Medicaid 5 yr look back period and Medicaid Estate Recovery Program

John, my understanding is yes, it’s community based Medicaid they’d be applying for. Depending on just what Chicago or state is doing, they may not actually go onto “open” Medicaid... by that I mean ability to see any doctor who takes “duals”. Duals = on MediCARE & Medicaid.

What instead may be required is they enroll into a MCO (managed care organization). They have to get care from providers & facilities in the MCO. Some MediCARE Advantage Plans have plans that they too have geared for “duals”; & yes those too have it set up where they must get care from providers “in network” for the Advantage Plan. Imo you have to, have to, have to look at your folks medical & drug use & see how it best matches up for a MCO or Advantage Plan or other “dual” program. Btw almost always MCO & Advantage Plans get a “capitation fee” per enrollee from CMS (Centers for MediCARE & Medicaid aka the feds) & that’s part of how they can pull off “zero fees” on things. MCO seem to be what states are trending into with Molina & Superior as big players; the big Health Science Teaching Centers (like what Pritzger & Nwestern are) I bet will have their own plans too. Personally I am not a fan of Advantage Plans at all ever....

If they have more serious stuff and kinda at the edge of needing daily oversight care, they could get screened to enroll in PACE. PACE are all in one community health centers where they go to regularly & all medical care gets funneled via PACE. If they are healthy & fit, they are not PACE. But 1 good fall and that could change.

Really try to straighten out just wtf on house ownership situation BEFORE they fill out any application. Whatever info they put in now will go into a database and you don’t want it coming back to bite you all on the butt years from now.... Good luck, your a good son!

My understanding is that for Medicaid there’s 2 types - each administrated uniquely by each state but within federal guidelines:
- community based programs which are huge, with everything from WIC (Women’s, infants & children’s) to CHIP (child health) to PACE (all encompassing care for elders). Breast pumps to immunization. Eligibility based on “need” (like for care of a diagnosis), income and resources. No asset review. No estate recovery unless the applicant is over age 55. If your state took ACA, it allowed somewhat higher income to be able to get health insurance via community based Medicaid.
Community based is viewed as for limited term based on your “need”. Like for pregnancy based Medicaid, it’s I think 15 months unless you’re breastfeeding. For End stage Renal for any age, medicaid covers the 90 day waiting period before MediCARE will kick in. Community based is looked at as “bridge funding” from a planning process. It’s not permanent or long term. That’s why the asset info or lookback cannot be done. The Feds could change this but it would need new laws to do so completely imo. Instead states are placing narrower restrictions on community Medicaid. Like you have to only see providers in 1 or 2 managed care groups for your area if Medicaid is to pay.

- LTC medicaid for in a facility which pays for room & board costs as well as whatever health care costs not paid by primary insurance if primary exists (like Medicare). State is required to attempt recovery. Eligibility based on “need” (for level of care), income and assets with look back on assets as it’s viewed as a long term placement. Skilled nursing care in a NH facility is dedicated (required) funding by Medicaid for all states as per federal guidelines. States can file for waivers or demonstration projects to take some of the required / dedicated funding (it’s based on states demographics & another reason why census very important) to instead go to waivers, like for AL.

States have to provide LTC in a skilled nursing care facility if they take federal Medicaid $, but determine daily reimbursement rate paid. Some states pay at or under daily operating cost of a NH bed. So facilities have to have private pay to make #s work.

when tsunami of boomers start needing skilled care, there's not gonna be enough facilities. Will not be pretty.

As said, think you have Medicare and Medicaid mixed up.

Medicare is a health program thru the Federal Government that you go on at the age of 65. At that time, your parents may need to find a supplimental since Medicare only pays for 80%. If ur parents are already collecting SS, Medicare will be automatic. If not, they will need to apply. Your Office of Aging in ur County can sit down with your parents and explain what supplimentals are available in your state. They can help them choose the right one for them.

Medicaid is a State program funded partially by the Federal Government. There are Federal guidelines but each State has their own Criteria. There is Medicaid Health insurance and homecare. This is for low income people. If your parents income falls into that category, they maybe able to get their supplimental thru Medicaid.

Then there is Medicaid for LTC. Which at 65 your parents will not need for a long time. This u do not apply for until needed. In my State ur given 90 days to get all the paperwork needed, spend down and find a LTC facility for the applicant. This will entail the 5 yr look back. In that period of time no transfers of money, houses or large gifts can be made.

Copy and paste Igloo's info to keep it handy.

On house, so why was this done?
- was it that parents could not qualify for a mortgage but needed a home, so you bought home & you are solely responsible for debt?
- Or you did this as an investment?
- Or was it your home, but you moved into bigger / better and your folks moved out of thier old home or apt into your old place? If it’s this, did they sell their old home and if so, how has that $ been spent? If any $ was gifted or transferred within 5 yrs of application date for LTC Medicaid, there will be a transfer penalty inquiry done by the state.

For this property
- can you totally on your own pay all property costs? & pay whatever costs you have on your other home & living costs as well?
- can your folks totally on their own pay all property & living costs?
All costs too... like taxes, insurance, maintenance, have emergency fund just sitting there to deal with a major replacement (like all new electric or AC/ heating system, so 5k -10k emergency fund).
- what’s mortgage like? 5 more years or 15? Rate super good?
and
- How were their names added onto title?
Did you actually submit this to the mortgage company & mortgage holder issued new Deed? Or did you instead go to courthouse and fill out paperwork to have your folks added onto assessor info so it’s the 3 of you on tax bill? Or did you do a Quit Claim Deed to add them and filed this at courthouse?

I’m guessing there has NOT been new mortgage agreement done.... so I'd be concerned that unless mortgage co approved of adding on other “owners” and you got new mortgage agreement done with all 3 names and signatures on it, & filed, that your folks are not recognized by mortgage co as owners. That mortgage is secure debt on the house and the securitization was based on the loan to you & you alone. If Medicaid MERP actually happened years from now, and house still not paid off (horrors!), I bet mortgage co won’t recognize MERP lien or claim as folks not legally on mortgage agreement. But it will be a hot mess of paperwork to deal with. I’d suggest you clearly look at your mortgage agreement asap to see the terms and IF whatever you did to add them to title is valid. I bet it’s not & you need to have it changed back so no issues with mortgage co BUT that’s also imo beyond great as you can get them to rent it a FMV (fair market value) with a rental agreement done. Medicaid expects them to pay for housing in some way. But needs to be coming in as “rent” to you, then you use rental $ topay the in your name mortgage payment. You don’t want them paying mortgage directly as that looks like gifting.

In my experience, the existing mortgage would be “struck” with a Release of a Deed of Trust done & filed AND new mortgage agreement done with all 3 names and a new Deed of Trust filed at the courthouse. This legally establishes all 3 of you with interest in the property....... everybody is equal owner. Mortgage co doesnt give a fig whether you pay or Easter Bunny pays the note. But mortgage co does care if others can claim rights or liens or debts on property that mortgage co holds securitization on. Terms of mortgage could change if your folks are added. A lot of this depends on debt left on the mortgage & parents credit worthiness as to just how readily mortgage co will do this.
In my experience, it’s only if you own property outright & in full can you on your own add or delete others onto the title.

Really do some research and clean up whatever legal / title / mortgage stuff soon. (If you did this via a Quit Claim it’s gonna be sticky to get thru.) Get a rental agreement going so if Medicaid is ever needed you can show all $ to you was legit with no gifting issues. Good luck.

John, to me you have 2 different things to deal with..... their health insurance & sticky ownership on a home. Both affect their finances but different to deal with imo. I’m with the others that perhaps you have gotten MediCARE & Medicaid confused. If they are both approaching 65, they must sign up for MediCARE. This is important cause if they do NOT do this within the initial entry period (l think it’s 3 months prior to turning 65), there will be a permanent increase in their premium. For Medicare, there is part A (hospitalization) which is free & part B for which premium is taken out of their SS income. SSA does this paperwork. However they need to decide just what type of additional coverage they are likely to need & if they want original MediCARE with a secondary “gap” or “supplemental” policy to deal with B C D; or they want to leave original MediCARE & go with an Advantage Plan. You can help them by looking at their health & drug costs to see what’s what & which way may fit best for their needs. Each Sept. CMS puts out “MediCARE & you” which lists advantage, special needs & drug plans by state. The gap policies, for those you get comparisons done by independent insurance agent.

If they have limited income & resources, they might be eligible for Medicaid which is uniquely run by each state (so Medi-Cal over in California can be administered differently than Texas’ Star Plus system).
Medicaid has it that all costs paid by Medicaid for applications over age 55, have to have an attempt at recovery from their estate or assets after death. It’s done via MERP. Just how it runs really interdependent on Illinois medicaid administrative code, state laws on property rights and probate; and if MERP is done by state employees or outside contractor. Unless your folks are 1 foot in the grave & 1 foot on a banana peel, MERP is way way waaaaay off. And laws & codes can change over time. But it will be there lurking subterranean for house if they go onto Medicaid. Personally I think you need to deal with house ownership this year because of this. I’m doing a 2nd post on my perspective on this.

Now if they are still working & have employer sponsored health insurance, Medicare can be suspended (you get a 1095-C that shows this & you gotta keep it so no MediCARE penalty when they eventually file for Medicare). If they are retired, their old employers may offer secondary insurance, which has premiums taken from retirement so that’s their secondary health insurance as opposed to Advantage Plan or gap policy.

Really to me you have to look at their annual spend for care & drugs and what’s likely future costs; then which policy seems fits best. If they are just 64, they likely have 2 decades more & you want to get them into health insurance plan that makes sense for their risk.

if your in Chicago, it will be a competitive market for them. Lucky you. Will be dzs and dzs of Advantage and “gap” to look at. It will be confusing. What may be a way to deal with it is to speak to billing at your folks internal medicine Primary care doctors office to see which plans their current docs are in. Ditto if they regularly see specialists- like cardiologist or ophthalmologist- to see who they participate with. And then look at what the copay is & what they have to meet annually to have no copay.

If they have more serious health issues, personally I’d look at plans that have Pritzker or Northwestern for providers, clinics and hospital systems. Also Chicago is going to have a huge Area Agency on Aging; AoA /AAoA will have info and seminars on the health insurance maze.
good luck.

Ahhh, now that makes more sense. I think she is asking about Medicare as opposed to Medicaid. Medicaid has a look back, Medicare is a health plan that everyone is eligible for at age 65.

With parents name on the home, I would certainly consult with an elder law attorney on how to prepare should they need Medicaid. One parent could have a medical emergency any time. Then would there be funds available to pay out of pocket for nursing home care should that be needed? That can be very expensive, in excess of $10,000.00 a month. If that happens, the house because parents names are on it could be in jeopardy.

In my area attorneys often have free seminars on how to financially prepare for aging and all the expense that goes with it. Find one of those so you and your parents can learn how to prepare.

R U sure that you do not have Medicaid and Medicare confused? Are your parents suffering from illnesses or dementia? If not, then there is no need for applying for Medicaid. Applying for Medicare, is very easy and quick. Medicaid is another issue all together.

I think Rosered is correct. I think they have Medicare eligibility at 65 confused with Medicaid. They need to consult a Medicare specialist in their area to help them select a Medicare program that meets their needs.

Actually there is NO lookback period for Medicaid health insurance or community based Medicaid. Those are both based on income not assets. Community based Medicaid pays for thing like caregivers/home care.

Medicaid programs differ from state to state. I also think in your situation, seeing an Elder Care attorney would be very helpful.

5-year lookback applies to all Medicaid programs. However, I think you might be confusing Medicaid and Medicare. Medicare is the federal program that pays for some portion of health care of all eligible people age 65 or older. Medicaid is the federal-state program that pays for long-term care for people who qualify based on income and assets.

You need to see an elder law attorney. Call the Area Agency on Aging. They may be able to give you guidance.