Hint: Start with a Board Certified Estate Attorney (Even if You Think You Can't Afford It)
Disclaimer: This post contains information and opinions from someone with no background in law, medicine, or science (proceed with extreme caution). Always consult with your own trusted and licensed medical and legal practitioners before making any decisions about diagnosis, treatment, estate planning, or outcomes for dementia or any other condition.
I'd like to spend this post walking you through how to get Medicaid assistance based upon own personal experience (both in the early 1990s and again in 2016-2017) and in Tennessee (mid 1980s). Therefore, individual results may vary, but I promise you that this is an honest walkthrough from an only child's perspective both in childhood with grandparents and as an adult with parents.
Anyone who says that Medicaid is unnecessary has never been an only child fighting for a loved one with dementia.
In 2015, I tried to avoid thinking about Medicaid as long as possible. The reason? My mom's parents (own grandparents).
By the mid-1980s, during a 50-year marriage, my mom's parents were living in a house they owned in Memphis, TN; however, granddaddy's dementia was getting worse and grandmother could no longer care for him by herself. Since mom was an only child living in Texas, it was difficult to care for them from a distance so grandmother decided that it was time for help from a nursing home which would quickly deplete their lifetime savings of about $350,000 (an impressive sum based upon their frugality having lived through the Great Depression with his pension as a Greyhound bus driver and social security helping with monthly expenses since she worked their 50-year marriage as the homemaker).
As a result, my dad went there to help them clear the house and move granddaddy to a nursing home since his paranoia from the dementia was getting worse. At the time, they were able to use their savings to pay for granddaddy's nursing home which was about $3,500 a month (as I recall) in 1986 dollars. Meanwhile, grandmother was having trouble paying the bills since she felt tremendous overwhelm so, upon granddaddy's death, dad helped them to sell their Memphis house so she could move in with us in the house dad built. From 1987~1993 dad slept on the couch so mom and grandmother could have the bed. Once in Austin, a neurologist would diagnose grandmother's "frazzle" as Alzheimer's Disease which, for her, would require Medicaid for nursing home care since her shared savings had been depleted to assist granddaddy. Such needless tragedy that they (and then dad) would all suffer the same way. As a kid, this time also stood out to me because dad was always upset by then-President Ronald Reagan's budget cuts to health care programs including Medicaid; and, in the end, these did not even benefit the former President during his own struggle and death from Alzheimer's complications.
As with Reagan (or for anyone else who doesn't need the financial help), then Medicaid is likely never given a second thought since it's not an issue; however, for those making a working income then they must spend any lifetime earned savings on a nursing home which is completely wasteful to anyone else in the family who may benefit from meager inheritance as wealthy families would from larger fortunes. This calls for a guttural "Grr. Argh."
In Texas, the Federal Medicaid program is administered by the Texas Department of Health and Human Services (Texas HHS). When you hear the term, "Medicaid expansion," this generally refers to states that opt-in to additional funding for Medicaid from the Federal government; however, many states, like Texas, have chosen not to expand Medicaid since some people prefer limited government interference for reasons that I will never understand as one who has benefitted from government assistance with literally no other options available to pay for this critical service.
It's hard enough to pay for long-term care. Why make it more difficult for everyone by not expanding Medicaid?
To start, it's important to understand that Medicaid *only* supplements nursing home care (and does not pay for home health, independent living, or assisted living). Therefore, if you haven't already, please consider buying long-term care insurance which will be cheaper the younger you start. My parents and grandparents never had long-term care insurance because (at the time) they didn't think they would need it for their future nursing homes but these costs are rising each year; and, this for-profit system does not encourage a living wage for its employees which is an abomination and a topic for another day.
In Texas at present for elder housing options, you are looking at monthly rental costs ranging from $2,600 for a studio apartment (independent living) to $6,500 (or more) for a nursing home. If you prefer to have in-home care then these costs start at $25 per hour (for caregiving) up to $125 or more for nursing care per hour.
Let's also consider the different care options that exist right now (when either you or a loved one may need it). Please know that some people are already in personal care homes for either mental or physical rehabilitation or both (for example, for a head injury); however, this discussion considers what happens if you have never needed previous care since that's what I feel I can reasonably discuss based upon own personal experience.
Let's start with the basics: You will need Medicaid if you can't pay for out-of-pocket costs for a nursing home which range at present (in Austin, TX) from $4,500 to $13,000+ per month. Also, not all nursing homes will accept Medicaid (at all) which means that you or a loved one simply won't be admitted unless you or they can fork over the full payment each month. For dad, the facility he was moved to from the Emergency Room when he could no longer walk (due to Alz complications), cost $10,000 per month and had a 2-3 year Medicaid waitlist. The only reason he was there at all is because the Nurse Care Manager (as recommended by our estate planning attorney) spoke to the ER doctor and explained to him why there was no way that dad could ever return home since she had already evaluated his condition while he was there with mom (as she was his primary caregiver while I was at work). For untold families right now, Medicaid is not an option for complex reasons so their ailing loved ones end up at home with insufficient care from family members (and that’s if they’re lucky). Right now, I have a friend whose dad has Parkinson’s and he lives at home with his wife and ailing daughter as his primary caregivers because they didn’t know that Medicaid was an option; or, perhaps they made too much money and don’t qualify (am not certain). Either way, it’s an untenable and unnecessary way for anyone to live.
To recap at present, Medicaid *only* pays for nursing home care (not these additional needs shown below [unless an individual may qualify for the Star+Waiver with this helpful explanation. Bottom line: If you think that you or a loved one may qualify for this waiver, then please get on the waitlist now by calling: 877.438.5658 because this process will take time through Texas Health & Human Services Commission.] By the way, I have written these definitions based upon own experience so please know that there are more accurate definitions that will vary in Texas and by state):
Home health: Personal or medical care (typically paid at an hourly rate) to a medical or non-medical caregiver.
Respite care: A group program (typically in the daytime) to help working caregivers
Independent living: These housing complexes or communities are typically designed for adults ages 55+ and may include additional amenities such as meals, housekeeping, and social activities
Assisted living: These facilities are typically for individuals 55 and older but may also provide temporary rehabilitation (for example, after a surgery
Nursing home: Provide medical and limited personal care (feeding, bathing, and dressing) for individuals who can no longer care for themselves.
Also, in Texas, individuals never pay for Hospice since it's paid through private donations and not by those who need it:
Hospice care: Comfort care given to individuals within 18 months or less of death (in Texas, this determination is made by a licensed physician).
So, what to do?
After dad died and we sold the house he built to reimburse any remaining unpaid funds from his Medicaid benefits (which was torn down by the new owners for the land), we then tried to enroll mom in an independent living facility that would transition to nursing home care (as needed) but her net worth needed to be greater than $350,000 so she did not qualify. However, a state pension and social security gave her just enough income to cover the $2,600 monthly costs for her independent living apartment. Initially, we tried to enroll mom in an independent living facility that would transition into LifeCare, an optional non-governmental program (available in some states more than Texas) without her having to move elsewhere but her net worth needed to be greater than $350,000 so she did not qualify. If you can afford this option then it's a great way to alleviate future care burdens when transitioning from independent living to nursing home (as needed) since the overall rates for these services are locked in with LifeCare by paying up front.
When the time comes; however, she will also need to receive Medicaid with any proceeds from her income going directly to reimburse Medicaid. For example, for a married couple, Medicaid will consider all assets but not the primary homestead or primary vehicle as long as the other spouse is still living there and driving the auto. However, if the couple has a vacation home and sells it (within five years of needing Medicaid assistance) then Medicaid will take all proceeds from this sale to reimburse Medicaid. It's not an ideal system, but it's the one we have and we are grateful to have this safety net.
The alternative without Medicaid would have been for dad to return home from the hospital, unable to walk, and have mom or a home health provider come in and take care of him for say, $25 per hour (or more), and keeping in mind that his built home was neither designed nor accessible to meet his disability even at a minimal level nor was there enough money available to make such adjustments in time to help him.
If you can afford it, then long-term care insurance is a great way to avoid these financial burdens; however, even these benefits are limited in their duration so be careful when signing up for these policies and keep all your paperwork and tell your loved ones so that the benefit will be there when you need it!
My parents and grandparents never had long-term care insurance. I think they felt they didn't need it. They were mistaken. We all need LTC in the United States but some policies are better than others - buyer beware.
If for some reason you can't find your LTC or any insurance policy in Texas then please consider calling the Texas Department of Insurance (800-252-3439) which is the state agency that regulates insurance, workers' compensation, and also includes the State Fire Marshal's office. By the way, even if you're not in Texas, each state has a regulatory agency, department, or commission for insurance so please check them out and you can find yours at the National Association of Insurance Commissioners (NAIC).
When dad died on June 30, 2017, he had been at the nursing home for 10 months from September 2016 to June 2017. In total, this meant that at $6,500 per month, without any Medicaid, then we would have needed to pay $65k out-of-pocket with money we did not have! However, because his total household income in 2016 from all sources was below the limits (around $40,000 per year) then he was able to qualify for Medicaid. Hypothetically, the terrible part is that if you have $40,001 then you may not qualify because you make too much but it's always worth a try (and, all the more reason to hire an attorney - see #1 below) since there are laws in place to protect against such injustices!
The good news: Medicaid can help you with nursing home expenses when you or a loved one cannot pay! The bad news: Medicaid benefits vary by state so will focus on Scoobying this Texas mystery since it's what I know. Hopefully, this checklist will get you started, even if you're living in a different state.
Medicaid 101 Four-Step Checklist (based upon personal experience in Texas):
Estate planning is complex. Even if you or a loved one doesn't own much, then please research and find a licensed estate planning attorney in your area. The compassionate teams will work with you to negotiate a flat rate rather than paying an hourly fee. In other words, rather than pay $200 an hour (not uncommon), you might locate someone who will charge $1,800 (or more depending upon complexity) to handle everything with Medicaid from start to finish if you first gather all documents that they will need up front rather the firm doing this part for you. Here's an example of such checklists from Farrell & Johnson! However, even if you can't hire these attorneys, then please know that these lists will give you a good idea on how to start and the kinds of documents that your attorney(s) will need to proceed.
If you think that your loved one will need Medicaid because they won't be able to handle paying the $6,500-$13,000+ per month for a nursing home (in Texas), then please hire a licensed estate planning attorney right now (in your state)! The reason? Medicaid is complex and the reimbursement options may vary by state.
2. In Texas, do not proceed with a Medicaid application without #1. Having worked in state government for 20+ years, I have all compassion for government processes and system complexity; however, the reality is, when a loved one has dementia or other chronic condition; and you're already working full time, then the time to care is not on your side. Rather, it's OK to get help, and #1 will allow you to focus on caring for your loved one rather than trying to navigate a complex system alone. Trust me: having a reputable attorney will give you reliable advice that you can act upon rather than delaying care for no reason or for the wrong reasons. If possible, don't wait until your loved one is incapacitated and can no longer tell you their needs. For about $1,200, you can have a will prepared by a licensed attorney in Texas. In addition, try to find a licensed estate planning attorney who will handle the estate for a negotiated flat fee rather than a monthly charge.
Medicaid is a Federal reimbursement program and must be paid back as much as possible to the government (it's never free).
3. If you don't have one already, then PLEASE get a will and/or trust for you and your loved one along with a medical power of attorney in case you cannot handle your own personal or financial affairs. If your loved one is too far gone to prepare this document, then it's all the more reason to hire an attorney to help (#1). I know that this is a difficult subject to consider for yourself or loved ones because death is unpleasant. However, BELIEVE ME, in Texas, the probate process (which is the entire court process from start to finish after someone dies) can take YEARS without a valid will that a judge can easily sign-off on. In addition, in families with multiple people vying for an inheritance, then you need to protect yourself if a will becomes contested. For example, a cocktail napkin or even a verbal promise just ain't gonna cut it when it reaches the judge and this is another reason to avoid preparing these documents yourself or with any online tools (tempting as though it may be).
4. With regard to all your financial accounts (bank, pension, investments, retirement, etc.), please MAKE SURE that you have a *current* Beneficiary form on file for each account. Otherwise, your money *will not* go to whom you want at all. Instead, the distributions must be determined by a judge during the probate process (which can take years and by the time you factor in court costs and attorneys fees then there may not be any money there to distribute). With a Beneficiary form, then this process is instant; and, upon your death, the financial assets go to the new owner - no questions asked and no probate (as long as uncontested); however, remember, that in Texas, minors (those under legal age) can NEVER inherit money. Therefore, see also #1.
Sidenote: A few years ago, I decided to cancel an online investment program that would automatically invest my spare change since this company wasn't able to give me a beneficiary form; and, this company was based out of California. Can you imagine the mess this would create if I were to die and my loved ones wanted to get this meager money?
Remember: In Texas, without the beneficiary form for any financial or investment account you own, then any funds at your death will AUTOMATICALLY have to go to Texas probate court (rather than to your chosen loved one) even if you already have a will (and this assumes that anyone else even knows about these funds in the first place).
At worst, an unethical company could just keep the money as unclaimed funds (or, ethically follow whatever usually happens under California law). However, either way, the point is that even if the funds are known by everyone (my family and the company), then (without this beneficiary form) the funds still MUST go through the probate process (even though a will exists). Keep in mind, this happens EVERY DAY in Texas and keep in mind how many people die without a will (or knowing their importance) which also creates additional case backlogs for everyone. Not to mention the nebulous additional burden the Covid-19 crisis has created for an already backlogged court system across the United States.