Hi,
So many details so little space, but hoping to breakdown details here, and get some understanding and sound advice.
My husband is the Medical POA for his brother ("John", disabled due to stroke in 2020, low-income, in Medicaid supportive living facility) and Financial POA for their mother ("Mom", has dementia, in self-pay memory care).
2014 John was approved for Medicaid medical, and rarely used it. Remained no/low-income, lived with Mom, worked occasional cash jobs and never paid rent to Mom, though she asked.
2020/10 Mom transferred her car title to John for $10 when she moved to assisted living, mostly for liability reasons.
2020/11 John suffered stroke due to untreated diabetes, high-blood pressure and was left with speech impediment and weakness on right side.
2021/01 John was approved for Medicaid long-term care through SLF application, and started SSDI/SSI application. Mom agreed to pay co-pay until SSI kicks in. Application is still pending.
2021/02 John moved into Supportive Living Facility for adults under 65 with physical disability. Two days later, he SOLD the car to Carmax, deposited the $8000 check and took $600 cash for "expenses". He/we did not know it would jeopardize his Medicaid eligibility and were more concerned about the car ending up lost in an auto pound due to negligence. He sold the car because he had NO money for gas/registration/insurance. Prior to selling the car, he had no income and no countable assets. He has since received $600 stimulus money which is not countable.
Technically, it has been 26 days since the car sale, but it is a new billing month for the SLF.
What should he do? We want him to do the right thing to protect his Medicaid medical and long-term care status. Can he keep $2000 for "assets" and pay down the rest to private pay at the SLF? Is this done through the SLF or does he need to contact Medicaid? Would this honest mistake affect his medical benefits? Any other options or insights since he is disabled (though allowed to drive, but not responsible).
Illinois Medicaid Penalty Divisor(2020): Specific to the Supportive Living Program, the penalty divisor is $181 per day / $5,430 per month.
Thanks in advance!
My understanding of LTC Medicaid is that if any $ comes in to affect their “at need” financial status that Medicaid needs to be made aware. But how the awareness can be done is kinda a grey area.... Stick w me on this...... if they are already on LTC Medicaid, there's an annual recertification form that has within it questions on changes in status and what it was and its distribution.... the usual situation is the elder inherited $ or sold their home and then used the $ to buy a preneed funeral / burial policy, or did costly dental work or bought an expensive wheelchair or other personal care items AND does all this within a banking statement..... so they begin their month ok for Medicaid financial $ max & end their month ok for Medicaid financial $ max. There is a quick & legit planned spending of the $ within the month.... and if there is still $ left they either let the Medicaid caseworker know or wait till the renewal gets reviewed and the state sends them a notice of suspension for LTC Medicaid and private pay till back down till once again at a 2k max in assets. Before the windfall of $, they have done the required copay (of their monthly SSA income) to the NH prior to this, so they have an established history of Medicaid compliance. Medicaid ime is used to dealing with this, it’s not a problem as long as no $ gifted and the $ used legitimately and copay paid.
But your BIL isn’t yet approved for LTC Medicaid, and add atop this, BIL is also getting SSDI application done. So there's 2 moving targets that caseworker dealing with, it’s a more involved eligibility. If they find out in April, he sold a car for $8k everything has to be recalibrated. The application was signed under penalty that the state was to notified of any changes, the caseworker is gonna be irritated at best or send the whole application over to a fraud unit at worst. You don’t want to go there. I think hubs needs to let Medicaid caseworker ASAP know that his brother - without consulting him as his DPOA - sold his car via a extremely persuasive CarMax salesperson, but your hubs has a plan on a defined spend down of the 8k and that hubs wants to make sure that this can work for his bros LTC Medicaid eligibility. Hubs is asking caseworker for advice on a defined use of the car $. Comprende?
Easiest is BIL uses the $ to buy in full a preneed funeral / burial policy. I bet that could use all the $ in a single action. If he does not have one, that’s what I’d do. FH guys know what’s what on Medicaid as to maximum value allowed, it could be like under $6500. I’d suggest that like manana, hubs contacts 2FH to get an preneed estimate in writing and then he contacts the caseworker on Friday to present that as the spend down of the car $. And then BIL uses his car $ to buy it. Hopefully caseworker has some flexibility in the 30 day window so no gap on eligibility as BIL sold car in Feb.
Your right that BIL can have a max of $2k in non exempt assets, but, personally I would not have it at 2k but a tad lower like $1700/$1800 so that there's a $100/$300 cushion as he will have a PNA / personal needs allowance (which runs from $50-$130 a mo depends on state) that adds $ each month.
Personally I would try to get this dealt with ASAP, as vehicle registration is recorded locally & then dovetails to the state. It’s just a couple of keystrokes for caseworker to find out. You want to let state know ahead of caseworker finding out on their own. Good luck & remember BIL cannot gift any of the car $.