That’s a tough one. If you prepare a detailed affidavit concerning the transactions and especially if you have your mother’s notes from when you lent her the money, as well as checks from you to her, Medicaid should accept the $2,000 as repayment of a loan. Without that kind of proof, the Medicaid agency may not accept your explanation and may treat the repayment as an asset transfer. I’d advise making your case as best you can just in case you’re successful.
For more on Medicaid's rules, click here.