Archive for March 16th, 2010
How to Pay for Long Term Health Care
Posted by Webmaster in Ask Craig A. Andreoli, Medicaid on March 16, 2010
How to Pay for Long Term Health Care
To understand the 5 Secrets to Obtaining Medicaid Benefits in New York State, you must first understand the answer to the question…. Why would I ever need Medicaid?
There are only 3 ways to pay for Long Term Health Care.
- Private pay: Reach into your pocket every month and pull out the $12,000 plus nursing home fee. If you are fortunate enough to afford such a luxury, you probably do not need to think about Medicaid planning.
- Long Term Health Care Insurance: You can privately insure yourself against having to pay the full cost of nursing home fees.
However, the premiums for such policies tend to be significant and you must be in good health, in other words, insurable. Long Term Health Insurance is an excellent option for the small amount of you who fall into this category.
- Medicaid: Medicaid is a Federal program that will pay for most of your Long Term Health Care needs. Medicaid is the single largest payer of Long Term Health Care in the country.
Chances are, Medicaid is the right choice for you. However, you need to know the rules of Medicaid to successfully have them pay for your Long Term Health Care needs. Those rules can be maddening to understand, so we thought it would be an excellent idea to try and simplify them for you. Look for my Next Blog “The Rules of Medicaid” for the answers.
The Rules of Medicaid
Posted by Webmaster in Ask Craig A. Andreoli, Medicaid on March 16, 2010
The Rules of Medicaid
Medicaid is a means tested-program. In short, it means that you must be poor.
What does poor mean in terms of Medicaid? It means that you can only have a certain amount of money and possessions (called Resources) in your name. It also means that your well spouse (a/k/a Community spouse) can only have a certain amount of Resources in his or her name.
In addition, depending on the type of Medicaid benefits you receive, Medicaid will only let you, and your spouse, keep a portion of your income. The break down looks like this for 2009, and appears will be the same for 2010.
The institutionalized person (person in a nursing home) can only have:
- Resources: – maximum of $13,800 of non-exempt assets.
- Income Level: $50 per month.
The Community spouse (healthy spouse) is allowed to keep:
- Resources: – minimum of $74,820 and a maximum of $109,560.
- Income Level: – $2,739 of the couple’s combined income.
If the couple’s or institutionalized person’s resources exceeds $74,820 or $13,800, respectively, then the excess normally must be spent on the cost of the Long Term Health Care before Medicaid eligibility can be established.
Anything above the Resource level may cause the Department of Social Services (the government organization that oversees the Medicaid program at the County level) to deny your Medicaid application or force you to contribute towards your health care.
Can I transfer assets out of my name to drop down to those Resource levels?
Yes, but for nursing home care, Medicaid will look back over the 5 years preceding the date of your Medicaid application to see if you transferred assets out of your name. If it sees a transfer in the last 5 years, they will penalize you. The penalty is a one month denial of Medicaid benefits for approximately every $11,000 you transferred. The penalty is there to dissuade you from transferring your assets rather than spending them on your Long Term Health care costs. My next Blog will reveal the 5 Secrets!
5 Secrets of Obtaining Medicaid Benefits in New York State
Posted by Craig A. Andreoli in Ask Craig A. Andreoli, Medicaid on March 16, 2010
5 Secrets of Obtaining Medicaid Benefits in New York State
FACT: According to the Agency for Health Care Policy and Research, 4 out of every 10 people over the age of 65, will wind up in a nursing home at some time.
FACT: The average cost of nursing home care on Long Island is approximately $12,000 per month. That number can even be much higher depending upon the nursing home facility and the required care.
QUESTION: Would you be able to afford those fees should you or a loved one need to be placed in a nursing home?
Medicaid is a Federal program that will pay for most of your Long Term Health Care needs. Medicaid is the single largest payer of Long Term Health Care in the country.
Chances are, Medicaid is the right choice for you. However, you need to know the rules of Medicaid to successfully have them pay for your Long Term Health Care needs. Those rules can be maddening to understand, so we thought it would be an excellent idea to reveal 5 secrets about the Medicaid program.
Secret 1: No penalty for transferring assets to a spouse. You can legally transfer as many assets as you want to your well or community spouse and not suffer a penalty from Medicaid. That’s right, you can transfer $1 million if you wish to your spouse, and still successfully apply for Medicaid benefits, so long as you use Secret # 2 along with the transfer.
Secret 2: Spousal Refusal. In New York State, a well or community spouse can sign a statement refusing to pay for the medical expenses of the institutionalized spouse and Medicaid, in New York, will determine eligibility of the applicant without considering the resources of the community spouse. This is known as “spousal refusal”. This will allow for the institutionalized spouse to receive nursing home care services right away and have those services paid for by Medicaid.
Secret 3: You can legally transfer all your assets away to a disabled child. If you have a child that is receiving Social Security Disability, you can hand over all of your resources to that child, thereby protecting your assets and still have Medicaid pay for your Long Term Health Care immediately. A pretty nifty tool if you fall under this category.
Secret 4: No look back period for Home Care. If the institutionalized spouse needs only non-nursing or custodial care (ex: toileting, bedding, assistance walking around, etc.), and that care takes place at home…there is no look back period of 5 years. The look back period is 0 days! That means you can transfer all your wealth away and the 1st day of the month following the transfer, you could be eligible for Medicaid benefits. A great option if you are not in need of full blown nursing home care.
Secret 5: Preplan!! The ability to preserve your assets and still have Medicaid pay for your future Long Term Health Care can be greatly increased if you just plan for that in advance. Plan when you are healthy and the 5 year look back period will not be such a huge obstacle. With preplanning you will still be able to keep control of your assets and you will avoid having to rely on the first 4 secrets. Transfers can take place to an irrevocable trust, or to other non-exempt recipients not discussed in this article.
Keep in mind that the information contained in this article is a simplification of the extremely complex rules and laws surrounding New York State Medicaid. By transferring assets to another person or to an irrevocable trust, you can protect all or part of your savings, but often times there can be adverse tax consequences and/or a penalty period of ineligibility.
It is always a wise idea to have the rules and concepts behind Medicaid explained to you by an experienced attorney who concentrates on Medicaid Planning. Furthermore, it is best to consult an attorney before making any transfers on your own.
Call the Law Office of Craig A. Andreoli, P.C. for a complimentary consultation on Medicaid Planning. We can help advise you as to whether with proper planning you can qualify for New York State Medicaid benefits.
