How a Call From Mary’s Attorney Saved Her $90,000

One of the common themes I repeat often, when it comes to Medicaid, is that timing is everything.   A recent call we received from Mary’s personal injury attorney, Bill, illustrates the point.  Mary’s husband, John has dementia and is about to enter a nursing home.  Mary and John don’t have much in the way of assets, about $100,000, but Bill is pursuing a claim on Mary’s behalf for injuries she received in a car accident.  Bill, recognizing the potential Medicaid issues, called me to ask if John’s situation impacts Mary’s claim.  I told him he reached out to me at the right time.  Here’s why.

 In the case of a married couple, Medicaid considers the assets of both the healthy and ill spouse in determining eligibility.  The questions then becomes “what point in time do we value their assets?”  That is what is called the “snapshot date”.  Medicaid values the assets as of the first day of the first month of continuous institutionalization.  Bill told me that he was close to settling Mary’s case and asked whether pushing the case to settle would be helpful. 

I explained that if Mary receives the settlement proceeds before John is approved for Medicaid  it would count as part of the spend down and she would only be able to keep, at most, one-half of the money.   We don’t want the case to settle until after John gets Medicaid because at that point there is a “division of assets”.  Mary keeps the $50,000 of assets that they have left after the spend down and whatever other assets she receives after that date.

 Once Bill understood the best sequence of events he recommended that Mary contact us to guide her on how to spend down and to handle the Medicaid application.  And that’s what we did.  In a few months time, John received Medicaid, Mary kept $50,000 of their savings and then Bill settled the case, providing Mary with $150,000 of additional funds to support her, money she especially needs since she most of John’s income must be paid to the nursing home.  So when we talk about timing being everything, in Mary’s case it meant, an extra $90,000 in her pocket.