Medicaid.

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We have looked into Medicaid. What I found was not what we expected. Everyone I've spoken with seems to think this is the way to go? I learned that if you have any assets that they become the Governments property when the person passes, this includes bank holdings, home,etc! This is called " State Recovery", which means that you will forefeit all assets to the government!!! No one tells you about this peice of information. Unless you get the assets deeded over to a family member prior to getting on medicaid your "up the creek without a paddle" as they say. So when I hear people saying "why don't you get on Medicaid" I cringe! Do your homework on the subject first before giving out this advice, it just might save a lot of heartache down the road! I know it helped us out.....emmensly!

4 Comments

stressedmom,

Check out our Medicare and Medicaid section. It has lots of content that will give you the pros and cons about Medicaid. Enrolling in Medicaid and Medicare is different for everyone so you need to do whats best for you, your loved one, and your family. Best of Luck!

https://www.agingcare.com/Medicare-Medicaid

Stressedmom, as karieh says, you need to do what is best for your loved one and your family. Medicaid is not intended for people who have a lot of assets -- those people are expected to use their assets to take care of themselves, first.

MERP - Medicaid ESTATE Recovery Program is required in order for the states to participate in the Medicaid for NH program. MERP is a part of each state's Medicaid application since about 2005/2006.

NH Medicaid is a federal/state needs-based entitlement program (and very different than how Medicare & SS are done as they are federally structured entitlement programs).Because it is needs-based what was done with assets in the 5 yr window prior to Medicaid application is central to qualifying. NH Medicaid is designed as a safety-net for low income who can show both financial (income & assets) and medical necessity for long term care in a NH. The monthly income ceiling and how assets are dealt with after death via MERP is set by each state as the states differ in law. All states have exemptions to MERP but you have to file for those. The state does not want grandma's house but the state can do a claim or a lien on the proceeds from the sale or transfer of grandma's house.

Because Medicaid is needs-based, doing a 5 yr look-back on the applicants assets is critical for the states to operate the program. If we were able to transfer all of our parents assets, empty out accounts, spend monthly retirement & SS on nonNH stuff today then go into a NH tomorrow paid 100% by the state, the system couldn't afford it and they wouldn't have any NH to go to. With the average cost of NH running 5K - 8 K a month, most people cannot afford to private pay for a NH
for the many months or years needed. Personally, imho, if they live long enough they will flat run out of $$ (unless they are generationally wealthy) and thank goodness there is Medicare and Medicaid out there for them so they can stay in a NH and get the level of care they need.

Medicaid gets to the heart of the issue of how to pay for long-term care -- the public through the tax-supported Medicaid program; and the users of long-term care through their personal resources, including those remaining after death.

If you don't want to spend down assets or do MERP compliance after death, you don't have to. No one is forcing you to apply for Medicaid but you will have to private pay for NH care if and when that is needed.

stressedmom, I'd like to clarify something in your post. In order to qualify for Medicaid, the person cannot have any significant assets except a car and a house. What happens if they have too many assets/too much money to qualify? The government does not take the assets at that time. It allows the applicant to spend all their assets on their own needs. So if a person has "bank holdings" they need to use them up to be eligible. They can't give them away. But they can put a new roof on their house. They can buy a pre-paid burial plan. They can get a new wardrobe, several pair of shoes, a deluxe wheelchair if they need one. They can buy new furniture to suit where they intend to live. They can pay off consumer debt. They don't give this money to the government -- they spend it on their own needs. When they have "spent down" their assets enough to quality for Medicaid, they will then get help to pay for in-home care (Elderly Waiver) or a skilled nursing facility. If they live long, this can be hundreds of thousands of dollars.

When the Medicaid recipient dies, the State can recover some of those taxpayer dollars by the sale of the house. (There is a list of exceptions to this power.) They are not going to recover bank holdings or insurance policies or stocks or bonds or anything else -- because those were already spent by the applicant at the time of applying.

Compare this to not applying for Medicaid. Nursing Homes are very expensive. Few elders have enough monthly income to pay the full amount. If their pension check is $2,000 and the NH costs $4,000, where is that additional amount going to come from? By liquidating the assets. So instead of spending the bank holdings on a new wardrobe and a funeral policy and a delux wheelchair, she's spending the money on NH fees. And if she lives long enough to run out of bank holdings etc. they she has to sell the house to continue living in NH. Or maybe she'd sell the house first, to avoid all that maintenance, taxes, insurance, etc.

It is a sad fact that one way or the other, assets are going to be used up to pay for an elder's care, with or without Medicaid.

This is a complicated enough topic that if you consider applying for Medicaid I suggest consulting an elder law attorney, to ensure that financial actions are as advantageous as they can be, and, of course, completely legal.

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