For many families, placing a loved one in a nursing home is a traumatic and unwelcomed event. In so many cases, the adult children of elderly parents are signing admission agreements to nursing homes that have a personal guarantee of payment – that if the nursing home doesn’t get paid, the adult child will be personally responsible. But these individuals are told, “Don’t worry, Medicaid will pay once the money runs out.”
Recently, I met a couple who placed their elderly mother in an assisted living facility five years ago. Mom exhausted all of her funds paying the nearly $6,000 monthly bill – well over $200,000 – and the facility told them to apply for Medicaid. Mom’s income was above $2,250 per month, so the facility informed the couple to set up a Qualifying Income Trust (QIT) for Mom’s excess income over $2,250, which would result in Mom being eligible for Medicaid. What the facility didn’t tell the couple, and what the couple didn’t know, was that each month the excess income needed to be transferred to the QIT and then from the QIT to the facility, even before the Medicaid application was approved. In this case, the application was pending with the Medicaid office for four months. Although the couple set up the QIT, because they weren’t actually making the monthly transfers of Mom’s income, she was ineligible for each of those months. By the time the couple was notified that the application was denied and unsuccessfully appealed, eight months had elapsed without Medicaid coverage, and the facility is owed nearly $30,000. And because the adult son signed the personal guarantee all those years ago, the facility will send that bill to him.
This is just one example of how even a simple Medicaid application can go horribly wrong. All parties – the Medicaid applicants, the family members of the applicants, and the facilities – should take great care prior to filing any Medicaid application and consult with an attorney. An Elder Law attorney can provide guidance, protection, and peace of mind so that families can focus on what’s important – their loved one.