When Should You Help Your Parents Apply for Medicaid?

Medicaid Planning Birmingham, AL: Medicaid and Seniors
Medicaid Planning Birmingham, AL: Medicaid and Seniors

Even with the best intentions, your parents could end up running out of money when paying for long-term care. Alzheimer’s disease is one of the many reasons that seniors end up bankrupt. The cost of care is far more than families may realize, and the disease isn’t quick. Some older adults live with Alzheimer’s for far more than the normal 7 to 10 years. 
 
In Alabama, the average cost of a private room in a nursing home is just over $6,900. If a family opts to hire caregivers, the monthly cost is around $3,120 per month for 40 hours a week. Alzheimer’s can cause wandering, which means that around-the-clock care is needed. That increases the cost to $13,104 per month. It’s not surprising that Alzheimer’s often leads to bankruptcy. At that point, Medicaid is the only way to ensure long-term care continues. 
 
Applying for Medicaid isn’t an easy process. There are a lot of little rules that your family has to follow or it can lead to a denial. Most families need an elder law expert’s help to understand the process and complete the application at the right time. 
 
Rules That Can Be Difficult to Understand 
 
To qualify for Medicaid, your parent must be down to the last of his or her assets. The basic rule is that assets like bank accounts, CDs, and stocks must be down to no more than $2,000 on the first of the month. 
 
Your parent cannot get down to $2,000 in a hurry by gifting money to family members. For example, your mom has $60,000 in her savings, so she gives you $50,000 to reach the $2,000 limit faster. The look-back is designed to catch actions like that. 
 
The look-back period starts the day you file a Medicaid application. The agency will look back at your mom or dad’s past five years of financial records to see if any financial gifts were made. 
 
If your mom sold her house to you for $200,000, but it was actually worth $400,000, that counts as a $200,000 gift. That gift is divided by the average monthly cost of nursing home care to determine how many months of Medicaid your mom is ineligible to receive. If the average cost is $4,000 per month, she’d be ineligible for another 50 months. 
 
Another issue is the sale of assets like cars and other personal items. It’s important to have clear sales records. Even if you sell a car for its Blue Book value, it will be scrutinized to make sure your mom or her agent didn’t charge too little to quickly lower assets. 
 
Why It’s Best to Hire an Expert 
 
Because your mom needs the money, you don’t want to make a mistake. Hardship exceptions might save her from having her application denied, but it’s not a guarantee that she’ll be granted the exception. The best way to ensure that her application goes through smoothly is by talking to an attorney who specializes in Medicaid applications. 
 
Talk to an elder law attorney about your mom’s financial standing and the eventual need for Medicaid. You’ll have an expert’s help in applying at the right time and being fully prepared for the five-year look-back process.

If you or a loved need assistance with Medicaid Planning in Birmingham, AL contact Nolan Elder Law & Estate Planning today. (205) 390-0101