“But We Did Exactly What the Medicaid Caseworker Said”

So many ways to get tripped up by the Medicaid system.  Here’s yet another one.  John was agent under power of attorney for his mom who was in a nursing facility.  Over the past 3 years he had spent Mom’s money down for her care and then applied for Medicaid.  He met with the caseworker, muddled through the process of providing all the documentation necessary and answering all the follow up inquiries over the next 6 months and finally received approval.  All sounds good.  What John did – or didn’t do – with Mom’s income, however, is where he ran into a real problem.

 Medicaid rules require that the Medicaid recipient give his/her income to the nursing facility and Medicaid will then pay the rest up to the Medicaid reimbursement rate, that rate at which the State pays the nursing home.  If I apply for Medicaid in January but don’t receive  approval until July, I must give the nursing home my income each and every month starting in January.  John didn’t do that.  But it’s his reason why that is a lesson in why you don’t want to do it yourself.

 Mom was living in an apartment, paying rent.  When John met with the Medicaid caseworker, he says she suggested that he keep paying the rent on the apartment in case Mom wasn’t accepted on Medicaid and needed to go back home.  John understood that to mean that he should use Mom’s Social Security income to pay the rent, which is what he did.  Of course, he then didn’t have that income to give to the nursing home.  So when he received word of Medicaid’s approval he thought it was smooth sailing.  Except that Mom now owed the nursing home close to $15,000, her Social Security income for the past 6 months.

 He tried to explain to the nursing home that he followed exactly what Medicaid told him to do but the facility is demanding payment and is ready to file suit against his Mom and possibly John as the agent under the power of attorney.   His mistake is in relying on the state employee to guide him.  The employee either flat out gave him incorrect information or, in trying to be helpful and offering him advice outside the scope of her job, didn’t make it crystal clear.  In other words, while it might be a good idea to keep the apartment for a few months, the caseworker should have made it clear that payment of the rent cannot come from Mom’s income which absolutely had to go to the nursing home.  Either way, he took some bad advice and ended up in a whole lot of hot water that could have easily been avoided if he had just sought out the proper guidance.