What to do with mom's pending personal injury settlement if she is in a nursing home and on Medicaid and Medicare?

August question.

This is a question for an elder law attorney. You need to speak to an elder law attorney who is versed in how Medicaid works. You can Google “elder law attorney” in your state and check to make sure they have experience with Medicaid.

We had a somewhat similar situation with my brother in law who's on LTC Medicaid, not an injury settlement but sale of property jointly held by him and two brothers. In our state (Maine) they allowed him to pay back the Medicaid program for amounts it had already paid to the nursing home on his behalf. They handled it this way so he could stay on Medicaid and not have it temporarily suspended while he privately paid to spend down the sale proceeds, or have to go off and reapply. (The amount wasn't large and covered maybe 3-4 months of Medicaid payments.)

Igloo, that was interesting. Medicare being able to recoup...I think I have heard that with regular health insurance too.

What happens with her being over “asset” eligibility for LTC Medicaid depends on how your State LTC Medicaid administrators their program. Just for clarification please keep in mind your mom is on 3 programs: Medicare and Medicaid as a “dual” for health insurance and also a separate program - LTC Medicaid- which is paying for her custodial care costs (like her room & board) at the NH & it has precise “at need” financial & medical eligibility.

Couple of items to be aware of:
- 40K may not be what is actually paid, as could be fees, court costs etc that come off the top of the payout. You need exact $ amount.
AND
- MediCARE has Secondary Payor Act requirement for any tort actions. So if costs paid by Medicare were included in the lawsuit and lawsuit paid those costs as listed in the settlement to you, MediCARE wants their $ reimbursed.
A good personal injury (tort) attorney know this and have this $ set aside to repay Medicare and do that. But if that didn’t happen, it is on you to make sure it happens. So ask the attorney. VERY important; clearly get information from the attorney on this.
- LTC Medicaid application had a notice or paragraph as to having to let Medicaid know of any changes in income &/or assets within 30/60/90 days. Find her paperwork, it should have how that is supposed to be done. It should hopefully also be on your states website. Once you find out a better idea of precisely what the $ amount that is when I’d suggest that you contact the caseworker. Eventually they will need a xerox of the check by certified mail or via fax.

What happens??? some States suspend eligibility and have them use the $ exclusively to private pay the NH if amount is smallish. Others removed eligibility entirely and they go back to square 1 & into spend down mode, then have to reapply for LTC Medicaid completely (yeah, horrors!). Others do a reimbursement of room&board day rate costs paid to date. A lot depends on what your State laws allow for.

Keep in mind, until deposited into her bank account, it is not an asset. Yet. Also ask atty if the settlement will be taxable income; I bet they issue her a 1099 but whether it’s taxable is a ? for that attorney to clearly answer.

What you’re dealing with is common as POAs deal with selling their parents home, OR parents inherit $ from a well-off & well-intentioned sibling OR assets get discovered, etc all happening after entering a NH. So Voila! over the 2K in assets most States LTC Medicaid allow.

If you don’t let caseworker know, it will surface either when annual renewal is done OR selected for a random review OR when your State does its electronic asset verification aka PARIS matching process. FWIW when they filed for LTC Medicaid, that allowed for State to access and cross reference any database for their or their spouses personal info. Just let caseworker know so that it’s all good and they know something is coming…

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For anyone reading’s this, I’ve got to tell you, PARIS - Public Assistance Reporting Information System is quite sophisticated. Last match was earlier this month & done quietly by eligibility programs across the US pretty much simultaneously. You do not want to deal with a PARIS Notice (of irregularity). Fraud in the system is minuscule and is found. States can cross reference IRS filings, Dept of Insurance and courthouse filings. Hiding assets, fraud, submitting stuff beyond allowed by spend down rules, squishy transfers, etc all eventually are found. It flat surfaces e..v..e..n..t..u..a..l..y. Penalty placed.

Whomever got elder to give/loan/invest/buy, or convinced them something 100% ok for Medicaid but wasn’t, has no obligation in all this. It’s the elder who gets penalty and their POA who deals with the fallout left behind.

If your spidey senses feel something is off, it probably is.

Yes, there is no protecting the money at this point. Medicaid will stop and can resume when the money is gone.

Medicare is her health insurance which she pays for with her SS payment. They recoup nothing when she passes.

Medicaid will TRY to recoup but if no assets left, they can't do a recovery. After death the person most involved in Moms care, usually the POA, will get a letter from recovery. I was told this info is given by the NH to Medicaid. You then tell them what assets Mom has. If none, no worries you tell them that. For me I still had Moms house for sale. So a lien was placed only for what Medicaid put out. When the house sold, the lien was satisfied. Family is not responsible for a LOs bills.

Your Mom will now use this settlement, which is her own assets, for her own care. You may want to consult an elder care attorney.

If I understand Medicaid correctly - If the settlement is in her name she will lose the Medicaid and have to use that settlement to self-pay until it runs out then have to apply for Medicaid again. I could be wrong but I think that is how it works.