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Legal Matters: Medicaid often requires a spend-down

It happened to my grandfather, long before I passed my bar exam. My family determined that he could no longer care for himself at home and required nursing home care.

My father applied for Medicaid for my grandfather because without it, my grandfather could not afford the care his failing health required. My grandfather was not alone. The cost for nursing home care in this country is something few seniors can afford.

In 2018, the cost for a semi-private room at a nursing home in the New Haven area was $13,338 a month. The Norwich area didn’t fare much better. Here it was $13,049.

Title 19 (also referred to as Medicaid) is a government program providing funding to cover long term care to those who financially qualify. Because there are asset limits in qualifying for Medicaid, many individuals have to “spend down” thier retirement savings.

With proper planning, there are certain transfers that are considered exempt by Medicaid, and these can be used in the spend-down process.

Upon applying for Medicaid, a case worker is assigned to your case, and he or she is responsible for carefully reviewing all your financial documentation to ensure that within five years of the application only allowable transfers have occurred. Basically the caseworker ensures that no one is trying to pull the wool over the State of Connecticut in order to receive benefits.

It is important to know that the money coming both into and out of the applicant’s accounts is subject to scrutiny.

Medicaid can also cover home care. Take the case of Holly, a client of mine who, due to a horrific car accident, was left both a widow and a paraplegic. Three and a half years after her accident, Holly’s son applied for Medicaid so Holly could continue to receive the 24/7 homecare she requires.

Her son did everything appropriately when it came to spending down and providing documentation to the Department of Social Services. We thought the next time the caseworker contacted us, we would be receiving an approval letter. We had spent lots of time obtaining documentation from Holly’s numerous accounts and we ensured that every large transfer or deposit was accounted for.

We were shocked when the caseworker requested information regarding the funds donated to Holly’s Go Fund Me page.

Apparently, as is the case with many tragic stories today, Holly’s family created a Go Fund Me page to help Holly in her time of need. Holly’s son never mentioned this to us in the application process.

Sure enough, when I searched her name on that trusty search engine that starts with a capital G, Holly’s Go Fund Me page was live and showed that the family had raised nearly $30,000 for Holly.

Now this story could have ended a very different way, but Holly’s son happened to be extremely detail oriented and organized and was able to provide an accounting of where the money was spent. The case worker was satisfied, and Holly was deemed eligible for Medicaid.

The moral of this story is that Department of Social Services will find out if you are hiding something about your assets and income. In Holly’s case, it was merely that her son had spent the raised money appropriately and hadn’t thought twice about it when he failed to mention it to us. Unfortunately, though, there are those out there looking to scam the government. Because of this, DSS will do a very thorough evaluation to ensure that if there were transfers, the transfers were exempt.

In a perfect world, everyone would be as detailed and organized as Holly’s son to make the Medicaid application process go very smoothly, but in reality most people don’t think about the Medicaid application process until a crisis hits.

If transfers appear suspicious, Medicaid benefits may be denied or months of ineligibility may be imposed. Because of the complexity of Medicaid rules, you should carefully evaluate your particular situation and consult an elder law attorney prior to taking any action.

Christina M. Accumanno, Esq., of Old Saybrook is an attorney with Brown Paindiris & Scott, LLP. Nothing in this article should be construed as legal advice.

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