I have DPOA. If my elder lives for a few more years her assets will be depleted and a Medicaid application is likely going to be required. Will the Medicaid review look at a pretty good credit card limit as an asset and say no to the application? My intent was to ask to bring it down to $2k to be closer to Medicaid requirements, but it will be enough to take care of an emergency in the meantime. Has anyone else done this? Is there a credit limit amount that is considered acceptable?
In recalling the Medicaid application for our LO, there did not seem to be any questions about credit cards. Our LO is on the "Medically Needy" program and is in a NH, so everything beyond a limited stipend of $35 goes to the home as our LO's "cost share." Your situation may be different.
You could try calling the county Medicaid office and asking them. However, please keep in mind that Medicaid occasionally changes how they do business and the answer you get today may not be the situation you encounter in a few years.
A second option is to talk with an elder law attorney who is experienced in Medicaid applications.
One thing you might want to think about is just what is going to happen with CC debt when the day comes that your elder goes into a NH & applies for Medicaid.
Medicaid requires them to do a copay (the SOC - share of cost in Medicaid speak) of all their monthly income less a small personal needs allowance. The PNA varies by state from $ 35 - $105 a mo and is designed to cover monthly barber /beauty salon, toiletries, some clothing replacement. Essentially they will have no-none-nada-zero of $ to ever pay on any existing CC, car note, house costs, etc once in a NH. If mom cannot zero out her CC debt between now & NH entry, she will default on the CC debt as she won't have the $ to pay on it. Often for the elderly with SS as their source of income & limited assets, paying the minimum monthly payment on CC debt that can never be paid off is not the better use of funds in the spend-down.
http://www.nelf.org/find-a-cela
In the real world economy, it would be a debt and liability. That said, in the Medicaid economy, there is a lot of room for inaccuracy and detrimental decisions. My suggestion - do not discuss/provide anything about her credit. Medicaid is unable to process the bundle of information already received. An additional piece of information can reset the whole process. Any new information or questions is a permit for Medicaid to further delay.
Nor is existing debt an "asset" to apply to HUD for housing assistance; they count your income, your dependents, special needs, etc., in figuring what a recipient might get in assistance.
Having an existing debt-load, does not help one get welfare; if one's income + assets are over-limit, there's no assistance.
However, IF one has borrowed money, using credit cards for instance, the IRS considers that debt as "taxable income" to an estate, unless the he is repay it.