Tag Archives: 2012

Elder Law Success Story in Cincinnati

Elder law attorneys assist individuals and families in developing estate plans to avoid depleting their assets should they become ill and need long term care. For those individuals who are already in a nursing home, elder law attorneys can help them qualify for Medicaid benefits while maximizing the amount of money they are able keep.
When an individual comes into our Cincinnati, Blue Ash or West Chester offices after having placed their spouse in a nursing home, they are often fearful of having to spend one-half of all of their assets. It is a wonderful feeling to be able to tell them, “don’t worry…you can keep more of your life savings and still qualify your spouse for Medicaid.” Often times, however, by the time individuals meet with us, they have already needlessly spent thousands of dollars simply because they weren’t educated on the Medicaid rules.
Naturally, in times of crisis such as placing your loved one in a nursing home, an elder law attorney is not the first person with whom most people discuss their concerns. It is usually a social worker at a hospital or a nursing home, a family friend, neighbor or sometimes a financial planner. So, when a social worker or financial planner invests the time with families and recognizes the need for a person to seek the advice of an elder law attorney, this can mean not only saving the family thousands of dollars…but it can also mean giving the family total peace of mind.
Many of you on our mailing list have helped more families than you will ever realize. We thought we would take this opportunity to share with an examples of the difference you’ve made in their lives.
* * * * * *
Mr. and Mrs. Smith had assets (not including their home) of approximately $220,000.  Mrs. Smith entered a nursing home in July 2011 and paid her own way for one year. The family heard from a friend they could make annual gifts of $12,000 per year per person to each of their two children. So, they gifted $48,000 on their own — without any legal advice. When the family came to our office we advised them to return all the gifts they had made or else they would need to pay for another six months of nursing home expenses out of their own pocket. Next, we re-applied for Medicaid in July 2012. Mrs. Smith received Medicaid benefits immediately. In this case, due to the advice of the social worker (along with our legal assistance) the family was able to save over $64,000!

MEDICAID SPEND-DOWN

There is a great deal of confusion regarding the spend-down of assets for Medicaid qualification.

For a single person, who can only keep $1,500 in Ohio and $2,000 in Kentucky, that individual may find him or herself won­dering what the money can be spent on without causing any Medicaid disqualification.

Similarly, for a married couple, the rules are even more complex. The community spouse, (i.e. the at-home spouse) may generally keep roughly one-half of the couple’s assets up to a maximum of about $113,640. Depending upon their resources, again the couple may have a substantial amount of money which needs to be spent before the nursing home spouse qualifies for Medicaid.

That is often where the confusion begins. That’s because there is so much misinformation about what kinds of things the money can be spent on.

For someone who is pursuing Medicaid eligibility, the following are the types of spend-down items, in no particular order, which should be considered:

1. Purchase pre-paid funeral plans. The rules regard­ing funerals are complicated so you should only deal with a funeral home knowledgeable in this type of planning.

2. Make home improvements. Home improvements are often an excellent use of funds in a Medicaid spend-down. For instance, the community spouse might fix the roof, get a new air conditioning system, new carpeting, new furniture, etc. The intention here is to fix the house up so that, hopefully, no other home repairs will need to be done during the lifetime of either spouse. That is especially important since the community spouse will have to spend down one-half of his or her assets and may no longer have the resources necessary for large expenditures later.

3. Buy household goods or personal effects. Once again the intention is to have the community spouse get the types of things which are needed to keep the household running without major expenditures down the road.

4. Attorney, Accountant and other Professional Fees. Paying professional fees can be an effective way to access expert advice, while also helping achieve your spend-down.

These are, of course, not the only items that qualify. The main rule to keep in mind is that whatever goods or services are purchased must be done at fair market value.

Also, don’t let anyone tell you that anything spent must be done solely for the benefit of the nursing home-spouse. However, please bear in mind, that in the case of a married couple, the spend-down may only begin 30 days after the nursing home stay has started.

When Is The Right Time To Do Medicaid Planning?

Our office receives many calls from concerned loved ones and family members wondering if or when they should start Medicaid planning. The answer: It is never too early or too late to discuss the planning options available. Below is one example of the many types of calls we get every day where we advise clients that Medicaid planning is an option right now.

* * * * *
Mrs. Brown is an 81-year-old widow experiencing short-term memory loss. She is still able to live alone in her own home. Her income is $750 a month, she has a home worth $135,000 and other assets of approximately $60,000. She heard from a friend that she should give away all her assets now to her kids just in case she would ever need to go to a nursing home. Her friend told her that so long as she gives everything away more than five years before moving to nursing home, she’ll be able to qualify for Medicaid without having to spenddown any of her assets.

Unfortunately, there are many problems with the advice Mrs. Brown’s friend gave her. First, Mrs. Brown may need nursing home care in less than five years. Due to this large transfer being made within the five year look back period, she will now be ineligible for Medicaid and will have no funds to pay for her own care. Once the money and house are transferred to her children, those assets actually belong to the children – no strings attached. Even if the children are trustworthy, and would be willing to give the money back if Mrs. Brown needed nursing home care, once the assets are in their names, the assets are subject to their creditors. One of the children could be sued or go through a divorce. Since the assets are in the children’s names, a lawsuit, tax problems, or a divorce could easily wipe out mom’s life savings, as well as leave her without her home.

Also, keep in mind that Mrs. Brown may never need nursing home care. Rather, she may need to make a move to an assisted living facility. Medicaid does not always cover the cost of care in an assisted living facility. Therefore, it’s important that Mrs. Brown hang on to her assets while she’s still relatively healthy so she can have the freedom and independence to pay for the level of care she needs when she needs it.

In this scenario, we would advise Mrs. Brown to get the proper estate planning documents in place so her children could act on her behalf in the event of incapacity, and to avoid probate in the event of her death. Depending on the family dynamics and Mrs. Brown’s prognosis, we may advise some of type of gift trust planning.

Medicare Coverage for Nursing Home Stays

Medicare provides up to 100 days of skilled nursing home coverage. However, in order to qualify, you must first have a 3 night inpatient hospital stay – observation status does not count.

In addition, the patient must receive a skilled level of care in the nursing facility. In general, this means the resident must receive daily rehabilitation services.

Coverage is free for 20 days. For 2012, days 21-100 have a daily co-pay of $144.50 per day. If the resident carries a Medicare Supplement policy, then this co-pay may be covered under the policy.

A new 100 day period begins if the patient has not received skilled care for 60 consecutive days.

Medicaid Releases Updated 2012 Numbers

The Medicaid numbers for 2012 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

  • Minimum Monthly Maintenance Needs Allowance: $1,839
  • Maximum Monthly Maintenance Needs Allowance: $2,841
  • Minimum Community Spousal Resource Allowance: $22,728
  • Maximum Community Spouse Resource Allowance: $113,640
  • Excess Shelter Standard: $552
  • Standard Utility Allowance: $599
For the nursing home resident, the numbers are:
  • Monthly Personal Needs Allowance: $40
  • Resource Allowance for an Individual: $1,500

For purposes of calculating the penalty for gifts made within five years, the number is as follws:

  • Average Private Pay Rate: $6,023

Medicare Skilled Nursing Facility Co-Insurance

  • (Days 21 to 100 per benefit period): $ 144.50