainly wasn’t a good result for son, who lost and now is responsible for paying Mom’s bill.  

So how could this have turned out better? If Nursing Home had encouraged Son to retain an elder law attorney to represent Mom in the Medicaid application process, it would have received a regular income stream with a timely and correctly filed application.  Sure, there is an expense involved in hiring someone.  But in the end Nursing Home would have received Medicaid benefits when it should have and Son would not be responsible for paying nursing home.  A winning result for all.

For further information and advice in any elder law matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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Plan for Long Term Care… Now… or Else

Friday, May 29th, 2009

Fredrick Niemann, New Jersey Long Term Care Insurance Attorney

“According to some sources, 60% of us will need long term care sometime during our lives. It is important for all of us to prepare for that day when we will need to help loved ones with elder care or we will need elder care for ourselves.”

“It is simply a fact of life to prepare financially for unexpected disasters by covering our homes, automobiles and health with insurance policies and to provide funding for our retirement. But no other life event can be as devastating to our lifestyle, finances and security as needing long term care. It drastically alters or completely eliminates the three principal retirement dreams of elderly Americans, which are:

  1. Remaining independent in the home without intervention from others
  2. Maintaining good health and receiving adequate health care
  3. Having enough money for everyday needs and not outliving assets and income

Yet, it is our experience that the majority of the American public does not plan for the devastating crisis of needing elder care. This lack of planning also has an adverse effect on the older person’s family, with sacrifices made in time, money, family lifestyles and even affecting the family’s or caregiver’s medical and emotional health.

Because of changing demographics and potential changes in government funding, the current generation — more-than-ever — needs to plan for long term care.

If you have spent time helping a parent or loved one cope with a disability resulting from aging, you know the frustration of balancing what you feel they need to do and what they want to do. Communication is strained at times, because after all, you are the child and they the parent, yet physically and mentally the rolls have changed.

When you make directives, assignments and arrangements in advance of needing elder care, then everyone involved can follow the prearranged care plan.

As an example, Jefferson Simpson wrote in his care plan that if dementia or Alzheimer’s inhibited his mental abilities to communicate or recognize his surroundings, he wished to be in a respectable facility and only asked that he be visited and brought chocolates. To his children this request seemed silly at the time, but when his mental capacities did diminish, the instructions were there. No one had to wonder if they should try to take care of Father Jefferson at home and how they would do it. Without quilt or question they placed him in a respectable facility that took care of his needs. All they had to do was make loving visits, and of course they brought chocolates.

In order for Jefferson’s simple request to happen, he had made financial, legal and personal long term care plans years before.

What do you want your children or friends to do on your behalf?

When it comes time for them to help, what if you can’t say what you want because of a physical or mental disability? This is where a written long term care plan comes into effect.
 
Do you have a financial plan or long term care insurance? Retirement savings can disappear quickly when used for care services.
 
Where is your paperwork; insurance policies, living will, medical directives, Armed Services discharge or disability papers? Is there someone designated to know the location?
 
What are the legal documents that are needed for power of attorney, estate planning and disbursement of assets? When do they have to be completed?
 
What types of care services and facilities are available and what are the costs?
 
What will government programs pay for and how do you qualify?
 
There is a lot you can do now to put together a plan for your own long term care. You may have limited resources in the future or health problems that will inhibit your ability to take care of things you could do now. For example.
 
James and Cindy want to be able to stay in their home as they age. In order to do this, when they were in their 40’s they took out a long term care insurance policy that will pay for home care if it is needed. The policy will also pay for nursing home costs as a care option. With taking the policy at a younger age and in good health the monthly payments are low. Extra funds can now be put away for retirement without worries of having to deplete savings for care costs.
 
Or consider Sarah’s following experience:
 
After taking care of her own parents for many years, Sarah realized the importance of making, in advance, a plan and preparations for herself. She saw all of her parents’ assets dissipated in order for her father to qualify for Medicaid nursing home coverage. She didn’t want the same thing to happen to her. She took the time to create her own plan on paper– expressing her wishes for her own care. A trip to her attorney provided all the legal documents and estate planning she wanted to be in place to insure care for her and an inheritance for her children.
 
There is much to learn about long term care and there are a lot of new services and programs available to draw from.
 
The National Care Planning Council has gathered together an overall review of government and private long term care services both on the Council website, www.longtermcarelink.net and in their book The 4 Steps of Long Term Care Planning.

The 4 Steps of Long Term Care Planning provides comprehensive information about long term care planning. The design also allows you to record personal information, family agreements and directions on 20 planning sheets at the back of the book. Using this book as a single-source repository for information and directions makes it much easier for you or your care coordinator to carry out your wishes when the need for care occurs.

For further information and advice in any elder law matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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The Frail Senior and Obama-Care

Friday, May 1st, 2009

Fredrick P. Niemann, Esq., an Elder Law Attorney

Have you been wondering if the proposed Obama-Biden “plan to lower healthcare costs and ensure affordable, accessible, health coverage for all” would provide long-term skilled nursing home care for frail seniors?  The short answer is…no!

The key features of the plan focus on providing access to healthcare to “over 45 million Americans—including over 8 million children” who lack health insurance.  The Obama-Biden Plan has five main strategies:

  1. Invest in electronic health information technology system
  2. Improve access to prevention and proven disease management programs
  3. Ensure that health providers deliver quality care
  4. Lower drug and insurance costs
  5. Reduce insurance costs for catastrophic illness coverage

Here is the principal goal as highlighted on the Obama website:  “Barack Obama and Joe Biden will guarantee affordable, accessible healthcare coverage for all Americans.”  Despite the presence of the seemingly straightforward words “healthcare coverage” and “all” in the sentence above, it’s critical to understand the definition of those words.  When it comes to healthcare and politics, even simple words may not have a common-sense meaning.  “Healthcare coverage” means “payment for acute healthcare costs.”  Acute care is the type of care given to recover from short-term diseases and accidents.

In the United States, public healthcare payers, such as Medicare and Tri-Care (for retired military) and the private healthcare insurers, reimburse healthcare providers only for acute care and acute illness rehabilitation.  These payers specifically exclude long-term care in a skilled care nursing home.  Care in a skilled care nursing home is defined as chronic care.  Neither Medicare nor private health insurance pay for chronic care in assisted living facilities or nursing homes.  Unfortunately, the bottom line for America’s frail seniors with a long-term illness is that the word “all” (as defined in the Obama-Biden Healthcare Plan) does not include them.

Sadly, this means that under our current healthcare program and the Obama proposals, the majority of America’s seniors have no alternative but to pay their own nursing home bills.  If you have Alzheimer’s, Parkinson’s, or another long-term illness—you are still on your own.  Even if Obama-care is enacted, you will be required to pay your own tab for long-term healthcare until you are impoverished enough to qualify for Medicaid.

But there are ways to prevent the impoverishment required to qualify for Medicaid, if you plan far enough ahead. 

For further information and advice in any elder law matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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The Home – To Transfer or Not to Transfer – Part 2

Wednesday, April 22nd, 2009

Fredrick P. Niemann, Esq., a Medicaid Planning Attorney

As we discussed last week, Joe wants to transfer his home to Jim, who lives there with his wife and children.  But let’s change the facts a bit.  Joe is not healthy but has the early stages of dementia and needs some in home assistance.  It is possible that within 5 years he will need nursing home care, so we are concerned about the 5 year Medicaid lookback.  What options do Joe and Jim have?

One possibility is for Jim to buy the home at a price that he can afford but that may be below fair market value.  If, for example, he purchases the home for $200,000 and it is worth $450,000, then $250,000 is considered a gift subject to the Medicaid transfer penalty.  Jim can spend down the $200,000 for his care but if he runs out of money then Jim may need to cover the cost of care until the 5 year time frame expires.

Now that Joe lives in Jim’s home, they could enter into an agreement for Joe to pay rent.  If Jim or his wife is providing care that Joe otherwise would need to hire an aide to do, then Joe could pay Jim to do it.  This is what is called a personal services contract.  Food, utilities, and other goods and services that Jim may be providing, can and should be paid for by Joe.  Perhaps the home needs to be modified to allow Joe to live there.  Jim could spend money to make those improvements when they become necessary, borrowing against the home. 

Some or all of these strategies may be ways for Jim to, in essence, pay Joe for some of the remaining uncompensated value of Joe’s home, over time, in a way that may be more affordable for Jim.  However, each of these financial arrangements must be in writing.  There are details that must be followed.  That’s because Medicaid presumes that any transfers of money or services is a gift, subject to a transfer penalty, unless it is in writing and at fair value.

A word of caution.  The Medicaid rules are complicated.  What will work in one state may not work in another.  What may suitable for one family may be entirely the wrong solution for another.  If you try to do it yourself and get it wrong, you may find yourself with a lengthy period of Medicaid ineligibility and no money to pay for care.  You need a knowledgeable and trusted elder law advisor to guide you through the maze of laws and regulations that leave hidden traps for the unwary.

For further information and advice in a New Jersey Medicaid or an estate planning matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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A Two Generation Family’s Long Term Care Crisis – Part 2

Wednesday, April 22nd, 2009

Fredrick P. Niemann, Esq., a Medicaid Attorney

So, in last week’s blog I presented a common scenario, Mom and Dad both needing long term care and nothing but a house left in their names.  The children are paying for their care.  We get Dad on Medicaid first. 

Now we work on getting Mom into a nursing home and then apply for Medicaid for her.  The home will have to be sold (unless there is a family member living there but we’ll address that exception in another issue)  but it won’t hold up Mom’s Medicaid, which is important, since it not so easy these days to sell in a what is a down market.  Once the home is sold Mom will lose her eligibility for Medicaid and will need to private pay from the proceeds of the sale.  She also could keep her Medicaid eligibility and pay the proceeds to the State to reimburse it for benefits paid up till that point.  Which option is better depends on how much is realized from the sale and how much is owed to the State.  But, keep in mind that the State pays the nursing home at a lower rate than you or I would pay (approximately 50% less).

And, what about the money that the children paid out of their own pocket for Mom and Dad’s care?  They can be reimbursed from the proceeds once they sell the house.  However, everything must be documented because Medicaid presumes that transfers between family members are gifts, not loans.  If it is a loan then there must be a written agreement.  The best practice is for there to be a recorded mortgage.  At the closing the mortgage is paid off and a discharge is recorded by the Buyer’s attorney.  The children are reimbursed directly and there is a record as far as Medicaid is concerned.

In the end, the parents are paying for their care from their own assets, the children are paid back (money which they will need for their own retirement and long term care needs) and depending on how much long term care is needed and what the home sells for, there may even be some amount left to transfer to the next generation in the form of an inheritance, after the State is reimbursed for benefits they paid out on Mom and Dad’s behalf.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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