Medicaid ($500 month gift)

[marijane]

What is the name of your state (only U.S. law)? PA

Family members have been caring for my grandfather for the past two years. My grandfather has also paid for private duty nursing care to supplement the family care. My grandfather recently expressed a desire to pay the family members for their time. My grandfather also wants to start taking advantage of the $500 per month gift he is allowed under Medicaid. Can he do both? I will assume if he pays family members for care, they would claim this as earned income to distinguish it from the gift money. Is that right?

[anteater]

I've never heard of this "$500 per month gift... allowed under Medicaid." Is there a source for that?

[commentator]

Me neither!

It may be a PA thing, but the ONLY person you need to be asking this question to is your grandfather's SSI case worker. If he has $500 available a month to gift people with, and wants to use this money to pay his family members to take care of him, I sure hope the SSI/Medicaid people know about this and have approved this action. Else you may be looking at "elder abuse" and Medicaid fraud.

[marijane]

Actually my grandfather is not receiving medicaid at this time so there is no abuse of anything. I am looking into the future. According to Medicaid laws, the look back is 5 years when applying for medicaid benefits to cover nursing home costs after an individual has spent down his/her own income. When Medicaid reviews eligibility I was informed by a caseworker at the Department of Welfare that my grandfather's income/assets will be reviewed back to five years and anything gifted will make him ineligible for medicaid for the time period equal to the amount of the gift. For example, if my grandfather gives away $2000.00 within the five year period, he will be ineligible for medicaid coverage of nursing home expenses for the time period that equals $2000.00 which for purposes of discussion is maybe about 7 - 10 days. The exception to this is that my grandfather is allowed to gift $500 of his income every month and this amount will not be considered in the five year look back.

Again, my grandfather is not receiving medicaid. He is at home paying for nursing care out of his pocket. I am trying to anticipate the future if and when he would go into a nursing home. My grandfather wants to pay certain family members to provide care for him in addition to what he is already receiving because it would be less expensive than to incur more hours through the private duty nursing agency. However, I do not want him to jeopardize his standing with Medicaid if and when he goes into a nursing home.

[Kiawah]

I'd get that $500 per month gift exception in writing. I've been thru the process in PA with my MIL a couple years ago. I don't recall seeing/reading/discussing anything like that in any of the documentation passed back and forth. I had years of bank documents that I had to provide with backup detail information, even challenging a $40ish expenditure.....so I would think they'd be all over a monthly outlay like that.

Luckily our process went extremely smooth because I had been doing POA for years and had everything scanned/filed/archived and could print out copies of anything asked for....but I could see how that application process could be an absolute nightmare for someone just stepping into the middle of it.

Get the details of that $500 gift exception in writing (if it really exists).

[anteater]

Originally Posted by Kiawah

I'd get that $500 per month gift exception in writing.

Me too.

The thing that struck me as very odd was the "of his income" part of "The exception to this is that my grandfather is allowed to gift $500 of his income every month and this amount will not be considered in the five year look back."

As opposed to $500 already sitting in the checking account or CD or brokerage account? A gift is a gift.

[commentator]

This is the sort of "what-iffy" question that is impossible to answer. If your grandfather dies without ever having to go into long term care, you've wasted LOTS of mental energy on something that never happened.

If your grandfather has a crisis health event and has to be hospitalized, and then transferred to a nursing facility and stays more than his Medicare coverage will permit without being discharged or dying; and a medical decision is made that he is going to require this type of care long term, THEN at this point, they will begin the steps to qualify him for Medicaid. This pulls in all his assets. This process requires a detailed comprehensive look at how his entire income, net worth, properties, holdings, personal possessions, etc have been dealt with in the last five years (or the appropriate look back period) from that point. This could happen three months from tomorrow. This could happen five or six years from now. This could NEVER happen.

Right now, if someone else has been handling his affairs, they really should be keeping detailed records. That is all the Medicaid prep that needs to be done. They need to be keeping receipts and documenting exactly how much is being spent on what. Very true, if he has given any big gifts to his family members during the five years previous to the first attempted certification, this will delay his approval. If the care is on-going, and Medicare has run out, the family members would be expected to pay up until they had met the amount of money it appears they have been gifted or taken from the estate. There is usually a slight "discounting" of this gifted amount, it is not penny for penny reimbursement, which is where the $500 probably comes up in PA. But this does not mean you can give anyone $500 a month trouble free.

It is possible that he could legitimately be paying someone in the family $500 a month at this time to care for him. But if there is other "care" money going out, such as payments for a nursing service, meal service, cleaning service, they may even question these payments. The situation is so vague and "what-iffy" that you cannot make any assumptions of how the caseworker will look at this if and when. The laws may have changed by then anyway.

But as to the possiblity that this thing in PA medicaid statues you have found means that Grandpa can benevolently be patting a grandchild on the head and saying, "Here, son, here's $500 as a gift this month, next month you'll get another one," I'd definitely get that in writing from somebody before I quit worrying about it, if I were inclined to worry.