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She has been on Medicaid for 15+ years and moved into a nursing home a year ago. I am concerned about the spend-down rule affecting her stay. She lives in NC.

The settlement $ is supposed to reported to LTC Medicaid program. The month that it is deposited into her bank, it’s considered “income” and then every month after it’s an “asset”. Most States use $2901 max for income and 2K for assets. So if your State uses these figures she will be considered over resourced by the 10K and will have to do a spend down. If it has not yet been deposited, try to find something to do a legit spend down on and then deposit it on the 1st of the month and do the spend down within that month. So she starts the month ok for LTC Medicaid limits and ends it ok for Medicaid limits for her bank statement. 10K is a fairly small amount & I’m sure you can find things useful for her and do the spend well within the month. A preneed funeral / burial policy could be an easy spend down for most of the $. If you do this make sure the policy she buys is ok for your States requirements on these. Or buy her a nicer wheelchair or other durable medical equipment; these too could use up most of the 10K. Or dental work if she’s able to see a dentist. Extra glasses. An iPad, if she can use one (& do get it engraved with her name on it).

Now if it’s already been deposited, this will likely be stickier as it’s already the 22nd of the month. Medicaid tends to do a waiver to allow it to flow into the next month without too much of a problem. But she or you as her POA have to let Medicaid know that you plan to do the spend down so she is back at 2K in assets at the end of next month.

One important item in settlements is to make sure that if - IF! - the bills that Medicare paid were included to determine the settlement amount, that that $ has been repaid to Medicaid. It’s the secondary payer requirement aspect of insurance policies. Other insurers also do this. Please pls make sure to find out from her attorney that any Medicare $ was withheld and repaid. MediCARE will eventually do a matchup & they can attach SSA income as they are a supercreditor. You do not want this to happen as it will become an issue for her LTC Medicaid Share of Cost / Resident liability requirements .
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