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My mother-in-law has been living alone since 2012 when her husband passed away suddenly. My wife and I have been primary care givers since she cannot drive. She lived about 15 miles away from us and needed constant attention.


We found a condo for her to move to that was 1 mile from our house. So she decided to sell her house in 2016. We put the word out via social media that the house was for sale privately. We got an immediate offer for $48k and another offer for $50k. It was a small 2 bedroom/1 bath home so my mother in law felt the $50k offer was good since the house needed a new roof and furnace and she didn't have the money to repair as she lived solely on SS.


She sold to an individual privately without a realtor. The buyer's banker handled the transaction. My mother in law paid off the remaining mortgage with the purchase price and put the rest in savings to live off of. She lived comfortably from 2016 to 2019 on her own and her proximity made my wife's role much easier to take care of her.


In early 2019, she was then diagnosed with early Dementia. By October 2019, she had episodes that clearly showed her dementia was advanced. She was placed in evaluation for 10 days. Adult services deemed her to go to assisted living memory care immediately as she was unable to live on her own anymore (falls and memory issues).


We found a nice place that required private pay for 6 months before going on Medicaid. So we spent October 2019 to current (May 2020) doing the spend down and paying privately for her care. We then started the process to move to Medicaid. My wife spent countless hours collecting documentation as required and was very thorough.


Medicaid questioned the sale of the house for $50k and said it was undervalued and was sold for less than market value. They felt the house was valued at $61k. So they penalized my wife and her two siblings and were told by assisted living care facility they need to pay balance of $11,000+ for April - June 2020 until Medicaid will kick in July 2020.


We have already done the spend down as directed by the assisted living facility so the mother in law has no more money. So the siblings are being forced to come up with $11,000+ to keep her in facility until Medicaid kicks in. Is this fair or legal? I know the government makes the rules but this seems unfair.


My mother in law could no longer afford the home in 2016 and it's care was becoming a physical and financial burden to her and her family. So she sold for a fair price. No one in the family benefited at all from the sale. She needed to move so she didn't have rent and mortgage payments plus financial responsibility for a house in disrepair. Do we have any recourse?


My wife even found 5 similar properties in her neighborhood back in 2016 that sold in the $50k - $55k area and gave them to the Medicaid rep helping us but the governing board still denied all documentation and said the sale was egregious and the sale was under value. We had no idea in 2016 that this decision would haunt the family. It seems like it is no one's business but my mother in law's who she sells to and for how much.


Any ideas for an appeal or if we are just out of luck? Thanks in advance for any ideas how to proceed.

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I would try to go up the ladder of appeal if that is an option. Medicaid's word against your word is hard to overcome, but not impossible. .

Medicaid operates on the premises that anyone getting government help is trying to hide income, resources, or gifts. So your task is to prove otherwise. You have to prove your mother-in-law and family have never done wrong under the Medicaid rules.

Many families have no remote clue they need to talk about or plan for this outcome. Many people from my parent's era, and even some from my own, never mention finances to children. Adult children are not allowed to ask about many things financial in many families.
dobu102 - you are being put through a situation that none of you could have reasonably anticipated. If your family had no experience with Medicaid, there is no way you could have guessed it's hassles and heartaches. What I really think is most unreasonable is a 5 year look back for someone like your mother in law.

Having gone through the 5 year look back and later knowing others who did this, it's a waste of my taxpayer dollars to investigate Social Security beneficiaries who get so little they are not even required to file income taxes or hold bank accounts.

Many think your family wants everything for nothing. Let those persons hang themselves when they suggest that "everyone on welfare" is out for a "free ride" from tax payers. They are ignorant and ignorance is bliss in some families.

I think the two inspections, had they been done prior to selling the house, would have put your family in a better position to prove that was a reasonable sale price. Even so, I would keep the case open using an elder attorney.
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The family is considering an Eldercare attorney. I appreciate everyone's help navigating these unknown waters for the first time. I feel this process is purposely kept secret and if you've never gone through it before with a parent, you just don't think to plan 5 years out into a future that may never happen. It is an intentional trap that Medicaid uses to seize control of everything.

I've read all weekend about families who have lost everything unknowingly because it wasn't protected properly because no one thinks it will happen to them. Not sure you can believe all you read anymore but some of the stories are very sad. Many people do not know what an irrevocable trust is until it is too late and sometimes that does not even protect a family.

The whole "sale of the house" thing still has me shaking my head.
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Kimber166 May 2020
I'm sorry but i have to respectfully disagree with this. You are getting your mom qualified for a TAXPAYER funded program. Why should my taxes pay for your mom to transfer assets, that could and should be used for her care, to you?

If you don't like it - then you keep the assets and keep mom too.
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Keep in mind that facilities are happy to let adult children pay if their elder parent runs out of money. Medicaid's rates are less than private pay and Medicaid takes forever and a day to come through.
If family has now paid an amount equal to/greater than Mom's penalty amount and sufficient documentation has been submitted to Medicaid, Mom needs an attorney to help get the county/state agencies plus the facility on the same page.
Offices sometimes loose documents or deny the next office access to documents already submitted by families. Families are sometimes asked to resubmit the same exact documents. An attorney can help with this unpleasant part of an already gut-wrenching process. Eligibility is a massive mountain of paperwork.

If she qualified for Medicaid during some of the months in which family paid the bill, I would also ask the attorney if family can recover any of those funds. The state can not require adult children to pay the bill unless family signed a contract saying they accepted this responsibility.
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Our DHHS just told us that if you think property is going to be sold that is owned or jointly owned by a Medicaid applicant, it is advisable to get independent appraisals from two different Realtors and get those on file with the Medicaid office. In our state, the value of property for Medicaid is the town or city's tax assessed value, and if you sell for under that you get into the situation eperienced by the OP's family. If the independent appraisals come in under the town-assessed value, the Realtor appraisal should explain why. Realtors do this market analysis all the time for buyers and seller, looking at comparable sales in the area ("comps"). Rather than having OP's wife look at comparable sales when mom's house sold, could you get 2 realtors to run the comps and do a report to show that the house did not sell under fair market value? Realtors have access to a lot more information that the public might not have, and they would be considered neutral parites. It would cost a little, but worth it if you can save $11,000.
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JoAnn29 May 2020
Where I live the assess for taxes every 10 years. Problem is, the housing market has tanked. You can be assessed at 160k but u will be lucky if you get 100k.
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So sorry. In hindsight, you should have had it accessed showing that it needed work. They are basing their findings on a house that probably needed no work. Is there a way you can prove the work that needed to be done?

You can try and appeal. A lawyer will not be cheap.
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Dobu; the should CERTAINLY appeal. It seems likely that at the local level, the folks in the Medicaid office don't have the authority to over-ride this sort of thing.

The idea of going back to the buyer and finding out about an appraisal is brilliant and you should follow up on that.

In many places, you can get a free 30 minute consult with an eldercare attorney; you can also look into law school clinics in your area.
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This is legal, but I would ask a lawyer to help you appeal.

Ask the buyer's bank if they did an appraisal. You might get lucky. Otherwise, I would consult a lawyer about the best grounds for an appeal.

We had a family situation where the house sold for what looked like less than it should have. If the home had been in good shape, it would have sold for over 200k. But the aged person had let it go and the roof in the bathroom was falling in, there was mold in the basement....it never would have gone for fair market value. It was sold as is. But we didn't have to apply for Medicaid for that person.

So my point is that it is not unusual for a fixer upper to be sold for less than a properly maintained home would have. Hopefully, someone has some documentation to show it needed a lot of work. I would ask a lawyer what are the grounds to appeal.

The Medicaid program is hurting and they seem to have been instructed to turn out the pockets of widows and community spouses looking for a spare dime. I have no problem with making sure people follow the rules but be reasonable.

We had a family member in NY- which is a state that allows spousal refusal -who was dunned for an additional $20k because the state has more lawyers than she does. She's legally allowed to have that money. If they don't like spousal refusal, then change the law. Don't harass the vulnerable elderly.

We got a lawyer. They negotiated a settlement.
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TNtechie May 2020
If available, request the appraisal copy be sent to you and not the Medicaid office; the bank appraisal might surprise you and be higher than the $61,000
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I'm so sorry that this has been such a painful process for your wife. If the folks who approve Medicaid claims were not business-like and dispassionate, there would be much fraud.

You are asking for the government to pay out 75K or more per year of YOUR tax money...for the rest of your MIL's life. It's a big chunk of change and if there aren't tight controls, then we ALL lose.
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Have you filed an appeal with Medicaid?

https://www.nolo.com/legal-encyclopedia/how-appeal-denial-medicaid-non-eligibility.html
In your shoes I would hire an Eldercare attorney to help with this.
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dobu102 May 2020
My wife and siblings are considering an appeal. Thanks for the link. They just don't want to rack up more costs with legal fees on top of the possible money already being asked for.
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You are required to sell the home for fair market value...meaning she can't sell a 100K condo to a friend for 60K. However since your wife can prove that 50-55 was a reasonable price back at that time I don't understand why they won't at least adjust to 55K.

I'm in a similar situation with my father. We made decisions that we thought were sound back before we had any idea what Medicaid was or that it would be needed. I think the 5 year look back is too much.
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dobu102 May 2020
I agree to some of the 5 year look back provisions but this seems to be particularly heavy handed. The sale was not to family or a friend. And my mother-in-law could not let it sit on the market for several months unfortunately. At that point, the entire family was ready to move on and get her closer to family who could help her.

It is sickening that this happens as much as it does. No one anticipates an elderly family member going through this and the financial repercussions impacting an entire family. Another sad point to the audit was that her son passed away in October 2018 of lung cancer. He had no health insurance or life insurance. So she gave her son money for medicine and eventually had to pay for his funeral. That too came under intense scrutiny where my wife had to provide documentation like his list of meds, employment history, and death certificate to prove how the money was spent. Very painful to dredge all that back up.....

They didn't show one iota of care or remorse....business as usual.
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