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Regarding million dollar hospital bill, remaining assets, SSI and Chapter 7

Prologik 707 153 August 15, 2015 at 10:34 AM in Finance (4)
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I'll try to be concise as possible. Four days ago I got out of hospital with over 1 million in debt (I'm doing ok now). I've been out of work the past 3.5 years, staying with my mother while still paying my 1K mortgage on my home of 12 years in another state. I've been living off my savings these past years and was just about to go back to work when I got sick. Now I am unable to work and the hospital is representing me for SSI for free. I vaguely remember signing something allowing them to do this for me. (Is there anything nefarious there?) Yesterday I closed my retirement and other accounts, leaving enough to pay my mortgage through the end of this year. Now I have about 60K I don't want to give to the hospital or anyone else. I want to know the best way I can protect that money, which will probably be about 40K after fees and income tax. I can give it to my mom for back rent and loans, but then she'd have to pay income tax on it and if she ever gave me some money down the road, I'd have to pay income tax on it again. Getting taxed 3 times on the same money doesn't sound very slick to me. Should I spend it, I do need a car? Just hold on to the various checks for a year or so? I can't find anything on the net. As far as my assets in my house, can I write a bill of sale for the entire contents in exchange for future rent to my mother? And as far as the house, which I care the least about, I know I can quick sale it back to my mortgage company some day before the end of the year, but by then I'm not sure I'll be able to protect the equity. I thank you in advance for any and all help.

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#2
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Last edited by narnaie August 15, 2015 at 11:32 AM
#3
I am really sorry to hear about this...

With your story... I personally know of two other people who have over one million dollars in hospital bills. One is recent like yours...

My advice was to go on Obama Care before he went to the hospital, he did not listen, the hospital said they will work with hime... 2.5 years 9 surgeries later... he has a bill of over one million... this guy is to poor even to go bankrupt.

I have a cousin that got burned (literally), she had an inheritance of about $125K, somehow her parents hid that money from her and she never paid a penny for her hospital bill. She spent 6 months in the hospital (before Obama Care) had no insurance... but she was a very nice person, so nice that she had her own room in the hospital for 5.5 months... go figure, someone that pays gets to share a room with three other people.

My question to you... why did you not go on Obama Care before you went into the hospital?
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#4
Thanks for the info, but I'm not worried about the hospital getting my meager 60K (40K after fees and taxes), I'm trying to figure out what to do with it because I can't have that and get SSI (I'm in my 40's and now I can't work, so getting SSI is pretty important to me) and the government program that will cover the hospital bill. Hospital administrator already said I qualify for the debt forgiveness program, I just cant have that much in my bank. So I need to figure out what to do with what little I have left and not just forfeit it.
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I usually use 0.1% of my brain to reply comment here, sorry. laugh out loud
#5
Take the 40k remaining and put it under your mattress.
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#6
Quote from Prologik View Post :
Thanks for the info, but I'm not worried about the hospital getting my meager 60K (40K after fees and taxes), I'm trying to figure out what to do with it because I can't have that and get SSI (I'm in my 40's and now I can't work, so getting SSI is pretty important to me) and the government program that will cover the hospital bill. Hospital administrator already said I qualify for the debt forgiveness program, I just cant have that much in my bank. So I need to figure out what to do with what little I have left and not just forfeit it.
Man, I really wish you had talked to a medicaid lawyer before doing anything. Or at least posted here on SD. Wink

I'm no lawyer and the following is just me BSing on a Saturday night. Insert all possible disclaimers and boilerplate....

If I were you, I wouldn't have closed my retirement accounts. Since those accounts are shielded. They were untouchable. Now that you took them out, that money is no longer protected.

Instead of SSI, why don't you apply for medicaid. Under Obamacare, medicaid is not based on assets anymore. It's purely income based. If you are under a certain income, you qualify for medicaid. Medicaid has a 3 month look back. So you can apply and be approved for it now and it will cover all medical expenses for the previous 3 months.

Did they bring this up at the hospital? Although it seems that some hospitals are behind the curve on medicaid. I was in an ER recently and listened to the staff talk to the person in the next bed about medicaid. They were quizzing her on all her assets including her cars to see if she qualified. There is no asset requirement at all anymore. Even if you are a billionaire but have little income you can qualify for medicaid.
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#7
What state are you in? California has a bill they passed "Assembly Bill 774" about 9 years ago or so regarding hospital fair billing practices for the uninsured or under insured as well as charity programs if you are under 350% of the federal poverty line.

As already noted keeping that money in retirement would of protected it.
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#8
The eligibility rules for Supplemental Security Income requires you to have no more than $2,000 in assets. But, not everything counts as an asset. Almost everything you'll need to know about how to qualify for SSI can be found here [disabilitysecrets.com] and here [ssa.gov]. Be careful with giving assets away as it may likely disqualify you for SSI for up to three years.

Concerning Medicaid, similar situation. Medicaid is intended for those who have very little. You'll likely need to what's called a "Medicaid spend down" in order to qualify for Medicaid. In other words, again, they'll likely consider you to have too many assets to qualify right away for Medicaid and will require you to reduce your assets. Read up on Medicaid spend down [nolo.com] process to learn more about what's considered a countable asset vs. a noncountable asset.
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Last edited by Brian1 August 15, 2015 at 11:44 PM

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#9
Quote from ghostofposterspast View Post :
Man, I really wish you had talked to a medicaid lawyer before doing anything. Or at least posted here on SD. Wink

I'm no lawyer and the following is just me BSing on a Saturday night. Insert all possible disclaimers and boilerplate....

If I were you, I wouldn't have closed my retirement accounts. Since those accounts are shielded. They were untouchable. Now that you took them out, that money is no longer protected.

Instead of SSI, why don't you apply for medicaid. Under Obamacare, medicaid is not based on assets anymore. It's purely income based. If you are under a certain income, you qualify for medicaid. Medicaid has a 3 month look back. So you can apply and be approved for it now and it will cover all medical expenses for the previous 3 months.

Did they bring this up at the hospital? Although it seems that some hospitals are behind the curve on medicaid. I was in an ER recently and listened to the staff talk to the person in the next bed about medicaid. They were quizzing her on all her assets including her cars to see if she qualified. There is no asset requirement at all anymore. Even if you are a billionaire but have little income you can qualify for medicaid.
That is true that its not based on assets anymore, however if you are decease anything you owned is now owned by the government if you get medicaid (unless I am wrong I believe that didn't change). As mentioned that was basically the point of Obama care to have affordable health insurance which I wish they keep improving it since it still has some big flaws, but check into that OP as a lot have mentioned.
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#10
Quote from gpister View Post :
That is true that its not based on assets anymore, however if you are decease anything you owned is now owned by the government if you get medicaid (unless I am wrong I believe that didn't change). As mentioned that was basically the point of Obama care to have affordable health insurance which I wish they keep improving it since it still has some big flaws, but check into that OP as a lot have mentioned.
That's only true if you are on medicaid when you are 55 or older. Expanded medicaid is part of Obamacare. That's why I said that OP should talk to a medicaid lawyer. There are ways to shield you assets from medicaid asset recovery. Primarily, putting your assets into a trust. Asset recovery has been on the books forever, but historically this hasn't been an issue since people on medicaid had no assets. But since the asset requirement was removed, that's no longer the case.

As for why it's 55 or older, I think that's when people start being placed into nursing homes. The intent of the law was to recovery assets for long term care which is quite expensive. About $100,000/year. Also, they don't take everything you owe, they basically become a creditor for the estate. So if they only paid out $1,000 they aren't going to take the whole house. They might take the house, sell it, take their $1,000 and then give the estate back the rest. Here's something everyone should do. Put your parent's house into a trust. Sooner or later, if they need long term care, they will be on medicaid. Even paid health insurance, and even long term care insurance, will run out sooner than you think for long term care.
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Last edited by ghostofposterspast August 16, 2015 at 09:05 AM
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#11
Quote from Brian1 View Post :
Concerning Medicaid, similar situation. Medicaid is intended for those who have very little. You'll likely need to what's called a "Medicaid spend down" in order to qualify for Medicaid. In other words, again, they'll likely consider you to have too many assets to qualify right away for Medicaid and will require you to reduce your assets. Read up on Medicaid spend down [nolo.com] process to learn more about what's considered a countable asset vs. a noncountable asset.
That's not true. All that is outdated information. That was before Obamacare. Now, there is no asset requirement. It's solely income based. There is no need for any "spend down". That's why I was dismayed those hospital social workers were quizzing her like there is. The are still working under the old requirements which have been out of date for almost 2 years.

http://www.medicaid.gov/medicaid-...ility.html
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#12
Quote from ghostofposterspast View Post :
Man, I really wish you had talked to a medicaid lawyer before doing anything. Or at least posted here on SD. Wink

I'm no lawyer and the following is just me BSing on a Saturday night. Insert all possible disclaimers and boilerplate....

If I were you, I wouldn't have closed my retirement accounts. Since those accounts are shielded. They were untouchable. Now that you took them out, that money is no longer protected.

Instead of SSI, why don't you apply for medicaid. Under Obamacare, medicaid is not based on assets anymore. It's purely income based. If you are under a certain income, you qualify for medicaid. Medicaid has a 3 month look back. So you can apply and be approved for it now and it will cover all medical expenses for the previous 3 months.

Did they bring this up at the hospital? Although it seems that some hospitals are behind the curve on medicaid. I was in an ER recently and listened to the staff talk to the person in the next bed about medicaid. They were quizzing her on all her assets including her cars to see if she qualified. There is no asset requirement at all anymore. Even if you are a billionaire but have little income you can qualify for medicaid.

I personally don't think he cares about the bill...

Just like the person who I know... they don't care, cause they don't plan to pay a penny. It's all about them and no one else.

In the end it is the tax dollar that pays for this... to bad he did not sign up for Obama Care
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#13
I'd take the money in cash or else give it to someone you trust, but are not related to. If it ever comes down to court or bankruptcy, they will ask what happened to the money so you will perjure yourself if you lie. If you leave it in your name anywhere it can be seized.

Also why pay taxes on the $60k? Structure your withdrawals so you are under the limit for paying taxes if possible over a period of a couple years. Usually retirement money is not seizeable in a court civil debt action.
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E finita la cuccagna

Liberals want you to think like them, Conservatives just want you to think!
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#14
Quote from ghostofposterspast View Post :
That's not true. All that is outdated information. That was before Obamacare. Now, there is no asset requirement. It's solely income based. There is no need for any "spend down". That's why I was dismayed those hospital social workers were quizzing her like there is. The are still working under the old requirements which have been out of date for almost 2 years.

http://www.medicaid.gov/medicaid-...ility.html
I checked on this and you're right. While the option of a Medicaid spend down is still a very real thing [medicare.gov] some people need to do in order to be eligible for Medicaid, due to Obamacare now it is only to reduce their income, not their assets. Thanks for the correction.
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