My cousin qualified for Medicaid for the Assisted Living. Social Services describes it as state based and they have a 3 yr. look back period.( It would change is she goes into NURSING home). She qualified by having under $2000. in assets and the right income and 1 car. All except $66.00 will go towards her Assisted Living. As POA, I don't want to mess up her Medicaid qualifications. Can I sell her care, furniture, etc. to pay her bills? I don't think she can have over $2000. in assets, but how does that work? If not, shall I let her property sit and her medical bills mount?
and what could you sell these items for realistically? I think this will make a big difference in how to approach doing this as you really need to make sure that her total funds is below your states Medicaid income & asset limit. If say she makes 4K from car sale and she does not have a prepaid funeral done, see if she can buy a no-cash-value funeral policy within a couple of days after the sale so that there is no issue for Medicaid. As others said you should speak with her caseworker on all this as the sale (a transfer of real property) will probably show up eventually for Medicaid as it is in state record database for her name, address & SS.
If she has all sorts of outstanding bills from before she went into a facility, what usually happens is that they default on the debt. Her medical costs from here on out will be paid as Medicaid does that. But she will not have any monthly income to pay on the old bills as she is required to do her co-pay to the facility. And really the $ 66 a month for her personal needs allowance is just enough to pay for haircuts, clothing replacement, etc. You really really really want to make sure that you in no way have any of her creditors or debt collectors believe that you personally will assume her debt. So be careful in all this.
Perchance does she still have her home?
She transferred the house to me four years ago, but kept a life estate. The only thing that can be sold to pay for her out of pocket medical expenses, clothes, care, etc. are furniture and her old car.
I was told by attorneys and the Social Services rep that the real estate transfer from 4 years ago, will not be looked at unless she goes into a Nursing Home within the next year. As long as she stays in Assisted Living, the transfer will not be addressed, because their lookback period is 3 years, and that's already passed.
I will check with a lawyer and the case worker before I sell anything. She hopes to return to the house, but if she can't improve, then that's not possible. The house needs numerous repairs and there is no one to live with her full time that could give her the care she needs. I guess I will have to pay the taxes, since she will not have the money to pay them. But, I won't do that until I get specific advice on whether that will count towards her income and mess up her Medicaid. It's so ridiculous.
The reason why I ask is that often when they do a life estate it is not allowed by Medicaid as it is viewed as a transfer of assets & transfer penalty issued (based on whatever the property value is on the house by the tax assessor if owned outright or the equity in the home if still with mortgage). But what exactly is very much dependent on your state laws. Like for TX if they do the house as an Enhanced Benefit Trust (Lady bird deed) that is outside of any after death Medicaid MERP (medicaid estate recovery program) claim as Lady Birds transfer outside of probate but a traditional style of life estates usually don't & so MERP can do a claim against the estate (which is the house). Really I'd suggest you take all of the paperwork on the house & your cousin to an elder law attorney to see where you stand BEFORE you apply for NH Medicaid. Since she is your cousin rather than your parent or your sibling this too could make a difference in how MERP views your situation for how your state administers Medicaid for NH.
About the taxes, you can pay those directly to the tax assessor from your own personal checking account. As others have said, one can keep their home and be on Medicaid. But the problem is that they will have no funds to pay on anything on the home once in a facility (like she pays all but $ 66 of their monthly income to the facility), so someone else (you!) will have to pay everything on the home for the possible years & years of your cousin's life. It could be a totally manageable amount of $$ for you if the house has no mortgage and the costs to maintain are within your personal financial purse without affecting your own personal finances.(and you have a really good sense of humor about dealing with an empty house) If you go this route it is critical that you maintain records with receipts to the penny for all expenses you pay on the empty house (taxes, insurance, yard, maintenance etc) as that total can be excluded from the possible MERP claim or lien & also you can enter it as a debt against the estate in probate which will probably be placed in line ahead of other debts (like if the medical debts are still hovering around). For most keeping an empty house for family in a NH that has costs just doesn't work. But if you do this, you really have to plan on doing it for the full run of the rest of their life in my opinion. You pay for everything directly so that it never goes into her bank account to pay for things. Insurance, assessor, utilities, etc don't care who the check comes from, they just want it paid.
I know it's a real mice-maze to deal with Medicaid. But you have to realize that Medicaid is totally a "needs-based" program in which you have to qualify both medically and financially to be "at-need". For medical that means needing skilled nursing services and for financial that means being impoverished at usually a max of 2K in non-exempt assets & about 2K in monthly income (exact amt is set by each state). The whole 5 year look back to to ensure that no assets were transferred that could have been used for their care. Otherwise everybody could sell ma's house, car & spend all her savings last week and then apply for NH Medicaid today with no problem….except that the program would be bust.
Really carefully figure out all the costs on the property; speak with her care plan group at the facility as to what her long term situation probable is; gather all the paperwork already done on the house and go see an elder law attorney to figure out what options are there for you & your cousin that will be Medicaid compliant. it could well be that the life-estate already done is totally fine. But What you don't want to happen is that you go along for 2 years and pay for all on the house (say 20K) and then when she dies, that MERP has a $ 144K in Medicaid (6K x 24 mos) paid for her that is a claim or lien on the property (120K assessor value) which has to be cleared (paid) in order for you to legally transfer the property to your name. (Some of the MERP amount can be reduced by all the costs you paid on the house, so this is important to do). And you cannot afford to settle the 100K MERP action and you have no exclusions or hardships to file with MERP so the house gets sold with all (but your 20K in expenses) the proceeds from the sale all going to the state to reimburse for Medicaid. You probably don't want that….
I did consult with an Elder Law attorney at length before applying her for Community Based Assistance for AL.. Actually, I consulted with a couple of attorneys and they all agree that if my cousin stays out of a Nursing Home for another year, the lookback will be passed. That is also what the Social Services Rep told me. In our state, it's 3 years for AL and for Nursing Home care it's 5. I asked them this many times they assured me it is the case, but I get your point about the LE. I read about it too and think that even if they had a lien on the property, it would dissolve at the time of her death, since her interests in the house dissolves them. I'm an attorney, but don't specialize in Elder issues, but I get some of the real estate issues.
She did have a deed prepared by an attorney and filed transferring the property 4 years ago to me, keeping a life estate. I had advised her to discuss it with an elder law attorney first, but I don't know if she did.
I'm okay with the house. I'll figure something out, but repairs must be done. It's the expenses for her out of pocket medical expenses, clothes, etc. that have to be paid. She was operating out of her mind with dementia when she cancelled her Medicare Part B coverage. I'm trying to straighten that out now! IT's unreal she did that. The doctor is backing me up. As a result of that cancellation, she has to pay out of pocket for all medical care, EXCEPT she has Part A and D. It's outside of Enrollment Period, so I'm having to fight to get Part B reinstated. It's a mess. Oh well, just more bills for her.
I appreciate all the input.