True or False? try this New Jersey Medicaid Quiz

Test your knowledge about nursing homes and the Medicaid-MLTSS program that pays for nursing home care, assisted living and part-time home care.

  1. Does a person’s monthly income have to be less than $2,313 (2,349 in 2020) to apply for Medicaid-MLTSS?
  2. Will the State take one-half the house if a married person moves into a nursing home?
  3. Does a married person have to sign over or pay one-half  of the couple’s assets when the ill spouse moves into the nursing home, before applying for Medicaid-MLTSS?
  4. Does a nursing home resident have to allow a nursing home to auto-debit his bank account every month?
  5. Does a nursing home resident have to hire the Medicaid application compiler who is recommended by the nursing home business office?
  6. Is $15,000 per year an excluded gift under the Medicaid-MLTSS transfer penalty rules?
  7. Is it illegal for a nursing home resident to use his money to make gifts to family members or set up trusts for family members, if he is paying for his care?
  8. If a Medicaid-MLTSS applicant transfers his house to his disabled child, will he be denied Medicaid benefits?
  9. Does the State put a lien on the house while a NJ Medicaid-MLTSS recipient is alive if all benefits are properly received?
  10.  Is there an upper limit on the income that the community spouse of a NJ Medicaid -MLTSS recipient can have in New Jersey?

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

NJ Medicaid announces its 2018 numbers for MLTSS eligibility

Eligibility for Medicaid to pay for nursing home care or community care is all about the numbers. Starting January 1, 2018, the Community Spouse Resource Allowance (CSRA) for the community spouse of a married Medicaid applicant is being raised to $123,600 (from $120,900 in 2017).  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.

In 2018, the “floor” under the CSRA is $24,720, so if the assets are quite limited, the community spouse does not have to “spend down” below this amount. If your assets are low, be quick and careful so that you can apply for Medicaid without much further depletion of resources.

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 $2,250 gross monthly income. Be sure the Trust is set up in the month BEFORE you have to apply.

The community spouse is entitled to have a Minimum Monthly Maintenance Needs Allowance for income support. This amount was raised on 7-1-2017 and remains in effect. The minimum is $2,030.00  and the maximum is $3,090. 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 important, special rules in cases where the combined incomes are below the MMMNA. You might become eligible without any spend-down in a case like that. Seek legal advice at the earliest possible date before the assets are spent down, to protect your interests

Call for an appointment about all the difficult details pertaining to Medicaid eligibility, and for help with an application … 732-382-6070

Some trust assets may disqualify a Medicaid applicant

One friend tells another, “Put your assets in a trust so the nursing home won’t take them.” But this technique isn’t necessarily the “magic bullet.” The concept of countable assets and resources is broader under Medicaid law  than it is under some other bodies of law. Placing your assets into a trust structure might avoid some problems — like probate in a state where probate estate administration requires ongoing aggravating  interaction with the probate court, or help with Veterans Pension eligibility, or to preserve them for your children while protecting them against the kids’ future creditors. Doing so doesn’t necessarily insulate the assets in the event you apply for Medicaid.

A “resource” is an asset other than income to which the Medicaid applicant or his/her spouse has the right, title and interest, and power to convert the asset to cash. If the applicant’s assets are in a trust, the trust can be counted as a resource if there are any circumstances under which the trust assets can be paid to/spent on the Medicaid applicant. So whether the assets that are sitting in a trust can be counted as resources is a crucial issue. Medicaid is a means-tested program with strict resource limits, and it can take a very long time to receive the Agency’s decision about the application. So it can be a nasty surprise to find out  months down the road that you never were eligible because the assets in the trust are countable resources.

This happened in a recent New Hampshire case. The applicant, Ms. Braiterman,  had transferred some of her assets to an irrevocable trust in 1994. Her children were the beneficiaries.She was not a beneficiary, and she had resigned as Trustee, but she had the retained  power to appoint herself as trustee. She also had the power to impose conditions on the trustee’s appointment of income or principal to the beneficiaries. Now this may have been a great plan with reference to estate tax/cost basis planning. But when she applied for Medicaid years later, the assets in the trust were counted,  so she had excess resources and her application was denied. Why? Because as a condition for the trustee to make a payment to her children, she could have required the trustee to obligate the children to spend the funds on her..

A similar result occurred in Washington State.  Margaret  Berto applied for Medicaid. She and her husband, who died before her, had transferred  their assets into a revocable living trust. In his Will he created a trust for her, so at his death, some of  the revocable trust’s assets were transferred to the testamentary trust. She was the co-trustee and she was the sole beneficiary. Presumably the assets in the revocable trust were spent down prior to the time she applied for Medicaid. The Trust was counted as an available resource, and eligibility for Medicaid was denied.

What makes the excess-resource cases even worse is that by the time the applicant receives the bad news, s/he and her spouse  may have amassed an enormous debt to  the nursing home.

 Careful planning can prevent a crisis. Medicaid planning requires careful evaluation of the specific Medicaid rules, which often compel a different plan than estate and tax

Call us for advice and representation on Medicaid eligibility planning, applications and  appeals…. 732 – 382-6070

New Jersey Supreme Court Committee Issues Opinion on Unlicensed Practice of Law in Medicaid

The Committee on the Unauthorized Practice of Law (UPL) of the New Jersey Supreme Court has issued UPL Opinion 53 Medicaid Advisors 5 16 16.  It concluded that non-attorney Medicaid application preparers, Medicaid advisors and assistors would be engaging in impermissible UPL when they give advice on “strategies to become eligible for Medicaid benefits, including advice on spending down resources, tax implications, guardianships, sale or transfer of assets, creation of trusts or service contracts, or the like.”

UPL can be very serious; under N.J.S.A. 2C:21-22, it is a crime of the third or fourth degree depending on the circumstances, and under N.J.S.A. 2C:21-22a, it can be the basis of a civil suit resulting in three times the value of all costs incurred by the victim as a result of the defendant’s criminal activity, including any fees paid to the defendant for services, costs incurred for attorneys’ fees, court costs and any out-of-pocket losses.  Criminal prosecution is not required for civil action under N.J.S.A. 2C:21-22a.

Why is this an issue? Allowing somebody to just assemble and file your application without providing you with the important legal analysis could deprive you of necessary asset and family protection. And as a consumer/applicant, you may not even know just what favorable legal options you’re missing out on.

As you can tell if you’ve been following this blog the last few years, applying for Medicaid to pay for nursing home care for your mother with Alzheimers is hardly a walk in the park. It’s not just a matter of compiling a 5-year  stack of account records and sending them in. There can be legal problems such as timing; lack of authority to access information; ownership of assets; providing the sufficient proof to meet the applicant’s legal burden; legal authority to transfer assets; impact of transfers on other creditors; or interpretation of a law as it applies to the specific situation. And there are opportunities to protect the other family members, but those require legal interpretation and strategy. Over the last few years, I  encountered several really sad cases where assets could have been transferred to a child under 21 or a disabled child or a spouse. Instead, by relying on the advice of a non-attorney, the spouse of the applicant paid the nursing home hundreds of thousands of dollars before they learned –from me, as an elder law attorney — that they could have become eligible for Medicaid a few years prior.

Elder care is a team effort.   Allowing somebody to just assemble and file your application without providing you with the important legal analysis could deprive you of necessary asset and family protection. And as a consumer/applicant, you may not even know just what advice you’re missing out on. Attorneys, accountants, social workers and other professionals should work together for their elderly clients, know the boundaries of the advice they give, and always put the client first.

Call us for advice and representations on Medicaid applications, appeals, guardianship and protective arrangements … 732-382-6070

More reasons to consult with a lawyer when filing for Medicaid

The Medicaid program pays for nursing home care for financially eligible people. The program is administered by the State Division of Medical Assistance and Health Care Services (DMAHS), which delegates the application processing to the employees of the county Boards of Social Services (sometimes called county welfare boards). All of these people are government employees. They receive and process applications by relying on the NJ State Medicaid Manual — which is the state’s regulations, that are in turn based on federal law — and innumerable directives received informally through the policy process behind the scenes. Then there are the administrative procedures which are locally created. There are 23 counties in New Jersey and the procedures that are used in Middlesex County, for instance, may be quite different than those used in Passaic or Burlington.

What this means for an applicant is that if they call a friend who applied in a different county, they could be getting an incorrect picture of what to expect in their own county.

Another big issue is that  there is a general legal principle by which New Jersey government employees may not// do not provide “advisory opinions” to applicants as to how the law applies to their given case. I represented state agencies back in the 80’s and early 90’s and we would get calls from people asking questions like “I want to do such-and-such. Do your regulations allow that?” and we’d have to politely demur and suggest that they call their own lawyer to interpret the law for them.

Why is this problematic for Medicaid applicants? The State Medicaid Manual at N.J.A.C. 10:71-2.2(c) gives the local agency the responsibility to “1. inform the applicants about the purpose and eligibility requirements for Medicaid” and  “…3. Assist the applicant in exploring their eligibility for assistance.”  So a person files an application, has no idea whether they are eligible, receives vague information and no specific guidance other than “bring in five years of financial records and all these other verifications,” and then sits and waits months and months without receiving any “assistance” from the agency. Sometimes, a denial notice is issued a year or more after the initial application was filed, and that’s when the applicant discovers that they still have “excess resources,” are not eligible, and have a giant debt to the facility.

This is particularly problematic for married couples, because the community spouse is entitled to retain a protected share of assets (called the CSRA), and there is thus a specific “target” for the spend-down in every single case, which can be easily calculated by adding together the value of all the non-excluded assets as of the date the ill spouse entered the facility, dividing by 2, and comparing that number to the maximum limit of the program. So  if the caseworker doesn’t do the “resource assessment” and calculate the protected community spouse resource allowance for the applicant early in the process, the applicant will never know just what the “target end point” is for the spend-down. Nursing homes cost more than $10,000 every month. If that couple doesn’t “spend down” to below the target, the hapless community spouse will be personally liable for the nursing home bill for every month until they hit the target.

I encountered an egregious example of this problem recently. Believe me, this is not the first time I’ve seen this happen. Wife entered facility in the fall of 2013. Husband went to the Medicaid office in early 2014. Husband needed to “spend-down” to $119,000 and wife could keep $2,000, but he didn’t know that at the time. Caseworker gave him a list of required documents to provide to her. Shortly after the initial intake, caseworker sent an appropriate letter asking for the documents needed to do the “resource assessment” which is what I’m talking about here — to determine his spend-down target. Applicant provided those records and never received any information after that. No calls, no calculations, no letters, no replies to phone calls; nothing. He eventually calls the agency and is told “just spend down” “Well how much do I have to spend?” he asks and the answer is “you have to spend down. Have a nice day. Goodbye.” Long story short, he spent over $100,000 on the nursing home in the first year, went back to Medicaid a year later and filed the application, got no assistance from the agency and only got requests for documents on repeated occasions, and never knew that he still had a little too much left in the resources because no one gave him any “assistance.” He received a Denial notice recently, saying that he had $24,000 of “excess resources” and therefore wasn’t eligible!! He is now in arrears to the facility for a full year of his wife’s care.

There are many federal rules that are designed to PROTECT the assets of an applicant and their spouse, and it’s just not true that you have to “just keep spending down.” But applicants won’t get that advice from the agency charged with “assisting” them, and non-attorneys aren’t necessarily familiar with the intricacies of federal and state law that can be used to protect Medicaid applicants and their families. Call an elder law attorney – you don’t have to do this on your own.

Call us for an appointment to discuss Medicaid eligibility, filing an application, or pursuing an appeal … 732-382-6070