Archive for the ‘Medicaid’ Category

Impending Changes Would Make Estate and Gift Taxes Apply to Many More Americans

Wednesday, December 26th, 2012

The rules governing taxes on gifts and estates are set for major changes at the end of the year unless Congress steps in.

The taxes, which currently concern mainly the very wealthy, will soon ensnare far more people if scheduled reductions in exemptions are allowed to go through. The exemption level for each tax is currently $5.12 million and is set to plunge to $1 million.

The lifetime exemption on gift taxes is also scheduled to make an identical drop.

The impending changes have prompted a frenzy of activity among wealthy Americans eager to make gifts and create trusts under current law, filling the calendars of estate planning attorneys and financial planners nationwide.

The estate tax rate is also scheduled to increase from a current top rate of 35 percent to a new top rate of 55 percent.

According to Congress’ Joint Committee on Taxation, the change in estate tax exemptions would make approximately 55,000 estates subject to the tax next year, compared to fewer than 4,000 estates under current law.

President Obama’s budget proposal of February 2012 called for an estate tax exemption level of $3.5 million and a top rate of 45 percent. It did not contain a recommendation for gifting exclusions.

Estate and gift taxes are not the only ones scheduled to change. The tax exemption for generation-skipping transfers and trusts would likewise drop from its current $5 million to $1 million under current law. In addition, trusts of this type currently can shelter assets from taxation for an unlimited number of generations, but President Obama has proposed limiting the effect to 90 years.

Most experts predict that Congress will not resolve the matter before the end of the calendar year, but any compromise reached in 2013 could be retroactively applied to January 1.

For more information, visit www.elderlawnewyork.com.

Facing sky-high LTC costs, clients nurse Medicaid hopes

Monday, December 17th, 2012

But misunderstandings about the national program abound; poor planning can leave retirees in a bad place

By Darla Mercado,  Investment News

December 7, 2012

Medicaid may look like a tempting long-term-care plan for retirees who want to pass assets on to their heirs, but that approach has its share of financial pitfalls.

Investors nearing retirement are asking more questions about Medicaid — the state and federal program that aids people who can’t afford to pay their medical bills — and the role it can play in helping to cover LTC costs. Nationwide Financial Services Inc. and Harris Interactive Inc. polled 501 financial advisers and found that 42% think of Medicaid planning as a way to preserve money for their heirs.

“People are exploring extreme steps to qualify for a program that wasn’t intended for them,” said John Carter, president of distribution and sales for Nationwide. “Medicaid wasn’t ever intended for people who could pay for those long-term-care needs.”

Medicaid requires applicants and their spouses to meet certain income and eligibility rules to qualify for the program: For instance, monthly income cannot exceed the costs of long-term care, and applicants generally cannot hold more than $2,000 in assets.

Enter a variety of Medicaid strategies that “impoverish” the person applying for the program in a bid to get under the $2,000 limit. But Medicaid applicants face a five-year look-back provision for asset transfers.

About half of the advisers polled said that they’ve had clients ask them about giving all their money to their children to qualify for government assistance in paying for long-term care.

Much of that anxiety is driven by the shakeup in the LTC insurance business, as well as the fact that today’s economic realities place greater emphasis on preserving wealth, noted Bernard A. Krooks, founding partner of Littman Krooks LLP and past president of the National Academy of Elder Law Attorneys.

Clients who were unable to pass the underwriting process at an LTC carrier may be interested in Medicaid planning.

“If you have a prospect with an interest in preparing for this risk, and you can’t sell them the insurance, then that’s a perfect candidate to refer to an elder-law attorney,” Mr. Krooks said. “You can set up a trust or a planning opportunity to help them accomplish their objectives.”

Many misconceptions come with Medicaid planning, however, which is one reason advisers might want to consider seeking outside help. “We would encourage advisers to work with elder-law attorneys,” Mr. Carter said. “There can be a lot of risk if you do it on your own.

Mr. Krooks noted that a common misconception is that if clients miss the five-year look-back, they have no way to protect assets. “That’s not true,” he said, noting that the solutions are state-specific. “In all states, there are things you can do even if you waited until the last minute. It’s not going to be as beneficial if you had done it earlier; you may not be able to protect as much.”

Clients are also unaware that Medicaid covers nursing home care but typically won’t foot the bill for assisted living and other care options, according to Nationwide. Additionally, Medicaid patients have very little choice in where they end up residing, and they won’t have access to private rooms.

Though advisers are becoming increasingly aware of the need to educate clients on covering the cost of care in retirement — 72% agree that many clients don’t see how crucial it is to plan for health care costs in retirement — many advisers also come up short on other facets of planning for long-term care.

For instance, 60% of the participants said they couldn’t explain to clients how the Affordable Health Care Act will affect their retirement. Only 42% were aware of filial-responsibility laws, which are state rules that establish a legal duty for children to support their impoverished parents. Nursing homes and other third parties can pursue children whose parents end up in care and are unable to pay.

To visit the Investment News website, click here.

Can a resident of a nursing home with Medicaid benefits leave the facility for an overnight visit that is a non-hospitalization leave

Monday, September 24th, 2012

Medicaid planning can be very tricky – with Medicaid legislation in constant fluctuation, with policies, waiting periods and maximum asset/income levels becoming stricter – planning is crucial. Our Certified Elder Law Attorney®s at Littman Krooks have put together a new series of entries that address some of the more frequently asked questions we’ve heard about Medicaid:

  • Can a resident of a nursing home with Medicaid benefits leave the facility for an overnight visit that is a non-hospitalization leave?

Medicaid Guidelines regulate bed reservation policies at nursing homes. A leave of absence is defined as an overnight absence (such as a visit with relatives and friends) or a leave to participate in medically acceptable therapeutic or rehabilitative plans of care. A leave of absence is considered to be non-inclusive of hospitalization time. Under Medicaid rules, Medicaid allows for up to ten (10) days in a 12-month period of time for a non-hospital leave. Medicaid is reimbursed for ninety-five (95%) of the Medicaid rate, otherwise payable to the facility for the services provided on behalf of the person (DAL/DQS #05-13).

  • What if the nursing home facility provides the patient with a bed hold waiver form?

At many facilities, if a bed hold waiver form is not signed, a patient will be discharged and their room will not be held during a leave of absence. A bed hold waiver form, when signed, permits the nursing home to hold the patient’s room during any absence that the resident may have from the facility. However, oftentimes, signing this agreement gives the nursing home permission to bill the resident privately, along with the NYS tax assessment, for every day that the resident is absent. Residents should carefully read any agreements prior to signing.

  • What if a Medicaid-eligible resident’s leave of absence exceeds the number of Medicaid reimbursable days?

For Medicaid residents that do sign the bed hold waiver agreement, residents should not be charged for any absences as Medicaid should be billed for the days absent as long as the patient falls within the 10 day rule within 12 months. If a Medicaid-eligible resident’s leave of absence exceeds the number of Medicaid reimbursable days, the facility may charge privately to the bed holder. The Department does not regulate the amount charged. Residents should inquire if their nursing home is not seeking reimbursement from Medicaid for these charges.

Summary:

  • Medicaid allows for up to ten (10) days in a 12-month period of time for a non-hospital leave;
  • A bed hold waiver form, when signed, oftentimes permits the nursing home to hold the patient’s room during any absence that the resident may have from the facility;
  • For any Medicaid residents that do sign the bed hold waiver agreement, Medicaid should be billed for the days absent as long as the patient falls within the 10 day rule within 12 months;
  • If a Medicaid-eligible resident’s leave of absence exceeds the number of Medicaid reimbursable days, the facility may charge privately to the bed holder. The Department does not regulate the amount charged.

For more information on medicaid planning, elder law, estate planning, veterans’ benefits, special needs planning or special education advocacy, visit our website at www.littmankrooks.com. Have a question? Contact us at info@littmankrooks.com.

Understanding Medicaid Rules: the Deficit Reduction Act of 2005 (DRA)

Thursday, August 23rd, 2012

Understanding Medicaid Rules: the Deficit Reduction Act of 2005 (DRA)

In previous postings, we examined the asset rules and transfer penalty rules for Medicaid, which many seniors rely on for nursing home care or, in New York, home health care.  In 2006, significant changes to the program went into effect, and we review them here.

In 2006, President George W. Bush signed the Deficit Reduction Act of 2005 (DRA), cutting approximately $40 billion from Medicaid, Medicare and other programs over five years.  The effect on Medicaid has been to tighten eligibility rules.

The primary impact of the DRA on Medicaid was to change the rules regarding the transfer penalty, which we examined in detail in a previous posting.  The DRA lengthened the “look-back” period from three years to five years, and changed the transfer penalty start date from the date of the transfer to the date an applicant enters a nursing home and would otherwise be eligible for Medicaid.

Another key change is in the application of stricter home equity limits.  In New York, Medicaid applicants cannot have more than $786,000 of equity in their homes, unless a spouse or other dependent relative resides there.

The DRA also affects certain estate planning tools that some Medicaid applicants have found useful.  The rules have been tightened on the use of annuities, promissory notes and life estates.

Annuities can provide income to nursing home residents, provided they are considered “noncountable” toward Medicaid asset limits.  To meet this requirement, they must be irrevocable, non-transferable and actuarially sound.  The DRA added a new requirement: the state must be named the remainder beneficiary, up to the amount of Medicaid benefits the applicant receives.

Prior to the passage of the DRA, a Medicaid applicant could avoid the transfer penalty by showing that a transfer of assets was not a countable gift, but a noncountable loan, by producing a promissory note or mortgage contract.  The DRA imposed restrictions on such loans: the term of the loan must not be longer than the anticipated life of the lender, deferred payments and balloon payments are not permitted, and the debt cannot be canceled upon the lender’s death.

Another strategy to avoid the transfer penalty is for the applicant to purchase a life estate in the home of another person, for instance a child.  This is still permitted, but the applicant must actually reside in the home for at least one year.

These estate planning tools can still be useful to Medicaid applicants, but they require the assistance of a qualified estate planning attorney.


For more information about New York Medicaid rules, visit http://www.health.ny.gov/health_care/medicaid/.For more information about our elder law services, visit www.elderlawnewyork.com.

Understanding Asset Rules for Medicaid

Friday, August 17th, 2012

Many seniors take advantage of Medicaid for health insurance coverage, nursing home care, or, in the state of New York, home health care.  Because Medicaid is a joint program between the federal government and the states, it is important to understand the rules that apply where you live.  Here we will review the resource or asset rules that apply to the program for nursing home or home health care recipients, both generally and in the state of New York.

Individuals who have a disability, are blind or are age 65 or over, or who require nursing home care, must pass a resource test to be eligible for Medicaid.  In New York, in order to be eligible for Medicaid, a person’s assets must be $14,250 or less.  Income is restricted to $792 per month if the person continues to reside in the community.  Nursing home residents are permitted a small monthly income for personal needs.

Asset rules also apply to a nursing home resident’s spouse, known as the “community spouse.”  In New York, the Community Spouse Resource Allowance (CSRA) is $74,820, or half of the joint assets of the couple, up to $113,640 in countable assets.

The community spouse is also entitled to a small amount of income, what is known as a minimum monthly maintenance needs allowance (MMMNA).  For income in excess of the MMMNA, 25 percent may go to the cost of the nursing home resident’s care.

Assets that do not count against the resource limits are those defined as “noncountable,” including personal possessions like furniture and clothing.  A primary residence and an automobile can be considered noncountable, with certain restrictions.  Prepaid funeral arrangements, some life insurance, and assets that are “inaccessible” can also be considered noncountable.

For more information about New York Medicaid rules, visit http://www.health.ny.gov/health_care/medicaid/. For more information about our elder law services, visit www.elderlawnewyork.com.

Planning to Retire Soon? Create a Retirement Checklist

Monday, July 16th, 2012

If you are considering retiring within the next five years, now is the time to create a retirement plan.  Many seniors say they wish they had planned more carefully for retirement.  There are several things you can do now to make sure your legal and financial affairs are in order when you retire.

Define Your Financial Goals

Naturally, one of the most important considerations in planning for retirement is safeguarding your financial security.  That means defining what you expect your lifestyle to be during retirement, and how your financial goals will be met.  You will want to consider factors such as how you will allocate money from your savings to supplement your retirement income, the possibility of rising health care expenses, and the effect that inflation may have on your purchasing power.

Your retirement plan will need to include a budget and an asset allocation strategy, and you will need to consider how to balance different sources of income and benefits, including Social Security, Medicare, and your own assets.  If you are employed, one thing you can do to maximize your savings is to invest as much as you can in your 401(k) before you retire.  Your employer can be a valuable source of information on how best to make use of your 401(k), and what benefits you will receive in retirement.  If you are married, then you and your spouse should create a joint retirement plan.

Create an Estate Plan

If you do not already have an estate plan, now is the time to create one.  Before retirement, you will want to be sure that you have taken the necessary steps to ensure that your assets will be distributed according to your wishes, through the execution of a will, and the establishment of any trusts that would benefit you and your family.  It is also important to establish a durable power of attorney, designating a person to make decisions for you in the event you become incapacitated.  Through a living will, you can issue specific instructions for what is to be done in certain medical situations.  An estate planning attorney can help you create a holistic plan for the management of your assets.

Retirement is something to look forward to, and something to plan for carefully.

To learn more about our elder law services, visit www.elderlawnewyork.com.

How can Families get Started in Planning a Nursing Home Placement for a Loved One?

Wednesday, June 27th, 2012

Guestblogger: Ginalisa Monterroso, Entitlement Analyst, Archcare at Mary Manning Walsh Home

How can families get started in planning a nursing home placement for a loved one?

  • Families really need to do lots of research. Use the internet, visit the neighborhoods and facilities and look for reviews that are done by people that have had their family members in the nursing home. Search for a facility where your loved one’s immediate needs are met, ask questions, see if they have an available rehabilitation center, what foods they will serve, how they can cater to your loved ones, what insurance the nursing home will take.
  • Always visit and ask questions.

What is the New York Patient Review and how and where can it be completed?

  • It is a “quick” medical assessment of the patient’s needs – it states what the patient is being treated for, the diagnosis, any symptoms, medications, needs and requirements medically per the doctor’s orders,(as opposed to going through an entire medical chart it is a 7-page summary of all the medical needs of a patient (type of care, type of equipment needed, etc.) so that nursing homes can make a quick assessment).  It can be completed

What is the admissions agreement?

  • This is an agreement that is generated by the facility stating all the requirements of what the facility offers for the resident as far as the needs, insurance (required), payments needed, it is a breakdown of what is included in regards to services, room and board, rehabilitation, insurance, notification on insurance being discontinued, the guidelines for where to go if your insurance is discontinued. Everyone should always read the agreement, it is important to know what is going to go on in a facility when you admit your family member.

How does one pay for nursing home care? Can it be subsidized?

  • There are a lot of options to pay for care. There are short-term options and long-term options. Medicare covers a short-term stay, it also covers assistance in-state nursing facilities (up to 100 days); if you need an extension, or a longer stay, there are other insurances that may cover the extra duration of the stay, for example, a long-term care policy, or medicaid. Paying out-of-pocket is very, very costly.

How do you complete the Medicaid or Medicare application?

  • Call the Social Security Administration and get your family member on Medicare. You should have the Medicare before you go into a nursing home. Medicaid can always be done once the family member enters the nursing home if the need for an extended stay is necessary. There is a financial person on site who can assist with applying for Medicaid. You should always have long-term care insurance set up before your nursing home placement.

What happens if I am a long distance caregiver or when the patient lives out of state?

  • The process of searching is still the same. Ask questions! Technology today has expanded – – do they have an online site? You can view the facility and take a tour online. Ask to speak to the directors of each department (especially admissions).

What legal assistance is required (or preferred) when dealing with a nursing home?

  • Emergency situations where people haven’t planned in advance are surprisingly common in nursing home placements.  You always want to have a power of attorney; go to a certified elder law attorney (CELA®) when dealing with your loved one. A CELA® member knows all the rules and regulations and will know what needs to be done or prepared in regards to entering a nursing home. Guardianships and financial planning are also important to discuss with a CELA® member to ensure that your loved one’s stay is comfortable.

What rights do patients have while they reside in a nursing home?

  • Patients have the same rights as they would as if they were not living in a nursing home: the right to privacy, to not be discriminated against, they have all the same rights as they would as if they were living at home. No one can make any decisions without asking a resident or confirming with a guardian or social worker (who are always on-site).  The family member has a right to find out what is going on (medically, financially) with their family member or loved one.  They are to be notified of any emergencies or needs that their loved one may have as they change.

What is the best advice you can give to family members on how to place your loved one in a nursing home?

  1. Be preparedPlan Ahead
  2. Look for symptoms in family members who are becoming frail or ailing
  3. Keep paperwork in one place (medical, financial and legal records)
  4. Make sure that you have discussed the needs and wants of your loved one so you are prepared if an emergency takes place (in regards to finances, health and legal matters)
  5. Speak to a certified elder law attorney (CELA®) to ensure your family members’ needs are met – it always helps down the road.

To learn more about elder law, elder care or nursing home placements, visit www.elderlawnewyork.com.

Medicaid Offers Home Attendant Services For Eligible Individuals

Wednesday, February 1st, 2012

New Yorkers who have Medicaid and need home attendant services can have this type of care covered. Approval is granted when financial and medical criteria are met, and an individual submits an M11q form that his or her doctor has thoroughly completed. These services can offer substantial savings for an individual and their family, and helps to provide for daily care.

Personal care services, which are also called home attendant services, can greatly assist individuals affected by physical or mental impairments. Individuals who have excess resources or income can get the skilled advice of a New York Medicaid planning lawyer to access benefits and preserve assets. Once home care is authorized, an attendant can assist from 12 hours a week to around-the-clock care.

It is also important for people who have been denied benefits to have their case reviewed. An experienced Medicaid planning attorney can uphold an individual’s rights and ensure that the medical and financial information is complete when a hearing is needed to seek benefits the second time around. Hearings can also be expedited in certain circumstances.

Littman Krooks LLP counsels individuals and families on how to access Medicaid benefits and plan for comprehensive care and estate matters. Our New York City, White Plains and Fishkill Medicaid planning attorneys are well versed in state regulations, benefits, and asset protection. To learn more, visit http://www.littmankrooks.com/elder-law-medicaid-planning/.

Federal Courts Rule Medicare Standards Too Strict

Monday, January 10th, 2011

Elderly Americans are facing overly strict standards when they apply for skilled nursing home care and home health care through Medicare, two federal courts recently decided.

The two courts, one in Pennsylvania and one in Vermont, ruled that the Obama administration’s standards were too strict and that some seniors have been unfairly denied home care.

The courts ruled against the government position that seniors are only entitled to home care if they can verify that their condition will improve because of it. They said that these rulings were a “failure to apply the correct legal standard”, and determined that seniors are entitled to Medicare coverage of home care if it will keep their condition from deteriorating or allow them to live life as they had been.

Before this ruling, elderly Americans with deteriorating conditions such as Alzheimer’s and Parkinson’s may have had trouble receiving Medicare for home care, as their conditions often do not allow them to improve.

The court cited past rulings that decided Medicare law should be interpreted to best favor beneficiaries. In response, 17 Democrats from the House of Representatives sent the Obama administration a letter arguing against its Medicare policies.

The government has not yet responded to the case.

If you or a loved one has been denied Medicare coverage of home care, contact an experienced elder law attorney for assistance.

To learn more about New York elder law, New York estate planning, visit http://www.elderlawnewyork.com

A Closer Look at Spousal Refusal

Thursday, June 24th, 2010

New York is one of only three states in the U.S. that allows spousal refusal. Spousal refusal is a planning option that protects a couple’s assets and allows an incapacitated spouse to qualify for Medicaid. To be eligible for Medicaid in New York, an individual cannot have more than $13,800 in non-exempt property, which is often a problem for married couples.  However, there is an alternative way to qualify for Medicaid benefits – spousal refusal. Under New York law, the spouse who does not reside in the nursing home (known as the “community spouse”) is allowed to keep his or her assets if spousal refusal is exercised.

The community spouse can invoke spousal refusal by signing a statement refusing to contribute income or resources to the spouse who is residing in an institution and receiving medical care. If the community spouse chooses to do this, the Medicaid agency is then required to disregard the community spouse’s income or resources when determining the eligibility of the spouse in an institution. Doing so will allow the community spouse to continue supporting himself or herself without fear of impoverishment.

Spousal refusal can work for couples as a last minute planning option, and the spouse in need (the incapacitated spouse residing in the institution) can start receiving benefits almost immediately. However, this planning option is not without cost. The Medicaid agency can choose to commence proceedings and attempt to force the community spouse to support the spouse in the institution. The agency can also file a claim to receive reimbursement from the community spouse’s estate once he or she has passed away. These planning options should be discussed with your elder law attorney.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.