Millions of Americans will soon receive stimulus checks from the U.S. government, if not already, that are intended to help them cope with the economic consequences of combating the spread of the Coronavirus, or COVID-19. The funding comes from a $2 trillion stimulus package known as the CARES Act. While the assistance is desperately needed in light of safer-at-home orders and protective closures of non-essential businesses, the checks could also jeopardize Medicaid eligibility for nursing home residents who rely on the program.

The consequences could be disastrous. Imagine an elder parent whose Medicaid long-term care benefits are suspended or revoked simply because he or she receives a stimulus check. Through no fault of the senior, the assistance could lead to exceeding strict personal asset limits. The elder adult would not have the ability to pay his or her bills, and the nursing home would incur unpaid expenses and face an unwanted eviction scenario.

Medicaid caps “countable assets” at $2,000 for the institutionalized spouse in most states, including Florida. Coronavirus stimulus checks, however, range from $1,200 for individuals making under $75,000 a year, to $2,400 for married couples making under $150,000 a year. Seniors who rely on Social Security also qualify. The payments are actually refundable tax credits, meaning the IRS will send the check or make a direct deposit even if it is more than what is owed in federal income tax. In any case, one dollar over the $2,000 threshold and disqualification becomes a major concern.

A solution is for adult children to intervene and help aging parents spend the money quickly instead of letting it count toward a countable asset total. While rapidly spending stimulus assistance is critical, so is spending it on allowable items. For example, paying forward nursing home expenses is absolutely allowed. Indeed, it is exactly the sort of expense the stimulus is meant for. Other exempt items include: 

  • Pre-paid burial and funeral expenses
  • An automobile
  • Term life insurance
  • Furnishings and appliances
  • Paying off a loan or credit card debts
  • Personal items, such as clothing, shoes and even wedding rings

Of course, before making any of these purchases, it is best practice to consult with your elder law attorney. Know that Medicaid defines non-countable expenses as anything that would help a Medicaid applicant or enrollee, but that is not always clear and it is crucial to make sure if you are in doubt. If you or someone you know would like more information, do not wait to contact our law office today.