Note: this article is based on the hypothetical situation of a child applying for Medicaid for a parent who is in a nursing home. The comments below may be applied to other situations. In any case you must first have the authority to take any action described below. A complete elder law – not estate planning – power of attorney should give you the authority you need.
Yes. Medicaid is the result of laws that Congress passed. It surprises some people, but the law does provide for asset protection. Like the income tax, Congress left ways for a person to save money in the Medicaid law. A Single applicant can save 60 to 90% of assets. Medicaid will pay the bill after the resident has spent down his or her money to $2,000.00. We help you save as much as we can out of the rest. You have probably heard you cannot save anything, it must all go to the nursing home. Many people are free to give advice. But, are they attorneys? Are they responsible if they give you wrong advice? Have they gone through law school and sat for a bar exam? Have they taken the extra step to be tested and certified as an elder law attorney? Can you sue them for malpractice if they are wrong?
Even if your loved on is in the nursing it is not too late to act. Here’s how:
First: secure a bed in your chosen nursing home. Many nursing homes claim they are only a post-hospital, short term care facility. But, if they are licensed as a nursing home and offer post-hospital Medicare rehab services, then they are a nursing home. They cannot limit their residents to short term stays. Residents have the right to stay in the nursing home as long as they need nursing home level of care and they arrange to have the bill paid.
Almost every nursing home in Michigan participates in Medicaid. Some claim to have a two year wait for a Medicaid certified bed. Not true. However some nursing homes do have a limited number of Medicaid certified beds. When these open they are first offered to residents who have already applied for Medicaid. Until a resident is in a Medicaid bed, Medicaid will not pay the bill even if the application is approved. If no Medicaid certified bed is open the resident will be transferred out of the nursing home to another that has an open Medicaid bed. It is up to the Patient/resident’s Advocate to be sure that the resident is transferred back when a Medicaid certified bed opens.
But, what if you believe that the movement to another nursing home and back again will be too traumatic for your patient? The best answer is to apply as early as possible and have a fund to private pay until a bed opens. That kind of “Medicaid planning” requires the assistance of an experienced elder law attorney.
Second: exercise sensible spend down. After you have secured the nursing home of your choice you are ready to allocate the remaining funds for “spend down.” First priority in spending is to buy things that make good sense. You need not spend on medical care. Take care of your family member in the nursing home. Purchase personal items that will be needed and much appreciated. Medicaid only allows $60 per month for personal items, so stock up on clothes, shoes and grooming needs. Prepay the funeral and burial of the resident. Medicaid provides nothing. The resident may also purchase burial spaces for family members.
Repair or improve the resident’s property. Make sensible repairs or improvements to the home. You do not need to overspend. Look for expenditures that will improve the value or the salability of the home. Replace the worn out carpet, freshen up the walls with new paint and update the kitchen. Be sure to get estimates and keep a complete record of work done and charges. The same goes for the car.
You and other family members may be paid “fair market value” for services but you will need to surmount the Michigan presumption gratuitous service and the Medicaid hostility to paying family members for services. Payments are deemed to be divestment of assets unless you can fall in an exception. In other words, your proof must meet Michigan Department of Health and Human Service standards. Contact us for a referral so you can consult with an experienced Elder Law attorney to make sure you are on the right track.
The Medicaid annuity can be used when there is no other way to save money. Note that if the probate court has appointed a guardian or conservator, you will have to have a public hearing in probate court to see if the judge will approve purchase of the Medicaid annuity. As a rule of thumb the Michigan Medicaid annuity can save more than half the remaining money. Once again, this an application strategy to save assets. Do not purchase an annuity unless you are in the process of preparing an application.
There are other strategies such as DRA compliant promissory notes that work in special cases and some that we can only cover in consultation because of the changing rules. With a combination of strategies it is possible to save as much as 90% of the money that would otherwise go to the nursing home. Remember the first point: make sure you have the nursing home you want lest you find your patient transferred because there are no Medicaid certified beds available. And if transfer is a possibility go back to the first point about a patient’s rights in the event of transfer.
No, you do not. The nursing home has a duty under the law to help you, if you ask. Indeed a nursing home is under strong financial pressure to be sure you get the application in and approved. After all, if your application is successful they get paid. But, the nursing home does not have the authority to review your application. That is a confidential matter between you and the Department of Health and Human Services (Medicaid). The nursing home does not have the authority to tell you how to spend your money.
However, when spending the money of another, here a relative or a friend in a nursing home, you must be careful to avoid prohibitions against financial elder abuse. Following the advice of an Elder Law attorney is good protection.
No. With few exceptions, nursing homes in Michigan participate in Medicaid’s guaranteed payment program. It is illegal for a nursing home to segregate residents for whom Medicaid is paying the bill from other long term care residents. It is permissible to have short-term Medicare patients in their own area. If you spot a discrimination in care between private pay and Medicaid long term care residents contact the Michigan Long Term Care Ombudsman immediately.
You need not spend all the resident’s money on nursing home bills. Congress has provided residents with the right to save in the Medicaid program. As we have observed the rights are not self operating. You, the resident’s patient advocate, must act. You must exercise those rights, nobody else will. You must seek professional advice to access all the protections Congress granted. Your resident can have the savings he or she worked so hard for go for the benefit of family. Just give us a call at 248-356-3500 and we can connect you with an experienced Elder Law attorney.
All the best,
Jim Schuster