Will Medicaid exempt long standing support payments in their look-back period?

A fellow caregiver asked...

Will Medicaid exempt long standing support payments to a disabled adult child from look-back rules and nursing home coverage eligibility? My mother, currently in a nursing home, will need to apply for Medicaid (Massachusetts Health) soon. For decades, she has been depositing several hundred dollars a month to a bank account for her mentally disabled adult son who lives out of state. He is homeless, whereabouts unknown, seems to move frequently to different states, and depends on her support for food and necessary living expenses. He lacks the capacity and will to apply for SSI or other government programs. Functionally, he is her dependent, but she has not claimed him on her tax returns since he left home. Will Medicaid make it impossible for her to continue this modest support of her son? It would be a catastrophe for him. Given that this is very long-standing necessary support of a disabled child, could Medicaid exempt the amount she leaves for him in a bank account each month without penalty or delay of coverage for her nursing home care?

Expert Answer

There are actually two different parts to the relationship between your mother's support for her son and her application for Medicaid coverage of nursing home care.

The first part has to do with whether her previous payments to her son would in any way affect her eligibility for Medicaid nursing home coverage. When someone applies for Medicaid nursing home coverage, they must have income and assets below certain limits set by the state's Medicaid program. In looking at an applicant's assets, Medicaid can examine any financial transactions over the previous five years to see if the applicant has given away assets in order to qualify for Medicaid. If Medicaid finds that the applicant has given away assets for the purpose of qualifying for Medicaid, it can delay Medicaid eligibility. In your mother's case, though, the money she's given to her son over the past five years was to help support him and was not intended to help her qualify for Medicaid. In those circumstances, Medicaid would not consider that money as part of your mother's current assets, and so it would not delay or otherwise affect her Medicaid eligibility.

Continuing to pay her son after your mother applies for Medicaid nursing home coverage, however, is another matter. Once someone qualifies for Medicaid nursing home coverage, almost all income the person receives must be paid to the nursing home. Out of any monthly income, the person in the nursing home may only keep a very small amount to pay for personal care needs. There is no provision in the Medicaid nursing home rules to allow someone to set aside their income to pay for someone else's care (except for a spouse).

However, there is still one possible way for your mother to continue giving her son money after she qualifies for Medicaid nursing home coverage. That is through a trust. There are special Medicaid trusts that allow someone to channel funds to a disabled adult child while still remaining eligible for Medicaid nursing home coverage. This kind of trust would require proof of her son's disability, which from the sound of things may be difficult to establish. To find out more about the possibility of setting up such a trust, you will need to consult with a lawyer who specializes in Medicaid trusts. To find a lawyer with this kind of experience, you can contact your local county bar association and ask for a referral to lawyers who specialize in this type of work.