Medicaid & Assets (long!)
I've lurked on these boards but never posted; I am looking for information about asset management in Medicaid. I know that each state has its own regulations for Medicaid, but know that several members have helped their parents and am hoping someone can point me in the right direction on some questions.
My parents are pretty young- 64 years old, but my dad is in very poor health. My mom, thankfully, is very healthy (knock on wood.) I moved back home to help with caregiving, but currently my dad is in the nursing home for rehab. We are not sure if he is well enough to recover his strength so that he can come back home. We are hopefully, but uncertain.
My dad does not have one specific diagnosis. He has the multiple symptoms of end-stage diabetes (e.g. dialysis, heart problems, has lost one leg and has chronic wounds in the other leg). He has very good days and very bad days. However, while there is a general slow deterioration, there is no set course. He may make it back home, or he may not be able to get strong enough to be back home. He was in the nursing home in the summer, and we thought he might not be able to come home at that time; instead, he came home and did very well- way beyond our expectations- until a simple, routine surgery had a life-threatening outcome, which put him in the hospital and back in the nursing home. Maybe he can recover and do as well as he was previously? We just don't know. It is possible, though unlikely, that there is no need to even worry about the questions below- maybe he will recover and do well for the next few years? We are generally hoping for the best but planning for the worst.
I am posting this because we (my mom, me, and my younger sister, with support also from my fiance) are trying to figure out how best to handle things financially. My parents are currently OK financially. They have a paid off home and no debts. My mom continues to work. My dad was a public school teacher and has good health insurance (thank God!!!), and a pension. So far, so good.
Now, if Dad is not able to recover enough strength to come home, he will soon begin the Medicaid spend-down, where he will go through his assets until they are exhausted before Medicaid will kick in. Since a lot of his money was in his 401k, he now has considerably less to go through then he did a year ago. My understanding is that Medicaid looks back over the past 5 years to ensure that no assets were transferred in an attempt to avoid the spend-down.
Here are my questions. My parents have some $$ saved for me and my sister, namely wedding funds and college funds (I am already through college).
1. These funds are in both my parents' names, so they will need to spent-down before Medicaid kicks in, yes?
2. Are college and weddings considered "Reasonable Expenses" when Medicaid looks back over the past 5 years?
3. My sister is currently in college and I am going to be married this coming July. My parents have given my sister the money, then she pays the bills. They would like to give us the money directly so that we can decide how to spend it on the wedding (we are unbelievably fortunate!!) However, if my parents are not paying the bills directly, it may look like my parents did, indeed, transfer large sums of money, and if so, will that get them into trouble with Medicaid?
4. I have read that individuals are able to give some money each year as gifts, I think it is something like $12k/year without the recipient being taxed. Is this allowable under Medicaid as well- if these gifts are given (which would cover the wedding and college amounts), would Medicaid consider these a transfer of assets to avoid the spend-down?
Please know that we are not trying to find loop-holes or anything, we want everything to be totally above board. My mom works for a elder community and knows how important private pay is for assisted living/nursing homes- she is not looking to avoid the spend-down. She and my Dad just want to make sure that the money they saved specifically for my sister and me are used for these goals, if possible. Also, I want to add that we are all very thankful that we even have the need to ask these questions!! They are good "problems" to have, if having money to allocate if possible could even be considered a problem.
I have looked online to try to find the answers, but have not found an answer. I am not even sure who to contact to find out the answers, so any direction would be appreciated!