Is Grandma responsible for bill if Medicaid waits?
Medicaid can pay benefits back to the first day someone applies, even if the eligibility decision isn't made until later. But Medicaid will grant this retroactive eligibility only if it determines that the applicant was eligible on the application date.
In your grandmother's case, it sounds like Medicaid is still deciding when she will become eligible. If Medicaid decides that your grandmother is not eligible for coverage until after she spends down her assets, she will be personally responsible for the nursing home bills she incurs before Medicaid eligibility begins. (Paying those bills, however, would be part of the Medicaid spend-down.)
The loan to your uncle also complicates things. One of the reasons Medicaid wants to know whether he has or will pay it back is to decide whether it really was a loan (with the intent to have it paid back), or instead was a gift to your uncle. If he hasn't paid any of it back, Medicaid may consider it a gift rather than a loan. This is particularly likely if there is no written document providing specific terms by which your uncle was to repay it. The reason for this is that Medicaid doesn't want to permit people to simply give their assets to their children and then become eligible for Medicaid simply by calling the gifts "loans" which no one intends to have repaid.
If the money given to your uncle is considered a gift, it may further delay your grandmother's Medicaid eligibility (because it was made within 5 years -- Medicaid's "look-back" period -- of your grandmother's application for Medicaid). The length of the eligibility delay depends on the amount of the gift (which is divided by the average cost of nursing home care in the state where your grandmother lives); the larger the gift, the longer the delay.
If Medicaid agrees instead that the money was in fact a loan, that may change how it considers the money. If and when your uncle begins to pay back the money, the amounts he repays will become part of your grandmother's assets. To the extent those amounts push her over Medicaid asset eligibility limits, she will have to spend that money on her care before Medicaid will pay -- just as she now has to do with her current assets.
About the only way Medicaid will allow your grandmother to qualify immediately for coverage despite the money she gave your uncle is if Medicaid considers the money to be a "bad" loan. That means Medicaid would have to be convinced that the money really was a legitimate loan when it was made, with your grandmother expecting to have it paid back, and also believe that your uncle cannot repay it. If Medicaid is convinced that both these things are true, then it could disregard that money entirely when considering your grandmother's eligibility.
