According to sources, roughly 44 million adult caregivers provide some unpaid care to adults and seniors with disabilities. Those receiving services are elderly parents, disabled spouses, or another elderly family member. In these types of arrangements, family members care for their loved ones until they are no longer able to do so. Sometimes it is the inability to physically care for their loved one brings about a move, and other times family members are simply unable to continue paying for their care. At that point, many families look to Medicaid to supplement the care.
But one often overlooked aspect of Medicaid planning is the possibility that a loved one will not qualify for Medicaid because of health and financial management services received prior to one’s application.
Family members who accept the responsibility for this care often sacrifice employment opportunities, give up daily activities, and make expensive home modifications to make such care possible. One important tool for such individuals to keep in mind is a caregiver agreement. Such agreements ensure that compensation received for services isn’t counted against their loved one when they go to apply for Medicaid.
Under current Medicaid rules, care provided by family members is presumed to be out of “love and affection,” so that providing money to caregivers in these situations would prevent eligibility for Medicaid for a period of time.
Without a properly drafted caretaker agreement, Medicaid will consider any money paid to the caregiver as uncompensated transfers and a period a nine months of ineligibility for Medicaid will follow. This will make the caregiver responsible for nursing home costs for up to nine months if their loved one beings to need those services.
Caregiver agreements set up the terms of compensation for caregivers who provide care and property management services. Their main function is to eliminate the penalty by making the reimbursement payments into “for value” transfers.
A good caregiver agreement will define the duties of each party as specifically as possible. It will distinguish between personal care services and property management services, clearly define the compensation method, describing the hourly rate and estimated time spent on various tasks.
In our next post, we’ll continue this topic and make several more suggestions concerning the use of caregiver agreements.
Source: Times Beacon Record, “Caretaker agreement for Medicaid planning” Nancy Burner, 16 Feb 2011.