My mother (widowed) has been living in an assisted living facility for apx. 3 1/2 years. She has Long Term Care Insurance which has been paying for that the entire time. Her insurance will be running out around January 2023.
At that time, she will be paying out of pocket for her assisted living expenses. She has enough assets for around 3 years of paying out of pocket.
I am planning ahead for the time for when her money runs out and she applies for Medicaid. My research shows that assets gifted during the 5 year look back could be subject to a payback or a penalty period of ineligibility.
For at least 10 years she has gifted my brother $6,000.00 per year and an additional one-time $10,000.00 gift.
I have been given a one-time $10,000.00 gift.
I have called our state and county Medicaid and aging departments for answers as to what the penalty or payback will be. No one can answer my questions. I was told when the application is made (3 years from now) they will answer. How does a person plan ahead? Help!!
The penalty is measured in time she won’t be eligible for state sponsored care. It is based on a daily rate for her state and how much she gave away during the five years.
Is brother going to take care of her then? Is she likely to pass before then? What if she requires more help than an ALF can manage and she requires a NH? Then her money might not last as long. Or what if her health is great and it is a matter of being broke? Medicaid requires her to be at need physically and financially. Not just financially.
The best insurance or preplanning she can do IMO is to see a certified elder attorney and have him/her go over your moms unique situation to give her a clear understanding of her financial future and what her state rules are. She needs to stop gifting. When she gives money away she is betting she won’t need it for her own care. Being able to pay her own way is a great gift to you and brother.