By:  Sarah Stewart Legal Group

In our line of work, we run across a lot of families searching for ways to help fund the care of their elderly loved ones.  Most of these elderly individuals are at a point where they aren’t able to take care of themselves anymore.  Many of the families were lucky, and have a Durable Power of Attorney in place; or weren’t so lucky, and had to file for Guardianship. Now, they need to figure out how to pay for care for the elderly loved one.

In Oklahoma, Medicaid is a government-funded option to help pay for nursing facility care.  To qualify for nursing facility care, an unmarried individual must meet the following criteria:

(1) Income must be less than $2,199 per month. There is an exception to this amount with a certain, special, trust in place, but even then, income cannot exceed $4,400.

(2) Assets must be less than or equal to $2,000.

Assets include all checking accounts, savings accounts, net cash surrender of life insurance policies over $1,500, burial funds over $1,500, value of all but one automobile, stocks, bonds, debts owed to the applicant, annuities, retirement accounts accessible by the applicant, and real estate owned by the applicant.

Home property (the home and property where the home is located) may be excluded from the asset amount if the elderly loved one intends to return to the home within 12 months of receiving care. After the 12 month period, the house must be sold to remain eligible for Medicaid.

If the elderly loved one does not intend to return home, the home will be counted as an asset and will likely need to be sold for the actual value of the home.  Any sales for less than the true value are considered a gift.  The full value of the home will be counted against the elderly loved one.

Any transfers of property that are not purchases for the value of the asset will be considered gifts.  The full value of the asset will be counted against the elderly loved one.  So, this means, don’t go around giving all of the elderly loved one’s stuff to family members.  This is a very bad idea.

Assets can be “spent down” on items that will benefit the applicant. They do not have to go solely to the facility.  For instance, someone with mobility issues may purchase new medical equipment like a cane or wheelchair, or a wheelchair accessible van.  They could even buy a nice, bigger television for their room.  However, these items must be reasonably linked to the applicant’s needs.  So, something like a high-end watch, jewelry, or furs will likely not be acceptable uses of the money.  Items cannot be purchased for the use of family members.

For married couples, the rules change slightly.  The assets will be considered 1/2 the spouse of the elderly loved one’s and 1/2 owned by the elderly loved one.  So, only 1/2 will have to be spent down.  Those spend downs can also benefit the spouse.  And, the rules on the housing exemption change to accommodate the spouse.  Otherwise, the basic principals are the same.

Medicaid is not the ideal way to fund an elderly loved one’s care.   Your options are limited as to where the loved one can live and how the loved one can live.  Though many people believe it is beneficial to rely on Medicaid, the reality is there are far better options for those who have the money to pay for their care.  Medicaid should be a last resort.  But, if you need Medicaid, be sure to understand the eligibility requirements.