My understanding is that any gifts given to family will be penalized by Medicaid. Others on here may have more experience in this, but I was worried about Mom paying my brother back for what he lost when the house he paid for that she lived in was foreclosed. An elder law attorney told me if we kept records noting she was paying him back and not giving him financial gifts, we should be okay.
Mom will have a 100K transfer penalty in which Medicaid will not pay for any of her care till the penalty is either paid back (with the funds used towards her spend-down) or the penalty period is over.
The penalty is based on your states Medicaid daily reimbursement rate for room & board. Like for TX it is about $ 145.00 a day so a 100K penalty means that roughly for 670 days (almost 2 years) Medicaid will not pay a penny for her care. Even if mom is currently impoverished and qualifies for Medicaid (that means mom meets the financial and medical needs for Medicaid), she will be ineligible for Medicaid to pay for any of her care. There is a specific formula in how the penalty is done and the date at which the penalty is based on.
So who is momma going to move in with? or is brother going to private pay for mom for the full penalty period?
The Mediaid look back period is five years. If she has funds to pay for until the date in 2015, then Medicaid can be applied for unless there have been other gift during this time. If she needs care now, Medicaid will not pay until that $100,000 is repaid to her.
This question can only be answered by an adviser in your state who knows all the facts of your mother's case, and the Medicaid regulations that apply in your state.
Has your mother already filed a Medicaid application for care in a facility? A $100,000 transfer four years ago would have to be listed on the application, and it would disqualify her. This would be a serious problem.
If your mother hasn't applied yet, you need a plan to deal with the asset transfer, the 5 year lookback period, and your mother's need for care as her health declines. Getting professional advice you can rely on, and professional preparation of the application, is the best way to protect your mother's health and financial well being.
If Mom gifted $55,000. To five children in October 2011 and now is spending down for private care her last remaining annuity of $40,000 at $2500 per month would it be logical to assume that the children could gift back to Mom $25,000 and then apply for Medicaid after all assets are gone? Or wait and let the reviewer decide what to do?
What Igloo wrote is right. Since the gift was made 4 years ago now, the penalty will not be as stiff as if it were made yesterday. The rate of decline in the penalty probably varies a good bit state to state, so check with your local Medicaid rep to see what the effect will be.
Cyncyn, with a five-year look back, you would have to get past Oct. 2016 to be in the clear. If you apply now, Medicaid will impose the full $55,000 penalty period. That means you pay the first $55,000 for her care, without touching her funds at all. If you were to offer to pay back 25K they will not be amused, nor will they pay.
Cyncyn, I do not understand your math. Did mom gift $55,000 total, $11,000 to each of five children? How do you arrive at the $25,000.00 to pay back? I assume that is $5,000.00 per child. Who is she paying for private care? Is it in her home? I would talk with Medicaid in your state to get reliable information, I would hope.
Mom did give each child $11k. Oct 2011 She still has $40k in an annuity that will be paying out over the course of the next 16 months after that she will have nothing but her SS which is $720. Per month. the math was just a rough estimate so she will be out of money by October 2015. But the look back goes until 10/2016 (60 months) so if each child gifted her back $5760. Would we be doing something wrong ? Or do we give back the $11 k at the end of the 40 k annuity?
Medicaid imposes a 5 year look back period, and since your mom gave your brother $100K within the 5-year look back period, it can affect her application for medicaid's long-term care benefits. As stated in infolongtermcare, she will be subjected to a penalty disqualification period, it depends on the value of the asset you transferred and the cost of care in your location. Supposed the cost of long-term care in your area is $50K per year, and your mom gifted $100K to your brother, then medicaid will only start paying 2 years after your application.
Unless there have been other "gifts", as Medicaid will refer to them, in this time frame the best thing would be to wait until 5 yrs. plus 1 day from the date of the 100k to avoid lookback/payback. That is if here health can wait that long. Otherwise there will be a penalty period. Only other way might be if this was a loan & there is some form of documentation. IE: living arangments to off set payback or agreements and/or payments of monies.
Cyncyn, would it be possible for the 5 of you to help pay for your Mothers care until the time period has elapsed? Based on your calculations that would be from Oct. of 2015 till the end of Oct. 2016. ( 1 year plus 1day. )
Yes I think I can pay for it from my social security. But I guess what concerns me is if I pay for it for it once Mom's money is gone and do so for at least a year will Medicaid say hey continue to pay?
Newfiegirl, yes these are considered gifts and will trigger a penalty under the Medicaid 5 year lookback. I assume the $13,000 amount was to avoid gift taxes, which it does....but it does NOT avoid Medicad lookback.
The penalty is based on your states Medicaid daily reimbursement rate for room & board. Like for TX it is about $ 145.00 a day so a 100K penalty means that roughly for 670 days (almost 2 years) Medicaid will not pay a penny for her care. Even if mom is currently impoverished and qualifies for Medicaid (that means mom meets the financial and medical needs for Medicaid), she will be ineligible for Medicaid to pay for any of her care. There is a specific formula in how the penalty is done and the date at which the penalty is based on.
So who is momma going to move in with? or is brother going to private pay for mom for the full penalty period?
Has your mother already filed a Medicaid application for care in a facility? A $100,000 transfer four years ago would have to be listed on the application, and it would disqualify her. This would be a serious problem.
If your mother hasn't applied yet, you need a plan to deal with the asset transfer, the 5 year lookback period, and your mother's need for care as her health declines. Getting professional advice you can rely on, and professional preparation of the application, is the best way to protect your mother's health and financial well being.
Angel