Medicaid spend-down money over the past years

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My mother sold her house 5 years ago and moved into an assisted living facility. I had a joint bank account and power of attorney. There was approx. $120,000 in this account and the money is now gone after paying her rent, food, medications, clothes, etc. I also used money in the account for gas, groceries, clothes, etc. How do I list this on the Medicaid form or should I?

6 Comments

Rickl - don't list it, unless she gave you a large lump sum or you took more than $2000 at any one time - say $2000 a year for 5 years - then you should not worry about it. Medicaide will ask for a few months of bank statements to see if there are any large with drawals but if it's been basic things like groceries and gas, it's no big deal. $120,000 in 5 years is not unreasonable for assisted living that can run as high as $30,000 per year...
I’m in NJ. When we were going through the process of getting my grandfather qualified for Medicaid, we had to provide bank statements, credit card statements, life insurance policies, property tax bills, etc. They went through these documents, the bank statements particularly with a fine-toothed comb and whenever they were not able to clearly determine what a particular transaction amount was for, we were asked to provide details of what that transaction was for. This included having to provide copies of receipts for purchases, copies or images of checks, etc. You should be prepared to provide all bank statements showing the beginning balance of 120k thru to the depletion of the account, proof of rent payments, bill payments, grocery store receipts, pharmacy receipts, any type of receipts that you have to account for the spending of these monies. The use of online banking proved to be invaluable to us in this case because using debit cards for purchases are automatically detailed as well as online bill pay transactions. We also learned that outstanding credit card balances also count when it comes to spend-down, so if your mom has any outstanding credit card balances, definitely provide those details and have copies of the statements ready to present if requested.

Listing the required level of detail on the Medicaid form itself may be impossible. I created a spreadsheet that allowed me to keep track of the details Medicaid requested and the corresponding information that I was able to provide. To be honest, you may not have a receipt for every single penny spent but the bottom line is they will request specific details do make sure the monies have definitely been spent and not simply stashed away somewhere or invested. If some of these monies were used for your own personal use, you should be prepared to provide receipts and/or statements. I know that in order to do a number of things for my grandparents, I had to transfer monies to my personal bank account simply because I did not have a debit card for their account. In this case, I actually provided copies of my own bank statements and receipts to show proof of the offsetting transactions.

If you don’t initially provide the level of detail that Medicaid requires, don’t worry ‘cause they will let you know. So if it’s a matter of getting the process started by simply providing the most high-level summary details, then go for it. They will not hesitate to ask you for more information if they need it.

It was a very tiresome and tedious process and I feel really bad for anyone who does not have someone to handle all of the minutia involved in the Medicaid qualification process. Certainly by the time they need these services, our elderly loved ones are in no ways capable of doing this on their own.

I wish you best of luck and patience.
Very helpful Shai. After the first of the year I have to go thru this process as well. I am very organized and believe i will have all that they will need but this has been soo sad and emotional and stressful. I mean, selling everything my mom has (which isn't a whole lot in the first place!) so she can live somewhere she doesn't want to be but has to be is just heartbreaking. I know I shouldn't think like this cuz it doesn't help me at all, but I think she would dis-own me as a daughter if she knew. She never wanted to be in a nursing home and we tried to avoid it but it just became impossible for me to handle, work full time and be a wife and mother...ugh.
Shai's recommendations are rock solid. As Shai points out, your state Medicaid office will not be shy about requesting information they need. I've worked in an elder law firm that processes Medicaid applications for families. The process is arduous, complicated, paper heavy and policy driven. Often caseworkers will make decisions which are contrary to the law. Consulting an elder law attorney will bring you peace of mind. Plus s/he can spot errors the caseworker makes interpreting policy (which happens more than you'd think).

Caseworkers for the State have one real job: to confirm the way an applicants money has been handled according to that State's interpretation of the Federal Medicaid law. They simply want to confirm any money she had was used for her care. In your case it sounds as if most was. If the amounts expended for your gas, groceries, etc were modest, I'd NOT volunteer it to the case worker. A few dollars here and there won't change the outcome.

Eligibility workers have the authority to ask for every bank statement going back to 2/06 to confirm how the money was spent. Unless there is some reason the worker thinks money was given away they will likely not request every stitch of paper from you. But, it's best to prepare as if they would.

One other hint: be sure you keep copies of everything you send the caseworker. Lost paperwork is common.



Thank you Mr. Eldercare! I do have an attorney helping me and the nursing home will help with the paperwork in applying for Medicaid. I just don't understand why Medicaid makes so much work for themselves?? I heard that even if I get an offer for my mom's house, it has to be 90% of the market value. Wouldn't it make sense that if I have a buyer, Medicaid should say "go for it" so they can get their money?
Glad to help out, Jaynesez.

I'd be VERY cautious about having the nursing home "help with the paperwork". My experience is that the person helping you knows little to nothing about Medicaid rules and simply "fills in the boxes". The issue is one of content vs context.

The question about 90% of value is a case in point. Are you certain that's the case? How does your State determine market value? If the values in your area are dropping and the market is thin, how will the caseworker value the property?

If you don't understand the impact of what's included in the application, you could put yourself in a very expensive corner

A reason Medicaid isn't willing to accept just any offer is because it's there job to protect the State. They have a vested interest in getting top dollar for property that's sold. The more money you make the less they have to shell out.

You'll sleep better if you have an elder law attorney experienced in Medicaid applications help you.

Hope this helps!

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