I received a letter saying mom is denied Medicaid. I need help.

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I first posted this in an article, but I'm hoping more people will read it here....

This past week I was so excited to get a phone call from a case manager telling me my mom had been approved for the elderly waiver here in Iowa. We set up a time for the initial consultation and discussed what services she might need (in her case, be willing to accept). Today I got home to find a Notice of Decision saying that mom has been denied services due to having resources over $2000.00.

She and my dad have a house worth about $80,000, three vehicles (two are pickups worth less than a total of $750.00) and an annuity with $6,500 in it. They have less than $2000 in the bank and bought burial contracts with their life insurance policies. They also own a rental property with a cash market value of $15,000 but according to the Medicaid article I first posted under, since they are receiving rent of over 6% ($120.00) per month, it should be considered an income resource for my dad. Mom gets about $1100/month in Social Security and IPERS (pension fund).

I have filed an appeal, but I don't know what resource is keeping mom from being accepted. Is there a way to find out exactly why Mom was denied? Her appointment with the Waiver Case Manager is this week. Should I cancel it? Can anyone help?

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I would contact an elder lawyer BEFORE my meeting with the Medicaid caseworker. It would be best to get their take on it before and then after the meeting. It's worth paying them. I got an affirmation for my mom for Medicaid and then a denial so I got a lawyer. It helped me keep my sanity, and she ended up getting covered.
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Get rid of the 2 trucks, the rental property and the annuity. Yes, the spouse can have assets, but obviously there are assets with her name on them too, which makes them joint assets and not just spouse assets.
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You know, just an idea: I also think it's the rental property that is the stumbling block here. Is it possible to SELL that to the person who is renting it? On a 15 year mortgage, the monthly payments would be about the same, taxes and insurance can't be much on a $15,000 home, and then you'd get out from under this Medicaid stumbling block.
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Make sure you have a current rental agreement that is notarized to take in with you.

they may say that $ 120 is not fair market rental, so ask the same Realtor to do a rental comparable letter that $ 120.00 is (if that is the case). FInd comperable rental property listing in today's paper or a penny-saver or Craig's list. If the rental house is truly looking bad take photos to show it's low value. For my mom, with the car she gave worthless nephew, I took photos of the car and letter from the auto repair shop she used since forever and then copies of all the work she had done on the car to validate it was below the blue book value......now with all this - which the casework places in the application and I signed off it was accurate - we got the transfer penalty to be right under the amount of exempt assets for my mom. But it was like a week of something every day faxed over to caseworker to keep it on his desk. For TX, the intake caseworker is pretty low paid and have like 15 minutes to do a review. So anything that seems high cotton finance gets a middle management review OR if it is missing a document is automatically put into the ticking time clock for denial pile. You have to send (fax) them something to keep it on active review.

Also the intake caseworker really doesn't know very much when it comes to rental valuation, annuity evaluation, etc. That is all high cotton finance and beyond their pay scale. Whomever you are meeting with will be much more knowledgeable about how to treat rental property and it's income stream.

One thing to think about is IF the rental property is just going to be an issue for mom AND IF in the near future mom & dad will need a NH, then they will be screwed for Medicaid because of the rental property. Consider selling it or placing it on the market. You know if they go into a NH, all of their monthly income has to be paid as their required Medicaid co-pay to the NH. They are each allowed to keep a small personal needs allowance (for TX it is $ 60.00 a month). So if in the future mom & dad will need a NH, can the house & the rental property be fully paid for (taxes, insurance, utilities, etc) from their allowance? For many the math just doesn't work and so family will have to pay for all on the house for as long as mom & dad are alive. If family can't do this for the possibly years & years, then you might as well sell now and take the hit and private pay down to whatever they need to fully qualify so they are impoverished for Medicaid rules.

Good luck and please post how the meeting goes.
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Thanks for your answers. A few more details might help...my mom can stay at home if she gets in-home care, which the Elderly Waiver supplies. This is our third try at getting her on Medicaid.

She needs help with med management and the Lifeline. My dad does still live at home, so he would be the community spouse. From what I've read on Iowa's website, the community spouse can have up to $115,000 in assets. They are clearly below that limit.

Both of dad's pickups are worth a total of $750.00 (the car dealership said they are only worth that because they do run).

The rental property has a cash market value of $15,000. This is in small town Iowa. My parents rent it to my nephew for $120.00/month, which is about all you could get for it. My realtor said the property was only worth that much because of the two car garage my brother built on it 2 years ago. The reason I thought it was excluded was because of an article on this website that says income streams from property exceeding 6% of its value are exempt assets. Maybe that part is wrong in Iowa....Also, we tried to use the tax appraisal of the house as proof of value, but DHS wanted the cash market value, so we did have to have a realtor write the letter. Probably an Iowa thing but that kind of nitpicking was what caused mom to be denied the second time around, since I couldn't get the paperwork to DHS within 14 business days. Geez!

And here I thought things were going pretty smoothly, it had only taken all summer, hours of phone calls, and 2 denials to get to this point. :} Now I'm back to teaching it is all falling apart...
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The rental property, it is not an excludable asset. Medicaid probably considers the value on the rental property as a joint asset and her half of the value on that asset far exceeds the $2000.00 limit. Medicaid may also determine that the rental property income of $120.00 is far below what could be asked for in the type of rental unit and area where it is being rented and have their own formular to determine rental income value. Medicaid has far more asset restrictions that a state's waiver for the elderly.
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OK - stevensmom, so I'm assuming this is being done as mom needs to go into a NH or needs other skilled nursing services or getting a waiver to pay for AL. It is good that you filed an appeal.

Medicaid is a joint federal & state program but administered by the state. So each state has it's own specific ceiling for how it views resources but within federal guidelines. The rules are somewhat different for an individual applicant (and easier imho) than for a couple (which are more complex).

What is the situation with your dad? Is he continuing to live a the house and therefore be fully considered "a community spouse". If so, your dealing with a couples situation and the whole "community spouse" issues and the asset situation usually is that the community spouse is allowed about $ 112K in assets excluding their homesteaded property and 1 vehicle. Oh community spouse refers to them to be "continuing to live in the community". Your dad could actually apply for monthly maintenance from your mom's income too if his income is low and they were interdependent of each others SS to make ends meet. MM is low in most states and you have to apply for it too. May have to go to court to get Medicaid to allow for this. But if dad is healthy and could live on his own for a long while you want to do whatever to increase his monthly $$.

Resources are in 2 groups: income & assets.
Income is whatever they get each month, like SS or retirement. The states determine the ceiling for income. My mom is a widow and in a NH & on Medicaid in TX and for TX it is $ 2,094.00 max for income so if my mom had $ 2,100.00 in income, she would be declined Medicaid. Now in those situations IF their income is a guaranteed income, they can do a Miller Trust to deal with excess income, so they can be income eligible for Medicaid. Now based on what you said, it seems mom's income is $ 1,100 a month. So income is not the issue for her.

So it has to be her/their assets.
Right off the bat, the cars are a problem...they are allowed only 1 vehicle. so 2 got to go. They need to be sold as close to their BLue Book value. If they give or gift them, the state can do a transfer penalty. I had to deal with this with my mom for a car almost at the edge of the 5 year look-back. It was a rush of a paperwork hurdle to get over but got the value lowered enough via statements from auto repair and photos of the car to show the BBV was not viable for her car. Keep in mind that all real property (home, cars, land) ownership is all recorded by the state and will come up eventually.......

The house value is totally OK, and if dad is staying living in the house the value and be without limits in most states anyways.

Funeral stuff is OK as long as NCV (no cash value), so I bet that is OK too.

Annuity only $ 6,500? That seems low for an annuity to be done. Look into that paperwork to see just what the annuity is and it's value. Ask if the annuity is being counted as a 50/50 resource or can be put into dad's assets tally.

Rental property...I bet that is it. If they co-own the property then it might be viewed as a 50/50 shared ownership and as a non-exempt resource (unlike their home) for mom's Medicaid application. So if its 15K, then mom has a $ 7,500K asset right there and over the 2K an individual is allowed. I'd ask the Case Manager if this is the problem, if it is, then see an attorney to see how the ownership can be transferred or sold to dad so that mom can get out of her ownership of the property. Now Medicaid is fully aware of the property so all this has to be done very transparent and able to pass an enhanced Medicaid review. There could be a transfer penalty for mom's share but if the value is 15K, then her penalty is maybe 7K so not too crazy to deal with. Is the 15K what the annual tax assessor statement reads? That is what Medicaid looks to first to determine property value. So find that statement (usually mailed in Oct/Nov for Jan payment). If the assessor value is wrong or too high, you can get & pay for an independent appraisal of the property which Medicaid will accept. Has to be a true appraisal and not what a Realtor says.

I'd go to the meeting and carefully listen to the case manager. if all this is stressing you out (rotflmao), have someone else go with you to take notes. Not family but a friend that will just write stuff down & not be emotional.

Then depending on what they tell you, find an elder law attorney, really. This site has a drop down list of them by state, I'd start there.

Good luck, it will be a total PIA to get through, so keep a sense of humor. My mom's application took almost 6 months, was over 100 pages of documentation and had glitches with insurance & vehicle. But really you just have to get through it and be organized in your paperwork. With NH costing anywhere from 5K - 15K a month, you have to dowhatever to make her eligible.

Keep all paperwork organized, my mom's state required an annual re-certification and with it a resubmission on current financials and details on property status, and all other assets. For even more fun has to be submitted with 14 days of the date on their letter, and every year I get it about 3 days before it is due.....really.
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