Tag Archives: gift penalty

Will Medicaid Take My Home?

A common assumption is that if you enter a nursing home, Medicaid will immediately take your house to pay for your care. In reality, that is not exactly true. Here are three common scenarios:

1) If you are married, your spouse is always allowed to stay in the house as long as he or she lives. However, after both spouses die, the State of Ohio will sometimes put a lien on the home. If that happens, the State will make a claim for the amount they have paid out in Medicaid benefits. This claim would then usually be paid from the proceeds of the house sale. With proper legal planning, this can sometimes be avoided.

2) If your spouse dies while you are still living in the nursing home, Medicaid may demand that you sell the home and use the proceeds for your nursing home costs. Again, depending on the circumstances, you can sometimes preserve the family home. Each situation is different. For example, if a son or daughter is living in the home and provided two years of care to the nursing home resident, this child can sometimes be given the home as a gift to avoid a forced sale by Medicaid. This is usually referred to as the child caretaker exception. Unfortunately, the Medicaid caseworker will not always let you know about this rule.  Another exception is if you have have a permanently disabled child. In that situation, the home can usually be given to that child, without adverse Medicaid consequences.

3) If you enter a nursing home and do not have a spouse or child living in the home, Medicaid will allow you to keep the house as long as you intend to return home. Otherwise, you must sell the home before you can attempt to qualify for Medicaid. There are some exceptions to this rule, such as the child caretaker rule. When the home sells, the proceeds must generally be used for your nursing home care. If you die before selling the home, the State of Ohio will usually put a lien on the home. If that happens, the State will make a claim for the amount they have paid out in Medicaid benefits.

The good news however, is that through proper legal planning, you can sometimes preserve the entire value of the home for future generations. Even in cases where Medicaid demands that you sell the home, there are often ways to preserve a portion of the sale proceeds for your family.

Each situation is unique, so you must consult with a qualified elder law attorney to go over your best options.

Medicaid Numbers for 2017

The Medicaid numbers for 2017 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $2,030

Maximum Monthly Maintenance Needs Allowance: $3,023

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $24,180

Maximum Community Spouse Resource Allowance: $120,900

Excess Shelter Standard: $609

Standard Utility Allowance: $513

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $50

Resource Allowance for an Individual: $2,000

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate in Ohio: $6,570

(In general, this means that for every $6,570 given away within the last five years, one month of nursing home coverage will be forfeited.)

Medicaid Releases Updated 2015 Numbers

The Medicaid numbers for 2015 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $1,967

Maximum Monthly Maintenance Needs Allowance: $2,981

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $23,844

Maximum Community Spouse Resource Allowance: $119,220

Excess Shelter Standard: $590

Standard Utility Allowance: $498

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $50

Resource Allowance for an Individual: $1,500

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate: $6,327

(In general, this means that for every $6,327 given away within the last five years, one month of nursing home coverage will be forfeited.)

Medicaid Releases Updated 2014 Numbers

The Medicaid numbers for 2014 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $1,939

Maximum Monthly Maintenance Needs Allowance: $2,931

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $23,448

Maximum Community Spouse Resource Allowance: $117,240

Excess Shelter Standard: $582

Standard Utility Allowance: $463

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $45

Resource Allowance for an Individual: $1,500

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate: $6,114

(In general, this means that for every $6,114 given away within the last five years, one month of nursing home coverage will be forfeited.)

Medicaid Releases Updated 2013 Numbers

The Medicaid numbers for 2013 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $1,892

Maximum Monthly Maintenance Needs Allowance: $2,898

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $23,184

Maximum Community Spouse Resource Allowance: $115,920

Excess Shelter Standard: $568

Standard Utility Allowance: $456

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $40

Resource Allowance for an Individual: $1,500

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate: $6,114

(In general, this means that for every $6,114 given away within the last five years, one month of nursing home coverage will be forfeited.)

Elder Law Success Story in Cincinnati

Elder law attorneys assist individuals and families in developing estate plans to avoid depleting their assets should they become ill and need long term care. For those individuals who are already in a nursing home, elder law attorneys can help them qualify for Medicaid benefits while maximizing the amount of money they are able keep.
When an individual comes into our Cincinnati, Blue Ash or West Chester offices after having placed their spouse in a nursing home, they are often fearful of having to spend one-half of all of their assets. It is a wonderful feeling to be able to tell them, “don’t worry…you can keep more of your life savings and still qualify your spouse for Medicaid.” Often times, however, by the time individuals meet with us, they have already needlessly spent thousands of dollars simply because they weren’t educated on the Medicaid rules.
Naturally, in times of crisis such as placing your loved one in a nursing home, an elder law attorney is not the first person with whom most people discuss their concerns. It is usually a social worker at a hospital or a nursing home, a family friend, neighbor or sometimes a financial planner. So, when a social worker or financial planner invests the time with families and recognizes the need for a person to seek the advice of an elder law attorney, this can mean not only saving the family thousands of dollars…but it can also mean giving the family total peace of mind.
Many of you on our mailing list have helped more families than you will ever realize. We thought we would take this opportunity to share with an examples of the difference you’ve made in their lives.
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Mr. and Mrs. Smith had assets (not including their home) of approximately $220,000.  Mrs. Smith entered a nursing home in July 2011 and paid her own way for one year. The family heard from a friend they could make annual gifts of $12,000 per year per person to each of their two children. So, they gifted $48,000 on their own — without any legal advice. When the family came to our office we advised them to return all the gifts they had made or else they would need to pay for another six months of nursing home expenses out of their own pocket. Next, we re-applied for Medicaid in July 2012. Mrs. Smith received Medicaid benefits immediately. In this case, due to the advice of the social worker (along with our legal assistance) the family was able to save over $64,000!

When Is The Right Time To Do Medicaid Planning?

Our office receives many calls from concerned loved ones and family members wondering if or when they should start Medicaid planning. The answer: It is never too early or too late to discuss the planning options available. Below is one example of the many types of calls we get every day where we advise clients that Medicaid planning is an option right now.

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Mrs. Brown is an 81-year-old widow experiencing short-term memory loss. She is still able to live alone in her own home. Her income is $750 a month, she has a home worth $135,000 and other assets of approximately $60,000. She heard from a friend that she should give away all her assets now to her kids just in case she would ever need to go to a nursing home. Her friend told her that so long as she gives everything away more than five years before moving to nursing home, she’ll be able to qualify for Medicaid without having to spenddown any of her assets.

Unfortunately, there are many problems with the advice Mrs. Brown’s friend gave her. First, Mrs. Brown may need nursing home care in less than five years. Due to this large transfer being made within the five year look back period, she will now be ineligible for Medicaid and will have no funds to pay for her own care. Once the money and house are transferred to her children, those assets actually belong to the children – no strings attached. Even if the children are trustworthy, and would be willing to give the money back if Mrs. Brown needed nursing home care, once the assets are in their names, the assets are subject to their creditors. One of the children could be sued or go through a divorce. Since the assets are in the children’s names, a lawsuit, tax problems, or a divorce could easily wipe out mom’s life savings, as well as leave her without her home.

Also, keep in mind that Mrs. Brown may never need nursing home care. Rather, she may need to make a move to an assisted living facility. Medicaid does not always cover the cost of care in an assisted living facility. Therefore, it’s important that Mrs. Brown hang on to her assets while she’s still relatively healthy so she can have the freedom and independence to pay for the level of care she needs when she needs it.

In this scenario, we would advise Mrs. Brown to get the proper estate planning documents in place so her children could act on her behalf in the event of incapacity, and to avoid probate in the event of her death. Depending on the family dynamics and Mrs. Brown’s prognosis, we may advise some of type of gift trust planning.

Medicaid Releases Updated 2012 Numbers

The Medicaid numbers for 2012 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

  • Minimum Monthly Maintenance Needs Allowance: $1,839
  • Maximum Monthly Maintenance Needs Allowance: $2,841
  • Minimum Community Spousal Resource Allowance: $22,728
  • Maximum Community Spouse Resource Allowance: $113,640
  • Excess Shelter Standard: $552
  • Standard Utility Allowance: $599
For the nursing home resident, the numbers are:
  • Monthly Personal Needs Allowance: $40
  • Resource Allowance for an Individual: $1,500

For purposes of calculating the penalty for gifts made within five years, the number is as follws:

  • Average Private Pay Rate: $6,023

Medicare Skilled Nursing Facility Co-Insurance

  • (Days 21 to 100 per benefit period): $ 144.50