Mom is in a nursing home and self pay. We applied for medicaid but she did not qualify. Her funds are now getting low. Can we just sell the house and use those funds to pay and then reapply for medicaid if she is still living when the funds from the house sell runs out?
Personally I’m of the very firm opinion that for NH v CS situations that it’s best to find a elder law atty who is well versed in just how your state looks at & administers LTC Medicaid. Individual LTC Medicaid application if there’s a good DPOA and somewhat fresh legal & you’ve been involved in your solo parents life & banking, those you can DIY if your organized. But for NH v CS, Correctly delineating $ has to, like seriously has to, b done correctly, otherwise Medicaid can find the NH spouse ineligible. Only mom in a NH is required to become impoverished with 2k in exempt assets not dad as the CS (the 2k is the standard for most states). IMO it is not a DIY as it’s not just taking dads asset limit and opening up a new bank acct for him but lots of little things.... like changing beneficiaries, doing a codicil to both their wills, applying for a CS waiver if need be. CS stuff is complex. It’s atty work.
plus it sounds like your folks have been regularly “gifting” 5k to you & or your siblings. It happens, none of us exactly really planned on being in this situation. But LTC Medicaid will want 5 yrs of all financials so $ will surface and cause a transfer inquiry.... which likely becomes a transfer penalty. Penalty is basically # of days ineligible for Medicaid based on equation of exact amount your state Medicaid pays facility for daily room&board and the total $ gifted from date of Medicaid application back 5 years (some states do 3). So state that pays $250 day rate & 50k gifted is 200 days ineligible..... but yours will have to be even further divvied up as dad can gift $ but mom cannot. It’s complicated, really and a good CELA level of elder law attorney will be able to ferret out things needed in advance of ever filing for Medicaid. Your parents have income, like their monthly SS, and that $ is what they use to pay for their new legal.
Does she make too much in SS and/or pension? Because that won't change even if you sell her house, spend those proceeds down and reapply. In my State the cap is a little more than 2300. So if ur Moms monthly income is 2500 you need to get her under that. In my State its done with a Miller trust. That $200 overage would be placed in the trust which reverts back to Medicaid at death.
Did she gift a large amount of money within the 5 year look back causing a penalty?
As said, you need to sell her house at Market Value. Those proceeds are put aside for Mom alone. Any out of pocket on your part you may not be able to recoup.
If house sale will provide enough $ to run out the clock on the lookback, then when they become re-impoverished that probably could solve those issues. But if it’s bigger $ or not medically at need, then that ineligiblity likely still exists.
The issue will be is that it looks like “gifting” of moms $ to you. Gifting is not allowed by Medicaid and places a transfer penalty on application. Yes you could try to appeal it if it were to happen, but that delays getting her application done. So imho you want if at all possible to have whatever “need” is paid by mom from her own bank account, it’s still her property and her responsibility.
Medicaid tends to take the view that whatever family does for their elder is done out of a sense of familial responsibility and done for free and without expectation of reimbursement. If we have an elder in a NH, we are just going to go and do and buy stuff for them and we’re not expecting to be repaid ... but it’s likely clothing, shoes, new eyeglasses a new lamp and chair..... we’re going to go over to the house & clear it out and clean it up. Its not buying all new appliances for her old kitchen or a new roof cause Realtor suggests that will enhance its marketability.
Also Medicaid will likely look to see if it sells at FMV (fair market value). If house actually has issues that makes it kinda impossible to sell at FMV (like it’s foundation is beyond bad), I’d suggest that mom get it inspected and then appraised so there's legal documentation as to why price is way off FMV. Sale should be listed by a Realtor & on MLS so no FSBO nonsense.
Realtors often want you to spruce up the place and do fresh painting, new appliances, get a quick update to front yard.... & it’s understandable but those costs need to be paid by mom; otherwise be clear that it’s an “AS IS” sale with no exceptions. Good luck!
thanks