Alternatives to Nursing Homes as Nursing Home Populations Swell With Younger Patients - Part 2

 

One of the main reasons cited for this movement of younger people into nursing homes are the budget cuts most states face in Medicare and Medicaid.  In the long term, it is more cost efficient to care for a younger person in their home with part time caretakers.  However, in the short term, this is a more expensive way of treating patients, as the caregivers need to be hired and trained.  In the budget crunch most states are experiencing, short term funding takes priority over long term spending.   Younger people are being moved into nursing homes earlier, as in the short term, this is a more economically viable way of treating them.

According to a study by the AARP Public Policy Institute, the cost of at home care is about a third the cost of providing care in a nursing home or institution.  Many states, however, simply do not have the funding for at home care in their Medicaid programs.

One of the most telling quotes about the movement of younger people to nursing homes is:

“Over the past 20 years, federal laws and policies have established a civil right to get long-term care at home. But NPR's investigation found that is only sporadically enforced.

More than 60 percent of what states spend on long-term care for the elderly and disabled goes to pay for people — like Michelle Fridley — to live in a nursing home. The amount spent on home-based care has grown steadily, but not nearly enough to meet the need. Nationwide, there are some 400,000 people on state waiting lists for home-based care, double the number 10 years ago.”

Frequently attorney’s like our firm, that specialize in caring for the elderly, and those that have long term care needs, must be engaged to support a patient’s right to at home care.  In 1999, the right to at home care was clearly established in the Supreme Court, in the “Olmstead Case”.   In that decision, the Supreme Court stated that the unnecessary institutionalization of people with disabilities is  a form of discrimination.

 

To be continued…

PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE Part 2

Cohen & Oalican, LLP discuss:


PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE

Part 2 of 7

Noncountable does not mean Protected

A home with equity of less than $750,000 is considered a noncountable asset. Without proper planning, at death the State will have a lien against your house and Medicaid will seek reimbursement for benefits provided. On the other hand, there are steps you can take to avoid a Medicaid lien and protect your home, saving hundreds of thousands of dollars.

Although the risk of a Medicaid lien is very real, the good news is that Medicaid will not force you to sell your house if you enter a nursing home. As long as a Medicaid applicant indicates on their application that they intend to return home, Medicaid will not force the sale of the house. This is a subjective question and it does not matter whether there is any realistic chance that the person actually will be able to return home.

Many people think the best way to protect their home is to give it outright to their children. Although this may sound like the simplest solution -- it may be the worst choice. Transferring a home outright to children can result in large capital gains taxes. Secondly, things can happen to children that can place the house at risk. What happens if a child gets divorced, is sued or has creditor problems? Seniors have been literally forced out of their own home as a result of ‘gifting’ their house to their children. There are several strategies available which will protect the house from Medicaid but also protect your right to live in the house. However, before you consider transferring your house, you have to understand the Medicaid transfer rules.

Be sure to consult with one of the attorneys at the offices of Cohen Oalican, LLP to create your Medicaid plan

This has been Part 2 in a series of 7, brought to you by Cohen & Oalican LLP, Elder Law Attorneys Boston, Raynham, Andover

Protecting your house from the cost of nursing home care - Part 1

Cohen & Oalican discuss Part 1 of 7

PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE



Introduction

For must of us, our home is our most valuable asset. “Value” refers both to how much money you would receive if you sold your house but perhaps more importantly, value describes the emotional attachments we hold for the place we live and raise our families. When we first meet with our clients we typically ask what they are most worried about. The overwhelming majority tell us that they want to protect their home. “I don’t want to lose my house, if I go to a nursing home” is an often repeated refrain.

There is a great deal of confusion regarding what will happen to your house if you enter a nursing home. Some people have the good fortune of being wealthy enough to pay privately for their care. Although when nursing homes typically cost $100,000 a year, most of us are not that lucky. Others had the foresight to buy long-term care insurance. However, most of our clients are not wealthy enough to pay for their care and they either cannot afford insurance, or are not qualified. The remaining choice is Medicaid.

The first basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $2,000 in "countable" assets in his or her name. "Countable" assets generally include everything you own, except for your home (if it is located in Massachusetts and it has equity less than $750,000). Everything else,(second homes, retirement savings, life insurance) is counted and may have to be spent down before you can obtain eligibility. Although Medicaid will consider your home to be a noncountable asset it is important to understand that does not mean your home is protected.

This has been Part 1 in a series of 7, brought to you by Cohen & Oalican LLP, Elder Law Attorneys Boston, Raynham, Andover

Financing Nursing Home Care - FAQ

1. Will Medicare pay for the cost of my care if I need nursing home care?

No.

Medicare will only pay for a maximum of 100 days in the skilled nursing facility if you meet certain requirements. You must have moved to the nursing home within 30 days of the hospital discharge and the hospital stay must have lasted at least three (3) days. Also, if you receive a skilled level of care, Medicare will pay completely for the first twenty (20) days. For days twenty-one (21) through 100, they will pay less a co-payment, which is set each year. In most situations, people receive less than the full 100 days of benefits. After that point, you either have to pay privately with your own funds or obtain Medicaid eligibility.

2. If my spouse requires Medicaid, will I lose all of my assets?

No.

Medicaid will allow a spouse living in the community to keep their home and a modest amount of the couple’s savings. However, Medicaid does cap the amount of assets the spouse in the community can keep regardless of whose name the assets were in when the couple first applied. For this reason, it is critically important for a couple to speak with an elder law attorney to ensure that the assets are protected.

3. Will my homestead declaration protect my house if my spouse or I need Medicaid benefits?

No.

A homestead declaration filed with the Registry of Deeds offers no protection in the Medicaid context.

4. If I give away my assets, will this make ineligible for five (5) years?

Perhaps.

With careful planning, it is possible to shorten the ineligibility period so that it is less than five (5) years. In addition, there are many exceptions to the Medicaid rules. Where there is no transfer penalty imposed by Medicaid, however, you need to work with a qualified elder law attorney to identify these planning opportunities.

For further information call one of our attorneys at Cohen & Oalican, LLP Boston, Andover or Raynham.

Protecting Your Spouse/Assets/Annuities

Cohen & Oalican LLP, Boston, Raynham and Andover Present:

The Final Article in the Series "Protecting Your Assets from the Cost of Nursing Home Care"

Protecting Your Spouse/Assets

Medicaid law provides for special protections for the spouse of a nursing home resident, known in the law as the "community" spouse. The spouse of a Medicaid applicant is entitled to keep a portion of the couple’s assets. The community spouse is entitled to keep a maximum of $109,560 (2010 figures). This assessment is not affected whether the assets are jointly held by the couple or they are all in the name of the nursing home spouse. For example, if a couple owns $75,000 in countable assets on the date the applicant enters a hospital, the community spouse will be entitled to a resource allowance of $75,000. If they have $250,000, the community spouse can keep the maximum of $109,560.

Protecting Your Spouse/Annuities

One means of protecting assets for the community spouse is through the purchase of an annuity. The purchase of an annuity transforms excess assets that would otherwise make the nursing home spouse ineligible for Medicaid into a non-countable stream of income for the community spouse. In other words, we can typically protect all of a couple’s savings for the at-home spouse and obtain Medicaid eligibility for the nursing home spouse, even at the last minute through the purchase of a Medicaid qualified annuity. However, the annuity does not need to be purchased ahead of time. In fact, the annuity should not be purchased until the spouse enters a nursing home.

Conclusion

The possibility for a spouse or parent to need nursing home care is the greatest financial risk facing most seniors. Given the State’s tightening budget, it has become even more difficult to obtain Medicaid eligibility and protect your assets. For your own peace of mind, it’s more important than ever to hire an experienced Elder Law Attorney to create a comprehensive Asset Protection Plan to preserve all that you have worked for.

Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP, Boston, Raynham and Andover Present Part 3: The Transfer Penalty and the Look-Back



The Transfer Penalty and the Look-Back


If you give away your assets it will make you and your spouse ineligible for Medicaid benefits for up to five years. When you apply for benefits, Medicaid reviews five years of bank statements in order to identify any disqualifying transfers. This is known as the “look-back period.” Any transfers that happened before the five year period are protected and do not have to be reported to Medicaid. However, if you apply for benefits during the look-back period, Medicaid imposes one month of ineligibility for approximately every $8,000 you give away. In addition, the clock does not start “ticking” on the ineligibility period until you are in a nursing and have spent down your assets. The easiest way to explain the transfer rules is by way of an example. Let’s assume Mrs. Smith transfers $24,000 to her grandson on March 15, 2009. On April 15, 2010, Mrs. Smith suffers a stroke and is admitted to a nursing home. Assume she spends down her assets below $2,000 as of August 2010. Because she would be applying during the look-back period, Medicaid would impose three months of ineligibility ($24,000 ÷ $8,000 = 3 months). The transfer penalty would not start until August 1, 2010 and would end in November 2010.

In Part 4 Cohen & Oalican will discuss Protecting Your Spouse/Assets


Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP, Boston, Raynham and Andover PResent Part 2: The Home


The Home

Homes with equity of less than $750,000 are not considered a noncountable asset. However this does not mean that the house is protected. Without proper planning, at death the State will have a lien against your house and at death Medicaid will seek reimbursement for benefits provided. With proper legal planning you can avoid a Medicaid lien and protect your home saving hundreds of thousands of dollars. Many people think the best way to protect their home is to give it outright to their children. Although this may sound like the simplest solution -- it may be the worst choice. Transferring a home outright to children can result in large capital gains taxes. Secondly, things can happen to children that can place the house at risk. What happens if a child gets divorced, is sued or has creditor problems? Seniors have been literally forced out of their own home as a result of ‘gifting’ their house to their children. One strategy our office uses to protect homes from the Medicaid lien is an irrevocable trust. An irrevocable trust can protect your home from a Medicaid lien and avoid the risks of outright gifts.

In Part 3 Cohen & Oalican will discuss The Transfer Penalty and the Look-Back

Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP present Part 1 The Asset Rules

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Nobody wants to think of the possibility of entering a nursing home. But the truth is, if you ignore this issue you are putting your spouse’s financial security, your life savings, your home and your children’s inheritance at risk. Nursing homes in Massachusetts cost approximately $10,000 a month. Most people don’t realize that traditional health insurance policies and Medicare provide little or no long term care coverage, but Medicaid coverage is very different. With proper planning and the right legal guidance, most married middle-class seniors,
who have accumulated savings and a house, could be eligible for Medicaid to help pay some or all of their long term care costs. Unfortunately many seniors, who pay privately for nursing home care, spend their life savings until they have nothing left – and only then do they believe they are eligible for Medicaid (the program is called MassHealth in Massachusetts).

The Medicaid rules are complicated and include many traps for the unwary. An experienced elder law attorney can help you navigate through the Medicaid maze protecting your family’s savings and home.

The Asset Rules

The first basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $2,000 in "countable" assets in his or her name. "Countable" assets generally include everything you own, except for the applicant's home (if it is located in Massachusetts and it has equity less than $750,000). Everything else,(second homes, retirement savings, life insurance) is counted and may have to be spent down before you can obtain eligibility.

In Part 2 Cohen & Oalican will discuss The Home

Cohen & Oalican provide a full spectrum of services for the elderly, for disabled adults, and for the families.

Elderlaw and reverse mortgages - Cohen & Oalican., LLP

In our last blog we mentioned a New York Times series focusing on retirement. These articles serve to raise awareness and to inform people of the importance of making financial decisions based on their specific needs and Medicaid Planning. The most recent article in the series dealt with reverse mortgages. As many of you may know, a reverse mortgage is a loan with a bank, where the bank pays the homeowner either monthly or in a lump sum, compared with a typical mortgage where the homeowner makes monthly payments to the bank. For some clients a reverse mortgage can be a terrific estate planning tool to make funds available to keep an elder in their home. However, the New York Times points out that reverse mortgages are not appropriate for everyone.

Reverse mortgages have very high closing costs, sometimes as high as eight percent of the loan. Questions consumers should ask to determine if a reverse mortgage is their best option:
How long do you plan to stay in your home? If you plan to stay home for just a couple of years, other kinds of loans might make more sense.
What do you plan to use the money for? If you are using the money for a vacation or plan to invest the funds, do not proceed with a reverse mortgage.

If you have any questions pertaining to Medicaid, guardianship, conservatorship or other elder law issues, please feel free to contact us Cohen & Oalican, LLP

Facing the Realties of Long-Term Care

Cohen & Oalican, LLP; Medicaid, MassHealth and Elderlaw Attorneys in Boston, Andover, Raynham.

On Thursday, October 23, 2008, the New York Times included a Special Section entitled "Retirement" containing a number of interesting and informative articles. Given the present financial crisis and the resulting uncertainties we face, it is more important than ever to be well informed about financial and legal issues which may impact our families and to do some medicaid planning. We encourage you to read these articles as well as other articles which impact seniors at the New York Times website.
"Young Workers Must Face Realties of Long-Term Care" focuses on the the need for baby boomers, many of whom are caring for elderly parents, to consider their own potential need for long-term care in the future. Faced with the rising costs of nursing home residence and the present economic crisis, this article answers basic questions concerning long-term-care insurance: when to buy coverage, where to buy coverage, how much coverage is needed, etc. The full article can be accessed at the following link: Article.


This series, brought to you by Boston Attorneys Cohen & Oalican, LLP, specializing in Guardianship and Conservatorship Attorneys in Boston. Posted by Elder Law Boston Lawyer

Protecting your Primary Residence with Changes to MassHealth (Medicaid) laws

Elder law attorneys Cohen & Oalican of Boston, Andover and Raynham want to alert you that on February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which significantly changes the federal Medicaid laws. The three most important changes concern: 1) the transfer of assets to qualify for Medicaid; 2) Medicaid annuities; and 3) Medicaid’s treatment of the primary residence. This article covers the changes in Medicaid annuities.


The Primary Residence

In the past, Medicaid did not count the value of an applicant’s home in determining eligibility. This meant that an individual did not need to sell his or her home, regardless of value, in order to qualify for Medicaid. Under the new rules, however, a house valued at over $500,000 is now counted in determining Medicaid eligibility. (Massachusetts has the option of increasing this threshold to $750,000.) Under the new rules, a single person whose home is worth more than $500,000 cannot qualify for Medicaid unless he or she agrees to sell the house. However, even under the new rules, a house continues to be non-countable if a spouse, disabled or blind child, or child under the age of 21 lives there.

Conclusion

As you can see, these changes dramatically alter the Medicaid program. Nursing homes will have to work closely with residents and their families to ensure that residents are able to smoothly transition from paying privately to receiving Medical Assistance from MassHealth. As always, our office is available to answer your questions or to provide any assistance you may need.
If you would like to review the full text of the law, go to http://thomas.loc.gov/, and enter "S. 1932" in the “search bill” text box.


This is the final article in a series regarding changes the Deficit Reduction Act of 2005 has made in dealing with Medicaid (MassHealth). Thank you for putting your trust in our Elder Law legal practice, Cohen & Oalican, LLP

Medicaid Planning - Boston Attorneys - Conclusion

The possibility for a spouse or parent to need nursing home care is the greatest financial risk facing most seniors. Given Massachusetts' tightening budget, it has become even more difficult to obtain Medicaid eligibility and protect your assets. For your own peace of mind, it’s more important than ever to hire an experienced Elder Law Attorney to create a comprehensive Asset Protection Plan to preserve all that you have worked for.