Spousal Impoverishment Protections in Medicaid Home Care Program Help All Ages

NAELA has been at the forefront of keeping the Spousal Impoverishment Protections in the Medicaid Home Care Program (HCBS) that were included in the Affordable Care Act.  So far, with great effort, it’s working.

It’s important for disabled people who are under 65 and who meet the nursing facility level of care to recognize that these protections are out there. The “level of care” standard is generally thought of as needing assistance with three of six of the basic ADL’s, called activities of daily living. The disability community worries a lot about the “marriage penalty” in SSI, and this is a real and legitimate concern.  But in New Jersey, if it’s homecare that’s preeminent, marrying your significant other should not necessarily prevent you from keeping your Medicaid/MLTSS benefits.  Spouses are allowed to keep certain exempt assets, and all of their income from working and other sources, without affecting the Medicaid applicant’s eligibility.

Sometimes when a disabled person is used to being on one kind of Medicaid eligibility, they accept what their caseworker says about what they can and can’t do.  Never take what a Medicaid worker says at face value!  Speak with an elder law attorney and get that critical second opinion.  You may not even realize what creative planning options are out there!

Call for advice on Medicaid applications, asset protection and appeals ………. 732-382-6070

Warning!! Watch out for Medicaid Traps when setting up an Irrevocable Prepaid Funeral Contract

When “spending down” excess resources in connection with an application for Medicaid benefits under the MLTSS program, the individual frequently purchases an irrevocable, prepaid funeral contract, because such a contract is treated as an “excluded resource” under the rules of the program. These contracts are set up by the funeral home, and the individual looks through a menu of items and selects their choices for the pre-arrangements. Once the contract is paid for, the individual cannot revoke it and cannot get back the money. Typically, a funeral arrangement will include a casket, preparation and transportation of the body, hearse, limousine, pallbearers, use of funeral home’s chapel space for visitation or service, and whatever is needed for a memorial service such as clergy, music, flowers, guest sign-in book, prayer cards, and sometimes a religious icon that is placed on the casket.

Medicaid applications are filed after the individual’s non-excluded resources (assets) are below the limits set by the MLTSS program. The application is processed by the County Board of Social Services. This summer, our clients have received notices from certain County Boards that various prepaid items in the irrevocable contract are still being counted as resources because they are “for the living” and not “for the funeral for the deceased.” Needless to say, this has come as a shock and in some cases results in the County Board rejecting the application due to “excess resources”  in spite of the fact that the applicant has no access to the money paid for those items.

Believe it or not, we have seen cases in which the County is trying to disallow an exclusion for the payment made for pallbearers ($50 each), clergy ($500), cost of the room for the viewing ($800), and the memorial package that includes guestbook ($30), prayer cards ($45). The Counties are relying on the instruction written in the New Jersey  State Med-Com No. 18-08, since the State’s regulation [N.J.A.C. 10:71-4.4.(b) 9 ] is not explicit as to what would be disallowed. Med-Com 18-08 Funeral Trusts

If the available resources of the applicant (and spouse, if any) are very close to the resource limit, counting the few bucks that are no longer accessible because they are part of the irrevocable funeral contract can be disastrous — the county would deny the application due to “excess resources,” leaving the applicant (and spouse) potentially liable for nursing home bills that run over $10,000 per month until the resources are below the limits and a new application can be filed. In my opinion, though, what should happen, at most, is the imposition of a transfer-of-assets penalty (see N.J.A.C. 10:71-4.10) because money has been placed into an irrevocable trust that cannot pay out benefits during the lifetime of the applicant (see N.J.A.C. 10:71-4.11).That penalty period would run from the time of the application, assuming all other criteria have been met.

I say this because the State’s definition of a “resource” is that it is an asset that “could be converted to cash” and is “available” to the individual. See N.J.A.C. 10:71-4.1(b) and (c). Clearly, the assets held in the irrevocable funeral trust are not “available” at all during the lifetime of the individual. Therefore, they cannot and should not be counted as “resources.”

Review these issues carefully when setting up the prepaid funeral trust. Certain expenses might have to be paid separately by a third party such as a family  member, and not included as part of what the irrevocable contract covers, or should be expressly delineated as having been paid for separately by someone else.

 

Call us for legal advice and representation on  Medicaid spend-downs, applications and appeals ……….. 732-382-6070

 

The Governor has a Medicaid system improvement bill on his desk

If you or any of your colleagues, friends, or family members are in support of improving the system for Medicaid eligibility determinations, you should call the Governor’s Office  of new jersey’s Governor Murphy at 609.292.6000 and request that the Governor sign A4569/S499 into law. pass on this information to people you know who are interested in this issue.

According to BillTrack50, in its Bill Summary, This bill “requires the Commissioner of Human Services to develop an information technology platform for the intake, processing, and tracking of applications for benefits under the Medicaid and NJ FamilyCare programs.” Among other things, “The goals of the system will be: to simplify the applications and eligibility determination processes for both applicants and eligibility determination staff; to standardize application of eligibility policy across the various agencies responsible for eligibility determination; to allow for real-time tracking of the status of applications.”

At our Firm, we prepare and file Medicaid applications for the MLTSS long-term care Medicaid programs in nursing homes, assisted living and community care settings. It’s an incredibly complex process, since five years of transaction records are required, substantial evidence can be required for certain things, it can be challenging to explain transactions that occurred several years prior, and there seem to be many unwritten procedures and policies which vary a bit county by county. There are many legal pitfalls that can occur for an individual client that need particularized attention. Applications are regularly turned down due to insufficient evidence or failure to submit everything that is required. Applicants with alzheimers and other cognitive deterioration may not be able to recall or retrieve the necessary information.

Simplifying the application process would be great. This bill is a step ahead for monitoring and uniformity.

  • Implementation of the bill would bring accountability and uniformity to the Medicaid application system, in-line with the Governor’s goal to create a Fairer NJ. You can’t drive improvement to this process, if you can’t monitor.
  • Federal Government will pay 90% of IT development work and 75% for operations.
  • Bill has unanimous support in both houses
  • Bill is based on the report by the NJHCQI (Health Care Quality Institute), “Medicaid 2.0: Blueprint for the Future” with additional input/amendments/improvements by NJ NAELA (the New Jersey chapter of the National Academy of Elder Law Attorneys)
  • If you have personal or professional experience which reinforces the need for the implementation of this bill, you should feel free to share it with the Governor’s office.

Call us for legal advice on how to achieve Medicaid eligibility for someone who needs long-term care ……….. 732-382-6070