The Paradox of Medicaid

by Lynn B. Johnson on February 28, 2013

medicaidMy mom has Parkinson’s disease. Twenty percent of people with Parkinson’s disease also get Parkinson’s dementia, and she has that, too. I cared for her for five years, the last two of which she lived with us so that I could provide the around-the-clock assistance she required. This past summer, when she forgot how to stand up, it was time to move her to a skilled-nursing facility.

I evaluated a few different places and chose one that was reasonably priced, cooked from scratch, didn’t smell, and took the best care of residents’ personal grooming requirements.  Mom had enough money to pay out of pocket for a few months, but it soon became necessary to apply for Medicaid. Mom has Medicare part A, B, and D: none of which covers long-term skilled nursing care.

There are many different services of Medicaid; we applied for long-term care services. Besides having Mom evaluated for her “functional eligibility evaluation” —i.e. her inability to perform Activities of Daily Living (ADLs) such as personal care, eating, and transferring from a bed to a chair and back again— Medicaid eligibility is also contingent on the applicant having a low level of income as well as minimal assets. The specific requirements vary by state, but elderly, blind, or disabled people are typically eligible if their annual income is at the federal poverty level ($11,170 in 2011) and they have fewer than $2,000 in assets: although in our state, that’s $1,500 in assets.  According to the National Clearinghouse for Long Term Care Information, “Assets not considered during the eligibility discussion include:

  • Your primary residence
  • Your personal belongings
  • One motor vehicle
  • Property that is essential to self-support
  • Life insurance with a face value under $1,500
  • Certain burial arrangements
  • Assets held in specific kinds of trusts.

In order for my mom to qualify based on those thresholds, I had to close out many of her accounts while also pre-paying for upcoming tax liabilities while she still had the funds available to do so. That entailed:

  • Surrendering her life-insurance policies and spending the money on tax and funeral responsibilities.
  • Pre-paying her tax-year 2012 estimated tax (we had liquidated and spent the rest of her IRA on her care needs, necessitating the payment of capital-gains taxes).
  • Pre-paying her accountant for tax-year 2012 1040 preparation.
  • Purchasing a pre-need burial contract: although there was enough money from her life-insurance policy to pay for loved ones to fly out for her funeral, Medicaid would not accept such fripperies in her burial contract, so I had to keep it to the barest minimum. (For what it’s worth, before Mom was stricken with dementia, I’d ask what she’d want done with her body after she died and she’d always reply, “throw me out on the woodpile,” which sounded like basic cremation to me.)
  • Funding a trust account for Mom at the nursing home to cover the cost of personal-care items and other small purchases.

I spent all of her money and sent the checks to the payees by the end of October, and went back to trying to find a job (because, when you have a service contract to provide care to your mother and she goes to a nursing home, you have not only just put your mother in a nursing home but have also lost your job).

The nursing-home financial officer, whom I’ll call Glinda for her magical powers of remaining calm in the face of bureaucracy, gathered my proof of checks written and tracking receipts for the Priority Mail packages and had me sign a form that allowed her to handle the Medicaid application for me and my Mom.

Glinda does this a lot, but she warned me that not only had Medicaid recently changed all of its requirements, but the person who she used to deal with exclusively had retired, and the new claims examiner was new to the agency. She told me that this would be a long process. She didn’t include the word “exhausting” but I heard it in her voice. There appear to be no consistencies in the process – it takes as long as it takes.

She wasn’t kidding:

  • Early November: I submitted everything to Glinda, who passed it on to Medicaid while warning me that they’d require a “five-year look-back” in order to evaluate every penny spent by mom for validity.
  • Early December: Medicaid rejected Mom’s claim, saying they didn’t have the necessary documents. (They didn’t have them because they hadn’t asked for them, and you “don’t give anything to Medicaid until they ask for it,” Glinda told me.)

I spent the next few days gathering five-years’ worth of bank statements and check registers for Glinda, who again sent them along to Medicaid. Then we waited …for two months.

In the meantime, I paid the nursing home $425 per month for my mom’s care (the amount of her Social Security check after deducting her Medicaid part A and B premiums).

The saga continued:

  • During the first week of February, Glinda received word that the Medicaid claims examiner had some questions and needed further documentation. I gathered this in the two days allotted.
  • Glinda happily accepted my documents and told me that she would contact the claims examiner. “I’d like to have a phone call with the examiner and you because that way we can wrap up any of her remaining questions quickly and get your mom approved.”
  • Later that week, Glinda told me that she was expecting a call from Medicaid that Wednesday. I would need to stay home to be available for the call. I stayed home all day. No call came. Glinda emailed and called the examiner to set up another conference call. The examiner never got back to her.
  • Two weeks later, Mom’s application was again denied.

“Usually they give us a reason and supply us with the paperwork so that we can start an appeal,” Glinda told me. “But this came in an email, with no reason.”

Glinda involved the people at the nursing home’s corporate office. They were able to determine that the claim was denied because the funeral home didn’t cash the check I’d written for more than three months. Why they didn’t cash it, I don’t know. Why it matters —because an irrevocable pre-paid funeral contract is an allowable asset under Medicaid, and Mom’s contract is dated October 31— I don’t know.

Now, Glinda is both appealing the denial of service and also re-applying for Medicaid as of February 1, although we don’t know how the late cashing of that check will hurt Mom’s chances. Glinda also said that we can apply for three months’ worth of past medical costs.

“Don’t panic yet,” she advised. I, however, do not relish the prospects of starting the whole process over again, and I’m considering involving my congresswoman in this fight.

My husband thinks Medicaid is stalling in the hope that my mom will die before we get the approval, thereby preventing us from filing a lawsuit on her behalf. A friend of mine shared that when her mom tried to get her grandma on Medicaid, it took 8-10 hours of work a week: particularly significant when you learn that my friend’s mom worked for Blue Cross for 20 years.

“A big part of the technique is wearing the applicant down,” my friend said.

And this is where we come to the paradox of Medicaid: it exists so that people who are stricken with disease and poverty can receive healthcare, but the stress and bureaucracy of negotiating the application process leaves you wanting to die.

Recommendations

  • If you are helping someone prepare or apply for Medicaid, expect that it will take double the amount of time you originally anticipated.
  • Do not expect websites to be helpful.  Some very general information about applying for Medicaid is available at the National Clearinghouse for Long Term Care Information.
  • If possible, work with an elder-law specialist or a health-care facility.
  • If you can’t work with someone else, become very well-versed in the Medicaid eligibility requirements for your loved-one’s situation and also the state in which they reside.
  • Make sure you have access to their online banking, and make sure that online banking provides you with the ability to access at least five-years’ worth of online statements.
  • Expect it to be a numbing process that will wear you down and make you want to quit.

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