I am doing the numbers and see no downside. Our mother is getting ready to enter an assisted living facility, she has (had) $150,000 in a bank account. $42,000 has already been gifted away. If we gift away the balance before we make a Medicaid claim, then acknowledge that the entire $150,000 was gifted withing the 5 year look back period, the will take the $150,000 and divide that by the Medicaid divisor for our state ($8,084 per month) to get the number of months that she would be excluded from receiving Medicaid benefits (about 19 months). So for 19 months, we have to pay for her assisted living cost. Let's assume that it does cost $8,000 per month. We pay 19 months at $8,000, less the $2,200 per month that she gets from her pension and SS, that comes to $110,200. So at the end of 19 months we are left with $39,800 that we wouldn't have had if we didn't drain the account. Am I missing something here or is this the way to go?
She is in an assisted living facility now that we like but since her stroke she has lost some abilities and we are unsure if she will be able to continue in the AL facility where she currently resides. We will see.
Vikki's point on the copay is super important - the minimum 20% shared costs to pay for Medicare adds up.
Mom has funds. Take her & her purse to see elder law attorney.
Transfer penalty formula is based on skilled nursing reinbursement in a NH.
AL coverage - if your state even does this - is a medicaid waiver program. It is diversionary funding. It is not dedicated medicaid funding as LTC in a NH (skilled nursing services would be). most states Medicaid do not pay AL. For those that do, the program could change and no more $ - this is happening right now with PACE - or it can limit funding to certain eligible groups (like dialysis or brittle diabetics get priority) so your mom will never be eligible.
Another thing to consider is that the vendors who participate in waivers can limit their participation. This is why you often read, the AL took mom but she had to private pay for 2 /3 years before eligible for the medicaid waiver. For the facility, having 5 beds waiver available is a ok risk financially as many on the list are going to not ever need the bed as they will die or transition to needing a NH. Comprende?
What will be likely is that if mom gifts 150k, family will need to private pay for her AL costs for however long she is good for AL. Whether 6 mos or 6 years. There will always be someone else more eligiblity priority than her. Then when she needs a higher level of care in a NH, she applies for Medicaid. Now although she now qualifies for medicaid as she has met the " need" for skilled nursing care and is now impoverished so "at need" financially due to the 150large in gifting, she will be ineligible for medicaid to pay. & for 19 months you or someone will need to private pay the $ 8,084 a month or whatever it has risen to in 2019, 2022. ..transfer penalty starts from the date of the NH Medicaid application.
Mom has 100large, perhaps rather than trying to game the system instead be glad that this enables you all to have choice as to where she lives. The documentation required for Medicaid is basically an all access pass to their lives & finances. And with this all access pass you don't get the cool lanyard to wear backstage or the band tour T shirt.
Perhaps I'm misunderstanding your plans, but I thought the look back period extended to the time of gifting, which would be, say in 2015, and then would run forward for another 5 years rather than 19 months. I'm not sure I understand what the 19 months represents or what its significance is.
Iggy, are you out here - this is your area of expertise!