Medicaid

When most people think of a comprehensive estate plan in Illinois, they likely think of a last will and testament that names legal guardians for their minor children. They may think of trusts that can transfer their assets outside of probate, quickly and privately or that can protect loved ones with special needs providing for them in a way that does not jeopardize their government benefits. 

Most people have also heard of Read more . . .

Q: How will the proposed House tax reform impact seniors, the disabled, and Medicaid?

If the House of Representatives’ proposed tax reform plan passes, critics claim that the elimination of the medical expense deduction would "deliver a serious financial blow to seniors and individuals with disabilities "– – particularly those without long-term care insurance who must self-pay for long-term care.

Many people don't realize that comprehensive estate planning involves more than a simple Last Will and Testament. Trusts and tax planning, providing for your incapacity, and protecting your assets to secure your family's future are common goals in estate planning.
Read more . . .

Q: How can Medicaid planning protect my assets?

Estate planning is something many of us put off because the thought of our own death or disability makes us uncomfortable. But failure to get our legal affairs in order can leave our loved ones unprotected and financially vulnerable—which is even more frightening.

Can a disabled person and their family save money without jeopardizing their government disability benefits?

Special needs planning in Illinois just became a bit easier for some disabled people and their families.

Until recently, government benefit programs for the disabled such as Medicaid and Supplemental Security Income (“SSI”) have limited the recipient’s total personal assets to $2000. With such a low total assets cap, and with the devastating penalty of suspending government benefits for exceeding that $2000 limit, disabled recipients and their families weren’t able to save money for a rainy day or any of the disabled person’s supplemental needs.
Read more . . .

Mary recently visited the office attorney because she was confused. Her husband had been admitted to a nursing home, and Mary had been approached by the home’s caseworker. The caseworker asked for Mary’s financial information, and inquired how she intended to pay for her husband's care, which would total more than $8,000.00 per month. She asked if Mary was going to apply for Medicaid, and that question was the source of Mary’s confusion. Her attorney explained to Mary that Medicaid is a government program to help pay for nursing home costs, but to qualify, Mary had to meet certain income and asset restrictions.

Mary was even more confused. She told the attorney she was already on Medicare and that she didn't know why she had to do anything else. She asked, “Why isn't Medicare paying?” Mary’s attorney explained that Medicare is health insurance for individuals over 65 or those who have been disabled for two years. Medicaid, on the other hand, is a social program to pay for people with few assets or low income to ensure they have proper health care, including nursing home care. Mary didn't know what to do. She didn’t think she had the money to pay for her husband’s care, but her attorney had mentioned that she wasn’t currently eligible for Medicaid benefits because she had too much money to qualify. He went on to explain how Medicaid planning works by sharing with Mary the information that follows.

There are two elements associated with Medicaid planning: the legal strategies needed to qualify for benefits, and the actual application process.

The first step of the planning is to make a series of legal and financial decisions that will result in Mary's assets and income qualifying for Medicaid. There are several legal strategies to choose from, including the use of certain types of trusts.

For many clients the process seems overly complicated. Fortunately, it is possible to calculate and explain what assets are at risk and what assets would be immediately protected. It is also possible to determine when a person needing nursing care will qualify for Medicaid, and how to ensure that Medicaid begins paying as soon as legally possible, to minimize the loss of assets to the spouse who still lives at home. This stage of income and asset adjustments will usually result in a period of ineligibility for Medicaid benefits.

The second step of the planning is the formal qualification and application process. After all ineligibility periods created during the planning process have expired, there is a specific qualification and application process to receive benefits. The MPN attorney can be retained separately to assist in the filing of the application for Medicaid benefits with the local Medicaid department so that the nursing home resident can begin to receive the benefits.

It’s important to understand that Medicaid planning to get the nursing home resident eligible for Medicaid in the future is separate from and different than actually applying for the benefits from the local Medicaid Department. In fact, the second step will not be necessary if the person under care returns home, or if he or she does not survive the ineligibility period created under the plan. Like most financial and estate planning, Medicaid planning is always better if done in advance. However, even if tragedy strikes unexpectedly, it’s good to know that there are still options available to keep from depleting your assets.

"The stairs are getting to hard to climb."

"Since my wife died, I only eat toast or soup for dinner."

“I can’t imagine moving after all these years. This is my home.”

These are just a few of the common concerns we hear. Sometimes we hear them from our older clients, and other times these concerns are voiced through our younger clients trying to help their parents with difficult decisions.

Given the choice, most seniors want to continue living in their own home rather than moving in with a relative, or going to an assisted living facility or nursing home. Unfortunately, that choice is not always available. But when it is a choice, it is usually because there are local resources available to provide certain critical services.

When thinking about whether “staying at home” is feasible, start with these issues:

• Medical

The first time the question arises about staying at home is usually after some sort of medical problem or scare. It could be a stroke or heart attack, or possibly the onset of dementia. Or it could be as simple as Mom or Dad forgetting to take their medicine.

The first question to ask is whether the medical problems are serious enough that they present a safety issue. Start by talking to a doctor about how the specific illness or behavior might affect the ability to stay at home.

• Current Needs

If you determine that it is possible to stay at home from a medical point of view, the next thing to do is to analyze your current needs. Think about the services or personal care you require, and who might be available to provide. Areas to consider include:

• Personal care including bathing, hair care, and dressing.
• Homemaking including housecleaning, yard work, grocery shopping, and laundry.
• Meal preparation and cleanup.
• Money management including bill payment, check balancing, and filing medical claims forms.
• Medical care and medication management.
• Mobility both at home and in town. Is driving still possible? If not, is public transportation or ride-sharing an option?

No solution is ideal. But for those who want to stay in their home, the reality is that outside service providers are often needed to take care of the critical issues.Some of the best places to look for these service providers include:

• Friends and people you know. It may be that a neighbor is experiencing similar issues and may have found a good source for assistance. You should start with someone you know who is satisfied with the care and service they are receiving.
• Community and local government resources. Most communities have a variety of services available to residents, and local healthcare providers and social workers may have suggestions. Often your community will have an Agency on Aging or similar government agencies who maintain a list of service providers. If you belong to a religious group, check with their local office to see if they can provide you with relevant information.

More and more you will find people known as “geriatric care managers” who can help you identify and engage local service providers. They can also work with you to form a long-term care plan. They charge for this service, and it probably won't be covered by any insurance plan, but they can be very helpful. They also can check with you from time to time to make sure your needs haven't changed.

Unfortunately, even if you are able to assemble a team of service providers, there is almost always a limit to the funds you have available to pay for these services.

Some services are more expensive than others. Some services are provided for free. Some services are covered by Medicare, private "Medigap" policies or other private health insurance, Medicaid, or long-term care insurance. Others are not. Determining the costs and how you are going to pay for the help you need, is an important part of planning.

Keep in mind that paying for just a few services out of pocket could cost less in the long run than moving into an independent living, assisted living, or long-term care facility. And you will have your wish of being able to stay at home.

Dad needed round the clock nursing home care.

Bob was dealing with the financial aspects of his dad’s care. His sister, Jean, was dealing with the emotional impact of what her father was going through as the primary caretaker. Bob got advice from his father’s attorney, a man who had done his parent’s wills and had been with the family for many years. As it turns out, Medicaid planning was not his specialty.

Jean insisted that she and Bob get a second opinion from another attorney in town, who was well known for expertise in Medicaid. After a long discussion, Bob agreed. He called the Medicaid attorney’s office to schedule an appointment and joked that the only reason for the appointment was to satisfy his sister’s request and move on with the process.

Bob had already been told by his father’s life long attorney that they would lose over $300,000 in assets and it would take 60 months or until they ran out of money in order to be eligible for Medicaid. He also shared that the local office of the aging told him to transfer the house so it would be protected. Bob trusted the family attorney and the local office of the aging and unfortunately believed them.

The client service administrator for the Medicaid law firm explained that the attorney could provide a complete analysis of his dad’s Medicaid eligibility if she were willing to complete a simple one page form. In less than twenty-four hours after receiving the Benefits Eligibility Form from Bob, they provided Bob and Jean a written analysis that concluded that their dad could qualify for Medicaid immediately, without losing any of the family savings or transferring the house.

Bob was in shock and in fact, a little angry. He thought it was a ploy by the Medicaid attorney to get him to hire him. He returned Bob’s call and explained that not only could the family achieve that result, but that it was completely legal under the law so long as all rules were followed properly in filing the application.

Bob asked why he should believe him when their family attorney and the local office of the aging told them something different? He did not know who to trust. The attorney asked Bob which result he would like better, the one depleting $300,000 of the family’s assets and needlessly transferring the house (which would have immediately disqualified Bob’s dad from receiving Medicaid), or the one that allowed his father to keep hold on his life savings and live life with dignity.

Although names and identifying facts have changed, this is a true story.

Every day we face tough choices like these. It is often the caregiver or the children who are forced to make these decisions. Without proper counsel and expertise many things go wrong that could have been avoided. Family wars break out because everyone wants to do what is best but no one knows how to achieve it. This is true not only for Medicaid planning but for planning in general.

Preserving the family assets provides options for the family they did not know were possible. The mistake the family attorney made was not knowing the exception Bob’s dad fell under that legally protected all the family assets immediately. Medicaid law is complicated and each individual’s qualification is determined on a case by case basis.

There is NO rule that qualification takes 60 months if assets are transferred and most social workers and health care agencies lack the legal knowledge to provide accurate advice.

A qualified Medicaid planning attorney should be able to provide a timely answer to eligibility that outlines the assets at risk to being lost, when eligibility can be obtained (it’s rarely 60 months) and the assets that can be protected.

Preserving and protecting a lifetime of one’s work is not an easy task. If you or someone you know is facing this situation, let them know that there is hope.