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She might have to spend down while she is medicaide pending but she will be in a nursing home and will get the care she needs and when she is eligdeable she will get on medicaide with no assets it will not be long until she gets on medicaide and the social worker should be able to help you with the paperwork and it is much easier for a parent than a spouseto get them on medicaide and after this occures you will be able to help others with the processe-it sure is a learning experience.
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That is a question that should be answered by the nursing home business office. They should walk you through the process. Here is the generic answer

If she has no assets both currently and through your states look-back period, and receives a total of $2096.00 from the VA & SS then she would probably qualify if she neded skilled care. If there were no assets there would be no spend-down, however she would be responsible for paying her 'share of cost' based on her income. So if the SNF monthly charges were $4096, and her income was $2096 her share of cost would be her monthly income less $35.00 spending money for a total $2041.00. In other words her checks go towards covering the costs

If she did have assets during the lookback period be prepared to document everything. A good thing to remember when you are providing documents to yours state medi-caid office is to keep 3 extra copies, send everything certified and when providing copies of any bank or financial statements give them ALL the pages even if the last one is blank (so check the page numbering - pg 1 of 4, means you would send 4 consecutive pages).
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Cat offers some really good advice about providing documents to the State but she is slightly incorrect with some of her figures.

To qualify for Medicaid requires your MIL to meet three sets of criteria: she must have a medical need, assets excluding a car and residence must be below $2000 and monthly income must be no more than $2022 (2009 limit).

Then it gets more complicated!

If any of your MIL's assets have been gifted or sold for less than fair market value since 2/7/06, her eligibility will be delayed based on a formula. If any transfers have been made, see an elder law attorney in your state for guidance.

Assuming no gifts have been made, the next question is whether the state is a so called "spend down" state or not. A "spend down state" determines income eligibility by first subtracting eligible medical expenses (like the cost of nursing home care) from the total income. If the balance is less than $2,022 your mother in law would be income eligible.

With the cost of NH care so high, if you're in a "spend down" State, Cat is correct. All but a very small portion of her income will go to the NH to cover her costs of care. Some States only allow a $35 personal needs allowance as Cat mentions. Others provide a bit more. Texas is $60.

If you're MIL lives in a "spend down" state, income qualification should be easy. If she lives in one of the twenty-one states that don't use the income spend down method, you may need a "Qualifying Income Trust" to get her financially eligible. Unless your State provides a prototype, you'll need to hire an attorney.

The business office managers should know if your MIL's State Medicaid program requires a "qualified income trust". For others reading this post, a word of caution: social workers and business office managers are not necessarily experts on your State's Medicaid rules. Be very careful relying on any advice they may offer. If you have any assets to speak of, have made any gifts or transfers of accounts or property or have income over the limit, spend a few bucks with an experienced elder law attorney. The peace of mind will be well worth the money
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I agree the elder lawyer is worth what you have to pay-ours put me on a retainer of 5 hrs and since I only used about 1 hr. I will be able to use him for paperwork concerning my husbands death-all social workers are not up on the medicaide rules they should be but do give wrong advice at times,
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Thanks for all the good information. She is hospice-enabled and in late stage dementia. She is in WI- which I think is a spend down state with a grandfathered 3 year lookback prior to Feb 2009. I believe any divestiture after 2/2009 has a 5 year lookback period. We are concerned about how the monthly income $2096 would play against NH costs which are $6500 per month. against the asset limit of $2000 +/-.
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