Medicaid - How would an inheritance affect Medicaid eligibility?
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Question
A brother of mine passed away last August. I just received a call
today from his insurance company in California stating that he had our
elderly mother listed as primary beneficiary of $5000. She is in
a local nursing home, on medicare and Michigan medicaid. She is not
able to communicate, sign, or comprehend anything. I am her daughter
and her attorney in fact under a durable power of attorney. I am
wondering how this inheritance will affect her coverage at the nursing
home as between Medicaid and Medicare. All her costs are currently
paid.
Answer
The receipt of $5,000 will cause your mother to lose Medicaid benefits
until those new funds are "spent down". This could be done by purchasing
or adding to her funeral contract (if she is not already at the limit),
through the purchase of other items of exempt assets, or through paying
for her care for one month and then reapplying. If the spend down
can occur within the month the funds are received or become available,
it is usually possible to avoid going off Medicaid benefits. In most
situations like this, where the amount at issue is relatively small and
where the family acts expeditiously, the caseworker will work with the
family to "keep the case open."
Depending on whether your mother owns an exempt homestead, this could
be important. Michigan's new "estate recovery" does not apply to
people who were receiving Medicaid benefits prior to September 2007.
So going off Medicaid and reapplying could open the door to estate recovery.
You are required to report a change in the assets of the Medicaid beneficiary
within ten days. Accordingly, a plan needs to be formulated quickly,
and the benefits need to be applied for immediately, so as to avoid ineligibility
for any extended period of time.
You should be able to do what you need to do as agent for your mother
under the power of attorney.
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Last Updated: 4-9-08
Send your comments, questions and suggestions to Phil Harter at 161
E Michigan Avenue, Battle Creek, Michigan 49014 or e mail to pharter@calhouncountymi.gov