I am impressed by the amount of families that have provided care to an aging family member in their own home. Although it takes a ton of time and coordination, these families have delayed the need for their aging loved one to leave home and seek assisted living or skilled nursing care. This is very encouraging because many of us want to stay in our home as long as possible.
But the efforts of one family to take care of their loved one caused them great complications when skilled nursing care became necessary. Complications costing over $150,000! How did this happen?
The loved one was widowed and unable to live independently. Her family banded together and between two family members, they setup a schedule to ensure that their loved one would have appropriate care in her own home. The caretakers were paid modestly for their care services from the loved one’s assets. After several years the care needs could no longer be handled by the family. She entered a skilled nursing facility and applied for Medicaid benefits to help pay for care as her assets had been depleted to less than $2,000.
The family was told that their loved one would not receive assistance with her nursing home costs until she privately paid for care that would exceed $150,000. The fact that the family did not have a care contract in place with doctor prescribed care before any money was paid to the caretakers resulted in a penalty for all the funds that were paid to the caretakers. Without a proper contract in place before money was exchanged, Medicaid policy views these payments as transfers for less than fair market value (gifts) for which a penalty would be assessed. Be sure to seek advice early in the stages of caring for a loved one to avoid surprises such as this.