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LegalGems
LegalGems, Attorney
Category: Estate Law
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Experience:  Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
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My Dad is currently in a nursing home in Indiana with a community

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My Dad is currently in a nursing home in Indiana with a community spouse at home. My parents have US Savings Bonds Series EE issued prior to 2000. According to Indiana Medicaid law section 2615.45.00 Series EE bonds issued prior to 11/9/2002 only the paid amount can be considered as resource. Does the interest on these bonds count as a resource after six months and if there is a community spouse who has their name on the bond cash them in later on?

LegalGems :

Hi; My goal is to provide you with great service - if you have any questions during our chat, please ask! I'll do my best to ensure your satisfaction! Thank you for your question. These types of bonds are often used in medicaid planning, because pursuant to the statute, the bond is not considered an asset at the time of the application (for medicaid eligibility) since they cannot be cashed in for 6 months , but after the application is approved, then the named spouse may redeem the bond. The idea is that the asset is not counted for 6 months after purchase because it cannot be redeemed during that period. If the individual applies for medicaid after the 6 month period, then the bond is evaluated as to its availability and value. So any interest accrued would be counted as a resource.

Customer:

So since all of these bonds were issued in the 80's and 90's the entire amount would count as a resource for eligibility purposes under Medicaid. Correct?

LegalGems :

Yes, that would be correct - as a resource, even the interest (as opposed to income).

Customer:

Then I have a problem Medicaid approved my Dad in Feb for Medicaid and they received all of this information at the time of application. They are now wanting to terminate his coverage effective 9/1 apparently based on an error on their part in their initial review. So I guess I will hope they do not ask for a refund since it is over $40000 and my parents do not have that amount.

LegalGems :

If there are available assets, they are likely to request a refund. However, there are hardship waivers - let me see if that would apply, because these typically aren't processed until the estate recovery process beings (post-death).

Customer:

Okay, my Dad is a two person assist right now so I guess I will sit down with the caseworker and see where we go from here. Thank you for your assistance.

LegalGems :

You are welcome. Please see the attached link http://www.in.gov/fssa/ompp/3446.htm, and click on hardship exception 54167. This is generally used for property that was transferred in the period prior to eligibility determination, however, it may be worthwhile to complete under these circumstances, claiming hardship if the eligibility is revoked and/or refund is sought (even though the asset was not actually transferred). This is the most applicable document I can find.

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