(Note “we” in this article refers to Elder Law attorneys. Want a good one? Call us at (248) 356-3500 for a referral.)
Can I re-phrase the question to : What is the value of having a lawyer do my Medicaid application? The reason why I say that, is the lawyer’s fee must have some relation to the results. If the application were a matter of merely taking 5 minutes to write basic information on a form, then maybe $50 would be too much. But there is much more to the Medicaid application process. Much, much more.
Consider the situation: Let’s say Dad is in the nursing home. The bill is over $10,000 a month. Medicaid will pay that bill as soon as Dad has “spent down” enough money to be eligible. That is till he only has $2,000 left attributable to him (by Medicaid standards). Mom needs money to live on. Can we save money for her? Without a lawyer, you will rely on the nursing home folks – they should know, shouldn’t they? They will tell you Dad needs to “spend down” until he is financially eligible for Medicaid. They say he can buy a funeral, but mostly the money must be spent at the nursing home. (No surprise) How much must he spend down?
First off: Medicaid counts assets of husband and wife. Medicaid allows an applicant to have $2,000 in cash assets. When the applicant is married the “community spouse” is allowed half of the cash assets up to a maximum of $137,400. (In 2022.) So if a couple had $300,000 in savings, the spend down amount would be $162,600. The applicant would then have $2,000 and the spouse $137,400.
Let’s say that Dad and Mom have $120,000 in savings. They must spend $58,000, leaving Dad $2,000 and Mom $60,000. That is what she’ll have left of their life savings if they follow the nursing home advice.
How can a lawyer help?
We will tell you that ALL of their life-savings can be saved for Mom or the family. (Except attorney fees, of course.)
The nursing home may tell you Dad needs a guardian, so you have to go to probate court. Then the probate court would tell you how to spend the money. (A good part would go to lawyer’s fees and court expenses.)
About 90% of the time our families avoid the probate court – and all that time and expense – and have Dad authorize Mom and you to be his Agents by a power of attorney.
But, what about the application? It’s not just writing information on a four page form. You must supply “documentation” proving everything you write down. You must provide documentation of all assets. Talk to many nursing home folk and they will tell you, that your first application for Medicaid may be rejected because you made some mistake. Many, perhaps most are rejected because of inadequate documentation, unreported assets, incomplete spend down or gifting of assets within 5 years of application.
You can expect that nobody at Department of Health and Human Services, the Medicaid department, will answer your questions. They are not there to answer questions. There job is to review your application and accept it or deny it.
When your application is denied you have to start over. That’s why the nursing home is on your back about paying the next month in advance, or going to probate court, or getting Medicaid application in fast as possible.
It takes many families three months to get a good application in. It goes like this. The first one is filed. Four weeks later the Medicaid worker contacts you by mail, delivered to the nursing home. You find it in the drawer next to the bed. You happened to find it, nobody told you it came last week. (Sometimes it is not this quick, because the Medicaid Department has been losing applications!) The worker asks for more information. It might be about life insurance policies, or other “unknown” assets. It takes you two weeks to get the information. A week later the worker says “not good enough.” She denies the application and you have to re-file.
When we file an application it is complete. We can often get Medicaid coverage the next month. If we cannot cover the next month’s bill through the application, then we go for PEME (pre-eligibility medical expense). We do not have our clients pay the nursing home in advance. We save that money for Mom or the family.
So, what do we offer to explain our value?
1. The spend down money does not go to the nursing home, but stays in the family.
2. A good application is quickly filed. The sooner we get it in, the sooner Medicaid will start paying the bill.
3. You have no stress dealing with Medicaid workers or the nursing home business office. You refer all questions to us.
4. You have more time with Dad or whoever you have in the nursing home. (They need you there. A nursing home is not a safe place without an “on duty” patient advocate.) And finally:
Hire us and You will not lose your home to the government
They don’t tell you at the Medicaid department that you can keep your home and be on Medicaid, but after you die they want your estate to sell it and give the money to the government as payback. They call it “estate recovery.”
Our clients avoid Michigan’s Medicaid estate recovery. The home stays in the family.
OK, so what is an average fee?
Most lawyers charge a flat fee. After all, how could you pay the lawyer’s bill after he got you Medicaid? Your money, except $2,000, is all gone! Paying a lawyer to help you with the application is legitimate “spend down.”
With a flat fee you have a fixed cost. You know what your attorney fees will be at the start. The benchmark we use for an average application is one month’s nursing home bill. Some applications are much more complicated than average. The fee could be 50% higher. Some are much simpler. We adjust accordingly.
Note, sometimes we advise you that we should to go to probate court so that the at-home spouse can get more income or a larger share of the couple’s life savings. A judge can allow the community spouse to have more income or assets than the Medicaid Department’s standard allowance. This is not an ongoing Guardianship. It is a one time only hearing in the court. Fees for this process are in addition to the Medicaid application fee.
Not everybody needs us to file the application.
Can every nursing home Medicaid applicant benefit by having a lawyer handle the application? No. An applicant who has no property but a small savings account would have a simple application and the spend down might be complete merely through purchasing a complete funeral plan. One consultation with a lawyer may be enough for you to confidently file the application. This too is a service we gladly provide.
Hope this article helped you.
All the best,
Jim