Should I request a credit card limit reduction for an elder before a Medicaid application is done? - AgingCare.com

Should I request a credit card limit reduction for an elder before a Medicaid application is done?

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I have DPOA. If my elder lives for a few more years her assets will be depleted and a Medicaid application is likely going to be required. Will the Medicaid review look at a pretty good credit card limit as an asset and say no to the application? My intent was to ask to bring it down to $2k to be closer to Medicaid requirements, but it will be enough to take care of an emergency in the meantime. Has anyone else done this? Is there a credit limit amount that is considered acceptable?

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Medicaid does not count the ability to borrow money as an asset. It's only cash in the bank (or other assets) that they will consider.
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Great question.

In recalling the Medicaid application for our LO, there did not seem to be any questions about credit cards. Our LO is on the "Medically Needy" program and is in a NH, so everything beyond a limited stipend of $35 goes to the home as our LO's "cost share." Your situation may be different.

You could try calling the county Medicaid office and asking them. However, please keep in mind that Medicaid occasionally changes how they do business and the answer you get today may not be the situation you encounter in a few years.

A second option is to talk with an elder law attorney who is experienced in Medicaid applications.
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I second the recommendation to speak with an elder law attorney. Many people mistakenly believe that they have to spend down to $2000 first and THEN seek help. "Available credit" on credit cards will not be considered an asset.
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I agree 2000% on the recommendation to seek the counsel of an elder law attorney...not just ANY attorney...but an actual ELDER LAW attorney. Medicaid planning is a mine field that the average person completely lacks the preparation & knowledge to navigate. You can save yourself a LOT of stress & costly mistakes by getting the advice of the elder attorney...and the earlier you do it, the better.
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In Pennsylvania the spend down amount to get to is $8000 before applying for Medicaid. I never remember answering any questions at all about credit cards. I agree with making an appointment with elder law attorney. Laws change all the time. This way you will know for sure, and it will cut down on your stress. Go to the best source for information and help. There is no way the average person can keep up on all of the Medicaid information and changes. You will feel better being informed.
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Mandatory requested information becomes FUBAR by Medicaid. Non requested information - doubly FUBAR. I would ask the card issuer if I could fax the financial POA that authorizes your making financial decisions on her behalf. Then I would ask to establish a lower credit limit. A cash advance or transfer balance option may exist on her account. Even if she can quickly borrow to obtain the cash and pay a bill, she would still owe it back to the credit issuer. If you are an authorized user on her account, it is especially important to keep a low balance. Any unpaid balance, though it may not be owed by you, but rather her estate, still gets reported along with your credit, so can present problems.
In the real world economy, it would be a debt and liability. That said, in the Medicaid economy, there is a lot of room for inaccuracy and detrimental decisions. My suggestion - do not discuss/provide anything about her credit. Medicaid is unable to process the bundle of information already received. An additional piece of information can reset the whole process. Any new information or questions is a permit for Medicaid to further delay.
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Available credit is not an asset. I would not raise any financial flags.
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From what I understand, when medicaid takes over care SS and pensions go to the care first. A small amount of money is put aside for personal needs. Not sure how they will be able to havea credit card when they don't have any money. Talk to Medicaid.
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Credit card limits are taken in consideration when trying to get loan. Even if you have never charged to the limit they still take the limit into consideration as a debt that could be incurred. The problem I see here is can the debt be paid off as part of spending down. Like I said, if Medicaid takes over for her care, she will only get a small amount a month for personal needs.
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Yes, the charges are reviewed to make sure that items purchased have been for the benefit of the elder and not the benefit of others.
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