Caveats for Caregivers (8)

This is my eighth essay on caregiving, first published on another website on February 3, 2013.

As may be inferred from the title to this diary entry, this is my eighth essay in this series about the problems I had to deal with when my mother went into a nursing home, along with some advice that I have to offer regarding those problems.  In general, this essay presupposes much of what has already been written; in particular, it is especially connected to my seventh essay recently published.  That diary entry covered my desire to keep my mother in a private-pay nursing home as long as possible, before transferring her to a Medicaid facility, which I knew I would have to do when she ran out of money.  My reason for doing so was that private-pay nursing homes are for rich people, while Medicaid nursing homes are for poor people, and, as is invariably the case, rich people are treated better than poor people.  That previous essay also discussed my efforts to protect my mother from noise, which meant finding her a roommate that was relatively quiet or paying extra for a private room. Although I touched on some of the financial aspects already, they will be the principal focus of this essay.

The monthly cost for a private room was $7,800; for a semi-private room, $6,500.  The rates were about the same at the private-pay facility as they were at the one that accepted Medicaid. Then there were the extras: telephone service; cable TV; beauty parlor; dentist; podiatrist; optometrist; the cost of an attendant to accompany us when she went to the doctor, in case she had to use the restroom; supplies not paid for by the nursing home; medicine not covered by insurance; and so forth, all of which averaged out at about $500 per month.

Given my mother’s income and assets, I knew she would be able to afford a private room for a year, or a semi-private room for eighteen months.  After her money was gone, there was always the possibility of my using my own money.  There would be no way I could pay all of her nursing home costs, but there was the possibility of my using my money to supplement Medicaid in order to keep her in a private room.  In other words, Medicaid will only pay for a semi-private room, but if I could kick in an extra $1,300, I could keep her in a private one.  That, plus the $500 worth of extras, would run me $1,800 per month.

If I had known for certain that my mother would live, say, one year after getting on Medicaid, I could have afforded to pay the difference, without too much of a dent in my net worth.  But there were no such guarantees.  I met a woman whose husband was a patient at the nursing home where my mother was staying.  She said that when her husband was first diagnosed with some kind of brain disease, the doctors told her he had three months to live.  “And that,” she said, “was seventeen years ago.”  With that kind of uncertainty, I knew that in order for me to start paying for a private room, I would have to go back to work to make sure I did not impoverish myself.  The daily visits to my mother, lasting four-and-a-half hours each, would then no longer be possible. My visits would have to be fewer and of shorter duration.  As my mother was extremely dependent on those visits, the option of my paying extra for a private room once she got on Medicaid was out of the question.

Because any extra money I could get for my mother would allow me to delay the day when I had to transfer her to the Medicaid facility, I applied for the Aid and Attendance benefit through the Department of Veterans Affairs, which I discussed in my fifth essay.  Unfortunately, it took the VA ten months to approve the application, and by that time I had already transferred my mother, since I was not sure she would get it.  In any event, after I had moved her to the Medicaid facility, the benefit was finally approved for $1,700 per month, which she started getting immediately. However, since it took them ten months to approve the benefit, they owed her for that period, which amounted to $17,000. For that, the VA said I would need to become my mother’s representative payee, which I also discussed in my fifth essay. They said that would take about forty-five days.  After a couple of months, I called them, but they said they were still processing the application.  A few weeks after that, my mother died.  I notified the VA, and they told me that as a result, the $17,000 was no longer payable.  If I had been a spouse or a dependent child, the accumulated benefit would have been paid. Or, if I had spent my own money taking care of my mother, and had the receipts to prove it, the money would have been paid. But none of this applied to my case.

Let me say at the outset that I really did not care.  The main reason I wanted the money was to keep my mother in the private-pay nursing home as long as possible, and once I had moved her to the Medicaid facility, it really did not matter anymore.  Although I would have inherited the $17,000, which ain’t hay, I humbly confess that I have enough money to last me for the rest my life regardless, and I have no real need of more. Besides, as far as I am concerned, the money never really belonged to me to begin with, so it is not as though they took something away from me that was mine.  However, I thought it might be important to relay this information, since others may not be as financially independent as I am, and they might find themselves counting heavily on something that may suddenly vanish.

Therefore, anyone who applies for the Aid and Attendance benefit should be aware of the situation regarding the accumulated amount.  If the VA had approved the application in the forty-five days they said it would take, the money would have been deposited in my mother’s bank account.  When she died, I would have inherited it.  But since they did not finish the application before my mother died, the money was no longer payable. Normally, this does not happen.  If Smith owes Jones money, and Jones dies, the debt does not die with him.  Smith still owes the money to Jones’s estate.  If Corporation XYZ is sued, and before the suit can be litigated, the plaintiff dies, his heirs may pursue the case.  With regard to the Aid and Attendance benefit, however, the government saves money by being inefficient.  I do not say that anyone intentionally used dilatory tactics to avoid having to pay the claim.  But the fact remains that the longer it takes the VA to process an application, the less likely they are to have to pay it.

When I reported my mother’s death to the VA, I was informed that I could apply for a $600 death benefit to help cover funeral expenses.  By that time, I was so tired of dealing with the VA that I decided it just was not worth it. However, the woman I spoke to on the phone assured me that it would be no problem, and so I filled out the form and sent it in.  I still have not heard from them. I doubt if I ever will.  I don’t care.

Because my mother died before she ran out of money, I never had to apply for Medicaid in her behalf.  Nevertheless, in anticipation of making that application, I did become aware of a few things that might be of interest.  In particular, there is the matter of qualifying.  In order for my mother to get Medicaid, I knew that she would have to run out of money, which means that her bank balance would have to drop below $2,000, and her income would have to be deposited in a qualified income trust, also known as a Miller trust.

In anticipation of this eventuality, a lot of people decide that it would be a shame to let grandma’s money go to waste.  Rather than allow the nursing home to deplete her assets, they decide to do it themselves.  With a little encouragement, grandma signs a few checks, reducing her substantial bank balance to the more modest amount of a few hundred dollars.  Then, they figure, when she does go into the nursing home, she will immediately qualify for Medicaid, inasmuch as her bank balance will be below the required ceiling. Needless to say, the government does not approve of such cleverness.

When the application for Medicaid is made on grandma’s behalf, an investigation is made of her finances, covering a look-back period of five years.  If there is any hint that she has given away her money, they want it back.  In other words, any large cash withdrawals that cannot be justified will be disallowed.  So, if grandma gave away, say, $100,000, then her children will have to pay for $100,000 worth of nursing home costs themselves before Medicaid will begin making the payments.  I read a story about a woman who applied for Medicaid on behalf of her mother.  When the civil servant handling the case looked over her mother’s bank statements, he found a $10,000 cash withdrawal.  The woman explained that her mother had had her roof repaired a couple of years ago, and she had paid cash.  But she did not have a receipt.  So, the $10,000 was disallowed, and the woman had to pay that amount of nursing home expenses before her mother could qualify for Medicaid.

Because neither my mother nor I have ever itemized expenses on our tax returns, the standard deduction always exceeding whatever could have been realized by itemizing, neither she nor I have ever worried about keeping track of expenses.  Income, yes; but expenses, no.  So while we each had records regarding such things as wages, interest, dividends, capital gains, and annuities, neither one of us really had any records regarding expenses. Since, like me, my mother preferred paying cash, and since, like me, my mother saw no need to hold on to receipts after the warranty period expired, there were almost no receipts for the five-year look-back period she would soon be facing. Fortunately, she had no really large cash withdrawals, like that of the woman whose mother had had her roof repaired, but only routine withdrawals that could easily be justified as money paid for groceries, sundries, gasoline, and the like.  At least, so I hoped.  Since I never had to find out, I cannot be for certain. Therefore, when it comes to nursing homes, keep in mind that justifying cash withdrawals is as important to Medicaid as reporting income is to the Internal Revenue Service.

Because of the importance of satisfying Medicaid that grandma has not given any of her money away, I advise you not to have any joint accounts with her. I know that it is tempting to do so, because it makes things easier.  A friend of mine had a joint checking account with his mother, with whom he lived. When she became incapacitated, he was able to pay her bills simply by writing checks.  As a result, there was no need for him to have power of attorney.  But if she had had to go into a nursing home and apply for Medicaid, distinguishing between his money and hers in that account could have proved messy.  I did not have a joint checking account with my mother, but we did have a joint safe deposit box.  We originally got the box for important papers, and there was no need for us to have two separate boxes. During the 1990s, I started buying gold coins, and as the average cost of those coins was only $350 each, I just stored them in a jar in my apartment. But as the price went up after the turn of the century, their increased value began to worry me, and so, without giving it a thought, I put the coins in the safe deposit box.  When I started anticipating the day I would have to apply for Medicaid, I looked at the application form, and naturally there was a question as to whether my mother had a safe deposit box, to which I would have to say, “Yes.”  Then they would want to know if she had anything of value in it.  They might even want to look inside, just to check.  If so, I wondered if I would be able to explain, to their satisfaction, that the gold was mine and not hers.  Now, I know what you are thinking.  Why didn’t I just take the gold out?  The answer is, they would probably ask me if anything of value had been removed from the box.  Maybe you could look them right in the eye and deny that you had removed the gold, and then sign a document testifying to such, under penalties of perjury, but I have been cursed with an inability to lie in such circumstances.  Oh, I can lie to be polite, or to protect a lady’s honor, but when it comes to lying to the Feds, forget about it.  I knew I would start channeling my inner George Washington:  “I cannot tell a lie.  I took gold out of the box.”  I consulted an eldercare attorney, and he told me just to be honest about it, tell them it was mine, and everything would be fine. Although I was glad to hear such reassurance, I was unable to be equally sanguine in the matter, and thus I continued to worry. As it turned out, I never had to find out if he was right.  But the moral of this tale should by now be clear:  do not have any joint accounts with grandma.

Even if all went well, I knew that from the time my mother qualified for Medicaid until the application was approved would be two or three months. The woman I talked to at the Medicaid office said it only took forty-five days, but every social worker I talked to said it would take two or three months. Now for the catch-22: During the application period, before Medicaid started paying, my mother would be responsible for the $6,500 per month it cost her to stay in the nursing home. But since her bank balance would have to be below $2,000, and since her income would not even come close to paying that amount, her being able to make those payments would be arithmetically impossible.  I asked the woman at Medicaid if I could get the application approved in advance, so that everything would be ready to go when my mother finally ran out of money.  Now, I know that you know that the answer to that silly question was “No,” but I was tired that day and not thinking clearly.

For someone like me, the obvious solution was that I would pay for the nursing home costs until Medicaid approved the application, at which point I would be reimbursed.  But it was my good fortune to have the financial resources to bridge that gap.  Many were the times that I asked myself along the way, “What do poor people do?”  In this case, I suppose that people who are really poor are already on Medicaid, and so there is no problem.  But there must be plenty of people who are not already on Medicaid, and who do not have children with enough money to make those payments, or possibly have no children at all, and thus are left in the lurch.  One woman, whom I got to know at the nursing home where her mother was also a patient, wondered about this problem as well.  “What if I were to just walk away?” she asked, theoretically speaking, of course.  I speculated that her mother might then become a ward of the state.  More ominously, there was the possibility of being sued by the state under filial-support laws, which can be used to compel children to pay for expenses incurred by their parents. These laws vary from state to state, the worst of which is Pennsylvania.  Although there do not appear to be such laws in Texas, where I live, this may change. When the politicians begin cutting Medicaid funding, more laws of this nature may be enacted. When they are, I can almost hear the politicians waxing nostalgic of the way things used to be, when family members took care of one another, and speaking glowingly of how these filial-support laws will help bring back those good old days.

In any event, one thing a poor person might do is avail himself of a nursing home that accepts Medicaid pending, in which the nursing home allows a patient to stay in a room until the application is approved, at which point it is reimbursed.  But none of the nursing homes I considered offered such.  It is my guess that the ones that offered Medicaid pending were either 150 miles from where I live, which would have made frequent visits impossible; or they were located in a part of town I would not have wanted to drive through in the daytime.

Some of these problems can be handled by eldercare attorneys. They can set up a Miller trust, help you apply for Medicaid, and arrange for allowable transfers of money that can then be used while waiting for the Medicaid application to be approved.  But all this costs money.  So once again, I ask myself, “What do poor people do?”  I hope I never have to find out the hard way.

Caveats for Caregivers (2)

This is my second essay on caregiving, first published on another website on April 16, 2012.

“We don’t accept cash.”

She must have misunderstood me.  When I offered to pay cash, she must have thought I was about to reach into my pocket, like some character from Mad Men, pull out a fat money clip, and begin peeling off hundred dollar bills until I got what I wanted.

“What I meant was,” I said, anxious to reassure her, “I could write you a check for the difference.”

“We wouldn’t know what to charge.”

“Well,” I continued, still not fully appreciating what I was up against, “I could put up a big deposit, and you could refund whatever you don’t use.  Or I could just give you my credit card.”

“We don’t accept cash.”

Maybe I should start at the beginning.  A little more than a year ago, my mother had to go to the hospital.  After she was there for about a week, she was still not well enough to go home, but neither was she sick enough to stay in the hospital.  So, a social worker stopped by my mother’s room to help me select a skilled nursing facility.  A skilled nursing facility provides care or therapy for people who have been released from a hospital, but are not ready to go home.  Medicare will pay most of it for 20 days, after which there is a co-payment for about 100 days.

The social worker suggested three such facilities, and I picked the one closest to where I lived. What I did not realize at the time was that a temporary stay at a skilled nursing facility is an opportunity to try out a nursing home.  In other words, the typical nursing home, providing long-term care, is often combined with a skilled nursing facility, providing temporary care.  In many cases, the rooms are the same:  someone who goes into a skilled nursing facility for therapy, but then undergoes a serious decline in health, requiring long-term care, will not even have to change rooms.

Medicare, of course, does not pay for long-term care.  I knew that if my mother should have to stay in a nursing home, she would soon run out of money, at which time I would have to get her on Medicaid.  When I happened to mention this to the woman in charge of admissions, she informed me that they did not accept Medicaid.  As I had naively supposed that all nursing homes accept Medicaid, this came as a surprise.  Moreover, I realized that an opportunity had been lost.  I had inadvertently selected a skilled nursing facility that would not be suitable for my mother, financially speaking, should she ever need long-term care.  Had I selected one that does take Medicaid, then from my mother’s temporary stay there, I would have known whether to bring her back when she needed to stay somewhere permanently. With this in mind, if you want to find out which nursing homes in your area accept Medicaid and which do not, I recommend

After about a month, my mother was released, and she returned to her apartment.  As it was close to my apartment, and as I was retired, I was able to spend a lot of time over at her place attending to her various needs, like shopping, cooking, and cleaning.  But after a few months, she had to go to the hospital again.  As before, she needed to be released to a skilled nursing facility, and this time I selected one that would accept Medicaid, especially since it appeared that this time she might have to stay for good.

However, the admissions coordinator informed me that GEHA (Government Employees Health Association), the insurance my mother had in addition to Medicare, was not a supplemental policy, but rather a secondary one, a distinction I have yet to fully grasp.  The practical consequence was that GEHA would not pay for the portion that Medicare did not cover.  “I’m sorry,” she said, “but we will not be able to admit your mother.”

I had already been through this with the previous nursing home, but in that instance, I was simply told that I would be responsible for paying the difference.  All I could figure was that the woman I was now talking to must be used to dealing with poor people, who cannot afford to pay anything out of pocket.  “Oh, that’s no problem,” I assured her, “we can pay cash for whatever Medicare does not cover.”

“We don’t accept cash.”

And thus began the surreal conversation with which this story opened.  I called the social worker at the hospital.  She offered to call the nursing home herself.  Ten minutes later, she called me back to tell me that the situation was exactly as I had described it.  I selected another nursing home.  In this case, the woman in charge of admissions did not even bring up the subject of payment.   After my mother was released from that place, I received a bill and paid it.

Hopefully, the cash-refusing nursing home is just an anomaly.  But it is something to be on guard against, in case it turns out to be the beginning of a trend.  In particular, in selecting a supplemental insurance policy, it might be a good idea to find out how much it covers of skilled nursing care.

There is one more thing you need to know about skilled nursing facilities.  A lot of nursing homes have waiting lists.  If you are hoping to get your mother into a nursing home, it may take months to get her admitted.  And I am not just talking about the really nice nursing homes for rich people, the ones that do not accept Medicaid, like the first place my mother stayed in. I once took a tour of a nursing home that looked like a cheap hotel where they rent rooms by the hour.  And they had a waiting list!  But if your mother enters a nursing home directly from the hospital, by way of the skilled nursing unit, she will move to the front of the line.  In fact, once she has a room there, they are unlikely to ask her to leave, should it turn out that she needs long-term care.

Officially, everyone is treated equally.  It is whispered, however, that when it comes to waiting lists, preference is often given to those who can pay privately for a while.  The reimbursement from Medicaid is not generous.  A Medicaid bed is better than an empty bed, but not that much better.  With too many Medicaid beds, a nursing home may end up having to close its doors.  It needs a certain proportion of the more remunerative private-pay beds in order to cover its costs.  Therefore, a prospective applicant who can pay privately for many months is more desirable than one who needs to get on Medicaid right away.  So, if you need to put your mother in a nursing home, and she can pay privately for a while, you should casually mention this fact when talking to the person in charge of admissions.

Now that I think about it, it might not be a bad idea to have one of those Mad Men money clips after all.