This is a common issue that comes up a lot from our clients. After reviewing the financial statements of the individual applying for Medicaid we find that there are many checks written to family members [particularly the children that have been helping with Mom or Dad] and after discussing the way Medicaid will deal with it, families repeatedly said “I wish we would have known earlier that this would cause a problem with Medicaid”. So, take note, this is us telling you now.
You're asking yourself right now...of course I help my Mom pay her bills and shop for her, who wouldn't right?
Right, but here's where it triggers an issue with Medicaid.
Many times, when an elderly person can no longer pay their bills or go shopping due to dementia issues or just due to not being able to get out as much as they used to the children start “helping” pay the bills by just picking things up for the parent at the store, picking up the medications at the pharmacy, or just taking over the online payment and putting it on the child’s account. Then to reimburse their children Mom or Dad will write a check to them or to "cash'. Seems harmless enough, I know but therein lies the problem.
Medicaid will scrutinize every financial transaction the applicant has made over the past 5 years to determine if Medicaid feels that the applicant has been giving away money to help qualify for benefits. When they see repeated checks to a family member or to "cash" Medicaid will automatically assume that these were "gifts" and it will cause an issue with the eligibility of the applicant. We have had a lot of cases where Medicaid has attempted to impose a penalty period [a period of time where the applicant is not eligible for benefits and must pay the nursing care costs from their own funds until the penalty period is over] which can cause significant financial harm to a family.
Therefore, to eliminate this possibility be sure that all payments for Mom or Dad's care, groceries, medication, bills, etc. all come from their account. This is very easy to do in today's world especially with the use of debit cards and online payments.
So, going forward you know what to do, right? But what about any checks that you may have form the past that you've already done this with? Well, the best that we can tell you is to get a copy of the check and hopefully a receipt for the items purchased and match them together.
Ok, you can all consider yourself warned now! If you have questions, please feel free to contact us and we can assist you with this or any other situation regarding Medicaid Planning or Elder Law