Listen to Lawrence…Community Medicaid Process Explained

May 14, 2020

Dear clients and friends,

Here is another one of your questions and my response:

Hello Lawrence-
Thank you for the informative emails. I wanted to inquire…..We are considering returning my 89 year old mother who has dementia to her home in Queens after living in an assisted living community for over 1 year. My mother owns a home in her name that currently has a reverse mortgage lien. Her only source of income is her social security and small pension of approximately $22,000 per year.

We have run out of funds for her very costly care. Is it possible to apply for Community Medicaid? We would like to consult with someone to find out if my mother would qualify for CM and what the process would entail. Can monies contributed to a pooled trust by a Medicaid recipient be retrieved by the estate of the recipient after death?

Assuming your mother needs help with her activities of daily living or is cognitively impaired (which you have indicated), she would receive and greatly benefit from applying for Community Medicaid, which will pay for aides to help take care of her in her home. To be eligible, she will need to have no more than $15,750 in assets and $895 in monthly income.

From the facts, I do not know the amount of her assets. If more than the limit, she will need to transfer the assets out of her name; there will be no look back or penalty for doing this, although that all changes on October 1st when a new 2 1/2 year look back will begin. Although the house is an exempt asset, it should come out of her name because Medicaid can go after it after her death. The problem, as you have stated, is that she has a reverse mortgage which may prevent the transfer of the house.

As to the income, she is over the monthly limit. However, her excess income can be contributed to a Pooled Income Trust maintained by a not for profit. Her excess income will be paid to this trust monthly but mom’s bills will also be paid by this trust monthly, essentially returning all the income to her. If money remains in this trust at the time of her death, it will not be returned; the trust or charity will keep it.

Obviously, this is a very complicated process and takes time to accomplish. We handle this planning and Medicaid application process everyday. We are also the only Elder Law firm that has a Care Manager on staff who will handle all the coordination with the home care provider.

I hope this helps.

Please pass this information to your family and friends and continue to keep your questions coming! If you are thinking about it, others are probably thinking about it too, so my answers will no doubt help you and many others. Let’s stay connected.