Must apply for Medicaid (PA) now at $20,000 asset level instead of being out of money?

After Worrieded replied to me, I looked up Medicaid Penalities. Here is what I found:

"Please note, there is no maximum penalty period. The state in which you reside has an average monthly cost of $4,000 for nursing home care and you gifted $60,000 during the look-back period. This means you will be ineligible for Medicaid for 15 months.Jun 28, 2019"

This is interesting
https://www.forbes.com/sites/markeghrari/2014/08/08/the-medicaid-penalty-period-explained/#7ffeda3f2ee4

Trying to find info if the gift is paid back, if there is still a penalty. No luck so far.

So what I get out of the info I did get, is if Mom gifted 10k and the NHs in your area charge 10k a month, Moms penalty period is one month? 5k-2 month penalty?

If your willing, you could pay for her care to get passed the the gifting time. Or apply, and pay the penalty. Lets say its 10k that was gifted. That covers 2 months of her AL, you can pay that out of pocket.

If the "gifts" were done in small increments, it may not even be noticed. Think about it, they are looking thru 5 years of bank statements. Moms caseworker took 4 a year making it 20. They would be looking for large amounts.

I think I would go with the penalty. Maybe other members could chime in.

Cold, is the facility trying to tell you that they don’t take Medicaid pending? If she applies in July and it takes 3 months to process, do you and family have funds to cover the fees until Medicaid is approved if she runs out of money? It may also be a way to ferret out problems with Medicaid application before you get into the process and suddenly there is a penalty (Note car transfer 4 years ago not near 5 years limit) and no family member can pay...State budgets are about to take a huge hit and staffing to process applications will be reduced or furloughed. My in-laws paid a lawyer for application for exactly this reason, dig out problems, assemble paperwork and shepherd through state with knowledge of response times, deadlines the state must meet, medical paperwork needed, etc. I have known folks who did on own and it can be a second full time job. Lawyers get paid to anticipate problems and you should be able to access one with NAELA certification. And the money spent for this is Medicaid compliant.

Some of this reply was composed while other were offering suggestions, but I'll post it anyway

Thanks for the suggestions/comments. The goal I have is to delay the application as much as we can legally, so the payback of these gifts aren't an issue. I hate trying to game a system and being less than honest. I could just give her the $10,000 for the month she needs to keep piece in the family (i.e pay back their gifts).

So otherwise we apply when the Home suggests, and disclose all the gifts we know about (I wouldn't be surprised if other small ones come out of the woodwork during review). The Home administrator mentioned that if we don't pay gifts back before we apply, it becomes more of a hassle and there is a penalty, which is a period of days Medicaid delays payment. (gift / $343 currently). If the Home's self pay rate is about $343 a day, then its a wash financially anyway. It looks like, if we know about a gift, pay it back before applying is the preferred method. If they find more gifts, we pay back then. I don't expect more than $10,000 we don't know about. She does not have a car (that old clunker was gifted maybe four years ago and subject of a different discussion)

Cold, how much of a gift are we talking about?

I agree with the advice up thread to talk to someone at Medicaid about the timing of the application and how much the penalty will be.

I empathize with your situation it is clear that there was no intention to defraud and your parents are clearly generous (and I'll bet frugal) people.

The SW at the NH may also be a good source of advice about this.

You need to apply before the money runs out. That is what they are trying to tell you. You need Medicaid ready to take over the cost of her care when her money is gone. The application takes a while. I live in NJ. This is what I did.

I applied for Medicaid for Mom in April when she had just about 20k. I was told I had 90days to spend down the 20k, get them all the paperwork they needed, including 5 yrs of statements, and get my Mom placed. I placed Mom on May1st. She paid May and June privately bringing her under the cap allowed of 2k. I called her caseworker confirming they got all the paperwork needed and July 1st Medicaid started paying.

So what I am saying, you need to apply now. The NH is trying to give you a heads up. Moms house does not count and either does her car. Be aware though, Medicaid will require Moms SS and any pension to be used to offset her care. This means, there will be no money for upkeep on her home. That would be your responsibility. If you sell the house, it has to be at fair Market Value. Medicaid may not allow you to be reimbursed for any out of pocket expenses. If you sell, Medicaid stops until u spend it down, then u have to apply again. The cap allowed cannot be spent on anything but her. She will get maybe $50 a month, in a Personal Needs Acct, for her personal needs.

I didn't expect a moral or "told you so" argument here, so I didn't provide any background to read through. Just trying to keep peace in the family.

What's done is done, those small gifts, in particular, was them feeling good about helping with grandchildren's college education. They were not trying to hide money from Medicaid and had sufficient income for living expenses. At the time, they were not planning to be needing Medicaid help as there is a wealth of community support.. We had forgotten all about the gifts until we looked through her bank record in preparation for Medicaid application.

It's easy to say pay it back... but if the recipient is destitute, they can't pay and the home will sue the siblings to recover. So yes someone will pay it back, if necessary. Yes there is an option to pay an elder lawyer $3000 (the going flat rate here), and be told out of luck anyway short of setting up vehicles/trusts thats not worth the 40K she has remaining. $3000 is a lot of money to these folks, especially to waste it. So if the answer is simply yes thats the way it is, we will deal with it, not that I would ever trust the competency of a Lawyer's office...... .

We were simply thinking of a selling home option, to give her 4 more months of self pay time, and by that time the gifts of over 5 years ago would become irrelevant.

I agree with Isthisreal, I think you just need to apply. While these things do vary state to state and you would be wise to know what the process/perimeters are in hers, I think I may be as simple as you apply and if during the look back they decide 10,000 in gift penalties needs to be paid it is the same thing as waiting until next month to apply...she is paying 10,000 in monthly bill. Your not trying to hide anything and it’s a fairly simple question, just ask the Medicaid worker who takes her application or ask the NH who is obviously on top of this and telling you it’s time to apply. It’s in their best interest actually to make this as smooth a process as possible so in place of an attorney who specializes in this they are probably a good place to go. That does not mean don’t consult an attorney, that would be my first choice, do that if you can.

I would ask them to show you that change in regs in writing.

It seems like the op's mom has only been in NH for a few months and the gifting went on close to 5 years ago. Mom probably didn't realize then that she was going to need this level of care, or didnt know Medicaid regs.

I find that many people are shocked to find out that they need to use their own money to pay for long term care.

Well you should actually apply and see what is what.

Whomever received the money will have to get busy and scrape it up to repay it. Selling the house doesn't negate the penalty period for the money gifted. She was in care at the time of the gifts, I find that hard to hear, who takes money from an old person in a nursing home and then wants the taxpayers to pay. I just don't believe that anyone should accept money from seniors, ever.

I would hire a professional to help with the Medicaid application so I completely understood what is going on and how to ensure that she continues to get the care required. It will be worth the money no doubt.