I started trust work and advanced nursing home planning in 1999. That experience is the basis that led me to NFA trust work. I have assisted many people with the admission process of a family member entering a nursing home as well as the process of qualifying the patient for Medicaid.
From 1999 until 2006, it was possible to access Medicaid benefits for nursing home patients even if the patient had done little or no planning prior to entering the nursing home. I knew the state and federal laws and the Georgia Medicaid Manual very well, and I helped many people qualify for the benefits they paid for while working and paying into Social Security.
This is an example of a very common phone call I would get in those days:
Caller: “Mom went in the hospital 3 weeks ago and was transferred to the nursing home 2 days ago. I hear that you help people qualify for Medicaid.”
Roy: “Yes sir I do. Is your Mom married or a widow? Can you give me a ball park figure on your Mom’s income and her resources?
Caller: “She has been a widow since Dad died 8 years ago. She owns her house which is worth about $150,000. She has savings of about $200,000 in the local bank. Her monthly income is Social Security and Dad’s pension and is about $1500 per month. We have been told that she will have to spend all her savings and that she will need to sell her home. Is that true? We don’t know what to do.”
Roy: “Selling her home is a really bad idea. It would turn an uncountable resource into cash which is a countable resource. Whoever told you that is uninformed. We can save your mom’s home and virtually all of her $200k savings. Almost all of her income will go towards her monthly nursing home bill. She is allowed to keep a small amount.”
Caller: “So you are telling me that Mom can keep her house and that she doesn’t have to spend all her savings? How can that be? We were told that she could only have $2000 in the bank before she could qualify for Medicaid.”
Roy: “If you understand how the state looks at resources and income and are able to place resources in the property category it is not a problem to qualify.”
Caller: When can we make an appointment?”
Those were the good old days, and they ended in 2005 when the Federal government passed the Deficit Reduction Act of 2005 (actually in February 2006 when it was implemented).
NOW YOU MUST PLAN AHEAD TO AVOID BOTH SPENDING DOWN YOUR LIFE SAVINGS BEFORE QUALIFYING FOR NURSING HOME MEDICAID AND HAVING THE STATE RECOVER WHAT IT PAID OUT FROM YOUR ESTATE AFTER YOUR DEATH.
You also must plan ahead to keep the state from taking your home place after your death if you qualify for Medicaid (Estate Recovery). None of us want to end up in a nursing home, but my crystal ball is broken so I can’t tell you what will happen. An effective estate plan should address the nursing home issue, especially since it can cost $6000-$8000 per month or more for private pay nursing home care.
Some basic Medicaid qualification information:
The Look Back Period for all transfers of resources is now 60 months.
Your home place is not considered a countable resource unless the value of it is more than $552,000. If your house is on the family farm of 200 acres you could have a problem.
The resource allowance for a single person (cash/money in the bank) is $2000.
Only one motor vehicle is excluded as a countable resource. If you have 3 cars, the value of two of them will be considered as part of your resource allowance.
Any cash value in a life insurance policy is a countable resource.
Pre-paid burial plans can be a countable resource if not structured properly.
Estate Recovery was implemented in 2006 by the State of Georgia. This means that if you receive nursing home Medicaid, regardless of whether you went through spend down or not, the estate will attempt to recover all money paid for your care from your estate after your death. That home place that was not countable while you were alive is now subject to being taken by the state to pay for your bill!
The State of Georgia and the US government have made it extremely difficult to qualify for the benefits you paid for while working and paying into Social Security. If you have saved all your life and wish to pass on your estate to loved ones, rather than the government, you must seek out good information, formulate a plan and put it into effect. The government is counting on you not to do these things.
If you would like a phone consultation about advanced estate planning, give us a call at 229-869-8210 or send an email to firstname.lastname@example.org.