Docstoc

Medicaid

Document Sample
Medicaid Powered By Docstoc
					 The Truth About
Medicaid Planning


          Presented by

   Lee A. Rosenthal, P.A.
Why People Don’t Plan…

Lack of Knowledge

Assumptions
 • Goals cannot be achieved
  • Nothing can be done
  • No one can help
Medicare vs. Medicaid
• Medicare is health insurance provided
  by the federal government.
 -Everyone is eligible to receive Medicare.


• Medicaid is catastrophic illness
  insurance.
 -Not everyone qualifies for Medicaid
 coverage.
    Some Words to the Wise
•   Most information from social workers and
    friends will be well-intentioned, but only
    partly true. Get good legal counsel from an
    elder law specialist.
•   Whatever you do, DO NOT apply for
    guardianship or conservatorship without
    advice from an elder law specialist.
“The Three Big Myths”
   (Actually there are EIGHT!)
MYTH # 1:

 “If my spouse or I go into a nursing home,
 the state will take my home away.”



THE TRUTH:

 Your home is an exempt asset if owned by
 you or you and your spouse.
MYTH # 2:

 “If I give assets away, I have to wait 36
 months to qualify for Medicaid.”

THE TRUTH:

 “Medicaid” will soon be looking back 60
 months for divestments (gifts). If you
 have made a gift you will incur a “penalty
 period” which may be longer or shorter
 than 36 months. (Soon to be 60 months.)
MYTH # 3:

 “If I go into a nursing home the state will
 take my assets away.”


THE TRUTH:

 The state takes nothing. Medicaid simply
 won’t pay anything until you spend all
 available assets.
MYTH # 4:

 “If I am already in a nursing home, it is too
 late to shelter any assets.”

THE TRUTH:

 You can shelter almost all assets
 (thousands of dollars) in most cases no
 matter how long you have been in a
 nursing home.
MYTH # 5:

 “I can give away $11,000 a year per person
 without penalty.”


THE TRUTH:

 That is a Federal Gift Tax limitation and
 has nothing to do with Medicaid eligibility.
 Medicaid gifting rules are completely
 different.
MYTH # 6:

 “My daily cost at the nursing home is the
 approximate cost of care.”


THE TRUTH:

 Nursing home charges for “additional
 supplies” and services such as latex
 gloves, catheters, needles, etc. can double
 the monthly cost.
MYTH # 7:

 “There is a small chance I will end up in a
 nursing home anyway.”


THE TRUTH:

 43% of 65 year old persons will spend at
 least 2 years in a nursing home.
MYTH # 8:

 “If I am receiving Medicaid, my quality of
 care will be lower.”


THE TRUTH:

 The nursing home does not care if you are
 “private pay” or if you are receiving
 government benefits.
       Medicaid Planning
• Develop a Comprehensive Plan

• Proper Will, Trust & Power of Attorney Planning

• Proper Financial and Asset Planning

• Long Term Care Insurance

• Maximize Medicaid Exemptions
     Planning Options

Plan for the Best
  • Hope the worst doesn’t happen

Plan for the Worst
  • Hope the best happens
        Our Definition of
        Estate Planning:
• I want to control my property while I
  am alive and well;

• I want to plan for myself and my loved
  ones if I become disabled; and,

• I want to give what I have to whom I
  want, when I want, the way I want.
Do I need an
Estate Plan?
  The Disaster Scenario
• How detailed are the instructions
  you leave for your fiduciary?

• The KEY Question:
   How can I ensure that my
   assets are used in the way that
   I want by whom I want?
            Fiduciaries: Who?
• The following have “fiduciary responsibility:”

       Trustees
       Attorneys in Fact
       Guardians

• If a trustee, guardian, or attorney in fact improperly
  converts the principal’s assets for their own use,
  they may be guilty of exploitation.

• Exploitation is a crime that is more often committed
  by family members, friends, and trusted business
  associates than by strangers.
                      PREVENTION



1)   Exploitation by trustees and attorneys in fact can often be
     prevented by drafting language requiring auditing of a
     person’s assets by an independent party, such as a qualified
     accountant or attorney.


2)   Escrow agreement for a Power of Attorney.


3)   Before agreeing to any investment that one does not
     understand, it would be helpful to have a disinterested
     professional, such as an attorney or investment advisor,
     offer an opinion about the prospective investment.
                   Medicaid Introduction
•   Medicaid is a joint federal-state program that provides health
    insurance coverage to low-income children, seniors, and people
    with disabilities.


•   In addition, it covers care in a nursing home for those who qualify.
    Medicaid is the default nursing home insurance of the middle-
    class.


                          Medicaid in Florida:
•   The agency called the Department of Children and Family Services
    (DCAF), formerly known as (HRS), promulgates specific rules,
    regulations, and policies in Florida.


•   DCAF policies were not always easily available to the public.
    However, they now have an Internet site that posts many of the
    rules and policies.
      Basic Medicaid Rules

Eligibility:
In Florida, eligibility for
Medicaid benefits depends
on (2) types of criteria:


• Level of care

• Financial
Level of Care Requirement
    •   A Medicaid applicant must be in need of the
        level of care and placement for which Medicaid
        benefits are sought.

    •   Determination is made by the Department of
        Elder Affairs Comprehensive Assessment and
        Review for Long Term Care Services Team
        (CARES) consisting of a registered nurse
        and/or social worker.

    •   The CARES team looks at activities of daily
        living. Generally, the CARES team considers
        whether a patient cannot perform three(3) of
        five(5) Activities of Daily Living (ADL):

        • Walking and standing (known as “transferring”)
        • Clothing oneself
        • Feeding oneself
        • Bathing oneself
        • Doing toiletry oneself
           Asset Test:

•   Determine Available Assets

•   Subtract Exempt Assets

•   Subtract Protected Resources

•   Balance = Spend Down Amount
Calculating the Spend Down:

•   Determine Available Assets
Available Assets:
          Don’t Forget:

•   Retirement Plans;

•   Life Insurance;

•   Personal Property; and,

•   Everything else you own!
Calculating the Spend Down:

•   Determine countable resources

•   Determine Exempt Assets
                         Exempt Assets
• A number of assets are categorized as exempt and therefore
  their value is not included when adding up the number of
  “countable” assets to see if the applicant or the applicant’s
  spouse has too many assets for eligibility. Exempt assets
  include:

               •   HOME: Applicant’s home, of unlimited value, is
                   not included as an asset if the applicant has the
                   intention to return to the home at some future
                   time.

• PERSONAL EFFECTS: Clothing, jewelry, furniture, appliance. If
  there is a community spouse, all personal property is excluded.
  If there is no community spouse, personal property is excluded
  if the equity value does not exceed $2000.00

• AUTOMOBILE: One automobile, regardless of the value.
  (Section 1625.95.40)
Exempt Assets Continued

•   PREPAID BURIAL CONTRACTS: If the contract is irrevocable, the value is not
    counted. (Section 1625.10.25)

•   BURIAL FUNDS: Up to $2500.00 per spouse may be set aside for burial
    expenses. These funds may not be commingled with other funds

•   BURIAL PLOTS: Includes grave sites, crypt, mausoleum, casket and head
    stones. (Section 1625.10.40)

•   LIFE INSURANCE: Life insurance is only counted to the extent of the cash
    surrender value; and if the face value on all policies have cash surrender value
    does not exceed $2500.00, the face surrender value is not counted.

                   • INCOME STREAM: The earnings that are distributed from the
                      asset are counted as income. Examples include properly
                      structured annuities, income producing real estate, and
                      income from non-negotiable loans. Medicaid now requires
                      that they be named as beneficiaries of the annuity second
                      only to the spouse.
Calculating the Spend Down:
• Determine countable resources

• Determine Exempt Assets

• Determine Protected Resources
    Protected Resources:
           SINGLE

• $2,000 in Assets
       Protected Resources:
        SPOUSE AT HOME
•   to $101,640 for Spouse at
    Home.

•   $2,000 in Assets for
    Institutionalized Spouse.
    INCOME TEST: SINGLE


•   $1,869 per month
     INCOME TEST:
COUPLE - SPOUSE AT HOME
•   No maximum for well spouse.

•   $35 per month for institutionalized
    spouse.
                Qualifying for Medicaid if you make too much $

•   QIT: A qualified income trust (QIT) is a device by which an applicant’s income may be
    deemed not to exceed the income cap. This is done by placing the excess income over the
    income cap in a special trust. The trust must be irrevocable. The only reason for the trust is
    to assist the applicant in qualifying for Medicaid.




                                            …If you own too much:

          • THE TRANSFER PENALTY: The other major rule for Medicaid eligibility is the
            penalty for transferring assets. If either the Medicaid applicant or spouse
            transfers assets, there will be an ineligibility period for Medicaid computed by
            dividing the amount of the transfer for less the value by $5,000.00. The resulting
            quotient is the number of months of ineligibility. The look back period for
            transfers is currently 36 months for transfers by individuals and 60 months as to
            transfer from trusts. In the near future, the look back period will increase to 60
            months from the date of application.)
       What’s Next?
• Please complete the feedback form.

• If you need our help or would like to
  discuss estate and Medicaid planning
  individually, see us to set an
  appointment to meet with us.

• Begin to gather asset and family
  information.

				
DOCUMENT INFO