Which state Medicare rules would apply?

1 answer | Last updated: Sep 14, 2017
A fellow caregiver asked...

My mother will be 90 years old this December. She is in excellent health, drives and still has no signs of any slowing of her mind. Because of this I am sure that what will probably cause any future problems would be a fall and breaking something. At that point we would probably have rehab, possible short term care facility. She would probably not be able to take care of herself independently anymore. There are just my brother and myself. The only assets she has is approx. $200,000 in a brokerage acct. My name has been added as joint owner.

The will states there will be a 50/50 split with my brother when she dies. Both of us feel that we would not want to put my mother in a nursing home. Either of us would take her in to our home and provide for her. She has health coverage still through her previous employer paid for her. I live in Florida, my brother is in Ohio which is where my mother also lives, My first question is there anything I can do at this point to start drawing down some of her funds and give them to my brother and myself and what impact would that have on her Medicare eligibility? Also, if she comes to live with me in Florida what Medicare rules would apply to her, Ohio or Florida?

Expert Answers

First of all, you mention Medicare, but it's actually Medicaid that you're talking about. Your mother and almost everyone age 65 and over qualifies for Medicare health care coverage regardless of their income and assets. On the other hand, Medicare does not cover long-term care, either at home or in a nursing facility.

Medicaid, on the other hand, does cover long-term care, both at home -- in this case, either in your home or your brother's -- or in a nursing home. But Medicaid is available only to people with very low incomes and few assets. As you rightly suggest, your mother would not be eligible for Medicaid coverage of any kind if she has $200,000 in assets. Whether she can give those assets to you and your brother and still qualify for Medicaid involves two different sets of rules. (The details of these rules vary slightly from state to state. The rules that would apply to her would depend on where she's living at the time she applies for Medicaid. If she's living with you in Florida or enters a nursing home there, then Florida's Medicaid rules would apply.)

The first set of rules has to do with Medicaid coverage of nursing home care. Despite your and your brother's best intentions, there may come a time when your mother needs nursing home care. In that case, if she seeks Medicaid coverage for the nursing home, Medicaid will look back at any transfer of assets she's made within the previous 60 months before applying. The amount of any assets transferred for less than full value -- such as gifts to you or your brother -- during that 5-year period will be considered as still belonging to your mother, and thus would delay her eligibility for Medicaid coverage of nursing home care. The length of the delay depends on the amount of the transfers and the average cost of nursing home care in the state where she's living, but it could be many months or even years if she were to give away the full $200,000.

However, these Medicaid transfer-of-assets rules, including the 60-month look-back period, do not apply to Medicaid eligibility for in-home care. So, your mother could give almost all of her assets to you and your brother and then qualify for Medicaid home care coverage. (Medicaid would allow her to keep only about $2,000.) The risk, however, is that she gives you and your brother all her money with all of you expecting that one of you will care for her in your home, but then it turns out that she needs nursing home care, either because her condition deteriorates badly or you or your brother find that you are unable to care for her adequately in your home. Because of this risk, if your mother does gives away all her assets to you and your brother, it would be a very good idea for you both to hold onto that money to pay for her nursing home care if she winds up needing it.