MEDICAID & LONG-TERM CARE
The cost of long-term care can be staggering to the uninitiated. For example, the cost of assisted living care in Atlanta is roughly $42000 - $72000 per year. If you need specialized memory care in an assisted living facility, the cost increases to $54000 - $84000 per year. Those who require long-term nursing home care should anticipate costs somewhere in the range of $80000 - $120000 per year. Finally, hiring caregivers to come to your home is often the most expensive option considering the average cost is $20 - $25 per hour. For those who need 24/7 care in their home, that can translate to more than $15000 per month! Because these costs can be so extreme, it is often necessary for families to seek the assistance of a Medicaid planner to help with asset protection. With the help of a Medicaid planning attorney, it is often possible to qualify for Medicaid benefits while preserving savings that can be used to provide supplemental care (along with securing the financial future of a healthy spouse).
Medicare is not among the options available to pay for long-term care. Thus, the short list of ways to pay for this care includes only 1) long-term care insurance, 2) VA Benefits (Aid & Attendance), and 3) Medicaid.
- Long-Term Care Insurance: Due to its very restrictive health underwriting requirements, this insurance is typically not available to our firm’s crisis mode Medicaid planning clients. While this is true, those who acquired long-term care insurance in the past are often better situated to coordinate care in their home or an assisted living facility. For those who are exploring preemptive Medicaid planning, this insurance can play a meaningful role in assuring the ability to pass through all applicable waiting periods without suffering economic harm.
- VA Wartime Pension (Aid & Attendance): This option is available exclusively to veterans and their widows, so a substantial portion of Georgia’s seniors will never quality. To qualify, the veteran must have served at least ninety days active duty with at least one of those days during wartime. Because Georgia Medicaid adds so little value in the assisted living arena, receiving help from the VA can make a significant difference when it comes to paying for care and protecting assets. The help of an Elder Law lawyer can be instrumental in securing VA benefits to help with in-home care, assisted living care, or care in a skilled nursing facility. In advance of seeking out an attorney, you might benefit from exploring the eligibility rules which govern the VA Wartime Pension with Aid & Attendance program.
- Medicaid: At last glance, more than 80% of those in Georgia’s nursing home beds were on Medicaid. It is the backbone of Georgia’s (and America’s) long-term care system. Whereas some states have a broad home and community-based Medicaid program, Georgia’s Medicaid program doesn’t begin to shine until one requires nursing care in a skilled nursing facility. For those interested in learning about Georgia’s home-based Medicaid program, you can read more here about the Community Care Services Program. Unless you can afford monthly long-term care costs approaching $10000, it might be beneficial to seek advice from an Elder Care Attorney about how Medicaid could play a role in paying for your care.
Will Medicare pay for a long-term nursing home placement?
No. Medicare will only pay for a short stay in a nursing home following a hospitalization. To be more specific, Medicare will fully pay for twenty days if the resident was hospitalized for at least three days prior to the placement and requires skilled care in the nursing home. Following the first twenty days, Medicare will help to pay for an additional eighty days so long as skilled care continues (therapy, injections, wound dressing, etc.). However, during these eighty days, the resident owes a $176.00 daily co-payment. It is possible that the resident’s Medicare supplemental insurance policy will cover this co-payment. It is uncommon for a resident to require skilled care for the entire 100 days. In all circumstances, Medicare coverage will cease at 100 days.
Upon what standard does Medicare coverage of skilled nursing care end?
In many cases, the skilled nursing care facility will seek to terminate coverage sooner than 100 days because the resident has reached a “plateau” … they are not “improving”. While this standard is almost universally utilized in the industry, this is what the law actually says about the timing of termination (42 CFR § 409.32):
“The restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.”
In fact, the Center for Medicare and Medicaid Services acknowledged this very point after being forced to settle a lawsuit on the subject:
“No ‘Improvement Standard’ is to be applied in determining Medicare coverage for maintenance claims that require skilled care. Medicare has long recognized that even in situations where no improvement is possible, skilled care may nevertheless be needed for maintenance purposes (i.e., to prevent or slow a decline in condition). The Medicare statute and regulations have never supported the imposition of an “Improvement Standard” rule-of-thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition. Thus, such coverage depends not on the beneficiary’s restoration potential, but on whether skilled care is required, along with the underlying reasonableness and necessity of the services themselves. The manual revisions now being issued will serve to reflect and articulate this basic principle more clearly. [Emphasis in original.]”
Those wishing to learn more about this topic should review the materials and attachments available here:
Will a resident receive lesser care if the payment source is Medicaid?
No. There are hundreds of nursing homes in Georgia and virtually all accept Medicaid as a source of payment. Nursing homes are not allowed to advise staff of a resident’s payment source. Staff are required to provide equal care to all residents. In reality, the factor most likely to determine the quality of care received is the frequency with which a resident receives visitors. For this reason, it is ideal that a resident be as close as possible to family and friends.
Isn’t it more difficult to get into a good nursing home if the resident will be on Medicaid?
Yes. Nursing homes may opt to consider source of payment upon admission. Accordingly, nursing homes will typically ask prospective residents to complete a financial summary in order to determine whether the person will be able to pay privately or have to seek assistance from Medicaid. For this reason, if an individual is destitute, it is imperative that the family place their loved one on several waiting lists at least three to six months ahead of an anticipated nursing home placement.
What makes it more likely to get into the nursing home of choice?
Nursing homes do not receive the same rate of reimbursement from each resident. Instead, reimbursement generally falls into three categories: Medicare, private pay (include long-term care insurance here), and Medicaid. Medicare offers the nursing home the highest rate of reimbursement. Private pay is the second highest rate of reimbursement. Medicaid is the lowest rate of reimbursement. Accordingly, residents who are seeking placement following a hospitalization are most attractive to nursing homes. Conversely, those who will be on Medicaid are least attractive. From this perspective, it becomes clear that placement in a nursing home is best facilitated by a prior hospitalization. If there is no traumatic medical event to require a hospitalization, then entering private pay is always the next best possibility.
What if a resident enters on Medicare or private pay and then converts to Medicaid?
While a nursing home can consider source of payment upon admission, it may not involuntarily discharge a resident for converting to Medicaid. Moreover, the facility may not retaliate in any way following conversion to Medicaid. Once a resident is Medicaid eligible, the facility must agree to accept Medicaid as payment in full.
Can a nursing home condition admission upon a promise to stay private pay for a period?
No. Duration of stay agreements that require a resident to remain private pay for a specified period are not allowed.
Can a nursing home require a family member to guarantee private payment for a period?
No. Nursing homes may not condition admission upon a third-party guarantee that a resident’s bill will be paid privately.
If a resident seeks Medicaid, will the state take all the resident’s property upon approval?
No. When determining eligibility, Medicaid will categorize all an individual’s property as either exempt or non-exempt. To the extent that non-exempt property is above the allowable limit, Medicaid will be denied and the person will have the options of either 1) implementing a smart Medicaid plan through the assistance of an eldercare attorney or 2) spend down savings to the non-exempt resource limit. At no time during the resident’s placement, however, will Medicaid “take” property. Rather, Medicaid will simply decline assistance until a Medicaid plan has been implemented or assets have otherwise been spent down. Note that while Medicaid will not “take” anything while the resident is living and receiving benefits, there will potentially be recovery from the person’s estate upon death.
What is “Medicaid planning”?
Medicaid planning is a means of working within all applicable law to set aside savings for the benefit of nursing home residents who will otherwise be economically devastated by the exorbitant cost of private nursing home care. By preserving savings, implementation of a Medicaid plan allows the resident continued access to the many things not otherwise covered by nursing home Medicaid. For example, items not within the scope of Medicaid coverage include a private room (often medically necessary for residents with behavioral issues arising from advanced dementia), companion caregivers (to supplement the personal care provided by overworked nursing home staff), geriatric care manager services, eyeglasses, dentures, hearing aids, beauty shop visits, cable television, telephone line, and all other personal belongings.
Is Medicaid planning legal and ethical?
Yes. Medicaid planning exists within the framework of all applicable state and federal law. It is not a means of hiding assets beyond the reach of government authority. It is not focused on preserving assets for the benefit of potential heirs. Instead, it is the only recourse left to those seniors facing economic disaster because they have too little to pay privately and too much to initially qualify for Medicaid. Seeking the advice of an eldercare attorney about Medicaid planning is akin to seeking advice from an estate tax planning attorney or a CPA about the rules found in the Internal Revenue Code.
Is there a limit to the size of an estate that can be restructured as part of a Medicaid plan?
Probably. Although the technical answer might be no, there is definitely a line above which it is philosophically and ethically inappropriate to implement a Medicaid plan. In determining whom to assist, this firm considers many factors including but not limited to the age and life expectancy of the resident, the age and life expectancy of a spouse, and the income available relative to private pay costs and monthly overhead for a spouse still at home. If it is clear that savings are dwindling rapidly and that which it took a lifetime to earn will be erased in a very short time, then it is this firm’s position that Medicaid planning would be appropriate.
After implementing a Medicaid plan, will I have access to money to care for mom?
Yes. There are a variety of planning opportunities in Georgia. Each allows access to funds in varying degrees. Keep in mind that the whole point of doing Medicaid planning is to create the ability to provide supplemental care to the nursing home resident. If access is too limited, then the plan misses the point.
What about buying long-term care insurance?
Long-term care insurance is an excellent idea for those who are insurable from a health perspective and who can afford it. For those already in a nursing home or who face imminent placement, this insurance will no longer be available. Accordingly, it is imperative to seek advice about insurability and cost as early as possible. Because most people facing the prospect of placement are uninsurable or the cost is prohibitive, Medicaid planning becomes the only alternative. Note also that the state of Georgia is in the process of creating the Georgia Long-term Care Partnership Program. While the details are still being worked out, the general premise of this program is to encourage people to buy long-term care insurance by allowing an increased Medicaid asset limit once the insurance benefits are exhausted. To learn more about the general concept, go here:
How quickly can implementation of a Medicaid plan result in eligibility for assistance?
Very quickly in Georgia. If an individual is in a nursing home or about to be in one, eligibility can usually be established within a matter of a few weeks or at most a few months. This is in stark contrast to the possibilities in other states where people must wait for up to five years to pass.
Why doesn’t Georgia have the five-year rule?
It does. But this is a rule that applies only to planning through gifting or irrevocable trusts. In reality, there are at least three types of planning available in Georgia. So long as gifting or an irrevocable trust are not utilized, then the five-year rule is not invoked and eligibility can ensue very quickly.
What are the resource eligibility rules in Georgia?
In 2017, assets that are considered non-exempt are limited to $2,000 for a single person and $120,900 for a couple (total of $122,900). Assets that are considered exempt are not subject to any valuation limit except that a single person’s home is limited to no more than $556,000 equity.
Can a couple simply place all assets in the healthy spouse’s name and expect to qualify?
Generally no. Moving assets into the healthy spouse’s name normally accomplishes nothing from a Medicaid perspective in Georgia. When determining a spouse’s eligibility, all assets owned in either spouse’s name will typically be included for purposes of the $122,900 test.
What are the income eligibility rules in Georgia?
In 2017, the standard income limit is $2,205. Note that this test looks only at the income of the nursing home resident. The community spouse’s income is not considered. If an individual has income that exceeds $2,205, execution of a Miller Income Trust will be required to gain eligibility. A Miller Trust is a simple legal entity created to serve as a conduit for the resident’s income. Following execution, the trustee will be charged with depositing the resident’s income into the trust each month and then paying it out according to specific rules set by Medicaid. Those rules generally allow the resident to receive a $50 personal needs allowance, allow a deduction to cover the cost of Medicare supplemental insurance, and allow a deduction to divert income to a spouse living at home whose income is below $3022. Any remaining funds generally must be paid to the nursing home.
Can planning be done today if nursing home placement is several years down the road?
Yes. Where placement is in the distant future, it is always advisable to seek long-term care insurance if one is insurable and it is affordable. Where placement is on the intermediate horizon, planning can be initiated ahead of time so long as it is understood that there is always the risk that changes in the law will either alter or destroy altogether the effect of that preemptive planning. Accordingly, those contemplating this question should definitely seek the advice of an elder law attorney to determine whether preemptive planning is appropriate.
Can’t I plan ahead and apply for Medicaid now to avoid complications with law changes?
No. An application for nursing home Medicaid cannot be filed until the person is actually placed in the nursing home.
My neighbor told me to give everything to my kids. Is this good advice?
This is a very dangerous possibility. Whereas such drastic action might help, it could also create a bigger problem than was there originally. Accordingly, it is critical to seek legal advice prior to gifting anything.
My neighbor told me to put all I own into a trust. Will this help at all?
Depends on timing. As a result of changes in the law since 1993, trusts are generally unhelpful or will actually create trouble for those seeking assistance from Medicaid. Having said this, it is possible that a very skillfully drafted irrevocable trust might provide some benefit if it is settled more than five years prior to the need for nursing home placement. Moreover, it might be possible to utilize a special needs trust as part of Medicaid planning in Georgia if the circumstances are appropriate.
Will the family home have to be sold in order to get help from Medicaid?
Generally no. The home is considered an exempt asset and need not be sold so long as the equity in the home is less than $552,000 (equity limit applies only to an unmarried applicant). If equity exceeds this amount, additional planning may be needed before eligibility can be achieved. Moreover, there are other factors to consider. First of all, a resident’s income will no longer be available to cover costs associated with a mortgage, taxes, insurance, and general maintenance (see next question about patient liability). Accordingly, it may become necessary to sell the house from this perspective notwithstanding the fact that Medicaid allows the resident to own it. In this case, the proceeds of the sale would destroy ongoing eligibility for Medicaid unless they are immediately restructured as part of an efficient Medicaid plan. This is not uncommon and actually is preferable to some who are glad to have access to the equity in the home to provide supplemental care to the resident.
Once a resident is on Medicaid, what happens to their income?
It depends on whether they are single or married. For a single person, all income other than a $50 personal needs allowance and that which is required to cover health insurance premiums will generally have to be paid to the nursing home as the resident’s fair share of the bill. This is called patient liability. For a married couple, the answer is significantly different. To the extent that the community spouse has low income, the nursing home resident will be able to share some or all of his income with her so that she does not become impoverished.
Will Medicaid cover the cost of assisted living?
No in almost all circumstances. Assisted living facilities generally provide custodial care that does not fall within the Medicaid arena. Medicaid will typically only pay for care provided in a skilled nursing facility. While this is true as a general rule, there is a Medicaid program in Georgia called the Community Care Services Program that can help with assisted living on very rare occasions.
Will Medicaid pay for any home health care?
Possibly. The Community Care Services Program is a Medicaid program designed to provide care for people in the home who would otherwise require nursing home placement. The underlying premise of this program is wonderful in that it seeks to prolong a higher quality of life for the individual at home while at the same time saving the state money because the cost of care in the home is less than the cost in a nursing home. While this sounds excellent in theory, the problem is that the program is woefully underfunded and usually has a lengthy waiting list. Those seeking more information about CCSP should call the Atlanta Regional Commission at 404-463-3333.
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