Adventures in Elder Law – The Medicaid Quagmire

After months of debating the cost and the pros and cons of consulting a lawyer about many issues with my mother that I couldn’t find clear answers to, I got a great-sounding referral from my 90-year old gardening friend, Leo, whose recent wife went through a similar ordeal.  So I headed off early yesterday morning to my first-ever lawyer appointment with a few butterflies in my stomach.

I find it a sad comment on our government that so many of us need lawyers to understand what I believe should be clear, accessible, and user-friendly guidelines to protect ourselves and our loved ones as we age.   And when it comes to Medicaid law, almost every caregiver you ask has a different understanding, plenty of fear about the inscrutable rules, and few resouces for clarification.  After months of stubborn independent research, I realized I was in over my head and admitted failure.  

Once the decision was made to enlist a lawyer, I felt excited, scared, a bit skeptical, and also very relieved to have finally conceeded to “dump” my overwhelming concerns onto the plate of someone who’s up on all the recent legal changes and trained to deal with such issues quickly and efficiently. 

The lawyer seemed friendly enough, brewed us some tea, and was generous with the 30-min. free consultation.  She covered all my questions laid out on the clipboard and resource folders I’d carefully set out, hoping to appear organized and together enough to not scare her off.  She wasn’t daunted by my scrawled list, my lack of exact financial figures, or the skeletons I brought up, including that I recently was horrified to discover a relative’s debt being garnished through Mom’s accout.  

She was quick and clear, jumping up to draw charts and other visuals for me on her large dry-erase board as she gestured grandly.

My mind was eased. 

And then we started talking about Medicare law.

The rest was a greedy caregiver’s dream.  She didn’t blink an eye or wait to gauge my reaction when she told me that we could have my mother set up her remaining money to be gifted to me.  This would incur a Medicaid penalty of several thousand dollars and a long waiting period before she could receive Medicaid assistance. 

As the financial power of attorney, I would pay her rent, from that gift I’d received, just short of the total each month.  (Though this part is still a bit fuzzy to me, what I understand is that this guarantees that Medicare has “evidence” that she’s struggling with her monthly income.)  Once the several-year penalty waiting period is over, Medicaid kicks in, paying the nursing facility less than half of what they would have received private-pay from Mom for her complete monthly care.  The remaining money I’d been gifted could be used as I chose. (Mom’s desires laid out in her will wouldn’t apply yet, and my sister, not power of attorney, would have no say.) 

I found this to be incredibly creepy on many levels.

First, though my husband and I are not well-off, I don’t want Mom’s money if it will deprive the system she’s entering in from caring well for people of all income levels.  If people with funding keep subverting the system like this, what will be left for others?  Not to mention that in order to enter a high-quality nursing facility you need to prove that you have 2-3 years of funds, so it’s already a segregated system, with most low-income people barred from initially entering the best residences.

Mom was a single mother most of her life, after a terrible tragedy with my father when we were young left her high and dry, as he was deeply in debt and hadn’t accrued much of a pension yet.  For the rest of her life she worked full-time as a secretary, in a time when that still wasn’t acceptable for mothers to do.  She became an incredible self-taught financial manager, finding great investments for her small income, until bursting with tears of pride, she bought a house for us.  (It was still really difficult for single women to get a mortgage or other forms of credit even in the late 70’s/early 80’s.)  A Republican would use Mom’s story to say she had pulled herself up by her bootstraps, and a Democrat would say that she climbed up the ladder due to the federal programs that gave her children (us) aid while she scrambled to get things together.  As is often the case, the truth is somewhere in between.

Though Mom was a financial success story, despite the hardships she endured, what about people who don’t have the advance knowledge, resources, or time to get well-versed in the new Medicare rules, and can’t (or don’t) hire a lawyer?  I never would have known about the 5-year look-back period if I weren’t involved in lots of caregiver networking that most people don’t have time for.  I never knew until recently that every check Mom had written to us (or to anyone) as a gift or reimbursement would be subject to scrutiny, no matter what the amount.

When I mentioned that my sister was a single mom who needed the money much more than I, the lawyer said I could set up a college fund for her son, and she and I could split the rest.   She was careful to tell me how much I would probably still receive if I took this path, as if evaluating my financial gain would be the only way I would make this decision.

I’m obvously naive and idealistic in this arena, and definitely uninitiated with lawyers, but I had gone in hoping for clear answers that would not so much give me what the lawyer assumed I wanted, but help clarify what would legally and fairly address Mom’s needs, Medicare and the facility’s needs, and take into consideration everything we could gauge about my mom’s wishes before her dementia set in, as reflected in her will.

As it turns out, I got a lesson in Medicaid loopholes and now feel even more confused about how to proceed morally with Mom’s situation when so many different interests are involved.  I had hoped that the law would address the ethics I didn’t know how to negotiate, but I’m left with the uncomfortable feeling that this is a game of rule-bending for the entitled people who care to play it.


What is your experience with finances and elder care?  How has Medicaid law helped or harmed your particular situation?

This entry was posted in caregiver stress, support, and respite, dementia, family issues, legal issues and tagged , , , , , , , , . Bookmark the permalink.

4 Responses to Adventures in Elder Law – The Medicaid Quagmire

  1. Marty says:

    Good post, Margaret. We went through the same thing, but had both Mom and Dad to think about. The tricks double when you have two. You have to move all the money from one parent to the other, then when the one with the bulk of the money has spent it down to $22K or some such, then the poor one can get on Medicaid, but the State will pay themselves back from the “rich” parent’s leftovers if the one on Medicaid dies first, etc. I’m glad our lawyer didn’t suggest the gifting of my parents money to us. That is indeed creepy and unfair to those who are absolutely penniless.
    May your decisions be good for your mom and guilt-free for you.

    • Hi Marty,

      Thanks for saying hello. Sounds like your experience is similar to my 90 year old friend who just went through Alzheimer’s with his spouse and had to play the spending down game.

      I just checked out your blog through the link you posted, really enjoyed it, and subscribed to your posts.

      Take care,

  2. momsbrain says:

    Very interesting post. I wrote about the Medicaid stuff on my blog. I saw a lawyer for the POA, but not for Mom’s Medicaid application. I had some guidance from a nursing home social worker. I knew about the look-back from my massage therapist, actually. It is interesting how one comes across the information. But I decided early on that whatever money Mom had, it would go to her and not be shielded for me and my siblings; we didn’t really have enough time to shield it anyhow. And I don’t regret that. Interesting that the lawyer immediately directed the conversation that way. You raise a very important question: If people with funding keep subverting the system like this, what will be left for others? And people wonder why these systems are broken…

    • Thanks for commenting! Haven’t done the POA yet for finances, since I’m on all her accounts, making it easy to help pay them, but I need to proceed with that, just so things are in place when they need to be. I want to research if that’s something we can do without a lawyer. Haven’t recovered from my first lawyer visit yet!

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