History of Church Tithing

Marian joined her church in 1990.  From that time on, she made tithed 10% of her income and other contributions to support her church.  Her giving of first fruits continued even after she became ill.  When she could no longer remain home, she sold her house and donated 10% of the proceeds to the Church. 

Need for Medicaid / SoonerCare

Marian was out of money by the end of 2016.  Medicare does not pay for long-term nursing home care.  Her income was insufficient to cover the cost of her nursing home.  In fact, she the cost exceeded her income by about $4,000 per month.  She had no choice but to file for Medicaid.  Medicaid, a separate program from Medicare,  pays the difference between her income and the nursing home’s reimbursement rate.  SoonerCare is Oklahoma’s version of Medicaid.

Medicaid Application and Examination

Medicaid is needs based program.  A person with too many countable assets will be denied.  In the past, people gave away property in order to qualify for this benefit.  In order to prevent intentional impoverishment, strict rules were adopted.  Now when anybody applies for Medicaid, the Department of Human Services (DHS) case worker is required to obtain financial records for the past 60 months.  The purpose is to attempt to determine whether assets were given away to become qualified to receive Medicaid or without receiving something of equal value in return.  Unfortunately, DHS is likely to treat all donations as improper gifts.

Church Giving Treated and Improper

In Marian’s case, she had given about $14,000 to her church over the past 60 months.  DHS used that amount to calculate a “penalty period”.  The penalty period is the length of time an applicant must wait before benefits are paid.    It is calculated by dividing the value of the property given away by $144.67[i] to determine the number of penalty period days.  This meant that she would not be eligible for benefits until 96 days after she was broke.  Either the family must come up with the difference; the facility eats the cost or the resident faces eviction.

Appeal to Fair Hearing Judge

Fortunately, the caseworker’s decision is appealable.  A Fair Hearing allows an applicant to file a request a hearing if DHS denies an application or imposes penalty period.  Marian requested a hearing because the rule say:

 A penalty would not apply if the individual can show satisfactorily that the intent was to dispose of assets at fair market value or that the transfer was exclusively for a purpose other than eligibility.

Because of Marian’s faithful pattern of tithing the Fair Hearing Judge agreed that no penalty should be imposed.  However, if Marian suddenly began giving as her health declined, the decision may have gone against her.

Conclusion

Planning is the best tool to avoid a bad result.  In fact, many families can save a significant amount of resources just by knowing the rules.  Having an attorney experienced in Medicaid laws can help avoid denials and penalties.

 

 

 

[i] 2017 rate.

About Richard Winblad

Richard Winblad is a lifelong Oklahoma City Metro resident with a law practice focused on Elder Law and Estate Planning. His practice focus helping seniors and veterans by giving sound legal estate planning advice including Medicaid Estate Planning and Veteran’s Benefit Qualification. In 1984, Richard graduated from OSU with an undergraduate degree in Business he later sought and earned a Law Degree from the University of Oklahoma in 1992. His practice is based in Edmond and is held in a beautiful pre-statehood home close to UCO at 102 E. Thatcher. He is president of the Oklahoma City Commercial Lawyers Association, a group that provides legal an ethical training for attorneys. He is also a member of “Lawyers with Purpose”, an organization that provides in depth training and support to attorneys who practice in the area of elder law. He received an AV Preeminent® rating by his peers through Martindale-Hubbell® Peer Review Ratings™. Dedicated to educating the public, Richard does workshops and presentations all around the state for professionals and laypersons. These programs provide vital information to our veterans and seniors as they look forward in planning living and financial needs that fit their desires.

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