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AFTER SPENDING DOWN: WHAT YOU STILL HAVE TO DO WHEN YOUR SPOUSE -- MOM -- GRANDPA - AUNT SADIE (ETC.) IS IN A NURSING HOME AND HAS APPLIED FOR MEDICAID IN CONNECTICUT (revised 7-19-22) DISCLAIMER
It's not enough to "spend down" to the right level of
assets, submit the application no more than three months later, and
respond promptly to requests for information by the Department of
Social Services. Even when you think your loved one is eligible
for Title 19, if (s)he is a nursing home resident (s)he still has
certain obligations, and if you are "in
charge" of his or her assets, the nursing home feels, rightly or
wrongly, that you have certain obligations too.
Chief among these is the obligation to pay "APPLIED INCOME" to the
nursing home during every single month that you expect will be covered
by Medicaid.
What is "applied income"? It is the amount the applicant must "contribute to the cost of care," a/k/a the co-pay. Basically, this is the amount that the State will not pay the nursing home, so the nursing home will look to the resident's income to make up the difference. Suppose the nursing home and the State have agreed that the nursing home will get $7,000 for every month care is provided to a resident receiving Medicaid. If the resident's "applied income" is $1,000, the State pays $6,000 and the resident is supposed to pay $1,000. "$7,000?!" you say. Well, yes -- the rate set by the State is usually much less than the private rate. You can see why the nursing home is upset if the $1,000 is not received. It would be nice if the State or the Nursing Home would just tell you from Day One the amount that you have to pay. But you are not always told (or if you were told, it may be in the pile of papers you never read because you were looking for a bank statement from four years ago.) Even if you aren't told, you must be sure that this is paid, or there can be big problems! Effective October 1, 2013, once the nusing home or state does tell you the amount, if you choose not to pay it, the nursing home can sue you after 90 days.. How to compute applied income? For someone who is single, it's pretty straightforward. You start with the resident's GROSS INCOME, BEFORE DEDUCTIONS. You subtract the following:
Imagine a single person, with $2,000 of income, Medicare Part B premium of $170.10 (some premiums are higher), and a supplemental premium of $300 per month. The Applied Income would look like this: $2,000.00
- 170.10 - 300.00 - 75.00 $1,454.90 = applied income! Suppose you forget to do this for 12 months. That's $17,458.80 that someone will owe the nursing home! (Although sometimes the State will let a Medicaid beneficiary pay off an old nursing home debt out of income over time, that may not apply when the debt is because you failed to pay this "applied income.") Why can't they tell you this right away? Sorry -- you may not get this number spelled out for you until the State grants the Medicaid application and sends out an official notice that says "you must pay" and lists this figure for every month of eligibility. While the nursing home can't use a new law to sue you if you don't pay until 90 days after it has given you a notice with the amount of applied income, it can still sue you using other theories, such as breaking the terms of the admissions agreemet you might have signed. Is this too hard? The nursing home may be particularly interested in "making it easy for you" by suggesting that the Social Security checks go directly to the nursing home. In many cases, the nursing home may go behind your back and get the resident to sign something to make this even "easier." There are downsides to this, however: (1) If the resident moves, it may be hard to retrieve the Social Security. (2) There is an old saying that "he who pays the piper, calls the tune." (3) What about that spousal allowance? Are they really going to cut a check to the spouse? or make sure the computation is correct? You will also have to keep the non-exempt assets down to $1,600 (don't forget cashing in the insurance -- you could also borrow it out and spend the proceeds -- and if the person is single and isn't returning home that will include putting the house on the market -- in CT it is exempt while listed for sale at a reasonable price); if there is a spouse, get ssets into the spouse's name; report any changes in assets or income within ten days; and fill out redetermination forms. (Don't freak out if income is over $1600 -- income doesn't count as an "asset" in the month of receipt, so if it's $2,000 and it goes into the account and at month's end the balance is still $3,600, you are OK, but point this out if questioned.) But paying the applied income is the most easily overlooked -- and the one that is most likely to result in someone being sued for an unpaid bill. And YES -- FAILURE TO PAY APPLIED INCOME IS THE FASTEST WAY TO GET THE FACILITY TO APPOINT A CONSERVATOR AND/OR FOR YOU TO GET SUED BY THE NURSING HOME, no matter how good your intentions. If you still have questions -- consult an elder law attorney! attorneys, caregivers, and others assisting the elderly. This is not legal advice, and establishes no attorney-client relationship. Accuracy and currency are not guaranteed. The law changes often; this may be out of date. Please report changes, errors, and suggestions to Lisa Davis. |