I just hungup from a lady that worked with the nursing home in submitting an applicationfor her mom. Mom had no assets otherthan a house, which normally is a non-countable asset. The nursing home helped her apply forMedicaid thinking everything was fine. Five months later (yes, five months even though the case is supposed tobe processed in 45 days) the case worker comes back with a denial.
The reasonfor the denial was that the house was in a revocable living trust. The nursing home missed this and it took thecaseworker apparently 5 months to figure this out. Why does that make a difference? The Department of Human Services (the State) allowsa person to keep their house for two reasons. The first reason is if the person gets better, they will have a place togo to from the facility. The secondreason (and I think the main reason) is that the house is a “pot” of money thatthe state can go after when the person passes away. However, the only way the State can get theirhands on the house is if the house goes through probate. If the house is in a revocable trust, thenthe house doesn’t go through probate and the State cannot gettheir money. Therefore, a house in arevocable trust is a COUNTABLE resource and will cause a person to bedisqualified. It’s for this reason thatI think the State is not so concerned about the applicant having a place to goback to but a pot of money to go after.
Please don’ttake my discussion above as “anti-Trust”. I’m not. Trust’s are very goodfor what they do: avoid probate. Arevocable trust though does not help with Medicaid and as shown above, can hurtyou with Medicaid. The fix is easy but youhave to know something needs to be fixed!
So, myadvice to these people (and the nursing home) was not what they really wantedto hear. She was disqualified for thosefive months and will owe the nursing home for that time. The patient doesn’t have any money so thehouse will have to be sold to reimburse the facility.
This bringsup two major issues. First, why did theState take five months to read a deed and see that the house was in atrust? I hear from people all the time “Can’tI just go down to the DHS office and let them help me do my application?” My answer typically is “Do you want the IRSto help you fill out your tax return?” The answer is a resounding “NO”. They do not have your best interest at heart. They work for the state. Granted, there are a few caseworkers that Ihave worked with that I think do look out for the applicant and will helpthem. However, those are very few. Most of them are bureaucrats that apparentlysee it as their job to deny you the benefits to which you are entitled. Even what appears to be a simple applicationcan cause significant problems.
The secondissue this brings up is the fact that you need someone with a tremendousworking knowledge of the DHS rules and how they function. There are a number of rules that, when read initially,seem to be somewhat clear but the State functions very differently than theyare written. Also, Medicaid is a Federallaw. The State should follow Federallaw, but there certain times that they do not. A qualified person who understands both State Medicaid policy andpractice but then also Federal law should be the person completing yourMedicaid application. A person with thisknowledge can recognize these intricate issues that may cost you a significantsum of money.
If you havequestions, do not hesitate to contact our office at any time and speak to anyof our attorneys.
Todd Whatley, CELA*
Certified Elder Law Attorney
LL.M. Elder Law