• Medicaid Q&A

    Answers to frequently asked questions about Medicaid and long-term care.

    Medicaid Q&A

    Scenario: Elderly widow/mother is placed in nursing home care. She only has 30 days left of Medicare and is not expected to be able to return to her home. Her children seek legal advice…

    Q. What is the first thing the children should do?
    A. Determine if she will qualify for Medicaid.
    Q. What are the qualifications for Medicaid?
    A. First, remember that Medicaid is a form of welfare. Assuming she has met the age and medical need requirement, there are two basic qualifications that must be met: Income and Resources. Income must be under $1650/mo. Beside the exempt assets, cannot exceed $2k in cash resources
    Q. What assets are considered “exempt assets”?
    A. Residence, income producing property, life estates, notes, vehicle, personal effects, burial contracts and plots, funeral accounts, life insurance(s) up to $5k value each
    Q. What if the residence includes acreage, such as a farm?
    A. Provided the acreage is contiguous with the residence, it is exempt property.
    Q. What vehicle is included?
    A. All vehicles, including boat, recreational, etc.
    Q. What if mom had $200k in CDs that she gave to the children?
    A. All transfers and gifts have a 36-month “look back” period, so it would depend upon WHEN the gift was made.
    Q. Would it be a good idea for mom to transfer other assets to the children, such as the residence?
    A. Remember that the residence is considered exempt property when qualifying for benefits. For her own capital gains purposes, provided she has lived in the home for 2 of the past 5 years, she has $250k equity without capital gains. Also, a gifted property like this will be received by the children at mom’s basis, so they may have a capital gains problem. If they inherit the property at her death, they receive the property at a “stepped-up” basis, or at current value, without any capital gain problem.
    Q. What about adding the children’s names to her bank account(s)?
    A. Adding a child or children as a co-owner on her account(s) exposes those accounts as available to satisfy the debts and creditors of the children.
    Q. So how can she reduce her resources, if required, in order to qualify?
    A. If advice had been sought earlier, and aggressive gifting program would have been recommended, keeping in mind the 36-month look back period. Also, remember that promissory notes are exempt in GA. Only the interest paid on the note is counted as income.
    Q. Once mom is qualified for Medicaid, what happens to her SSI and Pension income?
    A. Typical nursing home costs can run to $4200/month. She will be allowed to retain $30 per month which is allowed as a “personal allowance” for clothing purchases, haircuts, cosmetics, gifts, etc. The rest of her income will pass to the nursing home, and any shortfall/balance due will be paid by Medicaid.
    Q. What happens after she passes away? Will Medicaid approach the estate to pay back the benefits she has received?
    A. The State of Georgia, as virtually all other states, does attempt to recover from the estate of a decedent all monies received by that decedent as Medicaid benefits.
    Q. What else can the family do to protect Mom’s estate?
    A. Estate plan: Will or RLT, LWw/HCSD, POA