Medicaid Look Back Period Question

[joesxm3]

I am a little fuzzy on the penalty associated with the Medicaid look back period.

For example, if a parent gives some money to a child within the five year period and the child spends the money what happens when the parent applies for Medicaid?

Is the amount of the money just considered as an asset and the parent is denied Medicare because their asset level is too high?

Does the parent just have to wait until it is more than five years since the money was given and then apply for Medicaid?

Is there some way to "pay back" the money and dig out of the look back problem? It would seem that the parent cannot spend down money that they no longer have.

BTW - this is a hypothetical question. I do not think my parents gave any money to anyone and have not asked them about it yet. This question just popped into my mind and I figured I would ask.

Thanks.

 

[pb4uski]

Any lookback period money effectively extends the period Medicaid will start paying.

https://www.seniorliving.org/medicare-medicaid/look-back-period/

The Centers for Medicare & Medicaid Services (CMS) explains that when applying for Medicaid to pay for nursing home care and other services associated with senior care while in a nursing home, the Medicaid eligibility worker asks if the individual recently gave away any assets such as vehicles or money. The representative also asks if the person sold property for less than its fair market value at the time of the sale within the past five years.

This transferring of assets usually results in a penalty, meaning that the person seeking senior living at a nursing home is ineligible for Medicaid, “For as long as the value of the asset should have been used” to pay for the nursing home care.

The site uses the example that if nursing home care costs $5,000 per month and the individual transferred $10,000, then the person is ineligible for Medicaid for two months. The penalty begins the month of the Medicaid application, not the month the individual transferred the property.

The individual then potentially qualifies for Medicaid benefits after the Medicaid look back penalty ends. That qualification is contingent upon the person not transferring any assets in any months while serving the initial look-back period penalty.

 

[joesxm3]

Thanks. That makes sense.

And thanks for the link to that seniorliving.org site. I will check that out and probably find answers to more of my other questions.

 

[a60dan]

Just went through the long term care application process for my mom. They looked back five years, using data they required but supplied by me.

The most annoying part was their refusal to accept statements on CD

Once they had their piles of paper, I was asked to account for a few expenses.

I was careful to say that I had only exercised my POA in the past few months, since she was diagnosed with dementia.

My answers were accepted without further challenges.

Most of her money went for her care, but I did report that some went for credit card bills.

She had previously applied for Medicaid community, where they do not verify assets (take your word for it). At that time I learned that she should not have been paying those credit card bills. I had her write the “cease & desist” letters.

Had she transferred funds to family, I expect that we would have had to return it.

 

[Sunset]

.....
.....

Most of her money went for her care, but I did report that some went for credit card bills.

She had previously applied for Medicaid community, where they do not verify assets (take your word for it). At that time I learned that she should not have been paying those credit card bills. I had her write the “cease & desist” letters.
....

Is this because if a person is applying for medicaid, it is because they have or very soon will have zero dollars in the bank.
Probably get SS , but will be expected to declare bankruptcy ?

 

[garyt]

Most of her money went for her care, but I did report that some went for credit card bills.

She had previously applied for Medicaid community, where they do not verify assets (take your word for it). At that time I learned that she should not have been paying those credit card bills. I had her write the “cease & desist” letters.
.

Why should she not pay her CC bills? When it looked like my Mom would be going to a nursing home we went and paid off all their bills, CC, car, etc. It seems you should be able to pay your obligations, no? My parents had little money so it seems unfair to take what they have and leave my Dad saddled with the bills. I'm interested because now my Dad is 94 and who knows where he's headed.

 

[gwraigty]

I was told that when my grandmother had to go on Medicaid, my aunt had to pay back $5,000 that my grandmother had given her during the 5 year look back period. The money had been spent on a new deck. My grandmother had been living with my aunt at the time.

 

[a60dan]

Why should she not pay her CC bills? When it looked like my Mom would be going to a nursing home we went and paid off all their bills, CC, car, etc. It seems you should be able to pay your obligations, no? My parents had little money so it seems unfair to take what they have and leave my Dad saddled with the bills. I'm interested because now my Dad is 94 and who knows where he's headed.

I had sought counsel from Lifespan, and learned that my mother’s assets had gone below the threshold for Medicaid community eligibility.

The person we were working with told me that all of her money should be going toward her care and that I should not have been encouraging her to pay off the credit card bills.

She gave us a form for a letter to send to the creditors which I printed out for my mother and had her sign because I was not yet exercising my power of attorney at that time.

My understanding was that because she was below the threshold she was responsible to ensure that most everything she had left was used for her care.

REF:
https://www.lifespan-roch.org/

 

[MarieIG]

Is this because if a person is applying for medicaid, it is because they have or very soon will have zero dollars in the bank.
Probably get SS , but will be expected to declare bankruptcy ?

No. They are not required to go through bankruptcy Court.

 

[MarieIG]

Why should she not pay her CC bills? When it looked like my Mom would be going to a nursing home we went and paid off all their bills, CC, car, etc. It seems you should be able to pay your obligations, no? My parents had little money so it seems unfair to take what they have and leave my Dad saddled with the bills. I'm interested because now my Dad is 94 and who knows where he's headed.

There are many elder care lawyers who can ease the process. But, there is a difference with paying the bills incurred by a couple and gifting money to people other than a spouse (disabled child). I certainly would not think twice about having paid off those bills.

 

[Teacher Terry]

When a couple I was friends with was dying he sold everything and paid off all the bills. Then she went into a home and her SS and small pension paid for it. When the cost of her care doubled the home helped me apply for Medicaid. There was no issue with the way things were handled.

 

[pb4uski]

I was told that when my grandmother had to go on Medicaid, my aunt had to pay back $5,000 that my grandmother had given her during the 5 year look back period. The money had been spent on a new deck. My grandmother had been living with my aunt at the time.

They can't force a payback... the only thing they can do is to say that they wouldn't pay for the first month or so of your mother's nursing home costs... which means that your mother (or aunt or someone) would need to pay for that first month.

 

[a60dan]

There are many elder care lawyers who can ease the process. But, there is a difference with paying the bills incurred by a couple and gifting money to people other than a spouse (disabled child). I certainly would not think twice about having paid off those bills.

I neglected to mention that my mom is divorced. All her credit card debt was her own.

My personal opinion, a very "hot button" with her, is that she bought a lot of stuff she didn't need or use. Most recently, Publishers Clearing House sent some of her bills to collections. I don't have the energy to deal with that right now :-(

 

[gwraigty]

They can't force a payback... the only thing they can do is to say that they wouldn't pay for the first month or so of your mother's nursing home costs... which means that your mother (or aunt or someone) would need to pay for that first month.

I wasn't talking about my mother, who had already been dead long before the events I described, and never was in a nursing home. This was my father's mother and father's sister who were involved. I wasn't a party to it at all. I only heard about it years later. My aunt told me how mad she still was long after the fact at having to "pay back" the $5,000. Her rationale was that since my grandmother had also been living in her home, that the money my grandmother gave to make the home improvement could also have been for my grandmother's benefit. (Although I have no idea whether my grandmother ever set foot on the new deck that she'd paid for.)

Maybe it's as you said, that my aunt had to pay for the first $5,000 of the nursing home care before Medicaid would start paying. Anyway, it's ancient history. Just relating it, since the OP specifically asked about parents giving money to children during the look back period.