Medicaid lookback

[Pink Partridge]

I hope your mom doesn’t live in a state with filial law. My friend’s mom did and when her mom ran out of money, my friend was stuck with the bill. When the mom’s husband died, he left everything to his kids and not his wife. So she failed the lookback test.

anyway, if she does live somewhere with filial law, you and your siblings will be financially responsible before Medicaid foots the bill.

I often wonder how this works for adult children that are estranged from their parents? Or whose parents weren't the best to them growing up. That's a tough pill to swallow.

 

[HopperFan]

For years my mother would always say that my brother and I would 'be rich' when she died. We would tell her not to worry about us, we were financially stable. Fast forward to today where she is in a memory care facility, costing $15k per month. Luckily her savings have been able to cover that cost. Once her money runs out, most likely in the next two years, Medicaid supposedly will take over. I'd like to give her four toddler great-grandchildren a monetary Christmas gift from her. I was thinking of a $2,500 I bond for each child. This total is less than the cost of one month at her facility. I don't want this to jeopardize her Medicaid eligibility in the future, nor do I want to have to pay it back. My name is on my mother's checking and savings accounts and my brother's is on her investment accounts. Both of us have power of attorney. I don't want to do anything wrong, but not sure who can best advise us. My regular financial advisor? The lawyer who handled my own will? An elder law attorney?

I understand what you're saying and I know well and good that it's not my money. It was more trying to do something that she would want - giving a generous gift to her great grandchildren. My mother was the daughter of immigrants. She dropped out of school at 16 to get a job to help support her younger siblings. She continued working as a young wife and mother. My father became quite ill when my mother was pregnant with my younger brother. She was eligible for public assistance but was too proud to accept it, instead moving in with her widowed mother and her mother's boarder. We all stayed there for two years. Ten years later she became a young widow with two school age children to support. We lived frugally and my mother scrimped and saved always. She was very proud to have been able to give her granddaughters money toward their wedding gowns and generous wedding gifts. She was able to save a large nest egg on her own. I am very grateful that she has the money to pay for her living situation now, but I know that it would absolutely kill her if she knew it was costing almost $200,000 a year. She hates where she is and is always asking how much it costs. (It's a very nice facility, she just wants to be back living with me where she lived for almost 20 years.) My thought was more along the lines of knowing my mother would rather give 'her babies' a gift then giving everything she worked so hard for to someone else.

This isn't about setting up my grandchildren. It's about my mother doing something for them before the state takes the rest of her money. I am not worried about setting up my grandchildren myself. This isn't our goal!

Reading this, I don't mean to sound snippy! I guess I'm just sad, and tired, and frustrated. We had to take a large amount of money out of my mother's investments to pay for a buy in for the first facility she went to. Because of that, she had to pay $40,000 in income taxes. Now I just got her Social Security statement for the upcoming year and her benefits are being cut by $600 a month because of the large withdrawal. She worked so hard and now her money is just disappearing so quickly.

Been there. You say she is in memory care so I assume she is not capable of making any of her own decisions anymore. Unfortunately I don't think they care what you think she wants to do, her assets are now kinda locked in to taking care of her.

Your last paragraph is a good message to everyone - have your affairs in order long before you enter a phase where you might no longer be legally allowed to move things around. Even to be informed on how care facilities work and what are all the options. Another POV is that her savings are there to take care of her the best you can. She is fortunate to have the assets to do that. If you want money to go to others and you are willing to risk a Medicaid/Medicare home then you should gift long before you might need it. In case you have not verified this with her facility - many of the nicer ones (and you are paying lots so I assume it's nice) will not accept government aid. She would have to move to a less nice facility ... having toured them for MIL ... you'll want her to keep all her money for a nicer location.

 

[mom2rtk]

For families who have been through the process I think the parents do understand, so you are probably right in certain circles but I do not come from money so I actually had very little understanding of the whole ball of wax until the kids were in high school. My circles growing up were very different. Now, I always knew our kids wouldn't get income related help but what I didn't get was that not a single kid we know got through college without giant loans. Now, that's not too say it doesn't happen, I believe it does and that there are unicorns, but it just doesn't happen to any of the sort of normal people I have ever known.

The Financial Aid Dept should really be called a Loan Services Department, that would snap it into focus for everyone real quick

I don't come from money either and was very clear on the difference.

I'm sorry it wasn't clear to you though. These are important issues. Our high school (a very diverse mostly blue collar school) held parent "financial aid night" every year for anyone with college bound students. I thought they did a good job explaining it all. It also helps that I had navigated it myself going through college with both grants and loans.

 

[focusondisney]

My thought was more along the lines of knowing my mother would rather give 'her babies' a gift then giving everything she worked so hard for to someone else.……
It's about my mother doing something for them before the state takes the rest of her money.

Spending your mother’s money on her care & her living situation isn’t the state “taking her money” or “giving it to somebody else”. It’s her money being spent on her.

I’m sorry, but why shouldn’t she pay for her care? Why should Medicaid, funded by everyone, pay when she has her own money? Nice to give gifts to family, but not if it means the rest of us have to pay to make up the difference.

 

[OKW8297]

I understand what you're saying and I know well and good that it's not my money. It was more trying to do something that she would want - giving a generous gift to her great grandchildren. My mother was the daughter of immigrants. She dropped out of school at 16 to get a job to help support her younger siblings. She continued working as a young wife and mother. My father became quite ill when my mother was pregnant with my younger brother. She was eligible for public assistance but was too proud to accept it, instead moving in with her widowed mother and her mother's boarder. We all stayed there for two years. Ten years later she became a young widow with two school age children to support. We lived frugally and my mother scrimped and saved always. She was very proud to have been able to give her granddaughters money toward their wedding gowns and generous wedding gifts. She was able to save a large nest egg on her own. I am very grateful that she has the money to pay for her living situation now, but I know that it would absolutely kill her if she knew it was costing almost $200,000 a year. She hates where she is and is always asking how much it costs. (It's a very nice facility, she just wants to be back living with me where she lived for almost 20 years.) My thought was more along the lines of knowing my mother would rather give 'her babies' a gift then giving everything she worked so hard for to someone else.

This isn't about setting up my grandchildren. It's about my mother doing something for them before the state takes the rest of her money. I am not worried about setting up my grandchildren myself. This isn't our goal!

Reading this, I don't mean to sound snippy! I guess I'm just sad, and tired, and frustrated. We had to take a large amount of money out of my mother's investments to pay for a buy in for the first facility she went to. Because of that, she had to pay $40,000 in income taxes. Now I just got her Social Security statement for the upcoming year and her benefits are being cut by $600 a month because of the large withdrawal. She worked so hard and now her money is just disappearing so quickly.

The state isn’t “taking “ her money. It is paying for her care. Her money is to take care of her. Why should the state pay for her if she has the funds to pay? The perception that nursing homes“take “ assets or the state does infuriates me. I have worked in this field for over 20 years. If a family resents assets being used for a loved one’s care, then keep them home and care for them. I fully approve of the use of Medicaid but the sense of entitlement I’ve seen by children seeing their inheritance care for a parent is sickening

 

[Pink Partridge]

I’m sorry, but why shouldn’t she pay for her care? Why should Medicaid, funded by everyone, pay when she has her own money? Nice to give gifts to family, but not if it means the rest of us have to pay to make up the difference.

I agree with you. Baffling to give the toddlers money when Mom could use it for her care.

 

[focusondisney]

Did SS see her withdraw as income? I don’t understand why her checks would be cut?

Me either. Once you’re full retirement age, there’s no income limit for your Social Security. It doesn’t make sense that her check is being cut because she made a large withdrawal from her assets.

 

[barkley]

Me either. Once you’re full retirement age, there’s no income limit for your Social Security. It doesn’t make sense that her check is being cut because she made a large withdrawal from her assets.

did you get a notice of action explaining the reduction? if it's being reduced you do have the right to appeal. it may be an error but if not at least you will be told in writing exactly what rule is being applied (and then you might explore if she might be eligible to some other services through other programs that her previous level of social security excluded her from).

 

[focusondisney]

did you get a notice of action explaining the reduction? if it's being reduced you do have the right to appeal. it may be an error but if not at least you will be told in writing exactly what rule is being applied (and then you might explore if she might be eligible to some other services through other programs that her previous level of social security excluded her from).

I think you meant to quote the OP, not me.

 

[Ms Bibbidi]

Did SS see her withdraw as income? I don’t understand why her checks would be cut?

Yes, a sale of regular investments that produced a profit is income in the year taken. The same for tax deferred withdrawals from a pension fund. What OP is talking about is because of that income her mother’s cost for Medicare Part B probably had an adjustment upwards for high income. It is called an IRMAA surcharge. It is not a reduction in social security, but they do collect the Medicare costs and IRMAA surcharge out of the social security proceeds. To some people it feels like their social security was reduced, but that is not what is happening.

 

[barkley]

I just recently went on SSDI (not the income related part) because I was worried about all the horrifying hospital bills people were reporting during Covid and to help absorb expensive tests that I can't contribute towards because I haven't been able to work for a few years. I put my time in and qualify so it's my right to be covered by or so I thought. Now that I have been on SSDI I was notified that in a few months I have no choice but to pick up the hospital portion which opens a Pandoras box. It seems that it is out of my hands whether private or Medicare land as first or secondary coverage, this is based on the number of employees at the spouses company in the event of a hospitalization because I can't opt out of it. Well this would be fine if Medicare was medical insurance but as I read into the process it seems like Medicare is nothing at all like insurance in the way it functions out in the world and how I understood it to behave. Instead, Medicare actually acts like a sort of reverse mortgage loan which means that if the Medicare is drawn on for my care I or my family could end up needing to pay it back, even if I had private insurance. So now I am trying to figure out what else it is I don't know.

you might want to research this a bit more. ssdi (social security disability insurance) is only an income program that after a 2 year waiting period brings eligibility to medicare with it. medicare only has VERY LIMITED payback provisions-it must be repaid to medicare if you get a settlement, judgment, award, or other payment later. you're responsible for making sure medicare gets repaid from the settlement, judgment, award, or other payment. otherwise-there's no repayment. medicaid does have provisions for repayment in some cases. both programs operate differently.

saying this as someone who administered these programs, dealt with estates of multiple family members who were reliant on medicare for decades of care (and there was never repayment) and due to my own disability as well as my adult son's-have dealt with it as both a primary and a secondary insurance for going on 2 decades (never any repayment to them EXCEPT when care was due to any auto accident and they had to be reimbursed out of the settlement).

it's horribly confusing but finding your local/state's medicare hotline from the medicare.gov site can get you in contact with someone to help you navigate this and explain it so it makes sense (not that does ).

 

[Jeannie]

I agree with you. Baffling to give the toddlers money when Mom could use it for her care.

The state isn’t “taking “ her money. It is paying for her care. Her money is to take care of her. Why should the state pay for her if she has the funds to pay? The perception that nursing homes“take “ assets or the state does infuriates me. I have worked in this field for over 20 years. If a family resents assets being used for a loved one’s care, then keep them home and care for them. I fully approve of the use of Medicaid but the sense of entitlement I’ve seen by children seeing their inheritance care for a parent is sickening

I never wanted or needed an inheritance, nor did my brother or children. I hear what you're saying about the state not really taking money. It's just frustrating that she could have been frivolous or extravagant for years, not worrying about having money put aside, but now a small gift that would add up to less than one month of care can't be made.

Never in a million years did we see dementia being in the picture. Never thought she would need to be in a care facility. She's frail, being 90 years old, but otherwise pretty healthy.

 

[Jeannie]

In case you have not verified this with her facility - many of the nicer ones (and you are paying lots so I assume it's nice) will not accept government aid. She would have to move to a less nice facility ... having toured them for MIL ... you'll want her to keep all her money for a nicer location.

We asked about this before she moved in and were told that she would need to move to a shared room, but would be able to stay at the same facility.

 

[Ms Bibbidi]

Thank you, Jeannie for reading and appreciating the longer post that was here. I stand by what I said. I removed it because of the sensitive nature of it. My heartfelt condolences to you and your Mom having to live with dementia in the family.

 

[tvguy]

Never in a million years did we see dementia being in the picture. Never thought she would need to be in a care facility. She's frail, being 90 years old, but otherwise pretty healthy.

I learned a lot about financial planning from my mom. She learned a lot from my dad who had cancer and had time to get his affairs in order. My mom bought a policy that was a combination Long Term Care Insurance plan and Life Insurance. She did end up needing care that last 13 months of her life, and her LTC paid all but $600 a month of her care costs. Her Social Security, pension and investment income easily covered that, and I was able to keep her home up on the chance she might recover enough to return home.
My wife and I got coverage over 10 years ago, when it was relatively inexpensive. However, I wrote the check for our premiums today and our premiums went up $900 a year, each. There is no guarantee we will ever need the coverage and there is no guarantee we won;t.
But what I learned is you can't start saving for retirement, or planning for needs like LTC soon enough.

 

[Skippy918]

I often wonder how this works for adult children that are estranged from their parents? Or whose parents weren't the best to them growing up. That's a tough pill to swallow.

I’m not sure. My friend’s mom wasn’t the best and she wasn’t close with her mom even as an adult, so to be stuck with these bills which she could barely afford herself sucked. We suggested she get a lawyer to try and fight it, but she couldn’t afford one either. Her mom died 2 years ago and I think she’s still paying off the debt.

 

[Skippy918]

Here’s some info about which states have filial law. https://www.walshandassociates.com/...y-laws-could-leave-you-with-your-parents-debt

 

[tvguy]

Here’s some info about which states have filial law. https://www.walshandassociates.com/...y-laws-could-leave-you-with-your-parents-debt

I did a casual search and one thing that came up is that filial laws are rarely enforced in many states.

 

[NotUrsula]

The state isn’t “taking “ her money. It is paying for her care. Her money is to take care of her. Why should the state pay for her if she has the funds to pay? The perception that nursing homes“take “ assets or the state does infuriates me. I have worked in this field for over 20 years. If a family resents assets being used for a loved one’s care, then keep them home and care for them. I fully approve of the use of Medicaid but the sense of entitlement I’ve seen by children seeing their inheritance care for a parent is sickening

While I don't deny that in some (heck, maybe many) cases it's just plain greed and entitlement on the part of families, what I think is a gut reaction for the majority of Americans is that the amount of money that skilled nursing care currently costs seems incredibly out of line with how long it took the applicant to earn it, and the initial reaction is to try to protect those modest family goals that they worked toward all their adult lives, like home ownership, helping to send a grandchild to college, or to give them a used car. If the most money the family breadwinner ever made in a year was $15K (true in my parents' case, because my Dad died in 1974), paying that much for one month of care seems unreal, and their first reaction is to say, "Wait, why did I pay taxes into this system for all those decades only to be treated like some kind of financial deadbeat now that I'm experiencing a health crisis? Why can't just my modest home that I worked so hard to pay for pass to my children?" It seems outrageous to them that the US government is paying companies what they might think of as up to a couple of years' normal full-time earnings for a calendar quarter of care that does not include any hospitalization or doctor visits.

OP's mom always said she would be "rich" when Mom died; that was probably because her Mom undoubtedly thought that an inheritance equal to the value of a nice middle-class home would be considered a really big windfall coming all at once. Now, even with today's inflated home values, the equity value of an average home that it took 30 years to buy will be gone after paying just over 2 years of skilled nursing facility costs. It takes many working-class elderly quite a while to come to terms with what suddenly looks like abject career failure when they start having to deal with the bite of health care bills this size on a regular basis. It's also often a shock to their children, who thought of Mom and Dad as financially solid until suddenly illness changes the stakes, and overnight they no longer are. There is also a great loss of dignity there: it is humiliating to be the grandparent who cannot give a graduation gift or a wedding gift; who cannot even pass down a car that they can no longer drive because it is worth too much on paper.

I'll never forget my Mother's tears as she handed me a paper greeting card for my college graduation gift and apologized for never having been able to help with my tuition, or my MIL crying her eyes out, sobbing that the product of decades of 12 hour days on a chemical plant line that my FIL worked until it killed him, decades of never eating in a restaurant, never going on a vacation, never buying a piece of brand-name clothing ... came down in the end to life in a 12 x18 ft box shared with a stranger, where they even charged extra for watching TV. Three years ago my eldest sister died suddenly of the flu, and we all said a prayer of thanks that she was spared that awful slow slide back to poverty. I hope to God that I go the same way, because my youngest child is still a minor, and I know that pretty soon I'll probably have to give up paying for the long-term-care insurance that I took out when her brother was born, because even though I'm still working full-time, the premium has grown so much that it threatens to eat my entire paycheck by the time she finishes college.

I cut the OP some slack for an impulse to try to sustain her mother's small illusion of middle-class prosperity for just that little while longer, when the abyss of poverty is again looming at the end of the already dark tunnel she finds herself in. This is one of those social responsibility issues that seems very straightforward until you personally find yourself on the ugly side of it in spite of doing everything right to the best of your ability for an entire lifetime. When that happens to you or to someone you love, shades of grey may suddenly appear where you could not see them from your previous vantage point, and it takes a while to mentally work through that. I also agree that it's pretty rough on folks who work for the system to have to deal with that hurt & desperation day after day; it's just rough, period, and I can't really blame people for feeling angry about it all-around.

 

[barkley]

I’m not sure. My friend’s mom wasn’t the best and she wasn’t close with her mom even as an adult, so to be stuck with these bills which she could barely afford herself sucked. We suggested she get a lawyer to try and fight it, but she couldn’t afford one either. Her mom died 2 years ago and I think she’s still paying off the debt.

I did a casual search and one thing that came up is that filial laws are rarely enforced in many states.

i know that in california some counties are VERY ACTIVE in enforcing the law that requires even distant blood relatives to provide for the disposition of remains (health and safety code sections §7100 and 7103). failure to act in a timely manner is a criminal misdemeanor violation and could result in the next of kin being required to pay up to three times the cost of the disposition. section §7100 of the health and safety code establishes next of kin. i was personalty subjected to this law and despite the fact that the decedent and i were estranged due to his (on police record) threats of violence against me i learned from a very well respected attorney in the county that contacted me that the particular county was very active in pursing enforcement and my failing to make arrangements immediately would have resulted not only in a criminal prosecution but that county would enact their practice of utilizing the most expensive form of disposition which i would be responsible for repayment to them at the rate of 3x (in addition to the civil penalties of up to $10,000).