Photo by Dr.Kanapon Phumratprapin on Unsplash

Question:

Can a nursing home bill a resident who is a prospective long-term care Medicaid applicant a sufficient amount (around $5,000) to reduce total cash resources to less than $2,000? The charge would be made before the first of the month (May) to permit an application to be filed on May 1st. This charge would be in addition to the regular monthly payment to the nursing home in April.

Response:

Yes and no. This would work as a spend down, but Medicaid eligibility would not start on May 1st. Instead, it would begin on the date when the services for the $5,000 payment ran out. For instance, if the facility charged $250 a day, the $5,000 would cover 20 days ($5,000 divided by $250 = 20) and the Medicaid eligibility would begin on May 21st.

This may be fine, but there may be better ways to spend down the funds. The $5,000 can be spent on anything for the nursing home resident’s benefit, whether clothing, entertainment, equipment, food or special therapy, not necessarily to pay the nursing home. However, timing can get complicated. The nursing home resident will become eligible for Medicaid on the date their resources fall below $2,000 and will have to pay privately for their care until that date. So, if you come up with a plan to spend the $5,000 for the nursing home resident’s benefit, but it takes you until May 7th to implement the plan, you’ll have to set aside enough funds to pay the facility for seven days of care, $1,750 in our example.

Since the timing of the purchases often can be difficult to pin down, calibrating the spending and payments to the nursing home can be bit difficult. The best approach in our experience is to make some outside expenditures on the nursing home resident’s behalf but not to attempt to use the last dollar. For example, if you could identify $2,500 of spending that would enhance their life, that would give you 10 days to implement the purchases and leave sufficient funds to pay the nursing home for 10 days in our example

Related Articles

How to Spend Down for Medicaid Eligibility How Can I Protect IRA from Medicaid Spend Down if I Go to a Nursing Home? Using Immediate Annuities to Protect the Spouse of a Nursing Home Resident