If we apply for Medicaid and get denied will the penalty period start right then?

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If we apply for Medicaid and get denied will the penalty period start right then?

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My mom has been in ACL 5 yrs. Had long term care policy. The provider just told us it had a $ max and would expire after 7k more! We cannot afford to leave her in the home @ $4800/monthly. If we apply for Medicaid she will be denied as she has an acct worth $50,000 also she gifted us our inheritance 2 yrs ago $150,000. Question is: if we apply for Medicaid and get denied will the penalty period start right then?

Long Term Care Insurance Medicaid Paying for Care

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She will no doubt be denied for Medicaid because she has assets over the allowed amount. Also there is a 5 year look back and the inheritance would need to be used to pay toward her care as well. I'm not sure what you mean by penalty period. If you are referring to the amount of time that the inheritance and money in her account would take to use up to pay for her care, then yes. Otherwise there isn't really a penalty period. Why can't you use the $50,000 in her account for her care? And then if need be start paying out from that inheritance for her care. It would take nearly all the money to cover 3 more years but there would be still some of the inheritance left. If you apply now they will want all the money in the account and the inheritance used before she would be eligible.

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Absolutely what we would do...but my main concern is if we apply for medicaid now (as the 50,000 will only last about a year),I realize we will be denied the claim because of moms checking account having 50,000. If we apply but are denied do we still start the penalty period countdown at the date of application? Or, would it be wiser to pay down the 50,000 then at that time apply for the medicaid?

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The penalty period for looking back starts on day of application. Gifts given less than five years before application is made will count. If $150,000 was given the penalty is calculated by dividing the money gifted by the daily rate that Medicaid pays. Example if daily rate is $150 and gift is $150,000 then 1,000 days penalty. A long time to have to provide care. And the gift will surface.

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I read that in florida the equasion is $9171 a month divided by the gifted amount ...if that is true then we would be looking at @ 16 months to fund

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She had a long term care policy. Can you get the provider to confirm or deny if it is/was a "partnership" policy?

A partnership policy is what you are hoping for here, since you can "disregard" up to the amount paid out by the policy. 5 years of payments is probably a lot more than $200,000.

"Once an individual purchases a Partnership policy and uses some or all of the policy benefits, the amount of the policy benefits used will be disregarded for purposes of calculating eligibility for Medicaid. This means that they are able to keep their assets up to the amount of the policy benefits that were paid under their policy or coverage. For example, in a state that chooses to participate in the Long-Term Care Partnership Program, once you have used part or all of your maximum lifetime benefit (MLB), your assets would be protected up to the amount paid under the policy. You would not need to spend those assets before qualifying for that state's Medicaid program."
https://www.ltcfeds.com/help/faq/miscellaneous_partnership.html

Partnership policy availability varies by state.
https://www.partnershipforlongtermcare.com/partnershipmaps.html

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The way they calculate it may have changed when the lookback period changed, but they used to include gifted assets only if they would have been "excess property," which the partnership policies are designed to protect.

"The Medi-Cal "Look-Back" period in California is 30 months. "Transfer" means an outright gift or a "sale" made at less than "fair market value." If a disqualifying transfer of property is made, Medi-Cal will calculate the period of ineligibility for nursing facility level of care. It will be the number of months resulting when the "net fair market value" of the transferred asset, which would have resulted in excess property at the time of the transfer, is divided by the monthly average private nursing facility cost. "
https://www.dhcs.ca.gov/services/ltc/Documents/Medi_CalQandA.pdf

I am not a lawyer. My citation is from California. Your state rules may vary.

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The assets weren’t kept. They were gifted. So you can’t argue protecting something you gave away under Medicaid rules.

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You need a NAELA or CELA certified elderlaw attorney in your moms state to help you sort this out. This is very State specific stuff and doing it wrong will cost your mom everything ( plus she'll have no Medicaid).

Use her money to get the best legal advice available. That's an allowable expense for Medicaid purposes.

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Worriedincali..you are pretty correct. I calculated the penalty period in florida. It appears that it woul be @16 months. $3800 minus $1000 of social security being applied toward the rent at the home...equals $60,800....if we are allowed to pay the penalty period like that then we would still have some inheritance left at the end of the penalty period. Otherwise if we have to put all the money back in her account, Then medicaid will never kick in.

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Yes, you will have to find a way to fund mom's care until the penalty is repaid.

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If you are denied, nothing starts. The penalties only happen when the applicant is approved based on qualifying.

If the money she gave you is within the look back period, that will also require pay back or penalty.

I am going to make everyone mad now, why do you think you are entitled to an inheritance at the taxpayers expense? Her money is for her care as long as she is alive. Taking her assets so taxpayers have to pay her bills is unethical and criminal. Oh by the way, that is why taxes keep going up and that effects you and your children and grandchildren and their children, isn't that cool.

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I understand your take on this but its not like that. My parents had a long term care policy. When they first went into an assisted living facility together several years ago our older brother was the POA..4 months after my dad passed my brother also passed away. Thrusting my sister and I into the position of being POA. We had no idea that the care policy had an $amt expiration and we could not find the policy amongst my brothers files. As you can imagine things were quite hectic and unfortunate to say the least. My mom and dad fully expected us to have this inheritance so yes of course we would like to salvage as much of it as possible. That is by no means to say that we would begrudge any of it going to my mother. The money that was transferred was in a separate account and was designated for us..no one was stealing or breaking any law but I thank you for your input.

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You're on a short timetable, so it would really help you to get an elder care attorney's advice. Doing so helped me tremendously, and my mom's situation was much simpler than yours. You need advice on when to apply, spenddown, what the set amount is that Medicaid will use to compute penalty, etc.

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Just thinking - The $9171 you mentioned is probably for skilled nursing facility (SNF or NH). If your mom is in assisted living and her monthly bill is $ 4800, they probably have a different set figure for AL, since I doubt they'll be using a figure higher than her monthly payment.

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There is no penalty period as you describe it.

the penalty is money. Specifically, until the money she gifted is used to pay the facility till it runs out...meaning $200,000 (current savings plus those gifts) paid out. That is 41 months at $4800 per month paid to the facility.

but...it must be actually paid for her care.

the only other choice is to take her into your homes until the look back period is past....3 more years. (Look back is 5 years)

let me add...once she is out the the place her is in now, she would only come back as Medicaid ... those places are not usually on your first choice list...but may be the only place willing to take her without a year of self pay or more.

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Isthisreallyreal, Thanks for your great answer. What a parent designates for a child is irrevelant to Medicaid fraud examiners. Mom’s money should be spent for Mom’s care, not an inheritance. There are some government projections that there will be no nursing home Medicaid at some point in the future if Medicaid continues to be used at current rates. Many states are already severe financial problems because of nursing home expenditures with Medicaid. Some states already have hotlines for citizens to report possible Medicaid fraud. I want Medicaid to exist for those who need the funding; not for those who have sheltered money or gifted money.

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If we apply for Medicaid and get denied will the penalty period start right then?

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