Caregiver's Home Companion

Posted February 14, 2007

Ask An Expert

Finances: Protecting Dad's Medicaid

Q. My dad is 91 and lives with my wife and me. We built him a room, but he paid for it. We do the following: feed him three meals a day, all his washing and ironing, fix his medicines, give him his medicine, help him with his bath, lay out all the clothes he wears, arrange doctor's appointments, get him to the doctor, get his prescriptions filled, clean his room (700 sq. ft.), change his bed, take him to get his hair cut, put him to bed at night, spend approximately three hours a day to keep him company, plus chauffeur him.

For this, can you tell me how much my dad can pay me each month and not have Medicaid disqualify him?


Wayne W., Alabama.

A. There are several key issues here that go beyond your question, so let’s tackle them one by one:

Medicaid provides health coverage for individuals with both medical needs and limited finances. Medicaid programs are available for those who are blind, disabled, in need of nursing home care, etc. Coverage, eligibility requirements and income limits vary from state-to-state and also from one program to the next.

One recent development in the Medicaid program is the "five year look back period." When an individual applies for Medicaid, their finances of the past five years are reviewed to ensure that they were not simply "giving away" their assets in order to qualify for Medicaid. The "look back period" is being done by Medicaid offices across the country.

To avoid being caught in the throes of a Medicaid denial, many families are seeking the advice of elder law attorneys as to how to legitimately "spend down" one’s resources or even give a gift to a family member. It’s extremely wise to become informed about all the options and possible consequences before taking any steps involving a transfer of your father’s money.

Some families are turning to "caregiver contracts" drawn up with the help of an elder law attorney. These contracts specify what kind of assistance is being provided by family members and how costs of such care were determined. The contracts also help to identify and resolve the matter of taxes -- because after all, you are then entering into an employment relationship with your father and -- and that means the IRS will want its due of tax money.

I recommend that you contact an elder law attorney for the specifics in your state. The attorney can instruct you both in the ways that your father can either "spend down" or transfer some assets to you without jeopardizing your father’s eligibility for Medicaid. Visit the National Academy of Elder Law Attorneys at for help in locating an elder law attorney in your area.


This answer is provided by Paula S. McCarron, a writer with more than 20 years of experience in healthcare, including nursing homes and hospice. Her writing includes extensive reporting on caregiver compensation issues. She lives in Chelmsford, Massachusetts.

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