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For some reason most of us do not like to think about the future and what can
happen. Yet many of us are experiencing the realities of elder family members
needing extensive long term or nursing home care, right now! |
This should inspire you to act now and prepare for your future long term care
expenses. The cost for long-term nursing home care can be devastating to
a family's financial resources. Protect your resources with a Medicaid plan. |
DEFICIT REDUCTION ACT NOTICE:
The Deficit Reduction Act of 2005, signed into law on February 8, 2006,
contained significant changes to the Medicaid eligibility rules.
Special care in record keeping is needed for any person who
may need nursing home assistance in the next 5 years.
The manner in which divestment penalties are assessed is changed.
Any Medicaid applicant who has given resources away will be ineligible
for Medicaid nursing home assistance by the amount of time that
resource would have paid for nursing home care.
The Deficit Reduction Act of 2005 did retain important protections
for the spouse and disabled children of the nursing home resident.
Family members who once gratuitously assisted a loved one,
may now have a stronger reason to be paid for their care.
It is now more important than ever to consult with a knowledgeable
Elder Law attorney if you anticipate a spouse or parent may need
nursing home care in the not so distant future. Remember, earlier is better
than later, but late planning is better than no planning at all. |
MEDICAID PLANNING:
The average nursing home cost in Michigan in the year 2006 is $5,500.00 per
month. Therefore, many people are concerned with paying for the costs of
nursing home care should they or a family member need it.
Medicare pays for nursing home care in certain circumstances and for a limited
period of time. Most health insurance policies do not cover any long term care.
Medicaid is often the only assistance program available to help pay for nursing
home care. However, Medicaid will only pay for the costs of nursing home care
if the patient is impoverished.
The Medicaid eligibility rules define what assets must be included and what may
be excluded. The rules also address what married couples may keep so that one
spouse will qualify for Medicaid without also completely impoverishing the spouse
living in the community.
ELIGIBILITY REQUIREMENTS - There are primarily four requirements
in order for Medicaid to pay nursing home costs.
A. NON FINANCIAL REQUIREMENTS: A person must be at least 65 years of age,
blind or disabled, and be a U.S. citizen or a resident alien.
B. MEDICAL NECESSITY: The applicant must meet the medical eligibility
requirement for Medicaid.
C. INCOME: Monthly income cannot exceed costs of long term care
and other medical expenses.
D. ASSET ELIGIBILITY: The maximum in assets a person may own is $2,000.00
subject to many exceptions. A person should not think that if their amount of
assets greatly exceeds $2,000.00 that nothing can be done. There is usually an
array of techniques available for legally preserving assets without losing it all.
The base amount for both spouses entering a nursing home and applying for
Medicaid is $3,000.00, also subject to many exceptions.
SPOUSAL IMPOVERISHMENT - A typical spousal impoverishment case is one in
which one spouse is headed for the nursing home and the other will remain in
the community. The community spouse is entitled to a certain level of asset
protection which at the minimum is $19,920 and the maximum is $99,600
for the year 2006.
The amount the community spouse is allowed to keep is known as the Protected
Spousal Amount (PSA). However, what many individuals who go through the
Medicaid process do not discover is that there are federal regulations and state
rules that can be utilized to preserve in many, if not most, cases a significant
amount of assets for the community spouse which far exceeds the published
maximum stated above.
SPENDING DOWN is a phrase that is used to describe the process of spending
one's assets in order to become eligible for Medicaid by bringing the countable
resources below the $2,000.00 limit of assets allowed.
Spending down should only be done in an informed manner. Otherwise, money
may be needlessly spent on goods or services that could be preserved.
PENALTY PERIOD - A penalty period may result when a resource is transferred
out of the patient's control within 60 months from the date of the Medicaid
Application. This is called "divestment" and Medicaid will not pay for the
costs of long term care during the penalty period. Divestment can occur
whenever property is given away, a name is taken off a bank account,
or a name is placed on a deed.
Divestment should only be done in an informed manner. Some divestment may
leave the patient without any funds and without any way to pay for nursing
home cost. The Deficit Reduction Act of 2005 drastically changed the manner
in which divestment penalties are calculated. The new law can cause severe
Medicaid penalties against anyone who has given resources away after
February 7, 2006.
You should begin planning for Medicaid as soon as possible, to take advantage
of all options available. An experienced elder law lawyer will explain how, through
trusts, title changes, and gifting, you may be able to pass on some of your
estate to your heirs before you qualify for Medicaid. Other Medicaid trusts
are designed to preserve assets for your quality of life while you are receiving
government benefits. You do not necessarily have to spend down as quickly
as it seems. |
ADDITIONAL INFORMATION TO ASSIST YOU! |
P. Mark Accettura has written a comprehensive book
on the subject of Medicaid and Long Term Care: |
Medicaid and Long Term Care in Michigan.
Getting good care without going broke. |
Accettura & Hurwitz Attorneys and Counselors are experienced in
Medicaid Planning and Long Term Care plans to help you avoid
the many financial pitfalls associated with Long Term Care. |
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Contact us today! |
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