May 11

Medicaid’s Gift to Children Who Help Parents Postpone Nursing Home Care

In most states, transferring your house to your children (or someone else) may lead to a Medicaid penalty period, which would make you ineligible for Medicaid for a period of time. However, there are circumstances in which transferring a house will not result in a penalty period.  

One of those circumstances is if the Medicaid applicant transfers the house to a “caretaker child.”  This is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s entering a nursing home and who during that period provided care that allowed the applicant to avoid a nursing home stay.  In such cases, the Medicaid applicant may freely transfer a home to the child without triggering a transfer penalty.  Note that the exception applies only to a child, not a grandchild or other relative.

Each state Medicaid agency has its own rules for proof that the child has lived with the parent and provided the necessary level of care, making it doubly important to consult with your elder law attorney before making this (or any other) kind of transfer.

Others to whom a home may be transferred without Medicaid’s usual penalty are:

  • Your spouse
  • A child who is under age 21 or who is blind or disabled
  • Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
  • A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home

For more on Medicaid’s asset transfer rules, click here.

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April 21

Medicaid Applicant Received Proper Notice of Estate Recovery

A Michigan appeals court rules that a Medicaid recipient who was already enrolled in Medicaid received proper notice about the state’s right to estate recovery when the state provided notice in the recipient’s second application.  In re Estate of Keyes (Mich. Ct. App., No. 320420, April 16, 2015).

In 2007, Michigan amended its Medicaid law to include estate recovery, pending approval by the federal government. Esther Keyes entered a nursing home and began receiving Medicaid benefits in 2010. In 2011, the federal government approved the estate recovery plan. In 2012, Ms. Keyes submitted a Medicaid application that included a statement acknowledging that Ms. Keyes’ estate was subject to estate recovery. Ms. Keyes died, and the state sought recovery against her estate.

The estate argued that the state could not recover benefits because state law requires the state to notify a Medicaid recipient about the possibility of estate recovery at the time the recipient enrolls in Medicaid. The trial court ruled that the state did not notify Ms. Keyes at the time of enrollment and granted the estate summary judgment. The state appealed. 

The Michigan Court of Appeals reverses, holding the state properly notified Ms. Keyes that she was subject to estate recovery. According to the court, state law requires notice when the applicant seeks Medicaid benefits, not when the applicant enrolls. The court rules that because Ms. Keyes sought benefits in 2012 after receiving notification of the state’s right to estate recovery, the state provided proper notice.

For the full text of this decision, go to: http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/COA/20150416_C320420_38_320420.OPN.PDF

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March 4

New Jersey Settles Federal Lawsuit Involving Veterans Benefits and Medicaid Eligibility

The state of New Jersey has settled a class action lawsuit and agreed not to count veterans pension benefits as income when determining Medicaid eligibility.  Plaintiffs’ counsel has been paid $100,000 in fees.

Alma Galletta filed a class action lawsuit against New Jersey, seeking to enjoin the state from treating Veterans Administration Improved Pension (VAIP) as income for Medicaid eligibility purposes. Ms. Galletta argued that the entire income she received from her VAIP benefit resulted from unusual medical expenses, so it should not count toward her income for Medicaid eligibility purposes.

After a U.S. district court enjoined the state from counting one of the class member’s VAIP as income, the state began settlement negotiations with Ms. Galletta. On February 6, 2015, the court approved a consent order between the parties, in which the state agreed that VAIP will not be included as countable income during the Medicaid eligibility process and a notice will be distributed to caseworkers explaining the ruling. Ms. Galletta also received Medicaid benefits retroactive to her application. In addition, the court approved $100,000 in fees and costs for the plaintiffs’ attorneys.

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December 8

Senior Care Radio podcast – The history of Elder Law, Medicaid eligibility, and Gifting

Certified Elder Law Attorney Harold L. Grodberg, Esq. recently appeared on an episode of the Senior Care Radio podcast, where he discussed the history of Elder Law, Medicaid eligibility, and Gifting – what constitutes a gift and how to make sure you don’t ruin your medicaid options by gifting too much. He also touched on VA Benefits, Aid and Attendance, and Long Term Care and payment alternatives.

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