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HEFFNER &ASSOCIATES
ELDER LAW
Mark B. Heffner, Esq. , CELAHeffner & Associates
615 Jefferson BoulevardWarwick, Rhode Island
401-737-1600www.hefflaw.com
Medicaid & Medicaid Planning:Stuff you will want to know &
tell your clients
HEFFNER &ASSOCIATES
ELDER LAW
Disclaimer•Materials are for general education and should not be substituted for consultation with a competent elder law attorney in your jurisdiction•Materials presented from the perspective of Rhode Island Medicaid regulations and practice•Rules and practice vary significantly from State to State (and occasionally within the same State) and are subject to change
HEFFNER &ASSOCIATES
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•Practicing elder law since 1988•CELA (Certified Elder Law Attorney) by National Elder Law Foundation (accredited by ABA for specialization)•Served in Rhode Island House of Representatives for 10 years
Who is this guy?
•Harvard College; Boston College Law School
•Adjunct Professor, Roger Williams University Law School•Friend of Tom Grennan’s
HEFFNER &ASSOCIATES
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What is Medicaid?•It is not Medicare!
•Medicaid: in addition to general criteria (age, blind, disabled) & needing a level of care, must also fall within financial criteria (assets, income, transfer restrictions)
•Medicare: insurance model; no asset or income qualification requirements
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Why do should we (and our clients care about) Medicaid?
•Medicare--limited long term care (LTC) coverage 20 days full payment, up to 80 additional days with co-pay ($148/pay)
•Continues to require skilled (vs. custodial) care
•Medicare LTC coverage initially applicable if individual has a three day prior hospital admission &
HEFFNER &ASSOCIATES
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Why do should we (and our clients care about) Medicaid?
•Once Medicare ends (if it began at all), absent long term care insurance, individual pays privately
•Rhode Island: $8516/month
• Genworth 2013 cost of care survey (www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html)
•Massachusetts: $10,493/month
•Connecticut : $12,638/month
HEFFNER &ASSOCIATES
ELDER LAW
Resources vs. Income
Asset available to applicant to support, maintenance or medical careAvailable as of the first moment of a month (FOM) of desired eligibility
Anything received in cash or in-kind that can be used for food, clothing or shelterThat which is received during a monthIncome received within a month and not spent within the month becomes a resource as of the FOM of the following month
HEFFNER &ASSOCIATES
ELDER LAW
Resources
Excluded (Single Person)•Home (equity value limit: $525K) if “intent to return”
•Household goods & personal effects( no value limit, unless exceptional)
•Vehicle (limit: $4500, unless used for transportation to medical appts)•Life Insurance ($4000 face limit)
•Irrevocable Burial Contract, or funds set aside for burial ($1500)
•Funds otherwise available (limit: $4000)
Available
EVERYTHING ELSE
HEFFNER &ASSOCIATES
ELDER LAW
Resources
Excluded (Married Couple)•Home: no equity limitation if residence of “Community Spouse” (CS)
•Vehicle: if used by CS, no limitation on value
•CS retains “Community Spouse Resource Allowance” (CSRA)
HEFFNER &ASSOCIATES
ELDER LAW
Resources: Married CoupleWhat is Community Spouse Resource
Allowance Determine couple’s total joint resources as of first moment of the month (FOM) of the beginning of a period of continual institutionalization (POCI)Total joint resources: combined resources of the institutionalized spouse & community spouse, to extent of either’s ownership interest in the resource
Maximum CSRA 2013: $115,920
Minimum CSRA 2013: $ 23,184
Community Spouse Resource Allowance (CSRA) calculated by dividing total joint resources in half; however, CSRA is subject (in RI) to the following minimums and maximums
HEFFNER &ASSOCIATES
ELDER LAW
Income-GenerallyAnything received during a month in cash or in-kind that can be used for food, clothing or shelter. Recurring payments such as the following:•Gross Social Security
•Gross Pension
•Net--according to Medicaid--rental incomeIn addition, “one-off” or non-monthly payments--e.g.:•Inheritances & receipt of life insurance proceeds•Income tax refunds
•Gross Social Security
•Annual distributions from IRAs and other retirement plans
HEFFNER &ASSOCIATES
ELDER LAW
Income-Single IndividualAll gross income must be used for cost of care, minus:
•Gross Social Security
$50/month personal needs allowance; and
$Pro-rata monthly payment of Medicare supplement insurance (e.g. Blue Cross Plan 65)
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Income-Married Applicants
Community Spouse Allocation (“spousal slide over”) may be allowed as additional deduction from IS income. Two factors:•CS gross income; and
•Amount of spousal allowance, consisting of
Income of CS,--whether regular (e.g. Social Security), or periodic (e.g., inheritance) is not a factor in eligibility of institutional spouse (IS), except in following calculation
•Gross Social Security
•Basic monthly allowance to CS (currently $1,891.25); and•If there are shelter expenses, and if so whether standard shelter allowance or excess shelter allowance
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Transfers of AssetsPost-DRA’05, any transfer occurring on or after February 8, 2006 is subject to five year lookback periodQ: What types of transfers fall within lookback period?A: Uncompensated (UV) transfers--i.e., those for which fair market value (FMV) not received by applicant or the applicant’s spouse Penalty period (P): period of time--expressed in months--for which Medicaid LTC benefits are denied as result of a UC, calculated as follows:P=UV/C (average cost of a private resident in
a NF)Ex: Applicant’s spouse “sells” summer cottage with FMV of $100K to child for $25K.
UV ($75K)/C ($8,643)=P(8.68 months)Note: “C” varies from State to State, changes periodically
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Resources: Transfers--Exceptions to Imposition of P
•Applicant’s spouse;
P (penalty period for LTC services) not created if:
•Applicant’s son or daughter who (a) was residing in home for at least two years prior to the parent’s institutionalization, and (b) can demonstrate that he or she provided care which prevented parent from entering an institution for the two year period
Asset transferred is principal residence & transferred to:
•Applicant’s child under age 21, or child who is blind or totally and permanently disabled
•Applicant’s sibling who has an equity interest in the residence and resided there for at least one year immediately prior to the institutionalization of the applicant
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Resources: Transfers--Exceptions to Imposition of P
•Applicant’s spouse, or to another for the sole benefit of the spouse, or from the spouse to another for the sole benefit of the spouse;
P not created if:
Asset transferred is other than a principal residence and transferred to:
•Applicant’s child who is blind or totally and permanently disabled, or to another for the sole benefit of such child, or to a trust established for the sole benefit of such child•Trust for sole benefit of an individual who is under age 65 and is permanently and totally disabled
HEFFNER &ASSOCIATES
ELDER LAW
Resources: Transfers--Exceptions to Imposition of P
•Individual can prove his/her intention was to receive fair market value or other valuable compensation/consideration
P not created if:
•Applicant’s can prove transfer was exclusively for some purpose other than to qualify for MA•Asset is returned to applicant (in whole or in part)
•Asset transferred for fair market value or other valuable compensation/consideration
•Denial of LTC payment would work an undue hardship
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Estate Recovery•Federal and RI law require recoupment on funds spent on MA for individuals age 55 or older•Recovery initiated by State’s filing a claim in probate court (in RI):
•State may create lien against decedent’s real estate by filing notice of statement of claim in land evidence records
•State is priority creditor under many probate statutes•If probate estate not initiated by recipient’s fiduciary, State as a creditor can initiate the opening of probate under probate statutes
HEFFNER &ASSOCIATES
ELDER LAW
Mark B. Heffner, Esq. , CELAHeffner & Associates
615 Jefferson BoulevardWarwick, Rhode Island
www.hefflaw.com
National Elder Law Foundationwww.nelf.org
Provides interactive state map of Certified Elder Law Attorneys (CELA)
in each state