My grandmother entered a nursing home after a fall in November of 2019. At the time, the only asset she had was her home, SS check and pension check. She was able to qualify for Medicaid once the home was put up for sale. When she qualified for Medicaid, I was advised to ensure that all her income went toward her care. She had two large credit card balances. Long story short... the home didn't sell until October of 2020. Now that the home has sold, she is on private pay until bank account drops below the $2000 cap and she is able to qualify for Medicaid again. She is now being sued for one of the credit card debts. Since she is on private pay, do I pay off the credit card debt or will that come back in the 5 year review when she applies for Medicaid again? The financial aspect of long term care is so incredibly complicated!! I want to take care of my grandmother's finances in the best manner possible (I am her POA) but I don't want to do anything that will be detrimental to her qualifying for Medicaid when the time comes again.

Find Care & Housing
Based on the following article:

You can pay off:

Accrued Debt. One can pay off accrued debt, such as personal and vehicle loans, mortgages and credit card balances.

Medical Devices. One can purchase medical devices that are not covered by insurance, like dentures, eyeglasses, and hearing aids.

Home Modifications/ One can make home reparations and modifications to improve access and safety, as well as build on to their existing home, such as adding a first floor bedroom or bathroom.

Vehicle Repairs. Vehicle repairs, such as replacing the battery, getting an engine tune-up, or replacing old tires are also a way to spend down assets, as is selling an existing car at fair market value and purchasing a new one.

Life Care Agreements. One can create a formal life care agreement, often referred to as personal care agreement. This type of agreement is generally between an elderly care recipient and a relative or close family friend. It allows the care recipient to spend down their excess assets while receiving needed care. It is vital this type of contract is drafted properly and that pay is reasonable for the area in which one lives. If it isn’t, one could be in violation of Medicaid’s look-back period.

Annuities. One can purchase an annuity, which in simple terms, is a lump sum of cash converted into a monthly income stream for the Medicaid applicant or their spouse. The payments can be for a set period shorter than one’s life expectancy or equal to the beneficiary’s life expectancy.

Irrevocable Funeral Trusts. One can purchase to purchase an irrevocable funeral trust, which can only be used for the expenses of a funeral and burial. In general, up to $15,000 per spouse can be placed in a funeral trust. However, this amount varies by state.
Helpful Answer (12)
Reply to MsRandall
Isthisrealyreal Jul 15, 2021
One thing to be mindful of, not all annuities are Medicaid compliant. Anyone going this route should verify that the product they are buying meets the Medicaid criteria.

Great answer MsRandall.
See 1 more reply
You should check with them. But the Credit Card Debt is something your Grandmother owes and should be paid.
What you can do is call the Credit Card Co and explain things and tell them that you are paying for her care and are willing to pay half of the bill of what your Grandmother owes and they will probably accept it.
Don't mention the sell of her home to the Credit card people.
Helpful Answer (8)
Reply to bevthegreat
Maryjann Jul 15, 2021
As long as the elder care attorney in her state says this is okay, great negotiation idea.
I don’t know who gave you your Medicaid advise, but some of it is clearly wrong. Legitimate debts can be paid as part of the spend down. There was no reason to sell her homestead to make her eligible for Medicaid. I agree with others that you consult an elder care attorney immediately. These costs are also qualified expenses for the spend down. The general philosophy behind the spend down policy has to do with people deliberately trying to impoverish a relative in order to qualify them for Medicaid. Legitimate expenses and debts do not fall into this category. Get the facts about you state’s Medicaid laws and policies from someone who is on your side and knows how to apply government policies in ways that benefit your grandmother. There was never any reason why the credit card company was forced to sue your grandmother. You could have paid off this debt without incurring any penalties unless the debt was incurred by you or a relative in close proximity to her Medicaid application and included expenses that were clearly not incurred for her benefit such as expensive furniture, makeup, expensive clothes that are not her size, etc.
Helpful Answer (7)
Reply to Chellyfla
JoAnn29 Jul 15, 2021
Agree house didn't need to be sold. But, Mom cannot keep it up. She has no money. So, if no Community spouse, disabled child or former caregiver living there it just sits. Family is not responsible for upkeep. And if they do pay out of pocket, Medicaid does not guarentee reimbursement. So, better to sell it. In the end, a lean will be placed on it anyway. I so wish Moms house had sold while she was living. It was a headache.
See 1 more reply
At least you know how to do the Medicaid paperwork. You should do a one time legal consult to see if you should pay off her debts with the house sale and not get penalized. And that also depends if the nursing home took control of sll her finances. The lawsuit is nothing you can defend as she is getting sued. You might just find that she has nothing to be garnished in any way. There can be a lein placed by the card holder, but they may still not be first in line. She has to appear in court and she cannot. All you can do is carry a doctor note for the judge. Try not to make any payments to the cards with your own money. This forum cannot help you here with the best answer because states are different.
Helpful Answer (6)
Reply to MACinCT

When my LO went to a nursing home permanently, the only thing I didn't pay off was her last cable bill. She would periodically over the years call her cable and utilities trying to get discounts or some better deal. Cable company could almost always talk her into paying more and this last bill was ridiculous. So everything but the cable bill was paid with the house proceeds - including credit cards. She lived on credit cards and home equity loans and juggled those most of her life to maintain the appearance of a higher living standard. To me, paying those off was covering her expenses/care since most of what she charged was technically "living expenses" - just to a somewhat higher degree than what she could afford on her income. There were even a few nursing home and medical expenses on the credit cards. I don't know that I ever questioned it in advance, but I didn't want to deal with creditor harassment and there was no doubt the debts were hers, so I paid them and used the rest of the house proceeds to pay the nursing home until Medicaid kicked in. I also had statements to back up the fact that these were credit card charges she made for herself. Her credit cards had been zeroed out several years before by a generous person trying to help, so I had the comfort of knowing the credit cards she had at the time of her house sale were not things she bought for others or cash advance money that was then gifted to someone. I do not remember if I had to produce credit card statements with the Medicaid application, but I had them. Find out how your state views this - it's probably a question they get all the time. Either way, I'd be trying to close the loop on this lawsuit so it doesn't drag out because that will just be a burden for you and extra stress that you don't need. You may be advised to pay it since the funds are technically available.
Helpful Answer (6)
Reply to Mysteryshopper

Contact an elder law attorney in your state. I found that was the best avenue for me anyway. I went in with specific questions written down and ready, and was out before the full hour was up. It was worth the (prorated) peace of mind.
Helpful Answer (6)
Reply to New2This2021

Your Mother has enough money from the sale of her house to pay private pay for over 5 years? I would talk to her prior Medicaid caseworker. She is in the spend down process. The debt is hers. If she was on Medicaid, the CCs would have to write it off. Can't garnish SS. But she now has money.
Helpful Answer (5)
Reply to JoAnn29
Frances73 Jul 19, 2021
I agree, if you have money you should be expected to use it to pay your fees and expenses. Then if you outlive your resources you apply for Medicaid.

Medicaid was never intended to be an entitlement for every citizen. You don’t pay into it like Social Security and Medicare. It’s taxpayer funded.
contact an Elder Care Attorney asap and have them help you get things sorted out. They are good at what they do (especially the one we have for my mother). Search in the internet and see how the reviews are for that person, thats how I found mine and he is great. Wishing you luck.
Helpful Answer (5)
Reply to wolflover451

In this case, you MUST contact an eldercare attorney who specializes in Medicaid. This is far too complicated for a normal person to understand. You need professional help - don't mess with this.
Helpful Answer (5)
Reply to Riley2166

When my in-laws became mentally incapacitated and were broke, I never opened up the cc mail or from creditors because at that time they were upside down on a ballooning mortgage, owed back property taxes, etc, and there was no money to pay the years-old debt. I wrote on the envelope "Not living at this address, return to sender" and put them back in the mail. If they provided a phone number I called and explained I was the PoA and that they were both in nursing homes on Medicaid and incapacitated and could prove it. They stopped contacting them, but as others have said in your case it varies from state to state, plus your grandmother technically does have the money to pay the debt.
Helpful Answer (4)
Reply to Geaton777

See All Answers
Ask a Question
Subscribe to
Our Newsletter