Can anyone help me understand why a Medicaid waiver would be beneficial?

MMB - 1. Did the atty clearly explain what the rules are for spending down your moms $ to be within compliance for Medicaid?

Mom has to do the spend down on her needs or her assets....she cannot give or gift assets to her kids without having a transfer penalty placed against her on her medicaid application. The penalty will keep her from being eligible for Medicaid till either the transfer is reversed or her period of time of ineligibility is over. Medicaid although a federal& state program is administered uniquely by each state but in general, the state will do a 5 year look back starting on the date of the medicaid application as to just where moms assets went to have made her "at need" financially (which for NH Medicaid is around 2k in assets and 2k in monthly income). So any $ gifted or transferred within 5 years prior (although there's probably a trust that could work around this) will get a penalty based on what your state daily reinbursement rate is for NH room & board.

2 As far as waivers go, each state determines what waivers are available. Medicaid as initally planned (in the 1960's) was for skilled nursing care in a NH type of facility for the infirm elderly or profoundly disabled. But over time the states have used the discretionary funding of medicaid to pay for programs outside of a NH. Some states will pay for AL via a waiver, while others don't. Some states have IHHS community based Medicaid programs. Some states are shifting diversionary funding to PACE type of community based services. Before you get mom spending down her $, you probably want to have a clear idea of what level of care she likely will need in the near future and IF your state has a program that will work for whatever that level of care is. If mom can show medical need for a NH, then a total spend down makes sense IMHO if she is likely to run out if $ to pay for the average 3 years stay in a NH. if she's ok for AL, thats kinda more iffy as most AL are only private pay or require private pay for 2years or so before accepting a waiver.

Also since waivers are discretionary funding, the program could defund.

3. Medicaid is designed to be a safety net for those at need. If mom has always lived upper strata, she is not going to be happy (nor is family) in living in a shared room Medicaid bed in a NH. Where I live, the better majority of NH do not and will likely not ever take Medicaid, most have a buy-in fee as well. To find a nice Medicaid bed, it means driving to a NH in an adjacent county.

4. Is Mom paying your sister for her living at her home? Even if Sis says its not needed, I'd suggest mom does personal services contract with Sis. If you are managing moms affairs, you could do another to you as well. The elder law atty should know how to set these up.

You understandably do not want to give her money away. She absolutely could not do that under spend down. She could not give to you, your siblings, her grandchildren, a church -- all of the money has to be spent on her own needs.

And what would that gain her? Depends on what your state covers. Here it would pay for a nice adult day health program. It would pay for some in-home help your sister could use for respite time. It would cover all of her drug expenses (which can become astronomical in a hurry with certain diseases), and deductibles on her medicare coverage. In some states it covers ALF. (Igloo knows exactly what she is talking about in her location. Not all states are the same. Check it out in your area before making any decisions.)

Is 6 figures closer to $100,000 or a million$? With $900,000 Mom can probably pay for all of these things herself, and not need to consider Medicaid. But it is amazing how quickly $100,000 can be eaten up in expenses if Mom develops a chronic condition.

It does not sound to me like Mom is in need of Medicaid support at this time. Keep an open mind if circumstances change.

And I agree that Mom should be paying room and board and personal services to your sister. That is one way (the only way, really) to ensure that siblings who do the work get compensated. Parents on the poverty line may only be able to pay a token toward their own upkeep, but your mother can pay her own way, and should.

Agree with Jeanne and Igloo. Your mom should pay your sister room and board and for the care she receives. This is an acceptable way to spend down mom's assets if there is an agreement in place. The attorney can help with those. Paying a sibling for some is quite difficult. They do not seem to understand what the caregiver sibling encounters each day, how difficult it is, how much it is costing them personally or what their efforts are doing to help keep mom comfortable. I would suggest that you offer your sister a week of respite where you go to sis's house so she can get away for a week or two. That will help you to understand just a bit.