Medicaid Mess

Every so often, I come across a situation that illustrates so clearly the dangers of going it alone or getting bad advice when dealing with the common issues and dilemmas that are aging in America.  I received a call this week from a son in Mississippi.  Mom and Dad, no longer able to live at home alone, moved in with Son.  They owned their home in New Jersey which they transferred to Son. 

Dad’s health deteriorated to the point where he needed nursing home care.  The couple then spent down their assets and applied for nursing home care for Dad.  Meanwhile Son placed the New Jersey home up for sale.

Much to their surprise, the family was informed that the state Medicaid office denied Dad’s application.  Why? Because the transfer of the home to Son caused a Medicaid ineligibility period.  Dad cannot receive Medicaid for 4 and 1/2 years.  In other words, Son must give the money back to Mom and Dad and they must spend it down before Dad will receive Medicaid.

Son said that he was prepared to pay for Dad’s care.  I advised him to seek the advice of an elder law attorney in his state familiar with the Medicaid laws there before he does that.  It may make more sense for Mom to take some of the money and buy a new home which would be exempt from Medicaid.  There are other strategies that may be beneficial as well and should be explored in greater detail.

The lesson to be learned is to consult with a professional before making any decisions.  There is a maze of laws and services in this country that affect seniors.  It is easy to get tripped up by them and the cost to your family could be enormous.