Medicaid Spend Down – More Involved Than First Meets the Eye – Part 1

In this week’s post I return to Medicaid and a call we received a few weeks ago.  Mary called concerning her mother who is in a nursing facility.  Her long term care policy will be exhausted in a couple of months and Mary said she has no other assets.  Her reason for calling was to explore getting Mom on Medicaid.

As with any potential new matter that comes to  our office, in order to evaluate whether Medicaid is appropriate or even possible, we need answers to many questions that callers haven’t even considered.  We started to ask those questions and from the answers we received, I quickly realized this case was more complicated than initially presented.

For example, we learned that Mom had purchased a home in which her “disabled” son lives, although the son works a job that pays a bit more than minimum wage.  Mom has helped him out by paying much of the housing expenses.  Although Mary said Mom had only a few thousand dollars in the bank, she did mention a life insurance policy.  I learned that it is a whole life policy which has accumulated a cash surrender value of $150,000.  I also learned that Mom has what Mary called a lifetime annuity paying her $1500 per month.

I told Mary I needed to see the annuity contract, the deed to the home, proof of her brother’s disability, the insurance policy and the insurance company’s most recent annual statement showing the death benefit and the cash surrender value before I could evaluate Mom’s Medicaid eligibility.

Once Mary got those documents over to us, I reviewed them and schedul a call.  Next week I’ll tell you what those documents revealed.