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personal services contracts

Personal Services Contracts in Florida.

Personal Services Contracts in Florida.

When people are looking to protect assets from the costs of long-term care in Florida, one popular option is the concept of a personal services contract. This article discusses legal ways to protect assets in the event your elder needs long-term care Medicaid. Long-term care Medicaid can help pay for the cost of care at home, in assisted living, or in a nursing home.The goal in creating eligibility for long-term Medicaid generally involves legally reducing the assets to $2,000.00 for a single person or around $140,000 for a couple.  In creating Medicaid, we cannot give money away as this creates a Medicaid transfer penalty. So if we cannot give money away, how can we create Medicaid eligibility while protecting assets? One legal way to do this is to pay a caregiver for future services for the elder in advance.  This is generally referred to as a personal services contract.A personal service contract is an agreement between a caregiver (who can be a family member) and the elder to provide him or her with personal care services for his or her lifetime. This is a lump sum transfer of assets to the caregiver(s) in exchange for their contractual promise of care. As long as the transaction is for fair market value and is legally binding, the government cannot disqualify the applicant for Medicaid long-term care benefits as the transfer is not a gift, it is a payment for services.  Remember that we cannot give away money (or other assets) to receive Medicaid eligibility, but the applicant is allowed to hire someone to help them out within reasonable parameters.  Personal services contracts have been used for years in Florida and have been tested in the Florida appellate court as a valid tool for valid Medicaid “spend down” planning.The services provided by the caregiver generally includes bill payments, talking to doctors, grooming needs, visitation, hospital advocacy, etc., that the nursing home or assisted living facility does not generally provide. The caregiver is essentially getting paid to help the elder receive better care than he or she would receive without an advocate in such a facility.

The payment amount is calculated by the elder’s life expectancy, the amount of work expected and the hourly rate.  A typical example of this calculation is as follows:

Mom is 85 years old and in the nursing home. She has $50,000 in her bank accounts. We want to create eligibility for Medicaid and she has a caregiver who is able and willing to assist her.  Mom’s life expectancy according to the Florida Department of Children and Families is 6.62 years.  If the caregiver is able to work ten (10) hours per week advocating for Mom, which we would deem reasonable under the circumstances, we could pay the caregiver $35/hour (or less).  With this calculation, we would be able to pay a caregiver around $120,484 for his or her expected services (10 hours/week x 52 weeks/year x $35/hour x 6.62 years = $120,484.00). Since Mom only has $50,000 in assets, we could legally pay the caregiver a $50,000 lump sum to create Medicaid eligiblity and reduce her assets to less than $2,000. In this example, this is all done with assistance and guidance from a good elder law attorney.

There are a few items to note in this example:

  • It may be reasonable to pay a caregiver $35/hour in some, maybe not all cases, depending on the work the caregiver provides. The caregiver may be acting in more than just a caregiver role. For instance, the caregiver may provide physical service (checking in on the patient/elder, helping with hygiene issues) while also may provide some things that are closer to a guardianship role (such as bill paying and other legal responsibilities). So we may be able to justify a higher hourly rate in some circumstances, which is very important
  • Personal services contract are very exact and would only be done under certain circumstances with attorney consultation
  • The caregiver will have income tax issues in getting a lump-sum payment
  • The caregiver may need to get consent from Mom’s family/other children as this may disrupt Mom’s estate plan
  • The Personal Services Contract, and all spend down, is documented to the Department of Children and Families, so this is all disclosed to Medicaid as part of the application process
  • The Department of Children and Families reviews the contract, pay rate and the hours as a part of the Medicaid application
  • Each situation is different so an elder law attorney will review all options for correct Medicaid “spend down” planning

We typically look to personal services contracts as a part of spend down planning for single people. Medicaid rules are different between a married couple and a single person, so there may be other (i.e., better) legal ways to protect assets for a married couple.

Explain This Again?

The use of a personal services contract is most likely used in “crisis Medicaid planning,” where the elder is already in a nursing home or the elder needs imminent long-term care Medicaid (such as in-home or assisted living Medicaid). In the above example, Mom is in the nursing home and will be private paying for care when her Medicare/health insurance ends (if she had a 3 day qualifying hospital stay before going to rehabilitation).  Mom has money that would otherwise disappear to the cost of long-term care as the nursing home costs over $10,000/month on private pay. Since her money will be spent very quickly without Medicaid paying for long-term care, the family will want to discuss how to best spend Mom’s money to get Medicaid qualification (for Medicaid to pay for her care faster). The personal services contract will help legally spend her funds down to less than $2,000, so she will qualify for Medicaid sooner with an elder law attorney’s assistance.

Read more related articles here:

Personal Service Contracts. Medicaidplanning.org

37.104 Personal services contracts.

Also, read one of our previous Blogs at:

Personal Care Agreements

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

Elderly orphans

Elder Orphans. What Happens If An Elderly Person Has No One To Take Care Of Them?

What Happens If An Elderly Person Has No One To Care Of Them?

When an elderly person has no one to take care of them, they may opt to take care of themselves and continue living in their own home. Programs for seniors without family are available, as are nursing homes and assisted living. Some states will enlist a guardian for seniors who can no longer keep up with daily tasks of living or make decisions for themselves.

We have a lot to unpack in this article as we explore a senior’s options when they’re old, their physical health is declining, or they have dementia or memory loss, but they have no family (and possibly no money as well). Make sure you keep reading for lots of helpful information!

What Happens To Elderly Living Alone?

According to a 2013 report from AARP called The Aging of the Baby Boom and the Growing Care Gap: A Look at Future Declines in the Availability of Family Caregivers, the AARP estimated that by 2030, a whopping 16 percent of women up to 84 years old will have never had children.

For others – well, it’s hard enough losing the people we love as we get older. But for some seniors, they may lose family members or become estranged from those who were closest to them in their younger years – their spouse, their kids, and their friends.

For other seniors, it could be that they are close to family, but their loved ones have moved to another part of the world.

Either way, these “elder orphans” only have themselves to rely on. It can be a really tough situation to be in, but there are ways to cope.

Here is what can happen to them.

They Continue Living Alone

No rule says an aging senior has to change their lifestyle just because they’re getting older.

They should consider their care options, but due to fear of the unknown or stubbornness, they might decide to continue caring for themselves like nothing is wrong.

This can be highly dangerous, as we’re sure we don’t have to tell you. If an elderly person living alone slips and falls and is not wearing a medical alert device and is out of reach of the phone, then they have no way to call for help.

NOTE: if you don’t want to wear a medical alert device, a voice-activated Amazon Echo Dot or a smart watch, such as an Apple watch, can be used instead. There is even medical alert jewelry that looks like a regular necklace.

Without anyone checking in on them, the senior would have to force themselves to get to a phone or risk being stranded.

This happened to my mom – she fell and broke her shoulder and could not get up to reach the phone that was on the counter just above her. Thankfully my dad came home and found her after a couple of hours, but I still shudder to think about what would have happened if she had lived by herself.

Sadly, many older people will go through this trauma alone (and, in some cases, their quality of life will be severely impacted or they will not survive).

 

They Move Into An Assisted Living Facility Or A Nursing Home

After a drastic change in their physical condition, such as one slip and fall without anyone to help them, a senior might change their tune and decide that they need assistance in their day-to-day lives.

They could move into an assisted living community or even a nursing home.

Usually, adult children or other family members would encourage this decision for the elderly, but not in this case.

They Enter A Conservatorship

Of course, we should note that both assisted living and nursing home care are anything but cheap.

According to Where You Live Matters, a resource for seniors, as of 2018, the yearly cost of assisted living was $48,000. We’re sure the costs have only continued to climb in the years since that data was released.

Senior Living.org states that, as of 2021, the monthly cost of nursing home care is $7,756 for a semi-private room and $8,821 for a private room. The costs would be between $93,072 and $105,852 a year.

Keep in mind too that Medicare doesn’t often pay for these services, which means a senior would have to rely on different insurance or other financial means.

That’s a lot of money to ask of anyone, let alone an elderly person who likely hasn’t worked in decades.

So what happens when a senior can’t afford to live in a facility and they have no family who can step in and help?

Well, in some states, such as California, a senior could receive assistance. The state could offer a conservatorship where someone is assigned the role of the senior’s guardian.

They likely wouldn’t know the guardian, but the guardian still makes financial, health, and medical decisions for the senior.

Usually, this only happens if a senior is unable to make decisions for themselves.

Not every state offers conservatorship services though, and even for the ones that do, it’s not easy to obtain these services. The conservators who step in on a senior’s behalf are doing so on a volunteer basis, after all.

How Do You Plan For Old Age With No Family?

Aging is inevitable. Even with a full support system of beloved family, aging can be scary. Once you remove that network, the prospect of facing old age alone is daunting.

We don’t recommend an elderly individual does it alone, for their own health, safety, and mental well being.

Instead, these should be the pillars of planning as a senior determines how they’ll proceed through the years without a spouse, partner, or adult children.

Put Your Affairs In Order

One of the best things you can do for yourself is to make sure your legal and financial affairs are in order before you have a health problem or cognitive decline. You’ll make better decisions when you aren’t under stress.

If you live alone, this is especially important, as there may be no one else who knows your wishes or how to access your accounts.

Good legal planning with the help of an elder care lawyer is an important part of ensuring that your wishes are carried out in the event that you are unable to make or communicate decisions on your own behalf.

Here are some key elements of legal planning to keep in mind:

  • First, take inventory of existing legal documents, such as your will, power of attorney, and health care directive. Review these documents and make any necessary updates.
  • Second, make legal plans for your finances and property. For example, you may want to consider establishing a trust or setting up a beneficiary designation.
  • Third, put plans in place for enacting your future health care and long-term care preferences. This may include making decisions about end-of-life care, guardianship, and long-term care insurance.
  • Finally, name another person to make decisions on your behalf when you no longer can. This person, known as your agent or proxy, will be responsible for carrying out your wishes according to the terms of your legal documents. In order to do this, start by designating someone you trust as your power of attorney. This person will be able to make financial decisions on your behalf if you become incapacitated.

Many people don’t think about appointing a power of attorney until it’s too late.

Whether you’re dealing with an illness, injury, or just the natural aging process, there may come a time when you can no longer make your own decisions. That’s why it’s so important to have a power of attorney document in place.

This document allows you to appoint someone you trust to handle your financial and other affairs if you’re ever unable to do so yourself. You can also name successor agents in case your original choice is unavailable or unwilling to serve.

And it’s important to remember that power of attorney does not give the person you appoint complete control over your life. You still have the right to make your own decisions, as long as you have the legal capacity to do so.

So don’t put off appoint a power of attorney – it could be one of the most important decisions you ever make.

You should also write a will or talk to an attorney who can help with estate planning to outline how you would like your assets to be distributed after your death.

While these may not be pleasant topics to think about, making these plans now will give you peace of mind knowing that your affairs are in order.

End Of Life Wishes

Many people choose to avoid thinking about end-of-life care or funeral arrangements, but it’s an important topic to consider. End-of-life care can encompass a wide range of issues, from medical treatment to funeral arrangements.

Ideally, it’s best to express your wishes now while you are able to make decisions for yourself.

Addressing your wishes with your care team or a legal professional will ensure that your expressed requests will be followed when appropriate.

By taking the time to plan ahead, you can ensure that your wishes will be respected and that others will not have to make difficult decisions on your behalf.

Build Social Bonds

If you thought it was hard to find friends after college, it can be even more difficult in one’s senior years, but it has to be done!

A senior can find new friends in all sorts of places, from the doctor’s office waiting room to the post office.

Talk to neighbors, too, especially younger neighbors or neighbors with families. Explain the situation to them.

The point of being sociable is to build a support network. A senior should have people around them who will notice if they don’t pick up their phone. They need someone or several people who know the senior’s routine and can thus determine if they’re not following it.

These people will check in on the senior so that if, goodness forbid, a situation transpires where a senior has fallen and can’t get help or is otherwise unresponsive, the support network can step in and get the senior the proper medical care they need.

Mail carriers are also helpful if you ask them to keep an eye out for trouble. There are plenty of stories about mail carriers who asked for a home welfare check after someone who regularly picked up their mail stopped doing so. You can actually register to get this service.

Move Into A Joint Household

Assisted living can be expensive, but an informal joint household is usually a lot more affordable.

What is a joint household? This housing arrangement includes friends or extended family members of the senior who live under one roof. Collectively, they provide care for the senior.

This is a win-win-win situation. A senior doesn’t have to deal with the isolation of living alone, they’re surrounded by people they love, and they’re receiving care.

Find Other Family

Families are often bigger than we give them credit for and sometimes just need to reconnect. A senior should look into their family lineage if they’re fearing the years ahead without any care.

They just may have extended family in the area that they never realized were so close! For example, when I moved to Colorado, I was able to reunite with an elderly uncle who had been estranged from the family for several years.

Programs For Seniors Without Family

Another option for an older person is to seek the assistance of social services and programs designed for seniors without families. Here are some programs to look into.

Senior Centers

According to the National Council On Aging, a senior center serves “as a gateway to the nation’s aging network—connecting older adults to vital community services that can help them stay healthy and independent.”

They can put you in touch with your local Area Agency On Aging for things like meal delivery, financial assistance and help with personal needs.

AmeriCorps Senior Companion Program

The AmeriCorps Senior Companion Program provides companionship to nearby seniors living on their own. The companion program is about building friendships between volunteers and the elderly.

The goal is to “keep seniors independent longer.”

No Wrong Door

No Wrong Door in association with the Centers for Medicare and Medicaid Services, the Veterans Health Administration, and the Administration for Community Living offers seniors and others in need community-based support.

Equality Conversion Mortgage

The Home Equality Conversion Mortgage or HECM  through the U.S. Department of Housing and Urban Development allows a senior to use some of their home equity, none of which accrues interest or has to be repaid as long as they live in their home.

To be eligible for the HECM program, a senior must be at least 62 years old and have significant equity.

What Happens To Dementia Patients With No Family

After a diagnosis of Alzheimer’s or other dementia, it’s natural to feel overwhelmed. Suddenly, there are a lot of decisions to be made and new challenges to face.

If you have dementia, or are caring for someone with the condition, you may be worried about what will happen if you have no family members who can help you if you can no longer care for yourself.

After all, you may be able to manage perfectly well in the mild / beginning stages of the disease, but dementia is a progressive condition and it can lead to a decline in physical and mental abilities over time.

This can make it difficult to do everyday tasks and may eventually make it impossible for you to continue to live independently.

If you don’t have any family or friends who are able to help you, there are still options available to you. There are also many support services available for people with dementia.

Housing Options

One option is to move into a dementia-specific care facility. These facilities provide 24-hour care and support, and the various programs in this type of community can help to delay the progression of the condition.

The goal is to receive in-home support. This can include help with cooking, cleaning, and personal care.

Financial Considerations

The sooner you start planning, the more control you will have over your finances and the less stress you will feel. There are a few key things to keep in mind when financial planning with dementia.

Begin by collecting all of your important financial documents in one place. This should include bank statements, investment accounts, insurance policies, and wills or trusts.

Once you have gathered everything together, sit down with a trusted friend or accountant to review your finances and make a plan for the future. It may seem daunting at first, but taking these steps will help to ease your anxiety during an uncertain time.

Financially, consider the cost of the type of care you may need for memory care issues (such as home health aides or nursing home care) which can be extremely high. Even informal care, such as help from friends, can come with a significant financial cost, as it often requires hiring outside help to cover regular tasks like cooking or cleaning.

To help ease the financial burden:

  • Investigate any long-term care insurance that may be in place.
  • Also, if you are a veteran, you may be eligible for benefits that can help.
  • If you are younger than age 65, SSI (Supplemental Social Security) or Social Security Disability Insurance (SSDI) may be able to help.
  • You may also qualify to get help from Medicaid (there are income and asset qualifications to meet).
  • If you own a home, a reverse mortgage may be of assistance.

Put A Care Team Into Place

A care team is the group of people who you’ll partner with and rely on to provide you help, care, support and connection throughout the course of the disease.

The team may include your friends, co-workers or trusted neighbors. It also may include your doctor, nurses, social workers, geriatric care managers, clergy or therapist.

The goal of the care team is to provide physical, emotional and spiritual support. The care team also can provide important practical assistance, such as transportation to doctor’s appointments or help with household chores.

Begin to assemble a care team by making a list of everyone you can think of who may be willing to help.

Then, tell them about your diagnosis and let them know what you might need in the future (transportation to the grocery store or medical appointments, help preparing food, etc).

If they agree to help, add their names and contact information to your care team list.

Legal Paperwork

Put legal paperwork into place so that your wishes are carried out for both medical care and end of life care.

It is crucial to do this before you begin to experience cognitive decline, so if you have a family history of dementia or Alzheimer’s disease, it’s a good idea to put plans into place “just in case” you are ever diagnosed.

Regardless of a dementia diagnosis, you’ll need to appoint a power of attorney for both your financial and medical needs.

A power of attorney is a document that allows you to appoint someone to make decisions on your behalf. This can be useful in a variety of situations, such as if you become incapacitated or are unable to make decisions for yourself.

The person you appoint is called an attorney-in-fact or agent. It’s important to choose someone you trust, as they will have a lot of responsibility.

You should also name a successor agent, in case the person you originally choose is unable or unwilling to serve.

Keep in mind that even though you are giving the person you designate as your power of attorney the authority to make decisions, you still have the final say. They are there to help you, not override your decisions.

Power of attorney is a valuable tool that can give you peace of mind knowing that your affairs are in good hands.

How Do You Help An Elderly Person Who Lives Alone?

It can be tough for elderly people to get by without any family nearby. They might not have anyone to help them with yard work, grocery shopping, or even just keeping the house clean. And if they live alone, it can be easy for them to become isolated and lonely.

But there are some things you can do to help.

Check On Them

Just a quick check-in every now and then can make a world of difference in their lives. Something as simple as a phone call, a cup of coffee, or even simply waving to them from the sidewalk can help them feel connected and valued.

Checking in also gives you an opportunity to make sure that they are safe and comfortable. If you notice any problems, you can alert the proper authorities or provide assistance yourself.

Help Them Out

You could also offer to help out with practical tasks like grocery shopping or yard work.

If they don’t have transportation, you could give them a ride to appointments, social events, grocery shopping or medical appointments.

Visit Often

Solo seniors who struggle with mobility or age-related conditions like dementia probably don’t have the biggest social circle. They may not see or speak to anyone for days especially if they’re living alone.

By visiting the senior several times per week and spending companionable hours with them, you could improve their mental health and well being just through your presence.

Listen

Considering that a senior who lives alone might not have many people to talk to, they likely will have a lot to say when you two talk.

Sometimes, the senior may use you as a sounding board whereas other times, they’ll want to have an everyday conversation.

Let the senior talk, as this could be their only opportunity. Listen to them and respond thoughtfully and helpfully if you can.

Do Activities Together

Making your time together meaningful will have a senior looking forward to seeing you again.

You can engage in senior-friendly arts and crafts, watch old films or listen to old music together (which can invoke memories for dementia patients), or even get outside and take a walk if the senior is able to leave the house while under your care.

Conclusion

More seniors today are facing the prospect of getting older with no one to care for them.

Whether they never married and are childless, or divorced and childless, or their family moved away, or a tragic loss occurred, these seniors have to go through their most difficult years without family.

This never means that a senior is alone though. Through programs, conservatorships, community volunteers, friends and neighbors, and even long-distance family, a senior can almost always find a way to have someone looking out for them!

Read  more related articles here:

‘Elder orphans,’ without kids or spouses, face old age alone.

Elder Orphans Hiding in Plain Sight: A Growing Vulnerable Population

The Rise of Elder Orphans: What You Should Know

Also, read one of our previous Blogs here:

When Do I Need an Elder Law Attorney?

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

 

 

Medicaid Look Back Period

Medicaid Look Back Period 2022

Medicaid Look Back Period 2022

The majority of nursing home residents receive some Medicaid assistance. When considering nursing home care or other senior living decisions, knowing about the Medicaid look-back period helps reduce the possibility of penalties or disqualification from Medicaid for a period of time.

Learn about the Medicaid look-back period and how it potentially affects you or your loved one considering senior care or senior living options.

What Is The Medicaid Look Back Period?

The Medicaid look back period likely seems confusing for some individuals, particularly with changes made in recent years.

If you or your family member needs nursing home care, the individual must meet requirements for limited income and assets to qualify for Medicaid coverage for nursing home costs. Medicaid, a “last-resort” means of paying for nursing home costs, requires that a nursing home resident first use other means of paying for care before Medicaid begins providing coverage.

Medicaid helps make sure money and assets are not simply transferred to avoid paying out-of-pocket when a person has the means to pay at least some of the costs associated with nursing home senior care and senior living services. Medicaid does this in part by using the “Medicaid look-back period” to determine if there are violations of rules regarding transfer of assets.

The agency considers or “Looks back” over the previous five years to see if any assets were sold for less than true asset value, given away or otherwise transferred within the same time period when determining eligibility for Medicaid coverage and any violations that restrict or delay eligibility.

How Does The Medicaid Look Back Period Work?

The Centers for Medicare & Medicaid Services (CMS) explains that when applying for Medicaid to pay for nursing home care and other services associated with senior care while in a nursing home, the Medicaid eligibility worker asks if the individual recently gave away any assets such as vehicles or money. The representative also asks if the person sold property for less than its fair market value at the time of the sale within the past five years.

This transferring of assets usually results in a penalty, meaning that the person seeking senior living at a nursing home is ineligible for Medicaid, “For as long as the value of the asset should have been used” to pay for the nursing home care.

The site uses the example that if nursing home care costs $5,000 per month and the individual transferred $10,000, then the person is ineligible for Medicaid for two months. The penalty begins the month of the Medicaid application, not the month the individual transferred the property.

The individual then potentially qualifies for Medicaid benefits after the Medicaid look back penalty ends. That qualification is contingent upon the person not transferring any assets in any months while serving the initial look-back period penalty.

What Happened To The Three Year Medicaid Look Back Period?

It is true that the Medicaid look-back period was initially three years in most states. The CMS reported on the new regulations, effective February 2006, after the passing of the Deficit Reduction Act of 2005.

The DRA brought about several changes to the Medicaid look-back period. California, which still abides by its 30-month look-back period, became the only state not to extend the look-back period from three years to five years.

This potentially affects many people seeking nursing home senior care paid for by Medicaid, perhaps leaving some individuals to consider other means of paying for senior living options.

Another rule that changed is the fact that the Medicaid look-back period previously started with the day you transferred your assets. Now it begins 60 months prior to the date the person applies for Medicaid.

Are There Ways To Avoid Medicaid Look Back Period Penalties?

There are several exceptions to penalties for transferring assets during the Medicaid look-back period. If your transferred asset is a home and you transferred title to your spouse, there is no penalty. If your child lived with you for at least two years before you enter the nursing home and that child provided care to you during that period so you could continue living at home, you also avoid the penalty. If you have a child under age 21 who is blind or totally and permanently disabled under state-specific guidelines or if you transferred the home to your sibling who has an equity interest in that home and lived there for at least a year prior to your entering a nursing home there is no penalty.

NOLO points out that other exempt assets include household goods, personal effects, one automobile and some pre-paid funeral plans.

When considering nursing home senior care and senior living, make sure you avoid improper transfer of assets and know other guidelines of the Medicaid look-back period.

Read more related articles at:

Understanding the Medicaid Look-Back Period and Penalty Period

Understand Medicaid’s Look-Back Period; Penalties, Exceptions & State Variances

Also, read one of our previous Blogs at:

MEDICAID ALERT: New Medicaid Community Care Look Back Rules Start October 1, 2022

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

apply for medicaid

How to apply for Medicaid

Below is a general guide to the Medicaid application process. Be sure to contact your local Medicaid office for state-specific rules.

Note: Your Medicaid office may be called the Department of Health, the Department of Social Services, the Department of Insurance, or by another name.

  • Contact your local Medicaid office to ask how you need to submit your application. Some states require you apply in person, while others may allow you to apply by mail, online, by telephone, or at locations in the community, such as health centers and community organizations.
  • Find out which documents and forms of identification you may need in order to apply. Your Medicaid office may ask you to show the following:
    • Proof of date of birth (e.g., birth certificate)
    • Proof U.S. citizenship or lawful residence (e.g., passport, drivers license, birth certificate, green card, employment authorization card)
    • Proof of all types of income, earned and unearned (e.g., paycheck stubs, retirement benefits, Supplemental Security Income)
    • Proof of resources (e.g., bank or stock statements, life insurance policies, property)
    • Proof of residence (e.g., rent receipt, landlord statement, deed)
    • Medicare card and any other insurance cards (you can also provide a copy of the insurance policy)

Note: Medicaid coverage is available, regardless of citizenship status, if you are pregnant or require treatment for an emergency medical condition. A doctor must certify that you are pregnant or had an emergency, and you must meet all other eligibility requirements.

Troubleshooting

  • If you have any problems applying at a Medicaid office, ask to speak with a supervisor.
  • If you do not receive a timely decision on your Medicaid application or are turned down for Medicaid, you can appeal by asking for a state fair hearing (not a city or local one). Check with your Medicaid office to learn more about requesting a fair hearing.
  • Once you have Medicaid, you must recertify (show that you remain eligible for Medicaid) to continue to get Medicaid coverage. When you submit your Medicaid application, be sure to ask when and how you will need to recertify. In many states, recertification is an annual process.

Read more related articles here:

Florida Medicaid

New to Medicaid? How It Works

Also, read one of our previous Blogs here:

What It Means to Need ‘Nursing Home Level of Care’ for Medicaid Eligibility

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

medicaid house

Is Prior Occupancy Required to Have Home Excluded, When Qualifying for Long-Term Medicaid?

Is Prior Occupancy Required to Have Home Excluded,When Qualifying for Long-Term Medicaid ?

When qualifying for long-term Medicaid, there are asset and income restrictions. In many states, the applicant cannot have more than $2,000 in assets and receive benefits. Luckily, the equity in the applicant’s home is an excluded asset, up to a certain amount. But in order to have the home’s equity excluded, must the applicant have occupied that home prior to applying for benefits? This issue was recently litigated in Texas.

Clyde and Dorothy owned a home and lived in it until late 2010 when they sold it to Linda and Robby. Clyde and Dorothy moved into a rental property that was owned by Linda and Robby. In 2017, both Clyde and Dorothy moved into a nursing home. A week or so later, they purchased a one-half interest in the home they sold. They filed a Commission form stating that the home was their place of residence and indicated an intent to return there. About a month later, Clyde and Dorothy applied for Medicaid benefits. Their respective applications were denied, due to being over-resourced because the state counted the equity in the home as a countable resource.

Clyde and Dorothy appealed the decision; the Commissioner agreed with the state. Clyde and Dorothy appealed again. The trial court agreed with Clyde and Dorothy. The state appealed and now we have this case out of The Texas Court of Appeals, Third District.

The state argued that a Medicaid applicant must live in the home prior to applying for Medicaid, in order for the equity of the home to be excluded for Medicaid-eligibility purposes. Since Clyde and Dorothy did not live in the home before they entered the nursing home, the home’s equity should not be an excluded asset. In turn, Clyde and Dorothy argued that the home should be an excluded asset because they had an ownership interest in it, they both considered it to be their principal place of residence, and they intended to return there.

The list of excluded assets for Medicaid eligibility is enumerated in 42 U.S.C. § 1382b. Therein, the “home (including the land that appertains thereto)” is listed as an excluded asset.

In turn, 20 C.F.R. § 416.1212(a) defines “home”:

“A home is any property in which an individual (and spouse, if any) has an ownership interest and which serves as the individual’s principal place of residence. This property includes the shelter in which an individual resides, the land on which the shelter is located and related outbuildings.”

The state of Texas has modified this definition a bit. In 1 Tex. Admin. Code § 358.103(38), (69), it states:

“Home–A structure in which a person lives (including a mobile home, a houseboat, and a motor home), other buildings on the home property, and all adjacent land (including land separated by a road, river, or stream), in which the person has an ownership interest and that serves as his or her principal place of residence.”

“Principal place of residence–The home where a person resides, occupies, and lives.”

Finally, in Texas’s Medicaid handbook, in Section F-3000, it states, in part:

“For property to be considered a home for Medicaid eligibility purposes, the person or spouse must consider the property to be their home and:

  • have ownership interest in the property; and
  • reside in the property while having ownership interest.”

The court here affirmed the decision and sided with Clyde and Dorothy. The court reasoned that whether a home was someone’s principal place of residence is subjective, pointing to POMS SI 01130.100.A.2 which states that someone’s principal place of residence is what that person “considers his or her established or principal home”. (emphasis added)  The court looked at other relevant case law as well. In the end, it was ruled that a Medicaid applicant doesn’t have to physically live in the home that is sought to be excluded before the applicant moved to a nursing home. Indeed, it is not a requirement under federal law that the individual had occupied the property for it to be an excluded asset. If federal legislators had intended on this being a requirement, they would have written such in federal law. The court stated that it wouldn’t make practical sense or further the objectives of the Medicaid program to interpret the federal statute as having such requirement.

Read more related articles at:

Florida Medicaid (SMMC-LTC) Income & Assets Limits for Nursing Homes & Long Term Care

Medicaid Eligibility: 2022 Income, Asset & Care Requirements for Nursing Homes & Long-Term Care

Also, read more related articles at:

How Medicaid Planning Trusts Protect Assets and Homes from Estate Recovery

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

 

Medicaid POA

Importance of Having the Right Power of Attorney When Applying for Medicaid

Importance of Having the Right Power of Attorney When Applying for Medicaid

A Power of Attorney is one of the most important documents for an older person to have, especially when they plan on applying for Medicaid Long Term Care and receiving its benefits. Without it, the application process could stall or benefits might be denied.

WHAT IS A POWER OF ATTORNEY?

Power of Attorney (POA) basics are fairly straightforward. It’s a document where a “principal” or “grantor” (usually an elder) legally names an “agent” or “attorney-in-fact” (typically an adult child) to act on their behalf in medical and/or financial dealings if they are not capable of doing so themselves. POAs can be canceled or changed at any time for any reason, as long as the principal is competent enough to make those types of decisions. In all POAs, the agent’s powers end upon death of the principal.

Without a POA, anyone who loses the capacity to make decisions for themselves will have their financial holdings and health care choices managed by the state. In order to reclaim those powers, a family member would have to go to court and establish legal guardianship, which can be a lengthy and expensive process. In the context of applying for Medicaid Long Term Care, the state could choose not to apply, instead they could choose to sell the individual’s home and pay for care with those proceeds or make other financial decisions family members would likely not make.

Creating a POA is critical for potential Medicaid Long Term Care applicants. If the applicant’s health happens to fail rapidly and they are not capable of completing the Medicaid application on their own, having a POA will allow the agent (usually an adult child) to collect the necessary financial and medical documentations and complete the application. A POA will also prove valuable after the application has been approved so the agent can make further financial and medical decisions for the principal/elder/Medicaid beneficiary while they are receiving long term care.

WHAT IS THE BEST TYPES OF POA FOR FAMILIES CONSIDERING MEDICAID?

The most common type of POA for those considering Medicaid Long Term Care is a Durable Power of Attorney (DPOA). A DPOA is effective immediately and gives the agent (usually an adult child) decision-making power after the principal (typically an elder parent) has become mentally or physically incapacitated and is no longer able to make decisions on their own.

A springing POA can also be helpful for those seeking Medicaid Long Term Care benefits. Instead of being effective immediately, a springing POA is “sprung” into effect by a predetermined event like an incapacitating trauma such as a stroke or major accident, or a change in a preexisting illness or condition like Alzheimer’s disease or dementia.

A POA that will not be entirely helpful when it comes to Medicaid is a general or non-durable power of attorney. This type of POA is also effective immediately, but the powers of the agent/adult child end when the principal/elder is incapacitated, and therefore won’t allow the agent to perform the tasks needed for Medicaid application.

POWER OF ATTORNEY FUNCTIONS AND LIMITS

POAs do not give the agent (typically an adult child) full control of the life and possessions of the principal (usually an elder parent). Instead, the agent’s powers must be specifically detailed in the wording of the POA document. For Medicaid Long Term Care purposes, the principal should grant the agent control in two key areas – health care and finances.

With a DPOA for health care, the agent can decide if the principal needs to live in an assisted residential setting like a nursing home facility or Alzheimer’s care unit; the agent can make decisions regarding the principal’s health care options such as surgery, in-home health care and hospitalization; and the agent can choose the principal’s healthcare professionals and types of medications.

Even though the agent for the health care DPOA can make all of these choices, they can not use the principal’s funds to pay for the health care without approval from the agent for the financial DPOA. The health care and financial DPOA agent can be the same person, but they do not have to be.

The financial DPOA allows the agent to manage the principal’s finances – access bank and retirement accounts, write checks, pay bills, file taxes, manage real estate, file insurance claims, etc. The financial DPOA also allows the agent to apply for benefits like Medicaid for the principal, and just as importantly, access all the documentation needed in the Medicaid Long Term Care application process. Required documents for the application include year-end statements from all bank accounts, investments, IRAs, 401Ks and annuities for the last five years to satisfy Medicaid’s “look back” rules (except in California, where the look back period is 2.5 years instead of 5) as well as proof of all income streams (pensions, interest, royalties, wages) from the payer, and copies of all life insurance policies and trusts.

A Certified Medicaid Planner can help navigate all the DPOA permutations and options for your particular case. To schedule a free consultation with a Certified Medicaid Planner, start here.

WHEN IS THE RIGHT TIME FOR A POA?

The truth is it’s never too early to get a DPOA because the creation of a DPOA does not mean the principal (usually an elder parent) is incompetent, nor does it take away the principal’s rights to make financial, health care or any other kind of decision on their own. It simply means that if the principal is incapacitated and can no longer make their own decisions, the agent (typically an adult child) will do so on their behalf.

An elder can also grant an adult child, or another family member, power of attorney in a living will, as long as the elder was mentally capable while creating that living will.

POAs for Persons with Dementia / Alzheimer’s

If an elder is the early stages of Alzheimer’s or some other form dementia and still has the capacity to understand what the power of attorney documents mean and what powers they transfer, they can still create a DPOA. In cases like this, consulting with a Certified Medicaid Planner is strongly recommended.

Understanding how state Medicaid offices evaluate Alzheimer’s / dementia cases is critical because Medicaid applications could be ruled invalid if POA documents were created by someone the state considers incapacitated by those conditions. If that happens, the elder could become a ward of the state and family members would have to go to court to gain guardianship (also known as conservatorship) of the elder.

Read more related articles at:

Importance of Durable Powers of Attorney for Finance and Health Care to Medicaid

FloridaMedicaid.com/Durable Power Of Attorney

Also, read one of our previous Blogs here:

How Medicaid And Medicare Fit Into Planning For Long-Term Care

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

medicaid hardship

What Elements Must be Met for a Hardship Waiver?

What Elements Must be Met for a Hardship Waiver?

Federal law, specifically 42 U.S. Code § 1396p(c)(2)(D), dictates that a state must establish procedures that allow a Medicaid applicant to receive needed care via a hardship waiver. In these cases, the applicant (or their spouse) had made a transfer during the look-back period that would otherwise incur a penalty whereas the applicant would not be eligible to receive Medicaid benefits for a certain period of time. If the applicant can show that the imposition of the penalty period would deprive the applicant of necessary medical care or the necessities of life, then the hardship waiver can be approved, allowing the applicant to get needed care immediately. Basically, the penalty period is waived if the hardship waiver is granted.

Each state has its own nuanced rules for a hardship waiver, using the federal rule as a guide. New York’s rule is housed in 18 NYCRR 360-4.4(c) and states:

“Denial of eligibility will result in an undue hardship if:

(i) the institutionalized person is otherwise eligible for MA;

(ii) the institutionalized person is unable to obtain appropriate medical care without the provision of MA; and

(iii) despite his/her best efforts, the institutionalized person or the person’s spouse is unable to have the transferred resource returned or to receive fair market value for the resource. Best efforts include cooperating, as deemed appropriate by the commissioner of the social services district, in the pursuit of the return of such resource.”

In a recent opinion issued by the Supreme Court of the State of New York, Fourth Appellate Division, the court found that the applicant was not entitled to a hardship waiver. The applicant’s husband had made a transfer for less than fair market value during the lookback period and thus the applicant was assessed a penalty period. The opinion was a short two pages and didn’t go into many details about the facts or reasoning behind the decision, but the court found that two prongs of the test were unmet – the applicant was unable to prove that she couldn’t have the assets returned and she didn’t prove that she was not able to obtain medical care without benefits. Accordingly, her undue hardship application was denied.

What could the applicant have done differently to get her hardship waiver application approved? What evidence would have bolstered her claim? While the case didn’t go into any details, and the state statute doesn’t address the issue, it could be helpful to look at other states and their instructions on hardship waivers. For example, the District of Columbia Department of Health Care Finance states the following:

“The applicant/beneficiary has the burden of proof and must provide written evidence to clearly substantiate: (1) the reason for the transfer; (2) the risk of loss of long term care institutional or home and community based services, and (3) that losing Medicaid long term care services will either. threaten the individual’s life or health or will result in deprivation of food, clothing, shelter or other necessities of life. If the applicant/beneficiary is asserting that the denial of long term care services will threaten his/her life or health, the applicant/beneficiary must submit a signed statement from a physician to that effect.

Written documentation should include any evidence that the applicant/beneficiary believes is probative of the idea that discontinuation of long term care services will result in undue hardship, as defined. Examples of acceptable documentation include:

  • A letter from a nursing facility or home health agency documenting that the applicant/beneficiary’s access to services will be discharged imminently.
  • A physician’s statement
  • Rent statements or payments
  • Grocery bills
  • Clothing bills”

Most practitioners would agree that obtaining a hardship waiver is an uphill battle; it is difficult to be successful in such a claim. However, an elder law attorney can best assist clients by knowing what situations may qualify for the waiver, what type of evidence is needed to prove the claim, how the claims process works, and backup planning strategies to get the client care in case of a denial.

Read more related articles here:

The Hardship Exception to the Medicaid Penalty Period: Rare But Possible

Undue Hardship Instructional Guide

Also, read one of our previous Blogs at:

WHAT IS MEDICAID’S 5 YEAR LOOK BACK, AND HOW CAN IT AFFECT ME?

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

IRAs and Medicaid Crisis Planning

Dealing with IRAs in Crisis Planning

Dealing with IRAs in Crisis Planning

Thank you to our guest blogger Dale M. Krause, J.D., LL.M., President and CEO of Krause Financial Services, for leading this conversation on dealing with IRAs in crisis planning.

One of the biggest questions my office receives is how to handle a large IRA when conducting crisis planning for either Medicaid or VA. When dealing with VA planning, IRAs are always considered countable assets. In Medicaid planning, the specific rules vary from state to state, but they are considered countable assets in most states. This causes a big problem for attorneys and their clients when trying to accelerate eligibility for Medicaid or VA, however there are ways to save your client’s IRA and still qualify them for benefits.

Don’t Liquidate the Account!

Liquidating an IRA can have some devastating effects on your client. First, the entire value is considered taxable income. This could mean tens of thousands of dollars of tax consequences for your client. Additionally, the amount of the IRA could elevate your client’s tax bracket, forcing them to pay an even higher amount in taxes. Beyond the typical tax consequences of liquidating an IRA, if your married client’s income for the year is above $44,000, up to 85% of their Social Security benefits become taxable. Additionally, their Medicare Part B and Part D premiums could increase.

Alternative Solutions

Using an immediate annuity is a great way to eliminate an IRA as a countable asset and accelerate eligibility for benefits. The annuity contains zero cash value and is considered income only to the owner. Transferring the funds to the annuity is a tax-free event. Rather, the IRA funds are taxed as the annuity payments are made within each calendar year. In short, any tax consequence associated with the IRA are spread out over the term of the annuity.

In VA planning, the annuity can be structured to ensure the claimant’s income does not exceed their UMEs. Both level-pay and balloon-style annuities are available, which means the claimant has maximum flexibility with this product. Additionally, the annuity can be converted to be “Medicaid compliant” at any time should it become necessary.

In Medicaid planning, the annuity is the perfect solution for a community spouse with a large IRA. There are no limitations on the income of the community spouse, therefore the income from the tax-qualified Medicaid Compliant Annuity will not affect the eligibility of the institutionalized spouse. If you have a case that involves an institutionalized spouse with a large IRA, consider using the “Name on the Check Rule”. Ownership of the account cannot be transferred, therefore “Name on the Check Rule” involves the institutionalized spouse purchasing a tax-qualified annuity and designating the community spouse as payee. For Medicaid purposes, this diverts the income directly to the community spouse and it does not become part of the institutionalized spouse’s Medicaid co-pay. (Note: Success of this strategy varies from state to state).

Three Ways to Learn More about IRAs in Crisis Planning

1. Visit Krause Financial Services’ website www.medicaidannuity.com or give them a call at (866) 605-7437 for more information on how to handle IRAs in Medicaid and VA planning. They offer a variety of educational materials for elder law attorneys, including webinars and state-specific resources. The 2018 Krause Report is also available and is a comprehensive guide to crisis planning.

2. Better yet, meet Dale Krause at Symposium 2018. He is presenting “Dealing with IRAs (and Other Tricky Assets) in Medicaid and VA Pension Planning” on July 31 at 4:00 p.m. (View Full Symposium Agenda)

3. Can’t wait? Watch the course “Strategies Using IRAs in Veteran Benefits & Medicaid Planning” Dale Krause recorded for ElderCounsel.

Read more related articles at:

Can an IRA Affect Medicaid Eligibility?

Fixing the Leak: Avoiding IRA Liquidation in Crisis Medicaid Planning

IRA Taxes: Rules to Know & Understand

Coronavirus Relief for Retirement Plans and IRAs

Also, read one of our previous Blogs at:

Must I Liquidate My IRA Before I Can Apply for Medicaid?

Click here to check out our On Demand Video about Estate Planning.

 

 

Medicaid Work Requirements

The Current State of Medicaid Work Requirements

The Current State of Medicaid Work Requirements

Former President Trump made it very clear during his presidency that he supported Medicaid work requirements. Indeed, the former Administrator for Centers for Medicare & Medicaid Services (CMS), Seema Verma, under Trump’s administration, issued policy memoranda on how states could submit Section 1115 waivers in search of work requirement approval.

Thereafter, several states submitted such waivers, including Arkansas, Arizona, Iowa, Indiana, New Hampshire, Kentucky, Kansas, Maine, North Carolina, Mississippi, Ohio, Utah, Oklahoma, and Wisconsin. Kentucky was the first to attempt to implement such work requirements. Under that waiver program, each Medicaid recipient would be required to work, look for work, or participate in volunteer work for 80 hours each month. If the requirement wasn’t met, Medicaid coverage would be lost for 6 months. There were several exceptions to the rule, such as for pregnant women, full-time students, primary caregivers to dependents, the elderly, and the disabled.

However, days before the new work requirements were to become effective, a federal judge blocked the new rule. Similar litigation ensued in other states. Kentucky re-drafted their waiver application, and it was once again approved. During the litigation process, however, a different governor was elected and Kentucky subsequently rescinded the waiver.

Arkansas was the first state to actually implement such work requirement policy. They had their program in place for about a year before a federal judge halted it. A study conducted on the year-length program found that the work requirements did not increase employment and those that lost Medicaid coverage had adverse consequences, such as resulting medical debt and delayed medical care.

So, what is the current state of Medicaid work requirements? The Supreme Court of the United States had granted certiorari in Cochran v. Gresham; arguments were to commence on March 29. However, earlier this month, the Court removed the case from their docket. The current-acting CMS Administrator, Elizabeth Richter, sent letters to various states indicating that CMS was beginning a process of determining whether to withdraw the Section 1115 waivers seeking Medicaid work requirements, as the agency no longer believes work requirements supports the overall objectives of the Medicaid program. Because no states currently have Medicaid work requirements and President Biden’s administration and CMS both do not support work requirements, the Supreme Court has considered the case moot. For now, work requirements are a non-issue and the Supreme Court has declined to move the case forward.

Read more related articles at:

  A Snapshot of State Proposals to Implement Medicaid Work Requirements Nationwide

Waivers with Benefit, Copay, and Healthy Behavior Provisions: Approved and Pending as of September 8, 2021

MEDICAID WORK REQUIREMENTS

Also, read one of our previous Blogs at:

WHAT IS MEDICAID’S 5 YEAR LOOK BACK, AND HOW CAN IT AFFECT ME?

Click here to check out our On Demand Video about Estate Planning.

 

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