My 92 yr old mother is in a nursing home. More than 40 years ago my dad worked for the postal service. He was having extra money taken out of his paychecks to set up an annuity through the postal service so that upon his death my mother would receive a monthly check through the annuity. When he passed away several years ago the annuity kicked in and has been sending monthly payments from the postal service to my mom. I only know it is classified as an annuity because that is what it says on her yearly withholding statements.
When my mother applied for Medicaid for nursing homes this summer, that annuity was counted as gross income, even though she has taxes taken out of it each month, i.e. she only receives the net income. Right after my father passed away, an accountant told my mother to stop paying the withholding taxes on the annuity and she did. The result was a $5,000 tax bill in April. The lessons learned were to fire the accountant and to make sure the postal service was withholding the taxes.
Now, because Medicaid used the gross income amount shown on her annual tax withholding statement (W-something) when determining her eligibility, my mother's nursing home is charging more than her net income covers. I have asked the Medicaid office about this and was told to stop having the taxes withdrawn from her annuity payment each month. If I do that, there will be that $5,000 tax bill due in April and no one can tell me who will be paying it.
Has anyone else run into this problem? The Medicaid office acts as if they have never seen such a thing and I am getting nowhere with them. I have already been threatened with a 30-day notice by the nursing home for non-payment due to this discrepancy. Thankfully, once I explained the situation, they backed off and I paid the lesser amount, however, who knows how long that will last. The nursing home is taking all but $50 a month of her income to pay for her care and that $50 is used to pay for her private insurance.
If anyone has run into this problem, please give me some advice on what I need to do to get this straightened out. Thank you.
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When u mean coordinator do you mean a Medicaid caseworker? If not a caseworker, I would not go with what a coordinator says especially if associated with the facility. If not a caseworker, find out who Moms Medicaid caseworker is and call them. I really don't think the PNA should be used to cover medical insurance.
In my State I was told I could drop Mom employer insurance once she was on Medicaid. But, each state is different and from what others have said on the forum the SS is adjusted for the premium.
You need to find a tax CPA who understands government pensions. If the CPA confirms that Mom needs to have taxes taken out of her pension then you need to take that info to Medicaid. You tell them an error was made at time of application. They need to adjust the pension to net and pay the home accordingly.
Another question you need to ask the CPA is if Moms government pension can be garnished by the IRS for taxes due. If it can be, then Medicaid will need to adjust the amount they give the NH so Mom does not owe anything. She should not owe the NH anything.
What type of insurance are you paying? That $50 is Moms PNA (Personal Needs Acct) It is used for any personal things she may need that the NH does not provide. She needs no health insurance since Medicare and Medicaid should be covering her healthcare needs.
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