CLOSE
Tags Posts tagged with "Medicaid"

Medicaid

by -
0 1358
A common concern is that after paying premiums on a long-term care policy for years, it will never be accessed for care. Stock photo

By Nancy Burner, ESQ.

Nancy Burner, Esq.

With the ever-changing health care landscape both federally and on a state level, and the aging of the baby boomers, it may be time to take a second look at long-term care insurance. Historically, New York State residents have had the opportunity to receive long-term care benefits through the Medicaid program.

New York has been one of the most generous states in providing care for disabled and aged residents. But you do not have to be a health care expert to see that state and federal budgets are threatening to curtail Medicaid benefits, and many current programs cannot be relied upon to provide the same amount of care that they have in the past.

To battle these changes, a proper estate plan should provide an arsenal to protect against catastrophic health care costs. It is often advisable to consider all available resources when putting together a long-term care estate plan.

We do not have a crystal ball that will show the future of Medicaid or what the needs of each individual will be. But we do know that the baby boomers represent a critical mass of individuals moving toward unprecedented longevity.

In addition, we know that a large percentage of these individuals living longer will likely need care. Further, while many baby boomers and their relatives traditionally cared for aging parents, the economics facing future generations shows that third-party caregivers will be the norm, not the exception.

For clients facing these looming questions of who will provide care, where will the care be provided and how will it be paid for, long-term care insurance is one possible solution. Prudent estate planning may require putting together a team of professionals to help make decisions to protect your assets and autonomy, regardless of what the future holds. This team may include an elder law attorney, financial advisor and an insurance professional. Working together, they can provide you with options for protecting assets to avail yourself of public benefits, preserving and growing assets and purchasing insurance products that make sense in your plan.

Long-term care insurance can often pay for home care assistance or the cost of a nursing facility. If you start accessing your long-term care benefit while living at home and then transition into a nursing facility, the proper planning could make a huge difference in the amount paid toward the cost of care.

Also, many individuals do estate/elder law planning by creating irrevocable trusts, which commences the five-year look-back period for Medicaid nursing home care. They purchase long-term care insurance to cover the initial five-syear period.

Some clients find themselves in a position where they have high income and therefore fear that they will never qualify for Medicaid. Some have income that exceeds the lower Medicaid rate charged by the facility. This leaves them in the dubious position of not qualifying for Medicaid and therefore forced to pay the higher private pay rate.

Needless to say, current daily rates for nursing home care can be financially ruinous. Fortunately, there is a federal law that states that if an individual is eligible for Medicaid but for the fact that their monthly income exceeds the Medicaid rate at the nursing facility, the facility must allow that individual to pay privately at the Medicaid rate. This offers a large savings in the cost of nursing care; and, in the final analysis, the individual is never a Medicaid recipient.

The income of the individual can include Social Security payments, pensions, distributions from retirement assets, payouts on a long-term care policy, etc. With proper long-term care planning, the assets could be protected in an irrevocable Medicaid asset protection trust while the income is being used to pay for the facility.

While many will need long-term care in their lifetime, not everyone will require prolonged care. A common concern is that after paying premiums on a long-term care policy for years, it will never be accessed for care. It’s the age-old problem of paying for insurance that they hope they will never use. This creates a mental bias against insurance to pay for that kind of care.

Individuals prefer to believe that they will never need long-term care. For those with this concern, there are new policies commonly referred to as “hybrid policies.” These are life insurance policies with a long-term care rider attached. In this way, you can access the policy to cover the cost of care while living, but heirs can receive a death benefit if it is not used up. Some polices also allow the insured to cancel the policy and receive their investment back at any time.

The bottom line is that the landscape is ever changing, the assumptions we relied upon have changed, and if you plan on living long, you need to live and plan smarter. Maybe it’s time to reconsider long-term care insurance. If you can qualify medically and you can afford it, it may be just another necessary tool in your arsenal of weapons for “aging in place” and with autonomy. It may not be for everyone but it could be right for you. Take a second look.

Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office.

by -
0 1353

By Nancy Burner, Esq.

What does “look-back” mean? What is spousal refusal? Will Medicaid take my house if my husband has to go into a nursing home? All too often these are the questions we hear from our clients who are faced with navigating the Medicaid landscape once a crisis occurs. 

In New York State, the Medicaid program can provide a source of payment for those who are financially eligible and require care, either in a nursing facility or in their own home. In order to be eligible for Chronic Care Medicaid (payment for nursing home care), an individual must meet certain income and asset requirements.

To start, the applicant may have no more than $14,850 in liquid nonqualified (nonretirement) assets in their name. They may have qualified (retirement) assets in an unlimited amount provided they are taking a monthly distribution. 

When applying, the Department of Social Services will require a full financial accounting from both the applicant and his spouse for the five years immediately prior.  This is what is often referred to as the look-back. The purpose of this investigation is to determine among other things whether any transfers were made during this time period that would affect eligibility. The rule is that for every $12,390 that was transferred, a one-month penalty will be imposed.

For example, if in the financial review it is discovered that the applicant gifted $40,000 to his children during the look-back period, a determination will be made that imposes a penalty for roughly three months. This means that Medicaid will not pay for the first three months of nursing care, and the family will be responsible to pay privately. The aggregate result of this type of penalty is roughly a dollar-for-dollar penalty, meaning that for each dollar that you transfer you will have to pay a like amount in nursing home care should the need arise. This rule applies unless the transfer is considered an exempt transfer.  Transfers that are exempt do not create a penalty and therefore do not affect Medicaid eligibility. In New York State, transfers to spouses are exempt under the provisions of spousal refusal.

We use the term “spousal refusal” when the community spouse (the spouse who is not institutionalized) chooses not to contribute to the cost of care for an institutionalized spouse. This means that the institutionalized spouse cannot be denied Medicaid because the community spouse refuses to contribute. Moreover, the above penalties cannot be assessed due to the fact that the signing of a spousal refusal makes it such that the transfer is an exempt transfer.  The refusing spouse must still provide any and all financial information and cooperate fully with the Medicaid application. It is important to note that once Medicaid is approved, the county does have the right to seek recovery against the community spouse. Other exempt transfers include transfers to disabled children, transfers of the primary residence to a caretaker child and finally transfers of a primary residence to a sibling with an equity interest. 

With respect to income, an applicant for Chronic Care Medicaid may only keep $50.00 of his income monthly. His spouse may retain the greater of (1) all of his or her own income or (2) all of his or her income and enough of the institutionalized spouse’s income to bring them to $2,980.50. 

Community Medicaid is the program that covers care at home.  This program will cover the cost of a personal care aide to assist with activities of daily living such as bathing, cooking, dressing, etc. The program may also cover day programs, transportation to medical appointments, assisted living programs and some durable medical equipment and supplies. For 2015, an individual applying for Community Medicaid can have no more than $14,850, not including their home, in nonqualified (nonretirement) liquid assets. They may have qualified (retirement) assets in an unlimited amount, provided they are taking a monthly distribution. 

It is important to realize that the home is an exempt resource while the Community Medicaid recipient is alive; however, additional estate planning should be considered to avoid a Medicaid lien after the recipient’s death. While these limitations may seem daunting, the good news is that there is no look-back period. That means someone looking to get care at home can transfer assets in one month and be eligible for Community Medicaid the following month with no penalty assessed for the transfer of assets. 

With respect to income, an applicant for Community Medicaid may have no more than $845 per month.  An individual with an income over the $845 can opt to use a Pooled Income Trust. The excess income would be paid to a pooled trust company, and the trustees of the trust would pay expenses for the benefit of the applicant.

As you can see from this brief overview of Medicaid, there are many options available for care when the need arises. Make sure you are seeking advice from those knowledgeable in the area to make sure that you are getting the care that you require without sacrificing all that you have worked for.

Nancy Burner, Esq. has practiced elder law and estate planning for more than 25 years.

by -
0 1470

By Nancy Burner, ESQ.

For most of us, if a time comes when we need assistance, the preferred option would be to remain at home and receive whatever care services we needed in our familiar setting surrounded by family. For many, the Community-Based Long-Term Care Program, commonly referred to as Community Medicaid, makes that an affordable and therefore viable option.

Oftentimes we meet with families who are under the impression that they will not qualify for these services through the Medicaid program due to their income and assets. In most cases, that is not the case. Although an applicant for Community Medicaid must meet the necessary income and assets levels, oftentimes with planning we are able to assist in making an individual eligible with little wait.

An individual who is applying for homecare Medicaid may have no more than $14,850 in nonretirement liquid assets. Retirement assets will not be counted as a resource as long as the applicant is receiving monthly distributions from the account. An irrevocable prepaid burial fund is also permitted as an exempt resource. The primary residence is an exempt asset during the lifetime of the Medicaid recipient. However, when the applicant owns a home, it is advisable to consider additional estate planning to ensure that the home will be protected once the Medicaid recipient passes away. 

Although the home is considered an exempt resource as long as the Medicaid recipient is living in it, once the applicant passes, Medicaid can assert a lien on the home if it passes through the probate estate. One way to avoid this is to ensure that at the time of the death of the applicant no assets pass through the probate estate; this can be achieved by transferring the home to a trust. Once this is done, the home will pass to the intended beneficiaries without a probate proceeding and without an opportunity for Medicaid to seek recovery against the home. 

With respect to income, an applicant for Medicaid is permitted to keep $825 per month in income plus a $20 disregard. However, where the applicant has income that exceeds that $845 threshold, a Pooled Income Trust can be established to preserve the applicant’s excess income and direct it to a fund where it can be used to pay his or her household bills.  It is important to note that there is no “look back” for Community Medicaid. This means that for most people, with minimal planning, both the income and asset requirements can be met with a minimal waiting period allowing families to mitigate the cost of caring for their loved ones at home, in many cases making aging in place an option.   

Individuals looking for coverage for the cost of a home health aide must be able to show that they require assistance with their activities of daily living. Some examples of activities of daily living include dressing, bathing, toileting, ambulating and feeding.

Community Medicaid will not provide care services where the only need is supervisory; therefore, it is important to establish an assistive need with the tasks listed above. Once this need is established, the amount of hours awarded will depend upon the frequency with which assistance with the tasks are necessary. 

For example, an individual who only needs help dressing and bathing may receive minimal coverage during the scheduled times, maybe two hours in the morning and two hours in the evening. Contrast that with an individual who requires assistance with ambulating and toileting. Because these tasks are considered “unscheduled,” the hours awarded will be maximized.

In fact, where the need is established, the Medicaid program can provide care for up to 24 hours per day, seven days per week. Once approved, the individual may be enrolled in a managed long-term care company. The MLTC may also cover adult day health care programs, transportation to and from nonemergency medical appointments and medical supplies such as diapers, pull-ups, chux and durable medical equipment.

The Community-Based Medicaid Program is invaluable for many seniors who wish to age in place but are unable to do so without some level of assistance.

Nancy Burner, Esq. has practiced elder law and estate planning for 25 years.

Prev12Page 2 of 2
TBR News Media is your local news and entertainment website.
We provide you with the latest breaking news and information for your community.
Contact us: [email protected]

Most Viewed

©