My mother lives in Ohio in a Medicaid nursing home. I live in Florida and visit her about 6 times a year. The cost is over $1000 each time, for airfare, car rental, hotel and meals. My Mother has been notified that she needs to spend down her funds of $7000 or lose her Medicaid benefits. Can we use these funds for travel to visit her? Would that be considered an illegal gift?
No, unfortunately you cannot use your mother’s funds of $7,000 (or any part of it) to cover the travel costs for you to visit her. If you were to use any portion of these funds, it would be considered an illegal gift and could cause your mom to lose her current nursing home Medicaid benefits.
While your mother is required to “spend down” the funds, she must do so only on herself. This is because Medicaid has a look back rule that penalizes persons who give money away or transfers assets under fair market value. The look back rule is in effect to prevent long-term care Medicaid applicants / beneficiaries from simply giving away countable assets to meet / continue to meet Medicaid’s asset limit, and hence become / continue to be Medicaid eligible.
With the look back rule, Medicaid scrutinizes all past asset transfers for 60-months (30-months in California) preceding the date of one’s Medicaid application. What some people don’t realize is that even after this initial look back period, a Medicaid applicant can still violate the look back rule. Say, for example, in the case of your mother. For whatever reason, she currently has assets over Medicaid’s asset limit and must “spend down” her assets in order to remain eligible for Medicaid. Giving funds to you, or purchasing airline tickets and booking a hotel, for you to visit her violates the look back rule.
Ways in which your mother can “spend down” her excess assets without violating the look back rule is to pay off any debt she may have, purchase an irrevocable funeral trust, or buy items for her nursing home room, such as a power lift recliner that helps her stand or a new television. When “spending down”, exercise caution to ensure money is not used to buy anything that would be considered a countable asset. This is because if she were to purchase countable assets, it could push her over the asset limit, causing Medicaid ineligibility. For example, your mother would want to avoid buying stocks and / or bonds, as this would count towards Medicaid’s asset limit.