Nursing home care and Savings

[JanetRose]

Please do not get angry here.....it's just a question that came up between myself and a friend...

If the government is going to support you in a nursing home and you give away your savings so the government doesn't take it, how can they tell that you didn't just spend it, gamblings, vacations, etc?

 

[golfgal]

Please do not get angry here.....it's just a question that came up between myself and a friend...

If the government is going to support you in a nursing home and you give away your savings so the government doesn't take it, how can they tell that you didn't just spend it, gamblings, vacations, etc?

There is a 5 year lookback period (7 in some states-Florida is looking at going to 10 years) where if you had the money during that time they can not pay for care until the care costs equal to that amount of money. Say you had savings and investments worth $200,000 and you gave it away to your kids. They would say that $200,000 is equal to 2 1/2 years of care so they are not going to pay for anything for 2 1/2 years. Spending it yourself isn't the issue, it is giving it away so it looks like you didn't have it. Get long term care insurance and it won't be an issue at all.

 

[The Mystery Machine]

Please do not get angry here.....it's just a question that came up between myself and a friend...

If the government is going to support you in a nursing home and you give away your savings so the government doesn't take it, how can they tell that you didn't just spend it, gamblings, vacations, etc?

They look at your at all your financial records.

 

[creativeamanda]

They look at your at all your financial records.

We had to justify every check we wrote. We reduced how much she had by going to the funeral home and prepaying for her funeral. But in the end, you can get into a whole bunch of trouble trying to cheat the system like that.

 

[creativeamanda]

Oh, and I wouldn't enven try to apply for govt care until the bank is empty.

 

[golfgal]

Oh, and I wouldn't enven try to apply for govt care until the bank is empty.

I disagree with this-yes, you WILL get rejected if you have too much money but it starts your 5 year look back when you do apply so you want to do this ASAP.

 

[barkley]

in some states a person can ask for a what is basicly pre-application review.
essentialy they fill out the same application as they would if applying for actual benefits, provides the same information an applicant would-but the eligibility staff person uses it to determine only IF they would be eligible or not if making application at that time. then the staff member can educate the person on what items are exempt from consideration, and at least in the state i worked in, educate on what options are available that could hasten eligibility.


it is amazing how much more people can have assett wise than they realize and still qualify for medicaid programs, to this day i still remember a course myself and my staff had to take-it was titled "how a couple with a million dollars in assetts can qualify". it came down to what (in that state) was considered exempt from consideration, what could be set aside in legitimate accounts that by structuring them correctly made them exempt, and then pre-paying for certain things.


but yeah-the amount of documentation that was required initialy, and then what we could start asking for if we had a gut feeling something was'nt as it was being reported or appeared was amazing.


an elder law attny. who SPECIALIZES in the medicaid rules for the specific state a person lives in can be the best investment to learn how to structure assetts.

 

[creativeamanda]

I disagree with this-yes, you WILL get rejected if you have too much money but it starts your 5 year look back when you do apply so you want to do this ASAP.

Maybe it depends on the state. The offices in South Carolina wouldn't even take our application. They told us to come back when the account was empty with the receipts.

 

[Ohiodislover]

Maybe it depends on the state. The offices in South Carolina wouldn't even take our application. They told us to come back when the account was empty with the receipts.

That is a bit strange. I have worked with MA in Ohio and was certainly NOT the case.

The key is to plan WAY WAY ahead...well before the 5-7 year look back. Too many people don't do that. We have been going round and round bout that with my DHs mother. She is 76, and refuses to even consider pre planning. Big mistake IMO.

But for the OP's question. They investigate THOROUGHLY where the money went and why.

 

[allison443]

Please do not get angry here.....it's just a question that came up between myself and a friend...

If the government is going to support you in a nursing home and you give away your savings so the government doesn't take it, how can they tell that you didn't just spend it, gamblings, vacations, etc?

I just want to point out to your friend that the "government" wouldn't be "taking" her savings. She herself would be spending her savings to pay for the care she needs in a nursing home at this point in her life.

 

[diz8297]

I just want to point out to your friend that the "government" wouldn't be "taking" her savings. She herself would be spending her savings to pay for the care she needs in a nursing home at this point in her life.

Thank you for writing that!!!!!!!!!! The government is supposed to be the PAYOR OF LAST RESORT!!!!!!! I am not saying that anyone should be ashamed to apply for medicaid for long term care coverage or any such thing. I handle these things for a living, and I have certainly seen both sides of the coin. (Pardon the pun). But it frosts my petunias that people seem to think that the government or nursing home is "taking their money". Hey, you feel that strongly, take care of Grandma at home!! Just saying!

 

[golfgal]

I just want to point out to your friend that the "government" wouldn't be "taking" her savings. She herself would be spending her savings to pay for the care she needs in a nursing home at this point in her life.

Good point .

 

[auntie]

We had assests taken out of my parents names and put into a living trust with myself and my siblings as beneficiaries of the trust. Mom's house, and business assets. In NY state there was a 3 year "look back" period..but I've heard now it's 5 years. My father was on the "brink" several times of needing nursing home care..but instead we paid out of pocket for live in help. It was actually cheaper than a 40,000 a month nursing home. I'm sure laws vary from state to state, so a good elder care attorney is who you should consult. My brother himself is an attorney..and at the time he said the laws in this area are changing constantly (especially due to an aging population), and we consulted with a colleague of his to be sure to get things right.

My cousin is going through this right now with her husband. Only they are not elderly, but in their early 50's. Her husband was on his way to work a week before Christmas. He sustained a brain inury from a horrific car accident. He was hit broadside by a 23 year old kid driving a 5000 lb. SUV (he was in a small toyota) who just wasn't paying attention and ran a red light. My cousin's husband was in a coma for 5 months. He has been left permanently brain damaged. He likely will not walk, talk, feed himself, or for that matter open his eyes..they had him fitted with special glasses so as to keep his eye lids open).
My cousin and her husband hadn't yet thought of long term care insurance. I can't say I had either, and we're the same age. It was thought the insurance through his job would be sufficient. (he has good coverage working for NYC) All I can say is that everyone should realize that even the best of health insurance doesn't cover you for long term care.
She has met with several elder care attorneys..trying to figure out what's best for them. Her husband was actually set to retire from Corrections this past August, after 20 years on the job. If my cousin decides to keep her husband in a rehabilitative/nursing home, she will pretty much loose everything they have. While Medicaid will pay for his care... She will be limited to some $2700.00 a month in income. She can't live on that. Her taxes in the house alone are over $10,000 a year, and that's not including her mortgage. Any monies over that..will go to Medicaid for his care. She'll wind up loosing the house.

As far as suing the kid that hit him...well, they are doing that. However if they wind up on Medicaid ...anything they see from the law suit will go to the state for her husbands care. Turns out the kids policy is limited to $100,000...a drop in the bucket for what it's going to take to care for 52 year old brain damaged man for the remainder of his life. It's very sad. She's caught between a rock and a hard place.
Plan is at this point..she's taking him home, and with the help of family and friends will hopefully be able to care for him there. This way she can collect his pension and file for disability, and keep their assets, and whatever they manage to get in a law suit. It's not going to be easy.
She doesn't feel as if she has a choice. I'm not sure how much long term care insurance covers you in this type of situation, but I plan to find out for ourselves.
It sure isn't the way they envisioned their early retirement.

 

[tvguy]

If you have money, a good option is a combo life insurance/nursing home policy. A good policy will pay for 5 years care....the average stay in a nursing home is 18 months, so for most folks this is more than enough coverage. Premium is $75,000. If you never use the nursing home care, your heirs get the $75,000 as a life insurance payment. If you use some nursing care, the life insurance is reduced by $1 for every dollar you spend up to $75,000.

If you are on the other extreme financially, programs vary from state to state.
My wife was involved in her Grandparents financial move to state paid care in Illinois. Their only income was Social Security, and they were forced to sell their house, but they lived in a small town, and the appraised value was only $12,000 (it would have been worth $200,000 her in California!). After prepaying their funerals, that left $5,000, which is the most you can have in the bank under Illiinois law.

 

[golfgal]

If you have money, a good option is a combo life insurance/nursing home policy. A good policy will pay for 5 years care....the average stay in a nursing home is 18 months, so for most folks this is more than enough coverage. Premium is $75,000. If you never use the nursing home care, your heirs get the $75,000 as a life insurance payment. If you use some nursing care, the life insurance is reduced by $1 for every dollar you spend up to $75,000.

If you are on the other extreme financially, programs vary from state to state.
My wife was involved in her Grandparents financial move to state paid care in Illinois. Their only income was Social Security, and they were forced to sell their house, but they lived in a small town, and the appraised value was only $12,000 (it would have been worth $200,000 her in California!). After prepaying their funerals, that left $5,000, which is the most you can have in the bank under Illiinois law.

While these policies sound good the reality is they really are not. You are WAY better off getting Long Term Care insurance then any combo product. If you are not insurable, an annuity can be used to pay for long term care expenses without tax consequences. If you are in a partnership state then and you have a long term care policy you can protect assets up to what was spent on your long term care-which includes in home care which is what most people use anyway. If you spend $300,000 on that care you can protect that in assets even if you have to go on Medicaid to pay for your care after your long term care runs out.