One woman's story demonstrates a problem with elderly care that is all too common.
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Marge is angry.
This island retiree says the state’s Department of Human Services is cheating people like herself by failing to fully disclose important rules that provide how and under what conditions the government can try to collect reimbursements for long-term care paid for by Medicaid. (Marge is identified only by her first name in order to avoid complicating her ongoing dealings with the state system.)
Marge says she found out too late that an obscure legal provision would have allowed her to take title to her mother’s home and shield it from a state lien that will eventually force the property to be sold in order to repay every penny of the medical costs that have been paid by Medicaid.
Brochures about the Medicaid reimbursement process provided by the state contained information about other exemptions which did not apply in Marge’s case, but failed to even mention one for caregiver children that would have benefited her.
“The caregivers are the ones who work so hard, and the state is screwing them,” Marge said. “That’s the thing I’m upset about.”
With the aging of the Baby Boomers, more and more people are finding themselves up against the Medicaid bureaucracy as the long-term care provider of last resort.
Jim Pietsch, director of the University of Hawaii’s Elder Law Program, says Marge’s story demonstrates the bureaucratic labyrinth and maze of Medicaid laws and regulations has become “way too complicated for the normal person.”
“It shouldn’t be that way,” Pietsch said.
Marge decided to retire a decade ago, in large part to care for aging family members.
“At that time, my parents were getting sick, my uncle was getting sick, and they were all getting old,” Marge said.
After her dad died in 2007, she moved into the family home in Kalihi and became her mother’s primary caregiver, allowing her to remain in her own home (and, at the same time, saving Medicaid lots of money in the process). A stroke finally forced her mom into a nursing facility several years later, a move which quickly drained her remaining savings.
“I paid for her care with her money, and when that ran out, I filled out the forms and got her qualified for Medicaid so that she could stay in the nursing home,” Marge said.
“I tried taking her home again after all the rehab,” Marge said.
“I got her home, but she didn’t want to walk,” Marge said. “I told her, ‘you know, there are only the two of us. I can’t lift you any more by myself. I can’t take care of you if you don’t walk.’”
Less than 24 hours passed before Marge had to call 9-1-1 for assistance after her mother ended up on the floor, unable or unwilling to move.
Then it was back into the nursing home and onto Medicaid.
The Medicaid program provides long-term care, including nursing home care, for those who are eligible, including those over 65 who meet strict financial requirements.
Marge said her mother became eligible when the value of her savings and other assets fell below $2,000.
But then there was grandfather’s house.
The house, which sits on just under 5,000 feet of land in Kalihi, was purchased by Marge’s grandparents in early part of the 20th century. It passed jointly to her mother and uncle, and finally to her mom.
“She was so proud my grandfather gave her the house,” Marge said.
“I was born there during WWII,” she said, recalling that most houses in the area were organized into camps.
The Royal Hawaiian Band used to practice across the street, and she remembers colorful election campaigns when political rallies were candidates would hold forth while neighbors enjoyed music and food.
Marge said her mother wanted to transfer the house to her, but she demurred.
“I don’t want to be, like, cheating the government,” Marge now says. “I always felt, if you have assets, you maybe should use that money for your care. And I didn’t want to cheat my mom by taking her property, because, to me, that belongs to her.”
And there are those Medicaid rules, which don’t allow you to just give your savings and other assets away to family and friends in order to fall below the $2,000 asset limit.
The rules generally provide that major assets transferred within a five-year “look back” period have to be counted when determining whether an applicant is under the asset limit and eligible for Medicaid. So even if Marge had wanted to transfer the house into her own name in order to shield it from the process, it appeared to be too late.
Federal law requires states to pursue reimbursement for the costs of nursing home care. One method is for states to place a lien on homes owned by Medicaid patients in nursing care. Then when they die, or the home is eventually sold, the state will claim some or all of the proceeds as reimbursement for its previous payments.
Following the Rules
After her mother was approved for Medicaid, Marge started receiving notices about the lien process.
“The brochure said I could stay in the house because because I was the caregiver for at least two years before my mom had to move to the nursing home,” Marge said. “I could stay in the house until I die or until I sell the property.”
The brochure also described some instances when liens are not allowed. For example, liens can’t be used if a spouse, a dependent child under 21, or a disabled child of any age live in the house.
But since those didn’t apply to her, Marge understood that she would be allowed to continue living in the family home even after her mother’s death, but the lien would have to be paid off when she dies or the house is sold.
“I read all the lien papers they sent me,” Marge said. “I thought the brochure was supposed to be the whole truth.”
“Then they sent me a form saying I relinquished my rights.”
“What rights?” Marge wondered. “But they said if I don’t turn it in, my mom won’t qualify, and she’ll probably get thrown out of the nursing home. So I signed.”
Then in May 2013, Marge read a column in the Hawaii Herald by a local lawyer specializing in estate planning. There she learned of the “caregiver child” exemption, which allows a Medicaid applicant to transfer their home without penalty to a child who has been caring for them. The home would then not be subject to a state lien.
“When I found out the state wasn’t truthful, and all the papers they sent me failed to mention this exemption, it was like a stab in the back,” she said. “I’m trying to listen and be good, follow the rules, and do it according to the law, but the state’s legal papers are cheating me out of my rights. It’s a right, and they are supposed to let you know.”
“It may be too late for me, but let other people know,” she urged.
Jim Pietsch of the Elder Law Program could not say whether anything can be done at this point for people like Marge who were not informed of their legal rights during the lien process. However, he said a small industry has grown up to guide applicants and their families through the Medicaid system, and urged people to seek out expert advice and assistance.
The University of Hawaii Elder Law Program can be reached at 956-6544. Its publication, “WHAT’S NEXT?”: A Legal Handbook For Hawai`i’s Older Persons, Families, and Other Caregivers, is available for download.