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Ten tips

Help an aging parent qualify for Medicaid

By LAURA T. COFFEY
Published April 10, 2005

Do you have an aging parent who requires constant care because of a physical or mental condition? If your mom or dad lives in a nursing home or assisted-living facility for a year or more, his or her financial resources most likely will be exhausted or "spent down." Your parent then will be eligible for Medicaid, a joint federal-state government program that provides health care to millions of poor and disabled people.

1. BRACE YOURSELF FOR A BARRAGE OF PAPERWORK. There's no time like now to start organizing your parents' bank statements and other financial records. You'll have to be able to document income and assets for at least the past three years. The objective will be to prove to the government that your parent is, for all intents and purposes, impoverished.

2. RECOGNIZE THE LIMITS. To be eligible for Medicaid, nursing home patients must show no more than $5,000 in countable assets if their monthly income is less than $679, or $2,000 in assets if their monthly income exceeds $679. In 2005, their monthly income cap is $1,737.

3. KNOW WHAT YOUR OTHER PARENT CAN KEEP. If one of your parents moves into a nursing home and the other parent continues to live at home, that parent can keep the family home and car as well as $95,100 in assets. That parent also can have monthly income ranging from $1,561.25 to $2,377.50. Assets and income beyond those limits usually must be devoted to the costs of nursing home care.

4. DO AWAY WITH DEBTS. Be sure to help your parents pay off bills and debts before they apply for Medicaid. Such obligations are not factored into the government's formula for determining eligibility.

5. UNDERSTAND THE SYSTEM. Your parents will stand a much better chance of getting into the nursing home they, and you, prefer if they go in as private-pay patients as opposed to Medicaid patients. Many homes limit the number of Medicaid beds available, and they may want to see that you can pay for care on your own for several months or more.

6. KNOW YOUR PARENTS' RIGHTS. It's illegal for a nursing home to discriminate against Medicaid patients, so your parent can't legally be evicted after Medicaid goes into effect. Your parent could lose his or her private room at that time, however.

7. HIRE AN EXPERT. If you hire a lawyer, choose one who specializes in geriatrics. An elder-care lawyer can explain whether it makes sense to sell your parents' home or apply for a reverse mortgage to pay for care, as well as how to handle individual retirement accounts.

8. KNOW THE RULES ABOUT GIFTS. In most cases, the government cannot tap money your parents gave away at least three years before moving into a nursing home, or five years if your parents established any trusts.

9. LOOK INTO IRREVOCABLE BURIAL FUNDS. Money in such funds is exempt from the test for Medicaid eligibility. Your bank or an area funeral home can provide you with details.

10. HELP IS OUT THERE. The Eldercare Locator can connect you with a local agency on aging, which can give you the names and locations of nursing homes and help you determine your parents' eligibility for Medicaid. Call toll-free 1-800-677-1116.

Sources: Kiplinger's Personal Finance magazine (www.kiplinger.com) Gregory G. Gay, a lawyer who specializes in elder law in Pasco, Hernando and Citrus counties; "Consumer Reports Complete Guide to Health Services for Seniors" by Trudy Lieberman and the editors of Consumer Reports (To order the book by phone, call toll-free 1-800-500-9760).

[Last modified April 10, 2005, 00:39:14]