When a parent or spouse is diagnosed with Alzheimer’s invariably somebody will give advice: “You need to hide her assets.”
Here are two reasons why that is a bad idea.
I think you can see there are answers to these two simple questions, but that’s where things get really complicated. Multiple children = multiple opinions. If an agency sees checks coming into her account from one other bank account they may presume that is Her money you are “holding” for her. And so on and on it goes.
The best answer is to “What should we do now?” is talk to professionals whose job it is to give advice “you can take to the government.” And don’t forget the maxim: If you make a mistake, you pay. If a professional makes a mistake, he pays.
So when Mom’s diagnosis is Alzheimer’s see an experienced elder law attorney plus whatever financial advisors, accountants or social workers as you need to: Come up with a plan that is the best for MOM.
This is, perhaps, the last in my series of blog posts on Medicaid Estate Recovery (MER) and Why Rep. Jan Schakowsky’s H.B. 6698, Stop Unfair Medicaid Recoveries Act, must pass.
The idea of MER is to help with funding of the Medicaid Long Term Care program. It has failed to do that bringing in, on the average .5% of the Medicaid LTC budget. Yes, that is one half of one percent.
Here is the simple solution that could save the Medicaid budget many, many times more: Pay for custodial care in assisted living facilities.
The Alzheimer’s Foundation reports that 48% of nursing home residents have Alzheimer’s or other dementing diseases. Many of these residents moved from assisted living facilities where they received custodial care to the nursing home because they ran out of money to pay. Medicaid will pay for this care in a nursing home.
According to the Genworth Report in 2021 the average cost of a semi-private nursing home care is $94,900. The cost of assisted living is $54,000. If Medicaid paid $54,000 per year instead of $94,900 it would save $30,900 per resident, how much might it save?
Of course, not every Medicaid nursing home resident receives only custodial care. So what if two thirds of that 48% could have Medicaid pay for care in an assisted living facility instead of a nursing home? That would be 32% of the nursing home residents. And if Medicaid saved 30% on 32% of the LTC population Medicaid’s bill would be 86% as much. That savings is 14%.
For the math folk it works like this. Suppose there are 100 residents in a nursing home. If Medicaid pays 94,900 for each per year the total is $9,490,000. But if Medicaid pays $54,000 for 32 residents that is $1,728,000. Then Medicaid pays $94,900 for 68 residents: $6,453,200. The total is $8,181,200. That is 86% as much for a 14% savings. A 14% savings is 28 times greater than a .5% savings.
Seems simple because it is.
All the best,
Jim