A social worker told me to cash out my mom's IRA and spend down the assets. How this affect the cost of a nursing home?

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Mom needs nursing home or in home care. I am in Louisiana. Do they have a look back clause?

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The social worker probably was giving you general info as to what to do to get mom onto medicaid ASAP. Like mom has her IRA as huge asset that will keep her from being eligible from Medicaid till its spent down.

All states have a 5 year look back. The medicaid application has financial documents that must accompany the Louisiana NH Medicaid application. Like moms award letters that state how much she gets every mo. from SS & retirements; months / years of banks statements; any investment statements; property ownership. really anything of value as they have to basically be impoverished to be eligible financially. If the documents show any transfer of assets within the past 5 years that could be gifting, it will place a period of time mom is ineligible based on the amount of money. Like if mom gifted transferred a car valued 10k to a grandkid last year, she will have a 10k Penalty period. Keep in mind that if mom goes into a NH & onto medicaid, all her monthly income met be paid to the NH as her copay or SOC / share of cost. If mom still has her home & a car & perhaps other debt (credit cards, life insurance payments) , family needs to determine how to deal with paying those debts or costs to keep. It's a lot to deal with plus tend to moms medical care or oversight. If mom has been fairly organized finances and legal done & your already DPOA, I think you can DIY her medicaid application. But if not and there's been any comingling of her $ with family, or gifting, mom needs a good elder law atty to shepherd the application and deal with any new legal needed.

The application for at- home Medicaid is somewhat different as they can keep income as they have housing & living expenses. But often at home care isn't feasible as they really need 24/7 in a facility and they won't realistically be able to resume their old lifestyle living on their own at home. At home Medicaid only will pay for a set # of hours per week - maybe a max of 28/ 30 hrs - with family doing all the rest.

Really try to clearly find out what situation would be best for her, so she doesn't have to move & readjust again. My mil was in a Nh on medicaid in Nola. Choices of NH are limited in nola. Seems to be similar for BR & S'port. You may need to look in an adjacent parish to find one you like with an open medicaid bed.
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Then it is in pay status, so isn't countable. However, the income from the IRA will be considered in her qualifying. You may want to spread the distributions out during the year if a lump RMD will put her assets over the maximum amount allowed by Medicaid. For example, if Medicaid only allows $2K in assets and she receives a $10K RMD, it would cause problems. Smoothing the payments out could avoid those difficulties. Check with you Medicaid worker when it comes time to get some advice on this. I'm sure they are used to the situation.
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Thank you JessieBell. Mom has rec'd the RMD's and other withdrawals.
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I forgot to add that if the IRA is in non-pay status, then it is a countable asset that would need to be spent down so that total assets do not exceed that which will qualify her for assistance.
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This question is fairly complicated. What the answer depends on is if the IRA is in pay status or not. If your mother has taken distributions, including a minimum required distribution, the IRA is not a countable asset when it comes to Medicaid. However, any money drawn from the IRA will be counted as income. If this puts her over the income that qualifies her for Medicaid, it is something you have to consider.

If spending the money seems the best thing, there are definite rules that have to be followed when it comes to spending the money. It has to be spent for her maintenance and care. You can buy things like clothes or do needed house repairs. You can even purchase a car, though this probably wouldn't be needed for someone going into a nursing home. You can buy equipment that she needs, e.g. a wheelchair. Sometimes I think it would be easier to just apply the money to the home care rather than try to figure out how to spend it!

You can look up Medicaid rules for spend down online. You do have to be careful not to gift the money or get outside the accepted guidelines. If you follow the guidelines and her income qualifies her, it should be no problem if she needs to qualify for Medicaid in the future.
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