The answer to all these questions is No! However, myths abound, and people may be surprised to learn how they can actually protect assets in these situations.
For more information about the requirements of the MLTSS program and how to work with them for your benefit, about how you or your loved one can become eligible for Medicaid or protect your assets if nursing home care is needed, call us at ……. 732-382-6070
When a person applies for Medicaid under the NJ MLTSS program after having made gift transfers during the most recent 5 years, there will likely be a penalty period in which Medicaid will not pay for the care that this person needs (unless the transfers were exempt, such as transfers to a spouse or disabled child). This transfer penalty is mandated by federal law, and the greater the amount that was transferred, the longer the transfer penalty will be. If an applicant addresses this issue before the end of his spend-down period, there may be opportunities to protect the applicant by using some of the spend-down funds to purchase an annuity contract that can provide the income needed to pay for care during the penalty period.
The type of annuities that fit the bill are highly restricted and are not designed to maximize the rate of return the way conventional annuities might be. The reason that the technique works is because under federal and state Medicaid law, a distinction is made between “income” and “resources.” Resources must be reduced to a certain level before the person can even apply for benefits. Income, on the other hand, is usually received on a monthly basis and is turned over to the facility as a contribution towards the cost of care (with certain deductions). For the annuity plan to work, the contract cannot be countable as a “resource” as defined by Medicaid law. We had successfully litigated an IRA annuity case with the NJ Division of Medical Assistance and Health Services (DMAHS) in 2009-10 (the P.K. case) PK FAD A few years later, after several cases were decided in out of state venues,Lopes 2nd Cir ; Carlini we successfully litigated a non-IRA annuity case against DMAHS in 2013 (the M.W. case; M.W. FAD 1-28-140001M.W. Initial ALJ decision ) leading to confirmation that if properly structured, an annuity effectively transforms countable resources into an irrevocable stream of income. If properly done, this technique can provide protection for the Medicaid applicant as well as his/her community spouse, and can also help to assure that there is a way to pay for care during an anticipated Medicaid penalty period.
Seniors who are planning for their care have many tools in their toolbox; the question is always which tools to use and how to get the results that the senior needs.
Call us to discuss a Medicaid spend-down plan that suits your circumstances … 732-382-6070
Starting January 1, 2015, the Community Spouse Resource Allowance (CSRA) for the community spouse of a married Medicaid applicant is being raised to $119,220 from $117,240.00. This is the amount of countable available resources that the community spouse can have as of the date they want eligibility for their applicant-spouse (the home and one car are still considered non-countable). Does that mean that every excess dollar has to be “spent down” on nursing home care? Hardly. If you have moved your loved one to a nursing home and are being steered to someone such as a Medicaid application preparer who tells you that this is what’s necessary before an application can be filed, you should seriously consider getting personalized legal advice about your options.
The $19,220 is the CSRA maximum The “floor” under the CSRA is $23,844, so if the assets are quite limited, the community spouse does not have to “spend down” below this amount.
The Income Cap Limit which triggers the need to establish a Qualified Income trust (QIT) in New Jersey for the Medicaid applicant (see my prior posts) will be $2,199 gross monthly income.
The community spouse is entitled to have a Minimum Monthly Maintenance Needs Allowance for income support. This amount was raised on 7-1-2014 and remains in effect. The minimum is $1,966.25 and the maximum is $2,980.50. Several variables play into this calculation. Then the community spouse’s available income is applied first, and if there is a shortfall, a deduction is made from the applicant-spouse’s income to allocate some income to the community spouse. There are special rules in cases where the combined incomes are below the MMMNA. Seek legal advice at the earliest possible date before the assets are spent down, to protect your interests
Call for an appointment about Medicaid eligibility and applications … 732-382-6070
Under federal and state Medicaid law, German reparations payments for Holocaust survivors are exempted from being counted as either “income” or a “resource.” Ideally, the Medicaid applicant has escrowed the reparations in a separately identifiable account, but this is by no means a requirement. By being exempt, these payments (1) are not counted when determining if a person is income-eligible for a particular program; (2) are not included in the income that must be turned over to the facility by the Medicaid recipient each month; and (3) are not counted towards the resource limits, which are $2,000 for the applicant/ recipient and no more than $117,240 for their community spouse.
Under federal law, the States must pursue estate recovery against the estates of deceased Medicaid recipients, so that the State can be reimbursed from assets that were exempted during the recipient’s lifetime. There has been a gap between the exclusion for reparations and the broad mandate of the Medicaid estate recovery law. A-1041 is designed to address that problem. It is co-sponsored by Assemblyman GARY S. SCHAER and Assemblywoman VALERIE VAINIERI HUTTLE. http://www.njleg.state.nj.us/2014/Bills/A1500/1041_I1.HTM
If this issue is of interest to you, contact your NJ representatives and make your voice known.
For legal advice on Medicaid eligibility and preserving reparations payments, and for preparation of Medicaid applications, call 732-382-6070
As explained yesterday, the NJ State Medicaid Program cannot assert a lien against the Medicaid recipient’s property during his lifetime, unless the individual had wrongfully received benefits and the State sued and obtained a judgment. In all other cases, a lien can only be asserted after the death of a Medicaid beneficiary, and certain conditions must apply: the Medicaid recipient had to have an ownership interest in the asset at the time of death, and there must be no surviving spouse, no surviving child who is blind, disabled or minor, and no surviving sibling co-owner who resides in the premises. 42 USC 1396p(a)(1), N.J.S.A. 30:4D-7.2(a)(1), and N.J.A.C. 10:49-14.1(n)(1). The lien is limited to the lesser of the amount of the services that were provided or the date-of-death value of the individual’s interest in the property. Estate Recovery Medcom
After the death of a married Medicaid beneficiary, there can be estate recovery after the death of their community spouse with respect to assets that were jointly owned by both spouses or were “unavailable assets” that were owned by the Medicaid beneficiary at the time of their death. New Jersey adopted the “expanded estate” definition, so even non-probate assets can be reached if they were still owned by the Medicaid beneficiary at the time of death – jointly held assets and assets with beneficiary designations on them are the main types. So for instance if a person is incapacitated and has no power of attorney in place, he may begin receiving benefits because all of his assets are inaccessible. If he then dies, there will be a Medicaid lien against the estate unless the exceptions above apply to the situation.
Careful planning can prevent a crisis, and careful planning can avoid the imposition of a Medicaid lien.
Call us regarding Medicaid eligibility planning and appeals …