Generally speaking, the Medicaid program is the payor of last resort. If an individual is eligible for Medicare as his or her primary health insurance, Medicare would be the primary payor for medical needs, and Medicaid would become the secondary payor for any remainder. If an individual maintains a “medi-gap” insurance policy, that policy would be secondary and Medicaid would be in third place. When it comes to paying for long-term nursing home care (or assisted living or home care), Medicare and most Medi-gap policies do not pay for it, so Medicaid becomes the primary payor. If an individual has a long-term care insurance policy, Medicaid would generally pay the remainder of cost, at the Medicaid rate, after the benefit provided by the LTC policy.
Interested in digging deeper into this coordination of benefits? The Centers for Medicaid and Medicare Services has published an excellent, user friendly guidebook. Enjoy!
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For many senior citizens, being able to “age in place” and stay in their home is a really high priority. The obligation to use Medicaid dollars to support aged and disabled individuals in the least restrictive environment has been a cornerstone of federal policy since the Olmstead decision was issued by the Supreme Court in 1999. In addition to that there is the obligation to utilize “person-centered planning” and to individually tailor the services being provided. The New Jersey Medicaid Long Term Services and Supports (MLTSS) program which provides Home and Community based Services (HCBS) is required to develop procedures that will adequately address the needs of the individual so that he or she can be adequately supported in the community environment.
The Centers for Medicaid and Medicare Services issued an interesting “FAQ” on the subject of how to address the individual needs of a Medicaid recipient who has a tendency to “elope,” “wander” or “exit-seek.” While that FAQ is geared to program administrators and policy makers, it seems to me that it provides useful guidance to any of you who are engaged in senior care planning for someone who has this problem. For example: ” •Assessing the patterns, frequency, and triggers for unsafe wandering or exit-seeking through direct observation and by talking with the person exhibiting such behaviors, and, when appropriate, their families. •Using this baseline information to develop a person-centered plan to address unsafe wandering or exit-seeking, implementing the plan, and measuring its impact. •Using periodic assessments to update information about an individual’s unsafe wandering or exit-seeking, and adjust the person-centered plan as necessary.”
What I have learned over the years from the thousands of families I have advised is that, in an organic way, they are instinctively engaged in Person-centered service planning for their loved one. They try hard to sustain the activities that the loved one enjoyed and avoid the things that the person loathed. Out of a sense of respect and honor, they try hard to incorporate what has always mattered to their parent. Yet Elder care planning often needs to deal with new situations and behaviors that present themselves as a result of underlying dementia. Sometimes it isn’t clear whether the behavior is willful and intentional or is just an erratic problem triggered by unpredictable things as a result of Alzheimers or other dementia. In either case, the caregiver needs to find strategies to keep the person as safe as possible.
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There is a New Jersey insurance law which allows a person who is 62 years of age or older to designate an authorized third party to receive Policy Lapse Notices and Late Payment notices from the policyholder’s insurance company. This is a regulation at N.J.A.C. 11:2-19. The process is easy. Many companies will provide you with their own form upon request. For others, just send a written statement, signed and notarized, to your insurance company by certified mail, return receipt requested, designating the person (plus phone number and address) to whom you want the company to send the extra notices. The third party designee needs to also sign that letter to show their willingness to accept these notices. This notice can be revoked by the policy holder by a written communication, and the third party can, of course, resign by sending a written resignation.
The benefit for aging folks is that if you forget to send in a payment on your insurance policy because you’ve been out of the house during a prolonged illness, or things get worse and a notice of Lapse/termination arrives at the house, you have the comfort of knowing that your third party designee will receive that mail also and can then help you solve the problem. Presumably, your Agent under Power of Attorney can then spring into action on your behalf to prevent the lapse, make the payment or initiate steps to reinstate a lapsed policy. No matter what, the third party designee does not become personally liable merely because they agree to receive a copy of these notices.
Careful planning can prevent a crisis. Better to have another person on your elder care team who can receive a copy of such urgent mailings, than have to try to undo the damage later on when it may be too late.
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Reverse mortgages are non-recourse loans in which the lender provides funds for the homeowner’s use now, but unlike a conventional mortgage, the loan doesn’t have to be repaid until the homeowner dies or vacates the premises. At that point, the property is sold and the loan is repaid along with the deferred costs and points. AARP has an excellent, easy-to-understand booklet about the pros and cons of reverse mortgages. And this link can help you sample some calculations to see the costs of borrowing and the amounts available in different regions of the country at different ages for the borrower. Any existing loan needs to be paid off with the reverse mortgage proceeds, because these loans need to be in the first position. The federal government insures the homeowner/borrower against the risk that the lender goes out of business, and insures the lender against the risk that the property loses so much value that at the time for payoff, the proceeds of sale are inadequate.
If you run through some sample calculations you will see that the older the homeowner is, the higher the amount that can be borrowed (as a percentage of the equity). If the home has a small value and the homeowner is in his early 70’s with little in the way of savings, borrowing the equity could leave the homeowner with a very thin margin of equity as a cushion. The cost of reverse mortgages is clearly higher than the cost of a conventional home equity line of credit or mortgage. The problem is that those loans are underwritten based on the borrower’s income. So they are often not available for elderly borrowers on limited fixed incomes.
For a homeowner who needs care at home and is running out of money, a combination of Medicaid benefits and reverse mortgage can stretch the available dollars and may provide greater protection than just the loan itself – enabling the person to remain home longer.
Careful planning requires advance consideration of all of the available sources for payment and services. Call us for legal advice on elder care planning …. 732-382-6070