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My mother (widowed) has been living in an assisted living facility for apx. 3 1/2 years. She has Long Term Care Insurance which has been paying for that the entire time. Her insurance will be running out around January 2023.
At that time, she will be paying out of pocket for her assisted living expenses. She has enough assets for around 3 years of paying out of pocket.
I am planning ahead for the time for when her money runs out and she applies for Medicaid. My research shows that assets gifted during the 5 year look back could be subject to a payback or a penalty period of ineligibility.
For at least 10 years she has gifted my brother $6,000.00 per year and an additional one-time $10,000.00 gift.
I have been given a one-time $10,000.00 gift.
I have called our state and county Medicaid and aging departments for answers as to what the penalty or payback will be. No one can answer my questions. I was told when the application is made (3 years from now) they will answer. How does a person plan ahead? Help!!

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They can't tell you now and here's why. The penalty is computed on the average daily rate of nursing home care in that state each year. So if the rate in 2022 is 200 per day and 2023 it is 250 per day, etc. So if 10k was given away, figure out how many days that would have otherwise paid for that nursing home. That is the amount of the penalty, meaning how many days of coverage that person could have paid for themself, and then Medicaid would start after that penalty period is over. They can't predict the future daily rate of care, that's why they can't give you an answer now
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againx100 Oct 2022
Good answer. If you know this, the people refusing to give her any info could have told her what you just did. At least it's a formula even if not a specific # of days or dollars.
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The amount won’t matter if it is past the time.. so the question is how far back did mom make the last gift? If it was two years ago and she has enough for 3 years more she would be good if no more gifts made and nothing else changes. If the gifts were made yesterday she would be short.
The penalty is measured in time she won’t be eligible for state sponsored care. It is based on a daily rate for her state and how much she gave away during the five years.
Is brother going to take care of her then? Is she likely to pass before then? What if she requires more help than an ALF can manage and she requires a NH? Then her money might not last as long. Or what if her health is great and it is a matter of being broke? Medicaid requires her to be at need physically and financially. Not just financially.
The best insurance or preplanning she can do IMO is to see a certified elder attorney and have him/her go over your moms unique situation to give her a clear understanding of her financial future and what her state rules are. She needs to stop gifting. When she gives money away she is betting she won’t need it for her own care. Being able to pay her own way is a great gift to you and brother.
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First get some records of how much and when for each gift. Some of them may be ‘out of look back’ time. Stop mother making more gifts now, and make sure brother doesn’t accept any. My DH’s mother made gifts, but the brothers always knew that if she ran out of money we would need to pay them back. Can you let us know the size of the problem? In $, and for your family?
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