Navigating the Coordination of Medicaid benefits with other benefits

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!

Call us about asset protection planning, Medicaid eligibility and Fair hearings for denials of Medicaid benefits … 732-382-6070

 

 

Baby Boomers looking ahead: long term care insurance or Medicaid?

There’s no doubt about it, long-term care insurance is expensive, and the premiums can be steep if you wait until after age 70 to first buy a policy. Some companies have gotten approvals for big premium increases on old policies. The marketplace has shrunk as companies have left the business, and some companies create bureaucratic barriers to paying claims. However, there’s also no doubt that nursing home care is expensive — in New Jersey it is not uncommon for the monthly costs to hit $12,000 to $14,000 a month. Hiring a live-in to help you at your home can cost $6,000 a month.  If there’s no money and no insurance, then Medicaid is the only source of payment.

The Baby Boomers and those starting to plan their retirement years have to think way ahead, as life expectancy is lengthening and therefore the statistical risk of needing long-term care in one’s 80’s is real. The Boston College Center for Retirement Research has interesting articles and useful statustics on this subject.   http://crr.bc.edu/briefs/long-term-care-how-big-a-risk/ Their recent research shows that more people are trending towards waiting to see what happens, and then embarking on a Medicaid spend-down plan, rather than purchasing long-term care insurance. The benefit is the savings in premium dollars, of course. The downside is that the state Medicaid program may only provide a complicated or inadequate home health aide program for people residing outside of nursing homes.

As I see it, the main benefit of long-term care insurance is the way it helps people age in place at home. To remain in the home in a “naturally occurring retirement community (NORC)”, a person needs to plan out their need for hands-on assistance, transportation, medical services, grocery shopping & food preparation, and attending social & cultural events,  If you have the means, insuring for long term care costs can make a big difference in how quickly you can get your home care started and in the administrative process that’s involved after that. Policies frequently  have a 90-day waiting period. This means that once you require hands-on home health care because you’ve become dependent in two or more of the Activities of Daily Living (ADL’s), you need to cover the cost of that care during the waiting period. Depending on the circumstances, this may not be a big financial burden, because many patients are tending to their own needs at home and it isn’t until they are hospitalized due to illness or injury that they begin to have care in the home. For those patients, they may receive skilled care or “rehab” during this initial waiting period, paid for by Medicare part A or their Medicare Choice plan.

For those without such insurance, the only way to obtain in-home care is to pay for it privately or apply for Medicaid when the assets are below the required level ($2,000 in available assets; the home is not counted; there can also be a share of assets reserved for the spouse). The application is filed after the applicant’s assets reach this level, and then the long wait begins , as the application is being processed.  However, New Jersey’s MLTSS Home and Community Based Services programs  have been undergoing a massive reorganization since 2013 with an apparent shortage of staff to fully and swiftly implement the program. Everyone hopes that the snags will be worked out soon. The law requires that the county welfare agency notify the applicant within 90 days if there is a reason the application can’t be approved. This is often the opening volley in a protracted experience. So based on past experience, I think that it is still likely to take a very long time for  the county welfare agencies to process and approve the many home care applications they receive under MLTSS.

Careful planning can prevent a crisis and improve your ability to direct the course of your care plan.

Call us about planning for a good old age… 732-382-6070

 

Boomer Law – Estate Planning in NJ

You’re 55 to 70 and your kids are all over 21 and starting to find their way in the world. It’s been 20 years since you last made an estate plan, and that may have only been a Will. Sounds familiar? I see these situations all the time. There can be loads of issues for baby boomers  to think about as you bring your estate plan in sync with your real life circumstances:

(1) NJ imposes an estate tax on every dollar above $675,000 that passes at death to someone who isn’t a charity or your spouse. Consider including a disclaimer credit shelter trust that would enable some assets to be set aside for benefit of surviving spouse but bypass estate tax at their death.

(2)  If you have substantial wealth, you may want to leave it under your Will to a restricted trust where it will stay for a longer time, rather than leave it to your children outright. This needs to be written into the Will. You can also allocate their share of IRAs into that trust with special language that protects the tax-deferred status. Coordinate your beneficiary designations also.

(3) Choose new fiduciaries — Executor, Power of Attorney, Trustee for your kids.. Your spouse may no longer be capable; certain of your children may be good choices and others not so much. The friends or siblings you chose before may no longer be the best choice.

(4) Trusts for children with special needs. These need to be written differently than general discretionary trusts. See our previous blogs and website articles on this topic.

(5)  Our generation has a high rate of volunteerism. You have probably been involved with charitable organizations in the last few decades. Consider allocating a percentage of your IRA/401K or leaving a specific bequest in the Will for these specific groups (make sure you have the correct name and office location as well). Think of how much good you can do with charitable giving. If your estate has $500,000 or more in it, will the children really miss  the ten thousand you leave to charity? Probably not. You can even leave excess land to a land trust,

(6) Health Care Directives and Powers of Attorney can be specially tailored to reflect your wishes and lifestyle choices in the event you become mentally incapacitated.

(7)  Consolidate all your financial, insurance, medical  and legal information in one place and let your kids know where they can find it in an emergency. The strongbox is only good if your “trusted someone” knows where the key is. Get organized. Soon.

(8) Long Term Care Insurance. I know the costs are rising and the terms are shrinking — used to be you could buy a lifetime policy (I got mine when I was 49) and now you can’t, but you can still get a policy for 5 years or more. Make sure it includes coverage for in-home care and has an inflation factor. From what I’ve seen, my clients with LTC insurance have a much higher likelihood of remaining in their homes once they require the services of a nurses’ aide.

Careful planning can prevent a crisis. We all want to plan for a good middle age.

Call us for Boomer Law estate planning … 732-382-6070

 

 

Elder Care Planning: Building your Team

Tuesday evening I was privileged to participate in a lively panel at the JCC in Scotch Plains that was answering  questions on a wide range of elder care/ elder law issues. The panelists were terrific — Michele Morandi, D.O., geriatric physician based in Union and affiliated with Center for Hope Hospice https://centerforhope.com/ ; Chris Kaiser, MSW, LCSW, Director of the Older Adult Services at Jewish Family Services  http://jfscentralnj.org/services-older-adult.php ; Dale Ofei-Ayisi, MA, of the Rutgers U. COPSA dementia assessment program in Edison    http://ubhc.rutgers.edu/services/geriatric/  and Donna Farrell of the Union County Division on Aging. http://ucnj.org/government/human-services/division-of-the-aging/senior-services/

There were certain major themes that crossed the lines from medical to legal to social services: invest the time to plan ahead; failure to plan can cause great expense and trouble at a time of crisis; a thorough medical evaluation should be part of the dementia assessment process; the caring family members need to be practical and objective to help an aging person deal with their increasing limitations; there are many governmental services available but none that pay for 24/7 care in the home.

At the end of the program, I said that although issues are intertwined, an aging person needs a team for advice. The elder law attorney evaluates the Medicaid eligibility and designs an estate plan, creates the documents to implement a plan, and pursues any needed court proceedings. The accountant/CPA prepares the income taxes and evaluates & advise you on tax issues. The life insurance advisor gets you the insurance you may need to fund special needs trusts for disabled family members or to otherwise take care of those left behind. The reverse mortgage specialist gets you access to your home equity when the liquid assets are gone. The long term care insurance specialist helps you in that middle 40 – 70 age bracket so you have insurance to pay for home health care in the event of dementia or a catastrophe. The physician follows the patient over time and manages the health issues. The dementia assessment specialist can help you identify the nature of the dementia (diagnosis) so it can be understood and properly handled. The financial advisor guides your decisions about investments and use of specific assets. And the geriatric care manager (GCM) can assess the safety of your home and oversee/coordinate the delivery of care for you in your home. Then of course, you need close family or friends to be there for you as well, whether as your fiduciaries (power of attorney etc) or caregivers or companions.

There may even be a need for more help: a Medicare gap policy/ choice plan specialist; a medicare appeals specialist; an interior designer who is familiar with universal design to keep your house safe for you. The bottom line is, you need a team, and careful planning can prevent a crisis

Call for a consultation to start planning for your elder care legal needs: 732-382-6070

Coordinating Home Care for the Frail Aged takes Persistence

It is axiomatic that aged individuals would prefer to remain in the comfort of their familiar surroundings rather than finish their lives in an institutional setting. This is the case whether the person lives in a mansion or a little apartment, in a house with their beloved  front porch or a home with their comforting tiny living room or sunny little back yard. Federal initiatives exist that are intended to promote aging-in-place initiatives. Communities and nonprofits have created transportation assistance, meals on wheels, and related services to assist people to remain in their homes as long as possible. Accomplishing this is not necessarily an easy task, and requires tremendous supports and personnel. http://www.aoa.gov/AoA_programs/HCLTC/CIAIP/index.aspx

Arranging for care at home becomes even harder as the person’s medical condition becomes more complex and more fragile. The patient needs someone needs to coordinate their doctors’ house calls, their medication refills, the grocery shopping and the comings and goings of home health aides who provide the daily hands-on care. Skilled nursing oversight of the home health aides may be necessary to maintain a level state of health and prevent medical emergencies that lead to the traumatic, disruptive loop of hospitalizations and skilled nursing or therapeutic rehabilitation.

An array of skilled services can be provided in the home through Medicare for a home-bound patient, but full-time home health aide services (sometimes called “custodial care”) are not covered services under Medicare. Health insurance policies generally do not cover such services either. Unless the patient has long-term care insurance, that leaves private payment or Medicaid. The cost to pay for in-home 24/7 care in New Jersey typically ranges from $4,000 a month to as much as $7,000 through licensed, bonded agencies with nursing supervision. According to the 2012 annual report of the Employee Benefit Research Institute (EBRI), people over age 65 only had an average of $56,000 in savings. This isn’t even enough for one year of round-the-clock care in the home. http://www.averageretirementsavingsguide.com

That leaves Medicaid. In NJ the program has been called Global Options and will now be called the Home and Community-Based Services (HCBSS) portion of the Medicaid Long Term Services and Supports (MLTSS). Under the best of circumstances in the past, a participant could only receive 40 hours of home nurses’ aides services a week. It is unknown just what will occur under the new paradigm of HCBS/MLTSS which will be run through managed care companies. While the program is geared to support individuals outside of a nursing home setting, the individual participants have to need the same level of care as a nursing home resident. This is sometimes called “meeting an institutional level of care.” Thus the person living at home needs 24/7 support with their Activities of Daily Living (ADL’s), but the Medicaid program will not be providing 24/7 support. The person who is coordinating all of this for the frail aged person will need to look vigorously for ways to supplement the limited services available through Medicaid if they want to keep the elder at home.

The NY Times recently reported on a dreadful situation that occurred with a frail 91-year old gentleman in New York City who had a very high level of need for nursing care, but could not receive the services necessary in a home care setting. He was shuttled between hospitals and skilled nursing facilities, and was dropped from home care services by Medicaid managed care companies. His daughter had to be vigorously involved in every step of navigating these various systems. http://www.nytimes.com/2014/09/26/nyregion/family-fights-health-care-system-for-simple-request-to-die-at-home.html

Vigorous, persistent advocacy is needed to obtain the services needed for a good in-home care plan. As the state rolls out its new program, watch the state DMAHS website to see if there is guidance on just what a patient may be entitled to if they want to remain at home.

For federal statistics concerning aging in America, take a look at

AOA Aging Statisticsv

For legal advice and representation on Medicaid and home care for the elderly and disabled, call 732-382-6070