May 2, 2011
Prior to applying for Medicaid, you should consult an attorney to explore planning opportunities, but especially if you are married or have given away any assets or transferred ownership of any of your assets for less than fair market value within the last 5 years. Moreover, please be advised that applying too early or too late for Medicaid could cost you thousands of dollars.
Steps:
1. Application (additional application is required for Waiver programs)
You must file an application with the Department of Job and Family Services in the county where you reside, or if you are in a nursing home, the county where your nursing home is located.
2. Level of Care Assessment
An in-person assessment will be performed by a licensed professional of your ability to perform typical daily tasks of your own.
For example, you would qualify if you require hands-on assistance with two Activities of Daily Living (ADLs) or hands-on assistance with one ADL and you are unable to self-administer medication or due to cognitive impairment, the presence of another person on a 24 hour basis is required.
ADLs include bathing, grooming, toileting, dressing and eating.
3. Interview
An interview will be conducted with the applicant or authorized representative where you must produce verification of age and citizenship, resources, income, medical expenses, household expenses.
A great deal of documentation will be needed. It is a good idea to start collecting the necessary documentation as soon as you are even thinking about applying, as a failure to provide it to the agency in a timely manner could result in your application being delayed or denied.
The following list is a good place to start:
1.) Social Security Card
2.) Proof of Identity (ie. driver’s license, state identification card, etc.)
3.) Proof of Age (ie. driver’s license, birth certificate, marriage certificate, etc.)
4.) Proof of Residence (ie. deed, rent receipt, etc.)
5.) Last receipts for utilities, home insurance and property taxes (gas, electric, etc.)
6.) Proof of Citizenship (not required if you are receiving SSI or Medicare)
7.) Proof of Income (social security benefit letter, pension statements, etc.)
8.) Proof of Assets (bank statements, copies of stock certificates and bonds, etc.)
9.) Information on any Insurance Policies
10.) Medicare Card
11.) Medicare Supplement Card
12.) Trust Agreements
13.) Tax Returns (ideally from the last five years)
For information on what to expect after your application is submitted see http://www.randallperla.com/blog/i-applied-for-medicaid-now-what/
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
Cleveland Medicaid Attorneys
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
March 29, 2011
Caring for an elderly loved one is one of the hardest jobs in the world. Beyond the physical care that must be performed, you also have to practically become an expert in medical care and equipment, pharmaceuticals, and the like. How to pay for medical care is also an issue that should be on your radar. The purpose of this Medicaid Planning Guide is to provide you with an easy to understand guide to Medicaid and how it relates to you the Caregiver and the person you are caring for, who I refer to as the Caregivee.
What is Medicaid?
Medicaid is a health insurance program funded with state and federal money, administered by the Ohio Department of Job and Family Services. For those who qualify, Medicaid covers the cost of long-term care.
Why is Medicaid so Important?
Long-term care is very expensive. According to the 2010 Market Survey of Long-Term Care Costs conducted by Metlife, the annual cost of a semi-private room in a Cleveland area nursing home was $75,190 and a private room was $87,600.
Moreover, counter to popular belief, Medicare will not cover prolonged nursing home care. Medicare Part A provides limited coverage for skilled nursing care if certain requirements are met. However, even if your level of care meets Medicare’s eligibility requirements, Medicare Part A only covers the cost of a skilled nursing facility for up to 20 days, with the possibility of an additional 80 days on a co-payment basis.
Again, according to Metlife, which based their statistics on the Centers for Disease Control and Prevention, the average nursing home stay is 2.4 years. Moreover, most nursing home stays are not covered by Medicare at all, as most nursing home residents do not require skilled nursing care, which is a prerequisite to Medicare Part A coverage.
Since Medicare will not cover the costs of long-term care, and 70% of people over 65 will need long term care during their lifetimes, that begs the question, how will the average person pay for long-term care costs? The answer is Medicaid.
So I Understand that Medicaid Pays for Long-Term Care Costs, But How Do You Qualify?
There are a number of eligibility requirements for Medicaid.
1.) You must be age 65 or older, blind or disabled.
2.) You must have a nursing home level of care.
3.) You must meet the income and countable resource limits.
The biggest eligibility issue for most people is number three, income and countable resource limits.
What are the Income and Countable Resource Limits?
Generally speaking, if your monthly income is below the private pay rate, currently set at $6,023, you will meet the income qualifications for nursing home Medicaid.
Countable resources must currently be below $1,500.
What are Countable Resources?
Countable resources are anything of value that can be converted to cash and used for support like cash, bank accounts, stocks, bonds, retirement accounts, etc. However, there are certain resources that are exempt. For example, the home a person lives in is exempt as are household goods and personal effects, an automobile, life insurance if its face value is below $1,500, a burial space for yourself, a spouse or immediate family member, and an irrevocable pre-need burial contract.
So How Can You Qualify for Medicaid If Your Countable Resources are Above the Limit?
Well, for starters, you cannot simply give the assets away. When you apply for Medicaid, the Department of Job and Family Services will ask you whether you made any gifts within the last 5 years. A gift is anything given away for less than fair market value. (Keep in mind that lying on a Medicaid application is fraud and a misdemeanor of the first degree and a felony if you receive services as a result.) If you have made any gifts for the purpose of Medicaid eligibility you will be penalized. For example, if you gave away $100,000 in assets, Medicaid would not pay for your care after you are in a nursing home and otherwise financially eligible for 16.6 months. This penalty period is determined by dividing the amount of the gift by the current private pay rate of $6,023.
In Medicaid Planning, the first question that must be asked is what are your goals. Is it to preserve assets for your children, a loyal caregiver or other loved one? Medicaid planning is not just about ensuring your financial legacy, it is also about your quality of life goals. Do you want to make sure you have spending money each month? If you deplete your assets on care without planning, you will only have $40 a month to spend on additional personal needs like hair cuts, entertainment, etc. Do you want to stay in your home as long as possible? Do you want a single room in a care facility? These are also goals that must be properly planned for.
Once you have set your goals, the next question is where you are on timing. When it comes to planning, timing is everything. As stated, Medicaid has a 5 year look back period. Do you anticipate needing long-term care within the next 5 years? Remember, when it comes to Medicaid planning, one size does not fit all. Whereas a trust might be the way to go for one person, a gifting plan maybe better for others and whereas one strategy may greatly help one person, the same strategy can hurt another. A plan must be constructed that is tailored to your particular situation.
What are Some Medicaid Planning Strategies that are Unique to Caregivees?
Personal Care Agreement
A compact between caregiver and caregivee that says that the caregiver agrees to provide certain care to the caregivee in exchange for specified compensation. The agreement would set forth the specific responsibilities of the caregiver, including anticipated days and hours of service and the compensation to be paid for that care.
Advantages of a Formal Agreement:
- Provide compensation to a trusted loved one who may have had to quit a job, forgo job opportunities, or otherwise spent considerable energy and time providing care.
- Minimize problems among relatives as to who bears what responsibilities in regard to the relative and how such care is to be compensated.
- Ensure Medicaid eligibility should a nursing home or other at home caregiver become necessary. Ie. Spend down now by compensating the caregiver rather than later by paying the nursing home or other at-home caregiver. Unless there is a proper agreement in place, the State of Ohio will assume that the money paid is a gift or an improper transfer of assets and will impose penalties resulting in ineligibility for Medicaid benefits.
Why Plan for Medicaid if I’m Providing care?
If there comes a time when you are unable to provide care or nursing home placement is necessary, all of the assets of the caregivee will be considered available. Moreover, as discussed, the caregivee will not be eligible for Medicaid until all assets are depleted. Certainly the care you have been and will be providing is just as valuable and worthy of payment as care provided by a future home caretaker or nursing home. With a personal care agreement in place, the caregivee can pay you now with the assets he or she has and have Medicaid pay for future care.
Are There Any Other Medicaid Planning Strategies that Are Unique to Caregivers?
Yes, if a caregivee goes on Medicaid and a child caregiver resided in the caregivee’s home for at least 2 years immediately before the date the caregivee enters a long-term care facility and the caregiver provided care which permitted the caregivee to reside at home rather than in a long-term care facility, the home may be transferred to that child without penalty. However, form JFS 03697 “Level of Care Assessment” must be completed and approval obtained before making the transfer.
Will the Caregivee be able to Engage in Medicaid Planning Should He Become Incapacitated?
ONLY if he has the proper Durable Power of Attorney in place! In order to ensure that he will be able to engage in Medicaid planning, it is essential that he execute a Durable Power of Attorney with provisions specifically giving his attorney-in-fact Medicaid planning powers. An elder law attorney who is familiar with Medicaid planning strategies is the best person to ensure that the necessary provisions are included. If he does not have the proper Power of Attorney in place and he becomes incompetent, there is little hope that the assets in his name can be saved from long-term care costs.
For information on how to apply to Medicaid see http://www.randallperla.com/blog/what-is-the-medicaid-application-process/
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
Cleveland Medicaid Attorneys
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
February 28, 2011
Medicare Part A provides limited coverage for skilled nursing care if certain requirements are met. However, even if your care is Medicare Part A eligible, it only covers the cost of a skilled nursing facility for up to 20 days, with the possibility of an additional 80 days on a co-payment basis. The average nursing home stay is 2.4 years.
Beyond the limited time that Medicare Part A will cover care is the simple fact that it does not cover the majority of nursing home care because most residents of a nursing home do not require skilled care, which is a prerequisite for Medicare Part A coverage. So, most nursing home resident’s care will never be covered by Medicare Part A at all. Moreover, once it is determined that Medicare Part A will does not apply, a Medicare supplement policy will not cover nursing home care either.
So that begs the question- if Medicare won’t cover my long-term care costs, how will I pay for it? After all, the average annual cost of a nursing home room in the Cleveland Metropolitan area is $73,912.50. That’s a lot of money! You could deplete all your savings on long-term care costs and then apply for Medicaid, which does cover nursing home and other long-term care costs, once you are completely impoverished or you can be proactive, and implement a Medicaid planning strategy that will save your hard-earned money and improve your quality of life and that of your loved ones.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
Cleveland Medicaid Planning Attorneys
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
February 23, 2011
I was just reading a national long-term care website advocating the use of annuities for Medicaid planning purposes. The website stated that in the case of a married couple, where the institutionalized spouse (that is the one in a long-term care facility) has been approved for Medicaid, instead of spending down his spousal share, he can simply give the money to his wife and have her purchase an annuity for her benefit.
This assertion is false in Ohio and provides a powerful example of how important it is to consult with an attorney knowledgeable in Ohio Medicaid law before proceeding with any planning strategies. An institutionalized spouse can not convert his spousal share to benefit his wife after the date of institutionalization. This would likely result in an improper transfer and a penalty period for the institutionalized spouse- meaning Medicaid would not cover his long-term care costs for a set time period.
There are very specific rules that one must follow to purchase annuities and not incur a Medicaid penalty period in Ohio. More importantly perhaps, one must know when purchasing an annuity for Medicaid Planning purposes is advantageous and when it is not.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
Cleveland Medicaid Planning Attorneys
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
February 17, 2011
Probate is seen by most as a very negative process and one to be avoided at all cost. Probate is not the big, bad wolf, it is simply the legal process that takes places after someone dies. The primary purpose of the probate process is to pay the deceased person’s debts and taxes and transfer his property to his heirs and beneficiaries. True, probate is time consuming and can be costly. However, sometimes an attempt to avoid probate can end up costing a person much more.
Example- John, hearing about the horrors of probate, decides to gift his home, which he purchased in 1951, to his children now, rather than have the home go through the probate process when he dies. John has likely just made a big mistake. Under current federal tax law, since John gifted his assets to his children they received the home at John’s cost. Hence, when the children sell the home, unless they live in the home for two years after John dies, they will have to pay capital gains tax on profit from the sale of the home- that is the difference between how much John paid for the home in 1951 and the sales price. John could have avoided probate and capital gains by creating a Transfer on Death Designation Affidavit or a trust. (However, if John or his wife are planning on applying for Medicaid, neither option may be advisable).
Estate planning is best done by estate planning professionals and it does not need to cost you a fortune.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
Cleveland Estate Planning Attorneys
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
