Savings Game | Qualifying for Medicaid While Protecting Your Assets

 

One day, most of us are likely to have an elderly family member who needs round-the-clock care. Putting a transition plan in place now can save you significant money, time and headaches down the road. Medicaid, the state-federal health care program for the poor, pays for about half of all nursing home care in the U.S.

Diana Adams is an attorney in private practice in New York State doing eldercare law. She’s also currently applying for Medicaid for her elderly father. “If families are not prepared, the cost of long-term care is going to quickly absorb all the family’s assets,” she says. “This kind of issue is one of the reasons many middle-class people don’t end up with an inheritance.”

This column will focus on qualifying for Medicaid while protecting your assets. A future column will look at other options, such as long-term care insurance.

1) What can I keep?

When someone goes into a nursing home, he or she can retain up to $13,800 in assets. Any spouse or dependent, if still living independently, is entitled to keep his or her house and a car. On top of that, the so-called “community spouse” can also hold onto at least $21,912 and up to $109,560 of the couple’s joint assets. All of these figures increase with inflation each year and vary by state. You can also use some assets to purchase a prepaid funeral plan.

2) What might I lose?

Besides that house, car, funeral plan and sum of cash, everything else a couple owns is fair game to pay for nursing home care, which costs a median of $115,000 annually in New York state and $62,000 in Alabama.

When you apply for Medicaid, the state looks back at your financial records for five years to establish that you have no further money to pay for care out of pocket. If you put the title of your home in a child’s name or transfer money into a grandchild’s college fund during that five-year look-back period, the government is entitled to take those assets. They will even take the payoff on a life insurance policy. So if you have any reason to believe that someone in your family might need care within five years, now is the best time to hire an eldercare attorney and look into setting up a Medicaid trust or other transfer of assets to try to preserve your inheritance.

(If your relative has completed a major transfer of assets and is almost out of the 60-month look-back period when he or she must go into the nursing home, it might make financial sense to pay out of pocket for a few months before applying for Medicaid.)

3) What’s the application process like?

Most states maintain websites that give you an overview of the process. In brief, you need your Social Security number, tax returns to prove income from federal benefits or private pensions, information on your assets such as bank accounts and insurance policies, a marriage certificate (if any), proof of address such as a mortgage statement or piece of mail, and insurance and Medicare benefit cards. “These are much easier to get together when you’re not in an emergency situation — grandpa fell down the stairs,” says Adams. Most states have “enrollment facilitators” to help with the application; the numbers can be found on the website of your state department of health and human services or equivalent agency. You might also hire an attorney, which can cost hundreds of dollars an hour. Approval can take anywhere from weeks to months.

4) What happens next?

Once your relative is approved for Medicaid and safely placed in care, it’s time to turn your attention to the community spouse or dependent. “The situation changes quickly when the second spouse goes into a nursing home,” says Adams. Only $13,800 in assets can be retained, and the state has the right to put your home up for sale at a bargain-basement price. “Say Dad goes into a nursing home, and Mom stays in the house. You should right away do Medicaid planning for her and get everything out of her name. You could sell the house, or just transfer it to another family member who lets her stay there in an arrangement called a life estate.”

Be cautious and always consult a professional who is familiar with the laws in your particular state before attempting any steps to shield assets from Medicaid, be it a trust, a transfer or a gift. The Deficit Reduction Act of 2005 empowered states to take stronger-than-ever steps to cover Medicaid costs, and lawsuits are a real possibility

Solkoff Legal, P.A. counsels its clients on how to maximize Medicare and overall access to health care. The firm generally advises against enrolling in Medicare HMOs due to limitations on coverage. See our article on “Medicare and Medicare HMOs.” One negative of Medicare HMOs is that even if the limitations start affecting the quality of your care and your choices, you cannot just “get out” whenever you want.

You can join, switch, or drop a Medicare HMO (Advantage Plan):

• When you first become eligible for Medicare (3 months before you turn age 65 to 3 months after the month you turn age 65). If you get Medicare due to a disability, you can join during the 3 months before to 3 months after your 25th month of disability benefits (SSDi).
• From November 15–December 31 each year. Your new choice of coverage will begin on January 1 of the following year. If you have a Medicare HMO (Advantage Plan) and need to get out, this means that your disenrollment is not effective until the following January 1st at which point you would be back on straight Medicare.
• From January 1–March 31 of each year. However, you can’t add or change to a plan with prescription drug coverage during this time unless you already have Medicare prescription drug coverage. In certain situations, you may be able to join, switch, or drop Medicare HMOs (Advantage Plans) at other times (like if you move out of the service area, have both Medicare and Medicaid, or live in an institution).

As with all of the articles and information on this website, you should not rely upon this article as legal advice for you or any other specific person. There are many factors that must be weighed. You should take this information and then consult with Solkoff Legal, P.A. or another qualified firm in your area.

1. THOU SHALT NOT FEEL GUILTY!
2. THOU SHALT NOT IGNORE THY OWN HEALTH!
3. THOU SHALT NOT BE AFRAID TO ASK FOR HELP FROM FAMILY OR FRIENDS!
4. THOU SHALT NOT ALLOW ONESELF TO FEEL ISOLATED.  CALL UP A FRIEND OR FIND OUT ABOUT RESPITE CARE SO YOU CAN GET AWAY AND DO SOMETHING FUN!
5. THOU SHALT NOT DENY OCCASIONAL FEELINGS OF ANGER, RESENTMENT, FRUSTRATION.  THESE FEELINGS ARE NORMAL, AND THEY SHOULD BE RECOGNIZED.
6. THOU SHALT NOT BE AFRAID TO JOIN A SUPPORT GROUP.  IT REALLY HELPS TO BE WITH OTHERS WHO ARE IN SIMILAR SITUATIONS AS YOURSELF.  PLUS, IT GETS YOU OUT OF THE HOUSE.
7. THOU SHALT NOT FORGET TO KEEP THY SENSE OF HUMOR.
8. THOU SHALT NOT TAKE THY FEELINGS OF ANGER OUT ON THE PATIENT!
9. THOU SHALT REMEMBER TO TRY AND TAKE ONE DAY AT A TIME!
10. THOU SHALT NOT FEEL GUILTY!

 

Medicare is the national health insurance program for seniors over the age of 65. Medicare comes in parts.

• Part A is the primary hospital insurance component, which covers inpatient care in hospitals. It also covers hospice (end-of-life palliative care) and a very limited but important rehabilitation benefit for nursing homes and some home care.
• Part B covers other medically necessary services such as doctor visits and outpatient care.
• Part C allows you the choice of using a private health insurance company (HMO) instead of going directly through Medicare. It is really not even a part of Medicare but is instead another way of receiving similar services. More on Medicare HMOs in a moment.
• Medicare Part D is the newest addition to the “parts” of Medicare. Part D pays towards prescription drugs.
  Solkoff Legal, P.A. advises most of its clients to stay out of Medicare HMOs and to instead subscribe to Medicare with the addition of a Medicare Supplement Policy. This article explains why and how. As with all of the articles and information on this website, you should not rely upon this article as legal advice for you or any other specific person. There are many factors that must be weighed. You should take this information and then consult with Solkoff Legal, P.A. or another qualified firm in your area.

Medicare HMOs provide a full spectrum of health insurance benefits including a more inclusive prescription drug benefit than Part D alone. There is no premium to pay, only co-pays and deductibles. The theory behind a Medicare HMO is to ration health care among its members so as to provide a broad base of services overall. The HMOs also make deals with providers to get better pricing and/or service utilization agreements. Medicare HMOs can be a good choice for some because of its cost-effectiveness but there is a major trade off. Not all facilities, doctors or other health care providers will accept your Medicare HMO. This often creates significant problems in access to the health care of choice. You may not be able to go to your choice of nursing home or specialist.

There are very big differences among health care providers and facilities. Not all health care facilities and providers provide the same quality of care. Solkoff Legal, P.A. prefers its clients to have as much freedom of choice as possible in selecting the best health care providers and facilities.

Medicare A&B plus a good supplemental policy provides some of the best health insurance available today even as compared to private health insurance. Some people do not want to pay the premiums or cannot afford to pay the premiums for the Medicare Supplement policy and up going with Medicare HMOs. These HMOs are instead of Parts A, B and D. With Medicare and a good supplemental policy, people have freedom of choice in health care. Almost all of the providers people would ever want will accept Medicare but not all accept HMOs and fewer still would accept the one HMO chosen by the patient.

In later years, when we KNOW we will need more health care, our health insurance is not the place to scrimp and save. We can save money in other areas (as demonstrated by many other articles on this web site) but we should not give up freedom of choice in our health care unless we simply cannot afford the premiums for supplemental policies. As further incentive not to go with a Medicare HMO, know that even if you realize you made a big mistake, you can no longer easily get out of the HMO. There are now only certain periods of time when you can disenroll from the HMO and get back to Medicare.

To live as high a quality of life as possible in the face of aging and illness requires knowledge and resources. This course, rated among the most popular last session, offers actual take-away tools and knowledge that can save you big money, give you confidence, peace of mind and even laughter. With no selling of any services or products allowed, Delray Beach Florida Board Certified Attorney Scott Solkoff, author of bestselling books for lawyers on Elder Law, has put together a panel of top-notch professionals to pull back the curtain and reveal their top tips for succeeding in aging and caregiving.

All Classes are Tuesdays at 2:00 at the Ross JCC in Boynton Beach Florida:

October 18, 2012: Winning Life Course Overview: An Introduction for the Roadmap to Success in Aging and Caregiving: Scott Solkoff

October 25, 2012: Elder Law Estate Planning: It’s not just Wills & Trusts: Scott Solkoff

November 1, 2012: When a Loved One Needs Help: Planning for Peace and Success in Caregiving: David Levy

November 8, 2012: Talking to Your Doctor and Achieving Better Health: Stacey Shinder, M.D.

November 15, 2012: Planning for Costs & Quality of Care: Legal Protections for You and Your Savings – Part I: Scott Solkoff

November 22, 2012: Planning for Costs & Quality of Care: Legal Protections for You and Your Savings – Part 2: Scott Solkoff

November 29, 2012: Where Will I Live?: Learn how to live where you want for Independence and a Better Quality of Life, Panel to include: Ina Zimmerman, Barrington Terrace and Laurie Intondi, Ruth Rales Jewish Family Services

December 6, 2012: End of Life Planning: Part 1: Your Wishes Honored at End of Life (Hint: A Living Will is not enough): Dan Terner and Michelle Hollister

December 13, 2012: End of Life Planning Part 2: Getting Pre-Need Funeral Planning and Taking Care of Business (financial planning): Dan Terner, Phil Wishna & Paul Vattiato

December 20, 2012: Panel Discussion with “Winning Life” Instructors, including Q&A and roadmap to follow after course completion: All Instructors

Part 2 of Changes to Florida’s POA Laws

For a more detailed explanation of changes to Florida’s POA Laws, we’ve produced a longer video aimed at professionals in the field.

For the first time since 1995, Florida has made significant changes to its Power of Attorney Laws. We’ve published a summary video of the changes and a more detailed video designed for the estate planning or legal professional.

Scott Solkoff presents a – 4 minute – Summary Overview of Recent Changes to Florida’s Power of Attorney Law that went into effect October 1, 2011.

Over fifteen years ago, we created a successful and comprehensive method of protecting our clients’ assets against the costs of long-term care. With our planning, our clients legally and ethically obtain government benefits often worth hundreds of thousands of dollars to pay towards home care, assisted living and nursing home care. Instead of spending down to impoverishment and then going on Medicaid, our clients are able to keep their savings and get the benefits to get more and better care.

We literally wrote the book on Elder Law, authoring the bestselling text for lawyers nationally and in the State of Florida. We also developed a fixed fee structure where the client pays an agreed flat-fee that includes everything with no surprises and no hourly ratehe client knows exactly what the costs are up front. There are no hourly rates and no surprises down the road. Family Asset Protection Planning (FAPP) covers six different modalities the firm uses to help its clients:

(1) Asset protection in a long-term care context. Part of asset protection means the implementation of planning strategies designed to achieve eligibility for certain need–based government programs including certain Medicaid and Veteran’s benefits as appropriate and available.
(2) Estate Planning through the use of wills, trusts and different techniques of holding title, as appropriate. The goal of estate planning is to ensure that a client’s after-death wishes are honored but in such a way as to be consistent with the client’s asset protection goals. Most every client already comes with an estate plan (often as a referral from the estate planning attorney) but these plans typically need to be modified to meet the new objectives.
(3) Incapacity Planning is primarily directed to plan for what should happen if and as incapacity begins to affect a client and to deal with current incapacity issues. Regular durable power of attorneys do not suffice. Incapacity planning includes end-of-life health care decision-making, specialized powers of attorney and sometimes trusts and other devices.
(4) Protection against Estate Recovery is designed to prevent unnecessary loss of assets to the government upon the death of a Medicaid recipient.
(5) Application for Benefits: The firm will handle the application for public benefits by completing application materials and dealing with the government all the way through the eligibility determination. We show the government everything that we have done by opening the books and explaining the law to the government case workers.
(6) Guidance for Quality of Life: The firm is not a health care provider and we provide no medical advice. However, we have significant knowledge, experience and contacts within the elder care system. We leverage these benefits to the advantage of our clients through a structured process of providing non-clinical caregiving guidance.

Whether FAPP is right for you depends on many factors not covered in this article. The firm must pre-qualify prospective clients during an initial consultation.

The firm has an excellent track record of proven results and has earned a national reputation for our progress (“Google ” us to check out what others have to say!).

We can help achieve goals including Medicaid eligibility in weeks or months (no 5-year waiting periods necessary here).

To learn more and to see if our planning is right for you, set an initial consultation. When you call the office, you will be told what to expect and you will then shortly receive more information in the mail in advance of your meeting.

If you need the help, I hope we can guide you through the process. With experienced and caring attorneys and staff, we have put together a nationally recognized system and one that makes a tremendous difference in people’s lives. How fortunate I am to be in such a rewarding job. I personally invite you to come and meet us.