To what degree does Medicaid scrutinize during 5-year look-back?

Gt the home signed over to you and siblings asap or medicaid will take it all. Get legal advice before doing anything else. We had the same situation with our parents and it worked out well.

They look quite close. I heard that it is becoming worse now due to the expanding US deficit.

Hi, you may want to contact a elder lawyer or a case worker (in my norcal county it is in Health Services dept.). I am applying for MediCal for my mom. They require qualifying for MediCal before applying for IHSS, In Home Services. Mom is physically healthy with Alzheimer's and needs 24 hour help. It looks like there have been many changes in the rules concerning both MediCal/Medicaid and IHSS. The 5 or 3 year look back may not be what it was in some cases. Also, they said that you are allowed one house, one car and $2k in assets. Remodeling and house repair/maintenance seem to be acceptable expenses within reason. I think gold plated bath tubs would be a red flag. I tried getting info from sources non-gov with little results. I did contact a large elder law firm who charges $800 for initial assessment 2 hour consultation. If I had known of recent changes a few years ago it would have been a smart thing to do. Now mom's assets have dwindled to a point that is not worth it. I also researched Reverse Mortgages. They have a terrible reputation from the past unethical behavior of some banks and loan brokers. Some lost everything, scary. As a result of this criminal behavior, the gov has set strict rules for lenders to protect the homeowner. It may be worth talking to a reputable broker for more info. These loans now have many features that are good for some families. One of the features is that the homeowner is mandated to have a two hour counseling session with a neutral third party, gov approved counseling service. It was a thorough education on all aspects of the loan and how it works and offered follow on access throughout the application process. Mom qualified to have their fees waived, normally $150. In summary, I have spent over 200 hours in the last 4 months digging and researching. The information is not easily found nor easy to digest. That's why it would have been worth paying a lawyer who is current with all the rules and laws. Wishing you all the best in finding the best solution for your family.

As a Realtor you may be aware that IRS only allows homeowners to deduct $ spent in 3 months prior to home selling ( vs listing). Since you are private pay using her $ for her care, you can use her $ to maintain or improve her home.
Claw back applies:
If her $ is given or gifted to someone in 'arms reach' relationship. Ex: If she sold house to you at undermarket value, Medicaide would come after you for the Claw Back If she dies within 5 years of the sale and Medicaide was paying the bills.

If you put it on the market, As Is or Improved, and sold it to me undermarket... Perhaps to pay a medical expense before Medicaide kicked in, or you didn't get Medicare to cover..so you needed $ fast...then not an issue. I am a stranger who got a good buy.

Beware of Co-mingling. If you front the money for work, file a lien, get release from contactor that they were paid by you...acting as GC. Then you have a paper trail to show you need to be paid from Mom's $ before or at closing. Just like MTG or any other contractors. You want a paper trail. You can group costs together and file 1 lien, but worth the filing fee, IMHO.

Medicaide is wanting to be sure Mom's $ are not going to family and friends pockets, to get $ down so Medicaide starts picking up the bills.

Also all her $ do not have to go to medical expenses. She can buy nice things for herself, within reason. Ex: A $500 ring, or $1,000 in new clothes. Their resale value goes towards $2,000 assetts limit.
Buying a $50,000 mink, will be Clawed Back if bought within 5 years. Because the State is not buying mink coats and paying NH bills.
Do buy that burial plot and pre-paid funeral plan now! Again funeral plot does not count if you buy it now. If you splurge on a $3,000 pre-paid funeral plan, then $1,500 will count towards assetts limit before Medicaide pays. Concept: The state is not paying for funeral luncheon. You have the option to pre-paid $20,000. Just know Medicaide will collect at sale of house, or Claw Back if $ spent within 5 year timeframe.

Hope that clarifies things.

As far as Medicaid goes, a home is a non-countable asset. The Medicaid applicant is typically allowed to own $2,000. You should indeed be prepared for the 5 year look back. The spend down can be pre paid funeral, for example.

OldBob is correct. She can keep the house as long as she indicates that she intends to return to it if she is able to (even if she knows she will never be able). After she passes, Medicaid will recover against the house for the amount they provided.
The biggest problem with that, as someone else mentioned, is once she is receiving Medicaid, she will only have a small amount of her income left to spend on herself--maybe $50 a month or so--not enough to cover property taxes and home insurance, utilities, etc.
I'm wondering if some of her "spend-down" could be used to pre-pay those things in advance. That's a question for a good Elder Law attorney.
Or perhaps the house could be rented out to cover those expenses. That makes it an income-producing asset, which is also usually exempt from spend-down.
The Medicaid look-back is not as frightening as many seem to think. As long as her money was spent on her house, there will be no issue. They are only looking for money she gave away in large amounts, not money she spent.
She could have blown $5000 a week at a casino, as long as SHE did it herself. If she gave it to you to spend at the casino, that's unallowed gifting.
Not that I recommend gambling for spend-down, just giving an extreme example.

You do not have to sell the home....Even if mom can never return home, she can indicate she intends to on the proper form which the NH knows about, and the house remains hers until she passes away and then Medicaid will come after it...Get the form signed and apply for Medicaid.   The house fix up is a non-issue.  You could, however, fix it up all you like but in  your situation, why do it?  
(my excellent elder care lawyer put our house in a trust, and per the laws now on the books, it will not go to probate when I (surviving spouse) pass away, and thus the government can't take it.  You have time to look into all that.)

  

Grace + Peace,

Bob

I got an elder care attorney and they showed me how to save some of her money and helped me get her on Medicaid. Before doing anything I would ask for a free consultation with an elder care attorney. Hope this helps.

You have Every right to YES, Use her Money, honey, For Repair, No One would Care.
Get an Estimate and Labor Costs, etc....You and I both Know it Costs "Plenty" To Rehab for Mom and Dad...Put this Money away in a Safe Place for that...Rainy Day.

Hi...
I just fixed up (remodeled) my folks home, $60k, to get $1,000.000.
Sold! What a pain. We have elder care attorney.
As poa, then executor, after their passing there's lots of rules but,
My answer is just this:
Call the State medicaid office & Ask! They will tell you everything you need to know. The rules are pretty basic.

we all get this notion that medicaid is scary to be dealing with but, I never had a thing to hide. My intentions were to preserve as much money as possible however if you want to use them, they want your mom penniless! & since they want her to spend down darn it, throw them your questions.
I did.
Goodluck
I'velearned so much.
I ended up with an inheritance that made me lose #1-medicaid or option #2 spend down $70.000.00 immediately. ....I WILL NOT LET MY STATE tell me to go broke.
🤯🤯

Have you had an actual appraisal done on the house? We are getting reading to put our mom's house on the market and just had the appraisal done. Medicaid is very specific about market value sales price. We are selling hers as is.

We didn't know you were a real estate agent. Fortunately you are so you understand the market you are in. I think the comments were meant to help you as Medicaid could possibly question expenditures but that depends on so many variables. I too may be down that path one day soon. I basically think we all wish you the best and hopefully now you will only get specific responses regarding Medicaid. Your mother is fortunate to have you dealing with her house. As you know it can be a difficult process. I truly wish you the best.

Being a real estate agent you know what needs to be done to get the max value for the house. I can't imagine Medicaid would be upset if you increased moms assets by fixing the house up. It might be worth consulting an attorney familiar with the Medicaid application, sometimes it is how it is worded that makes it legal and okay vs not.

They are not going to say anything about what you did, it is all about the money with them.

I would print out some comps as is, then print out comps after reno's, this will show that you increased her bottom line.

Riverdale, where I live it is a seller's market, not enough inventory.

I think you should assess the housing market carefully first. We are about to put our house on the market. We live in a desirable area but an expensive state and it is a buyer's market. You might have faith in a particular realtor but they will not all agree. In general realtors want the house to be more than nice. Often they want it staged. This will run into thousands of dollars. I agree that you should consult with an elder care attorney. What you choose to do to the house may not bring more money unless you do alot and that could cause you more problems. If you haven't done this already I would research the real estate market where this house is. Basically you only need to do it for the past year because you may not get the information you need if you go back further. You could interview several agents but remain wary. It is very easy for them to have you spend your money and make their job easier. Sorry if I am offending any real estate agents on this site. I just had vastly varied opinions in the last year getting to this point.

Sorry, how well does Medicaid Scrutinize?

Here's my experience and I had a pretty laid back caseworker.

I was asked for five years of statements, I was lucky Mom kept hers that long. Of those 60 months the caseworker pulled 4 a year. I was also lucky that my bank, for a small fee, puts copies of the cancelled checks on the back of the statement. They look for consistency and any large amounts coming out of the accounts. Lets say within the 5 year look back Mom gave a someone 5k for a car or downpayment for something for them personally. Thats a no no. That money will need to be paid back or Mom would be penalized. Now if the 5k was for her, then no problem.

I agree with Country. You really need to sit down with Medicaid.

Will putting money into it guarantee that you will make it up in the sale. Some upgrading may help the house sell, but u never get that back.
Maybe just the very minimum. Sometimes paint and new carpeting help. A new kitchen floor. Actually a realtor should be able to help here.

Medicaid will allow a house but...Moms money cannot be used to keep it up. I had to let the taxes go on Moms. It also has to sell for Market Value while Moms living. You may want to consider getting Mom signed up for Medicaid before her money is gone, with the house up for sale. If the house sells while on Medicaid, Medicaid will stop and you will need to spend Mom down and reapply for Medicaid.

Maybe a Medicaid versed lawyer could help.

If all the work is done in your mother's best interests, invested to maximise her capital asset and show a return, I can't see how it could possibly trouble Medicaid. I suppose it couldn't hurt to ring them up and ask them?

But as a casual reader of property sections, I wonder if you had better spend a bit more time adding up. Property values are such a lottery anyway, houses being worth only what somebody will pay for them no matter what the pundits tell you, that you will need to be very certain that the improvements you make are going to pay for themselves.

Phewf what a project! Fingers crossed for you.