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Mom's condo flooded because her upstairs neighbor's condo flooded. The water ran down the walls. When we get the money from the insurance company to begin the repairs, now that everything has dried out, will that cause a problem with her Medicaid status? I know you have to "spend down" if your total assets exceed the magic $2000 figure, but if the money is supposed to be spent on the Medicaid recipient, does repairing her home back to living condition qualify? I don't want to do anything wrong, but am not sure how to find out the answer. I will definitely be spending all of the money on repairs. Thank you!!!!!

Sorry about the confusion SunnyDay.

I mean that you should never pay a contractor for work that has not been performed, if someone asks for money up front, it is never okay. They can ask for progress payments but it is fishy for a contractor to want money before work is done. A progress payment would be, say they deliver material to your house and want to get paid for that, they invoice showing x dollars for materials and as long as they are at your house it is okay to pay for materials plus 10%, which would be the contractors mark-up. But if they say we need payment for materials that have not been delivered, no way.

When I said maybe cashier's check made out to contractor, it should have been a new paragraph.

My understanding, and I could be wrong, is that when you report to Medicaid if the account balance reflects the insurance money, as in, it is in the account, it will cause a red flag, however, if the money comes in and goes out of the account it does not create a flag. As with any home improvements, you want to keep good records.

I also believe that you can arrange to have the insurance pay the restoration company directly.

I hope that someone can correct me if my understanding is wrong.
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Reply to Isthisrealyreal
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Keep a tight paper trail on insurance payouts. It’s going to show a blip in her income the month it’s deposited into her bank & it might red flag her Medicaid application in the future. But you will have the documentation to show what’s what & why.
You / her need to spend all insurance proceeds otherwise it becomes an asset. That shouldn’t be an issue as insurance usually doesn’t make you 100% whole anyways.

If you find you need to wait to get the work done as the preferred vendor is booked out, that’s ok. Just get an estimate with a TBD start date on the estimate, like good for 6 mos forward. This stuff happened with roofers after hailstorms or natural disasters.
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Reply to igloo572
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Isthisrealyreal, thank you for your response. I plan to have all the work done right away, either by the dryout company or by a company that was recommended by the insurance company. I'm not sure what you mean by this sentence, "I hope someone has a good way to help you without having to pay for work not done. Maybe buy cashiers checks made out to the licensed contractor(s). " Could you elaborate a little, please?
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Reply to sunnydayclouds
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Returning the home to livable condition is appropriate. Get the money spent before you have to provide the financial status, this will not increase her assets and from all I have read it will not affect her eligibility. If the money is sitting in her account and shows up on paperwork, yep, it will affect her Medicaid status.

I hope someone has a good way to help you without having to pay for work not done. Maybe buy cashiers checks made out to the licensed contractor(s).

Please be sure and use licensed contractors and go on your states contracts licensing website and check them out. Making sure they are licensed, bonded and insured without unresolved complaints will help save you a potential nightmare.
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Reply to Isthisrealyreal
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