How to spend down 10,000 legally to be eligible for Medicaid?

Why has Sonny not paid the nursing home the $10,000 for his mother's care? It would have been gone in under 2 months, and his mother would be (legally) eligible for Medicaid. If he consults an elder law attorney, it will cost him nearly 1/2 of the $10,000. Is $5000 really worth being at the end of one's rope for 6 months? He has waited too long to do this, and is lucky that the nursing home she is in has not issued a 30 day notice of discharge.

One of the best ways to spend down someone's money is to purchase an irrevocable burial plan for her (it must be irrevocable for Medicaid purposes.) You can spend the money on anything for her care, such as paying the nursing home. You can buy her clothes, hearing aids, glasses, dentures in other words anything for her. Be sure and keep your receipts so you can show Medicaid the money went for her care.

JoAnn29: I'm with you on that day one! The $10K should have been used up. My late mother"s NH ran @ $410/day.

I am taking care of mom in Ohio, we had her assessed for Medicaid 3 times, because of spend down, she never met the qualifications then about a month ago Medicaid stopped the spend down, so had to apply again. It was awful to go through, but finally got her approved for assisted living, but had to do a waiver. Don't quit, Our government sucks but I fought for my mother's rights and all seniors should have the care they deserve and worked for all their lives! I wish you the best and hang in there

I don't understand. The facility should have eaten up the $10,000 by now.

This is what I did as a POA for my mother who went to live in a Memory Care Facility... her possessions and stocks were sold/cashed in. I paid for her monthly care and other bills (insurance, medicines, etc.) until her funds were hovering about $20,000 (she needed to be below $2000 to qualify for Medicaid in WI) so then I prepaid 2 months of her care at the facility, took her to 2 specialists - for her foot and an oral care dentist, purchased a yearly subscription for 2 of her newspapers she gets, bought her some new clothes and toiletries she needed at her facility, and then when the amount was under $2000, including the next month's SS benefit, I submitted the form. That gave the State 2 months to work on her Medicaid application, and in the end it worked out fine. So my advice is to think of what the women needs and act accordingly and to check with the facility about paying 2 months instead of one month to use some of the funds up and allow the State enough time to process the application. Also, I set aside (stipulated by law) $1500 for burial as my mother is going to donate her body to science and this is the limit here in WI. I realize that elder attorneys may be one way to go, but I went to a free county service (Aging Disabilites Resource Center) to get advice how to spend down. I also filled out the form 6 mo. ahead of time to ensure I was doing it accurately and then was ready when the time came. My mother had nothing else to support her financially so I knew the importance of doing everything accurately and legally. I also (althought the specialist at the Aging Resource Center told me I did not need to do this) printed off the last 5 years of my mother's banking informatin (savings/checking) and after each item, I wrote what the money was for/from. P.S. If I did not purchase the 2 months to allow the State 60 days to process, etc. I don't feel the Medicaid application would have been processed in time. As it was they called me after about 10 days wondering where the form was (I had called the person who I was to turn it in to on the 1st of the month but it took her 10 days to get around to looking at the form and it was misplaced)... and the application was rejected twice.... Once, as the burial amount needed to be notorized... no one told me that... and another time she needed an additional letter from the VA about her break-down of VA funds. (Again, this was not told to me.) So in the end it worked out and all is well. I hope this helps. Good Luck!

Go to Medicaid.gov. Search spend down requirements for your particular state.

Ady1955, My approach to Your Question is if every One bent the rules like that Lady's Son intends doing, Your Country would go Bankrupt with the demand that there is for places in Nursing Care Homes. We cand bend or break the rules for Our own Personal gain. It could be considered fraud. My Late Mother and I saved for years to have a fund on stand by so that if She ever kneeded to go into full time Care the money was there in the Bank for Mam's use. Sadly Mother passed away while on Her first RESTBITE Care stay last June, Rest in peace. What I'm saying Ady is that We must try to do the right thing.

Just one thought. I worked as a private duty nurse for several patients in a nursing facility because the family wanted someone with their loved one at all times. My agency was paid by the family. Unless the facility prohibits this practice, but I don't think they can, then this caregiver can check on mom daily with son's approval. What is preventing the Medicaid application? Only the state can provide that information and hiring an attorney will surely deplete $10K quickly...

ady1955, not just consult "his lawyer" -- he really and truly needs to consult a specialist in Elder Law. Perhaps his attorney could refer him. He would pay for this with Mother's funds, since he is doing this on her behalf.

Her funeral and burial could be paid in advance. That is legal.

Lol @igloo572

Many NHs have found a way around signing a private pay contract while seeing if Medicaid is granted. In the admission contract, they'll state patient will still be charged a fee during Medicaid process only to be refunded after 30 days if Medicaid is approved.

Thank you everyone. I have already advised "Sonny" to contact his attorney. I was his mom's caretaker when she was still living at his house. I am not just a paid employee, it is just myself and her son. I am on all the releases so they need to talk to me about her care. The nursing facility that she is in is not the best and there is a big turnover with the employees because of a change of ownership. I go there daily to make sure she is up and dressed and involved in an activity. She will tell the aides she does not feel well and stay in bed if she has her way. If "Sonny" did pay me in advance and his mom passed away before that time, he would not need to worry about getting his money back from me. He just wants this matter solved asap and he does understand that the management at the nursing facility cannot give him any advise regarding this. Thanks again

I too wondered about your role as a caregiver, and confess that I was shocked at the suggestion of paying you 2 years in advance. Commercial companies providing maintenance contracts and similar services require payment in advance, but in your situation, I think this is highly improper.

In addition, this woman may not even be alive then. Even if such a transaction were to be considered, the son should have an attorney draft a contract by which you would be required to repay any "unused" portion of the payment allocation for you.

It concerns me as well that you seem to be taking point on this issue, when it's really the responsibility of the proxy. I can understand that you're concerned, but I also wonder if the state of her dementia is such that she is appropriately living in AL, or might need a higher level of care.

Ady - I'm going approach this differentiy & I'd guess that there are issues with the application.....that perhaps Sonny is not giving you all the details as to what's what.....an application filed in April has had some sort of communication or correspondence from the state to the resident or their DPOA as its over 7 months.

About the NH, a facility cannot find themselves to be viewed to be giving legal advice. Their role in the Medicaid process - in my experience - is to help the incoming resident or their DPOA fill out the LTC/NH medicaid application and give a list of the supporting financial documentation needed to accompany the application to the resident & DPOA; & it's the DPOAs responsibility to get all the documentation together to submit; and then the NH forwards all these documents along with their bill for the residents room & board to the Medicaid caseworker assigned to the facility.

Sonny needs to speak directly with the state caseworker assigned to moms application regarding the status of his moms application. It Is not NH responsibility to get mom qualified financially but the DPOA. The NH's social worker should be able to give him the contact info. IMO if he hasnt done this already then he needs to do this ASAP as mom is about month 7 (April -Oct) for her Medicaid application and most facilities have a limit on how long a resident can still be "Medicaid Pending". 6 mos seems to be the tipping point and after that the NH may require family to sign off on a private pay contract just in case Medicaid is denied or the NH sends out a "30 Day Notice".

If its really that mom has just 10k and no other assets or income issues and no transfer penalty concerns, doing a 10k spend down should be easy as its not much $. It could have been done back in April or May. Funeral & burial policy easily 7 - 10k; dental work easily 10k if not more (my mom did $$$$ in dental 2 years prior to Medicaid application and it was in retrospect a very VERY excellent use of her assets); new eyeglasses and hearing aids are also excellent spend downs as these go MIA at NH; multiple sets of easy on & off clothing in sturdy fabric as the laundry at NH have industrial machines and use powerful abrasive detergents. Mom could spend down 1-2k to get her legal reviewed and updated. Really 10k could be spent in a flash on her needs months & months ago.
I'm guessing that there are other issues with her application.

Something you wrote is a red flag to me......if mom is in a facility, why are you being paid as a caregiver?? And just why are you thinking that Sonny could pay you 2years in advance for continued caregiving? If she is in a facility, in theory her care is being provided for. An outside aide coming in to a facility usually is an issue both for liability and continuity of care as mom is under the orders of the MD /medical director of the facility and the staffing set by the DON (director of nursing). Outside independent aides seem to be usually not allowed or if allowed must be from a company that has liability, bonding, etc & cleared by the NH. Now some private pay NH allow for family to pay for a "sitter" and look the other way as to the sitter being there as long as the sitter understands the rules. But I'm digressing, if mom has been paying you for a while and there was not a personal care contract done & all above board with tax filing done, Medicaid could look at the $ paid to you as gifting. Did you have a legal contract & report income? Gifting of any type is NOT allowed by Medicaid and will cause the application to be delayed or denied. Sonny can hopefully explain the payments to you for caregiving for the time mom was still living in the community & had you as a caregiver, but it's going imo to be easier for an elder law atty to deal with this as its likely to be an appeal process to a transfer penalty inquiry. Paying you to caregive since April when she went into a facility is going to be an issue one way or another. If Sonny has not brought any of these concerns to you, i'd suggest you clearly ask him if there are concerns (IRS, medicaid) with payments for the entire period of time you "worked" for his mom. Sonny could be "at the end of his rope" perhaps not about a 10k spend down but a much much larger transfer penalty; if so he needs a NAELA or CELA level elder atty ASAP to deal with appeals.

$ given as a donation is gifting and not allowed.
$ given to Sonny for repairs to his home is gifting and not allowed.
All $ must be for her needs, her property or her care with proper paperwork;
otherwise it's gifting & subject to a penalty & she will be ineligible for Medicaid till the penalty period (set by days) is over.

I agree. I'd find an attorney in that jurisdiction who really knows the rules, laws and guidelines of Medicaid. Not all Elder Law attorneys know this. You have to ask specifically. Most of them advertise that they can assist with Medicaid issues. I'd make sure, before consulting with them. I'd ask their credentials, experience, etc.

He needs to stop spinning his wheels amd consult with an attorney who specializes in elder law. Today. The spend-down is a complex issue with complex answers. Professional guidance is a must.