As many of us are aware, the federal guidelines allow Medicaid applicants to transfer their home to a child caregiver without suffering a Medicaid penalty for the transfer. It is a transfer often attempted by families in the Medicaid application process. It is also a transfer that often fails to meet the requirements necessary for the Medicaid agency to acknowledge the transfer under the child caregiver exemption.
The federal guidelines for the transfer remain somewhat vague, declaring that each state must develop “reasonable standards … for determining eligibility for and the extent of medical assistance,” and that the individual must “fulfill the criteria established by the State in which he lives.” 42 USCA 1396a(a)(17)(A), 453 US 34. This makes it of critical importance that we look to our individual state laws for the specific guidelines necessary. It is also crucial that our clients provide the documentation necessary to prove they acted properly as a caregiver for the parent for at least two consecutive years prior to the transfer.
Generally, individual states require that the child caregiver has resided in the parent’s home for at least two consecutive years immediately preceding the institutionalization of the parent AND provided full-time care for the parent who would otherwise have required institutional care for that entire time period. This is a very specific burden to meet. Just last month, the Superior Court of New Jersey held that a transfer made to a child caregiver who had taken care of her parent for five years prior to institutionalization and met all other requirements of the rule was not valid because the parent had left the nursing home and resided with her son for five months prior to moving back to the nursing home and making the transfer to the daughter. MK v. Dep’t of Human Services, Superior Ct of NJ, Docket No. A-0790-14T3.
So, what must we ensure that our clients have in order to make the transfer? First, we as attorneys must have a clear understanding of the Medicaid guidelines in our own states. Then we need to be sure our clients obtain, and we review, the required documentation. The Medicaid Child Caregiver Exemption generally requires the following documentation.
1. Doctor’s letter
I immediately require that my clients bring me the letter from the doctor as soon as they indicate they may qualify for the exemption. I encourage them to have the doctor state all conditions that the parent suffers from, the time period the parent has suffered from those conditions, and that BUT FOR THE CARE OF THE CHILD, the period of time the parent would have required institutional care. Medicaid may, after reviewing the doctor’s letter, request medical records; however, they do not generally need to be provided without Medicaid requesting them.
2. Proof of child’s address
To qualify for the exemption, the child is required to have lived in the parent’s home for the two years IMMEDIATELY preceding the institutionalization. The fact that the child owns a home and spent part of the time there may pose an issue. Any break in living together in the parent’s home may pose issues as it did in the New Jersey case.
3. Proof of relationship
If the child has a different last name than the parent, he or she needs to be prepared to present a birth certificate in order to prove relationship. Step-children generally do not qualify for the child caregiver exemption.
4. Proof the child provided full-time care
Medicaid may also ask for the past two years of tax returns. Clients may run into an issue here if they worked during the past two years. Generally, the exemption disallows any occupation other than acting as caregiver for the parent. However, in some states, part-time work outside the home is allowed when another child was providing services, or a caregiver was hired, during that time period.
Again, the first step in successfully transferring a home under the child caregiver exemption is knowing the rules of your jurisdiction. Second, we must make sure our clients can actually provide us with the proof required to meet Medicaid’s standards. Often, it is the second prong where we run into trouble. Medicaid rules are often not malleable, and documentation must prove that each prong of the state standard is met.
If you want to learn more about Lawyers With Purpose and make sure you keep up on the latest and great in the estate and elder law arena, subscribe to our blog and we'll deliver content right to your in-box: https://blog.lawyerswithpurpose.com/
Kimberly Brannon, Technical-Legal & Software Trainer - Lawyers With Purpose