LONG TERM CARE PLANNING (MEDICARE, MEDICAID AND VETERAN'S BENEFITS)

 Long Term Care Planning is one of the reasons clients keep coming back to the office, and referring friends. At Susan I. Jean & Associates, we have over fifteen years experience in answering questions such as:

1. My wife just was diagnosed with Alzheimer's disease. She's physically healthy, and will probably live a long time. We don't have enough money to pay for her care for the rest of her life. Will I have to sell our home to pay for her care?
2. My husband needs home health care, but it costs an arm and a leg. Are there any programs out there that can help with the cost of care?
 So let's talk about the government programs that can help with the cost of care.

Medicare
 Many of my clients expect that Medicare will cover the costs of long term care. I understand this, because Medicare really does a good job of covering the usual medical costs. However, Medicare was not designed to pay for the costs of long term care. Medicare will normally pay for, at most, a semiprivate room, meals, skilled nursing and rehabilitative services, and other services and supplies (only after a three-day inpatient hospital stay for a related illness or injury) for up to 100 days in a benefit period.
 Medicare can also help with home health care costs. However, as with nursing home care, Medicare funding is limited to reasonable and necessary part-time or intermittent skilled nursing care and home health aide services, and physical therapy, occupational therapy, and speech-language pathology ordered by your doctor and provided by a Medicare-certified home health agency. The benefit also includes medical social services, other services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), and medical supplies for use at home.

Medicaid
 Medicaid is a joint program managed by the U.S. Department of Health & Human Services' Centers for Medicare and Medicaid Services, and the Virginia Department of Medical Assistance Services. It is an insurance program that covers medical costs to the extent that other medical insurance does not pay.

To qualify, Virginia applicants must:
1. Be able to prove status as a US citizen or legal alien, and a Virginia resident.
2. Demonstrate medical need, by showing that they need someone to help them with basic activities of living, such as bathing, grooming or eating.
3. Demonstrate financial need (see below).
4. Not have made any gifts that would cause a disqualification period (see below).
5.Financial need  - Financial need for Medicaid purposes varies depending on whether the applicant is single or married. 
Single: 
Resources: a single Medicaid applicant may have $2,000, plus their personal property (their "stuff"), a vehicle if necessary for medical transportation, and some funds for funeral and cremation or burial.
Income: in addition, the Medicaid applicant can keep enough income monthly to pay for Medicare, and for any Medicare supplement the applicant has, plus a Personal Needs Allowance of $40 per month.
Married:
1. A married Medicaid applicant has the same resource and income entitlements as a single applicant.
2. A Community Spouse is a spouse who is living at home or in an assisted living community.

Gifts: the rules regarding gifting and Medicaid are complex, and have changed over time.

 

First: what is a gift for Medicaid purposes?

  • Buying a child a car
  • Giving your daughter $12,000 per year
  • Paying for a grandchild's college tuition
  • Tithing
  • Charitable giving
  • Selling your home to your son for a dollar (unless, of course, the home is actually worth a dollar!)

If you give it away and don't get fair market value for it, it is probably a gift. 

 

Non-disqualifying gifts: There are certain gifts that do not disqualify you from receiving Medicaid benefits.  These include gifting from husband to wife or from wife to husband, gifting (in a Medicaid approved fashion) to or for the benefit of a blind or disabled child, gifting one vehicle worth $4500 or less, gifting the home to a caretaker child who meets Medicaid's specific criteria for proving status as a caretaker.

 

Other gifts will normally cause a Medicaid disqualification period.  How we determine the length of time, and the specific days and months disqualified, has changed over time, so a careful analysis is necessary to determine the consequences of a gift. 

A Community Spouse can keep:
Resources: the home, a vehicle, their "stuff", funds for funeral and cremation or burial, and one half of the family investments, within a floor and a ceiling. The floor at this time is $20,880; the ceiling is $104,400. So, if the husband and wife had a home, a car, and $80,000 in investments, the Community Spouse could keep $40,000.
Income: In addition, the Community Spouse is entitled to income of no less than $1,711.25 per month (and may be as much as $2,610 per month if the Community Spouse is entitled to a housing allowance). If the Community Spouse does not have at least this much income, the Medicaid spouse can contribute monthly to raise the Community Spouse's income to this level.

At Susan I. Jean & Associates, LLC, we have fifteen years of experience advising families in techniques for preserving sufficient funds to allow a dignified standard of living for the families of Medicaid applicants. We use techniques such as:

  • Gifts

  • Revocable Trusts with Medicaid Triggers

  • Irrevocable Trusts

  • Notes

  • Reverse Mortgages

  • Annuities

  • Smart Spending

  • Residential Choices

We pride ourselves on our ability to explain the process in plain English. We employ case managers who work with our clients to assist with all aspects of Medicaid qualification and retention of eligibility.

Veteran's Benefits

Aid and Attendance is a program available through the U. S. Department of Veterans Affairs. It is an income supplement that pays up to $1,554 a month to a qualifying single veteran, or $998 a month to a widow or widower of a qualifying veteran, or $1,842 a month to a qualifying veteran married to a nonveteran, or $2,346 a month to a qualifying veteran married to a veteran to defray the expense of long-term care. To qualify, veterans must:

1. Have served during wartime (they do not have to have been in the war theater)
2. Have no more than $80,000 in assets, not counting the family home, car and personal possessions
3. Prove financial need, usually by demonstrating medical expenses exceed their income.
4. Show they need someone to help them with basic activities of living, such as bathing, grooming or eating.

We are familiar with the program, qualification requirements, and techniques for helping families qualify without losing all of their investments.

WHAT TO EXPECT AT YOUR APPOINTMENT
When you make an appointment for a long term care consultation, the first step is normally a meeting with the case manager that would be assigned to your case. The case manager, either Donna or Mary Ellen, will meet with you to review your finances and be sure that when you meet with the attorney we will have information ahead of time, so we can "hit the ground running". The appointment with the attorney, normally Susan I. Jean but may also be with Christina C. Balaban, will usually last about one to one and a half hours. During this time, the attorney will review the situation, determine what your questions are, and provide a recommendation. The recommendation may be as simple as a "To Do" list. It may be a To Do list combined with a recommendation for some estate planning. It may be as extensive as a "Whole Shebang" retainer.
 A consultation is appropriate when the client is able and willing to execute the plan on their own, and does not need any legal assistance to do so.
  A Whole Shebang retainer is appropriate when the client is not able to execute the plan on their own. This may happen when the spouse is committed to visiting the spouse in the nursing home and does not have the time to collect the information needed for a Medicaid application. Or when the spouse is not financially astute. Or when the applicant is single and the family needs assistance.

The Whole Shebang normally combines a written Long Term Care plan, any necessary estate planning to support the plan, case management to assist with executing the plan, and assistance with filing the Medicaid application.