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Dangers of Paying for In Home Care

November 12, 2018

People generally prefer to remain living at home for as long as possible before considering moving into a nursing home for more specialized care.

One way to put off the need for moving into nursing home is to receive in home care from a relative or paid specialist.

However, when the time comes to move into a nursing home and apply for Medicaid coverage to pay for the nursing home stay, the previous in home care can cause eligibility problems if not handled in the proper way from the beginning.

The danger comes in as a result of the Medicaid look back period when applying for nursing home coverage. In order to receive Medicaid nursing home coverage, a person’s resources must be below a certain, very restrictive asset cap. This cap also involves a retrospective examination, the look back period, to find any below market transactions or gifts made within the previous five years. Any such gifts or transactions then get added back to an individual’s current financial picture to determine Medicaid eligibility.

How this involves in home care is that any payments made for in home care in the previous five years have to have been compliant with Medicaid regulations in order not to negatively affect current Medicaid eligibility. Any payments for care that do not comply with Medicaid regulations can be considered gifts. These gifts then get added back to a person’s current resources when calculating Medicaid eligibility. Significant payments for care that do not comply with Medicaid regulations can cause an individual to pay significantly more out of pocket for expensive nursing home coverage before becoming eligible for Medicaid.

One way to avoid this scenario is to have a relative who is willing to perform in home care with the understanding that they will never get paid for their services. However, this is not a realistic possibility for many people.

A more accessible option is enter into a Medicaid compliant Caregiver Agreement, also known as a Personal Services Contract, before any paid care is provided. The regulations about caregiver agreements are thorough and can involve what types of care are covered, what must be in a caregiver agreement, how the care is documented, and how the caregiver will be compensated. These regulations also vary by state. Due to the complexity of the regulations involved, it is important to meet with a local elder law attorney before entering into any sort of arrangement for paid in home care to prevent any potential problems affecting Medicaid eligibility.

To discuss in home care agreements or more general Medicaid planning, please call Martha C. Brown & Associates at (314) 962-0186.

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Martha C. Brown & Associates, LLC assist clients with Estate Planning, Elder Law and Probate in St. Louis City, St. Louis County, St. Charles County, Jefferson County, Franklin County and the surrounding areas including Arnold, Ballwin, Barnhart, Bellefontaine Neighbors, Black Jack, Bonne Terre, Brentwood, Bridgeton, Cedar Hill, Chesterfield, Clayton, Crestwood, Creve Coeur, Crystal City, Des Peres, DeSoto, Ellisville, Farmington, Fenton, Festus, Ferguson, Florissant, Fredericktown, Frontenac, Hazelwood, Herculaneum, High Ridge, Hillsboro, House Springs, Imperial, Kirkwood, Ladue, Lake St. Louis, Manchester, Maplewood, Maryland Heights, Mehlville, Normandy, O'Fallon, Olivette, Pacific, Pevely, Richmond Heights, St. Ann, St. Charles, St. Clair, St. Peters, Ste. Genevieve, Sunset Hills, Town & Country, University City, Union, Valley Park, Washington, Webster Groves, Wentzville , Wildwood.