Q & A – Medicaid for Nursing Home Care

As we approach our third act, new terminology comes into our daily lives that we may have heard before, but maybe never gave much thought to. Terms like Medicare, Medicaid, Social Security, Long-Term Care, and so on, can become sources of anxiety, if we don’t truly understand them. Therefore, today we’re answering some of the fundamental questions about Medicaid for nursing home care, in the hopes that we can alleviate at least one source of anxiety for you.

Question #1 – What is Medicaid?

Medicaid is a state and federal government-funded program that provides medical services to financially eligible individuals. Unlike Medicare, you do not have to be elderly to qualify for Medicaid, and many elderly individuals receive Medicaid benefits, including nursing home care. Every state administers its own version of Medicaid. For more information on Medicaid programs in your state, visit the Medicaid website, and select your state.

Question #2 – What are Medicaid’s basic financial eligibility requirements for nursing home care?

To determine your eligibility for nursing home benefits under Medicaid, the government will look at your income and resources in a given month to ensure you are within the legal limits for Medicaid benefits. To qualify for Medicaid, your monthly income must be less than the Medicaid rate for nursing home care, plus your typical monthly healthcare expenses. If you are eligible, you are allowed to keep $70 of your income for personal use. The rest is taken to pay for your care.

Question #3 – What is the Medically Needy Program under Medicaid?

For individuals that may exceed the financial limits to receive Medicaid, they may still qualify to receive Medicaid benefits under the medically needy program. This program allows individuals with medical needs to “spend down” their income to acceptable rates, by paying for medical care for which they have no insurance. For individuals over the age of 65, states are required to allow you to spend down your income regardless of medical necessity.

Question #4 – What resources can we have if my spouse is applying for Medicaid?

When a married couple applies for Medicaid, both spouses’ income and resources are included in the qualifying calculations. You may have all of the “exempt” resources, like an automobile and a house, along with one non-exempt item that does not exceed a set value (currently just over $58,000), such as cash or investments. Once your spouse qualifies for Medicaid, after one year, all excess income and resources must be transferred to the non-Medicaid-benefitted individual. That spouse may also accrue income and resources over and above the limits that Medicaid imposes on the benefitted spouse.

More information can be found on the Medicaid website, including requirements and benefits information for the state in which you reside. If you are interested in more information about long term care planning, speak with a qualified elder law attorney.

References:

Medicaid.gov. (Accessed November 28, 2019) https://www.medicaid.gov/medicaid/index.html

Holiday Gatherings Often Reveal Changes in Aging Family Members

A look in the refrigerator finds expired foods and an elderly relative is asking the same questions repeatedly. The same person who would never let you walk into the house with your shoes on now, is living in a mess. The children agree, Mom or Dad can’t live on their own anymore. It’s time to look into other options like assisted living or home care.

One of the biggest questions, according to the Cherokee Tribune & Ledger-News’ article is “How to pay for long-term care.”

The first question involves the types of facilities. There are many different options but the distinctions between them are often misunderstood. Assisted living facilities provide lodging, meals, assistance with eating, bathing, toileting, dressing, medication management and transportation. However, a skilled nursing facility adds more comprehensive health care services. There’s also the personal care home, which provides assisted-living type accommodations, but on a smaller scale.

The next question is how to pay for the residential care of an elderly family. This weighs heavily on the family. That elderly person is often the one who did the caregiving for so many years. The reversal of roles can also be emotionally difficult.

There are a few different ways people pay for care for an elderly family member.

Long-term care insurance, or LTC insurance. Few elderly people have the insurance to cover their residential facility stay, but some do. Ask if such a policy exists, or go through the piles of paperwork to see if there is such a policy. It will be worth the search.

Veteran’s benefits. If your loved one or their spouse served during certain times of war, is over 65 or is disabled and received an honorable discharge, he or she may be entitled to certain programs that pay for care through the Department of Veterans Affairs.

Private pay. If your loved one has financial accounts or other assets, they may need to pay the cost of their residential facility from these assets. If they don’t have assets, the family may wish to contribute to their care.

Another route is to apply for Medicaid. An elder law attorney in their state of residence will be able to help the individual and their family navigate the Medicaid application, explore if there are any options to preserving assets like the family home, and help with the necessary legal strategy and documents that need to be prepared.

Meet with an elder law estate planning attorney to learn what the steps are to help your elderly loved one enjoy their quality of life, as they move into this next phase of their life.

Reference: Cherokee Tribune & Ledger-News (November 30, 2019) “How to pay for longterm care.”

Tips for Seniors Who Are Moving to Assisted Living

When you are planning your move into assisted living, you can quickly get overwhelmed with the endless list of things you need to do. If you are moving out of a home where you have lived for many years, the thought of having to downsize and get rid of most of your possessions can produce anxiety. If thinking about all the work ahead of you makes you feel sad or tired, it can help to have a roadmap. Here are some organizational tips for seniors who are moving to assisted living.

You will be dealing with two situations – your current house and your new home. Each one needs a tailored game plan.

How to Minimize the Stress of Packing Up Your House

When you move from a large home to a smaller environment, the logistics dictate that everything will not fit into the new space. You will have to part with some of your items.

Rule #1 is you should be the one to decide what you keep and take with you to your new home. No one should dictate what you can have. These strategies can help:

  • Some of the bulk of your items will be a simple matter, because you will have no use for some things in assisted living. For example, since the facility will likely take care of the yard work, all the lawn and gardening equipment can go to a new home. You can save someone a lot of money, by giving them these items when they buy a house.
  • If you move to a warmer part of the country, you might not need your winter gear anymore. Donating those things can help keep someone in need from being cold and reduce how much you have to move.
  • Walk into one of your rooms and make a list of the three or four things you love the most in that room. If you only keep your favorite things, when you are in your new home, everything you see will bring you joy.

Changing how you think about the process, can make it less emotional for you. Instead of thinking about losing most of your belongings, imagine how liberating it will be when you are not tied down by so many things. Most people discover a lightness and freedom, when they get rid of the clutter and things that do not matter.

Settling into Your New Home

When you pack up at your previous house, visualize how the items you keep will fit into the new space. Make sure you hold on to the things that will make you feel comfortable and at home. Arrange your favorite things, so you can see familiar items from every angle throughout your space. With a little planning, you can recreate the feel of your old home environment. Keepsakes matter. While you do not want to be crowded by clutter or create tripping hazards, a cherished clock, photographs, books and artwork can help you feel as if you belong from the first day.

If you are planning to move to an assisted living facility, reach out to your qualified elder law attorney. They may be able to help you with government benefits and are familiar with the process of transitioning.

References:

A Place for Mom. “Moving Seniors: Settling in to Senior Care.” (accessed November 21, 2019) https://www.aplaceformom.com/planning-and-advice/articles/moving-seniors

When are You Done with Estate Planning?

A family has set up their estate plan. Two sons are already in the farming business and are thriving. Their daughter will receive the proceeds from a second-to-die life insurance policy and their considerable savings. The amounts are not equal in amount, but they are an equitable inheritance, and it seems like the couple has done its homework.

However, asks an article in The Courier, “The will is done, you’re sitting pretty—but are you?”

Estate planning is a lot like putting together a jigsaw puzzle. Like farming, it gets put together over time, piece by piece. Each piece represents something that needs to be done. For instance, a key part of the puzzle is having a last will and testament. That functions like building the outside frame of the puzzle, for those who start their puzzles by building the perimeter first. It frames the rest of your estate plan.

Other pieces are included within the will, like naming a personal representative, or executor. This is the person who is in charge of distributing your assets and making sure that the directions in your will are followed, when you pass away.

Do you have a plan for what happens when you die? For instance, if a husband dies, is there a plan for the wife to maintain the farm, or will she sell machinery and other transitory assets?

For the couple mentioned above who has the will, a transition spelled out in the will and a second-to-die policy in place to supplement the daughter’s inheritance, congratulations: they have many pieces of the puzzle in place. However, that’s not everything.

The other parts of the puzzle have to do with issues while the couple is still living. What happens if one or both are injured, or become ill? Who should take over the farming in the short or long term? Who will care for the spouse or spouses? Will they depend on each other for caretaking, or their daughter?

The number one worry for seniors is whether they have enough money to last until they die. However, by taking a portion of their savings and investing in a long-term care insurance policy, they can rest assured that they or their spouse will get the care they need—in a nursing home or at home—without burning through the family’s savings.

This piece of the estate planning puzzle—preparing for illness or disability—is often missing, and it can turn the rest of the estate plan into a pile of unattached pieces.

Speak with an estate planning attorney today to make sure your estate plan does not have any missing pieces. If you have not recently reviewed your estate plan in the last three or four years, schedule a review. Changes in the law and changes in your own life may make your old estate plan out of date and may no longer achieve the goals you had in mind.

Reference: The Courier (Sep. 4, 2019) “The will is done, you’re sitting pretty—but are you?”

The Dark Side of Dementia Care

You might expect the federal government to oversee and regulate assisted living facilities. However, since Medicare and Medicaid usually do not pay for stays at these facilities, there is no federal protection for the residents. When you consider how many assisted living centers now claim to offer dementia and memory care, you can see the brewing of a perfect storm. Highly vulnerable people are at the mercy of unregulated facilities. If you have a loved one in an assisted living center, you need to know about the dark side of dementia care.

People who live in nursing homes have some protections through federal legislation. The government imposes strict rules on nursing homes that receive funding from Medicare or Medicaid. Most assisted living centers are private pay, so the federal government cannot regulate them.

Some states have regulations designed to protect people in long-term care facilities. These states are discovering appalling conditions at many assisted living centers that advertise dementia care. Let’s be clear – there are wonderful facilities that provide fantastic dementia care. The problem is, a great number of for-profit facilities have sprung up quickly, without enough focus on the best interests of the residents.

The Reasons for Unacceptable Conditions at Dementia Care Facilities

The number of Americans with Alzheimer’s disease and other forms of dementia has risen dramatically over the last 20 years. Businesses all over the nation have seized on this opportunity to make a profit, by providing specialized care services. The problem is, many of these facilities do not deliver the promised level of care and security for these residents.

Long-term care can cost $5,000 to $7,000 a month or more. Most of the facility employees get paid low wages, particularly the workers who provide the lion’s share of the hands-on care of residents. To increase profits, the corporations that own and run these facilities often have high patient-to-staff ratios. In short, the centers are understaffed, and the workers are underpaid. Neither of those factors is conducive to the safe, attentive, nurturing environment that a person with dementia needs.

A Climate of Not Caring

Even when a state has regulations for assisted living centers, the punishments show little value for the well-being and lives of the elderly. For example, a 90-year-old lady with dementia lived in an assisted living facility in South Carolina. When she wandered away from the center one night, her absence went unnoticed for seven hours. By the time someone finally realized she was missing, she had already met a gory death.

An alligator in the pond next to the center killed and partially ate her. Her granddaughter was one of the first people to find the remains of the body. A year later, the state cited the facility for more than 10 violations involving patient safety, including not maintaining adequate numbers of staff and failing to perform nightly checks of residents. The state imposed a fine of $6,400.

Long-term care ombudsmen across the U.S. say that many facilities use psychotropic drugs as chemical restraints, instead of providing the quality care the residents need and for which they are paying thousands of dollars every month. The staff members often do not have training in dementia care, but even in states with a training requirement, industry experts say the regulations get ignored.

Every state makes its own regulations. Be sure to talk with an elder law attorney near you to find out how your state might differ from the general law of this article.

References:

Huffpost. “Dementia Care Is A Lucrative Business. Its Breakneck Growth Is Costing Patients’ Safety.” (accessed November 8, 2019) https://www.huffpost.com/entry/assisted-living-dementia-injuries_b_5c1d6f88e4b04aa0a171b895

How to Manage the Cost of Long Term Care

A single woman has seen her annual premiums for long-term care rise by more than 60% over the last six years. Her cost in 2018 was $2,721, up from $1,626 in 2013. She’s keeping her policy, reports CNBC in the article “Long-term care insurance costs are way up. How advisors can help clients cope”

For her, the price she is paying is worth the cost. However, these types of increases can take older individuals off guard, especially if they are living on a fixed income.

Last year, Genworth Financial received 120 approvals by state regulators to increase premiums on their long-term care insurance business. The weighted average rate increase was 45%. General Electric said earlier this year that it expects to raise premiums on its LTC policies by $1.7 billion in the next ten years. Insurers hold between $160 to $180 billion in LTC reserves, covering 6 to 7 million people, according to estimates from Fitch Ratings.

Elder care has also become increasingly expensive. The annual national median cost of a private room in a nursing home was $100,375 in 2018, according to Genworth Financial. The annual national median cost of a home health care aide was $50,336 in 2018.

Insurers entering the business in the 1990s and early 2000s didn’t anticipate that so many policyholders would continue to pay their premiums and eventually file claims. Fewer than 1% of policyholders have let their policies lapse, and this caught many companies off guard.

Low interest rates have also hurt overall profitability for the insurance companies.

About 40% of the bonds held in insurance companies’ general accounts had a maturity of more than 20 years at purchase, said the American Council of Life Insurers.

There are a few ways to tweak benefits to keep premiums more affordable, while continuing to have this essential coverage.

Daily Benefit. Policies sold in 2015 had an average daily benefit of $259. Paring down the daily benefit could keep premiums down.

Benefit Period. Insurance contracts sold in the 1990s and early 2000 could pay out for the remainder of a client’s life. Reducing that period to five or ten years could make premiums lower.

Inflation Protection. Inflation riders help stay ahead of the rising cost of care. For older policyholders, this might reduce the inflation protection.

Waiting Period. Most policies have a waiting period before benefits will be received. Adjusting this period of time might reduce benefits.

Policyholders are advised to speak with the insurance company directly, instead of relying on the premium increase notices. This may reveal more options that can be used to reduce the premiums, without sacrificing too much in the way of coverage. If you do not have long-term care insurance, there may still be options. Speak with a qualified elder law attorney to see if there are options available to you.

Reference: CNBC (September 8, 2019) “Long-term care insurance costs are way up. How advisors can help clients cope”

Relocating for Retirement? What You Need to Know

Sometimes having too many choices can become overwhelming. Move closer to the grandchildren, or live in a college town? Escape cold weather, or move to a mountain village? With the freedom to move anywhere, you’ll need to do some serious homework. A recent article titled “Don’t Relocate in Retirement Without Answering These 5 Questions” from Nasdaq contains some wise and practical advice.

There are some regions that are more retirement-friendly than others. If you end up in the wrong place, it could hurt your retirement finances. Therefore, ask these questions first:

What are the state’s taxes like? If you are living on Social Security benefits, retirement savings and a pension, the amount of money you’ll actually receive will vary depending on the state. There are 37 states that don’t tax Social Security benefits, but there are 13 that do. There are also some states that do not tax distributions from retirement accounts. Learn the local rules first. If you currently live in a state with no income tax, don’t move to a state that may require a big tax check.

If you live in a high tax state and don’t have enough money saved for a comfortable retirement, then moving to a lower tax state will help stretch your budget.

Is there an estate or inheritance tax, and is that a concern for you? If leaving money to heirs doesn’t matter to you, this isn’t a big deal. However, if you want to pass on your assets, then find out what the state’s inheritance taxes are. In some states, there are no taxes until you reach a pretty large amount. However, in states with inheritance taxes, even a small estate may be taxed, with those who inherit sometimes owing money on even small transfers.

What’s the cost of living compared to where you live now? When you’re working, moving to a place with a higher cost of living is not as big a deal, since your wages (hopefully) increase with the relocation. However, if your cost of living goes up and your income remains fixed, that’s a problem. The last thing you want to do is move to a place where the cost of living is so high, that it decimates your retirement savings.

If you live somewhere with high taxes and high prices, moving to a lower cost of living area will help your money last longer, and could make your retirement much easier.

Is it walkable or do you need a car? Cars present two problems for aging adults. One, they are expensive to maintain and insure. Two, at a certain point along the aging process, it becomes time to give up the keys. If you live in a walkable community, you may be able to go from having two cars to having one car. You might even be able to get rid of both cars and do yourself a favor, by walking more. This also gives you far more independence, far later in life.

What’s healthcare like? Even people who are perfectly healthy in their 50s and 60s, may find themselves living with chronic conditions in their 70s and 80s. You want to live where first-class healthcare is available. Check to see what hospitals and doctors are in the area before moving. You should also find out if medical care providers accept Medicare. Consider the cost of a nursing home or home care in your potential new community. Some areas of the country have much higher costs than others.

Reference: Nasdaq (Aug. 9, 2019) “Don’t Relocate in Retirement Without Answering These 5 Questions,”

Preparing for Alzheimer’s

Once there has been a diagnosis of dementia, there are a number of issues that families need to address, including legal issues. The best way to approach this task, says being patient in the article “Alzheimer’s and the Law” is to meet with an estate planning attorney who can guide the family in planning for the future, and creating the needed documents.

The conversation will start with who should be named to two different kinds of power of attorney. One is for the durable power of attorney, which will give the named person the ability to manage any business decisions, sign contracts and deal with insurance companies. This document will need to be inclusive, so the agent can act for the person who is going to be incapacitated.

Next, there will need to be a healthcare power of attorney. It should be complemented by a living will, which states what kind of lifesaving measures you would want, if you were to be declared terminally ill. The healthcare power of attorney also allows a person to be named to make medical decisions, if the person with dementia can no longer make good decisions on their own behalf.

As long as the doctor has not yet declared the person incapacitated, they can sign the power of attorney for financial and health care. If the person has been declared incapacitated, then the family will need to go to court for a guardianship proceeding, so the court can declare who will be in charge of the person with dementia.

Some families prefer to have one person in charge of the loved one’s financial affairs and a second person to be their healthcare power of attorney. If there is a family member who is good with money and business, that person will do a better job than someone whose heart is in the right place but doesn’t manage money well. A nervous or easily excitable family member may also not be the best choice for healthcare power of attorney, especially if important decisions need to be made in a crisis situation.

Make sure that the people who are being considered for these tasks live near enough, so they can be available when needed. A child who lives on the other side of the country may want to be the decision maker, but if they are too far away, it will create more problems than it solves.

Before naming anyone to the power of attorney roles, speak with them about the situation, and be clear about what they will be expected to do. Clarify the difference between the two roles, and that of the executor. The executor is the person who is in charge of the person’s estate after they pass. They do not have an active role, while the person is living.

People generally don’t like to think about times when they may not enjoy good health, but this is a situation where waiting to address the issue can become extremely costly. A skilled estate planning attorney who works with families with dementia will understand the situation. They can be a valuable resource of information about other related services that will become needed over time.

Reference: being patient (August 22, 2019) “Alzheimer’s and the Law”

Who Looks Out for the Solo Senior?

She was a bit surprised, when she couldn’t find any. She then realized that it’s the adult children who push their aging parents into long-term care facilities. That’s who usually gets mom or dad to move, asks Market Watch in the article “Who watches out for childless retirees? How ‘solo agers’ can stay happy and safe.”

The adult children are the ones who badger their aging parents to leave their single family home and take up residence in a long-term care or senior living community. Those who don’t have children, or whose children are not a part of their lives, are more likely to encounter serious risks like isolation, financial elder abuse, malnutrition and other dangers.

It is the children who usually instruct mom or dad to hand over the keys to the car, who notice a decline in physical or mental abilities and identify sources for help, oversee their finances and supervise caretakers. A solo person who can no longer care for themselves, isn’t likely to have the ability to conduct a thorough study of possible living situations.

This is a tough but necessary scenario that single seniors need to be aware of. How can you stay safe and happy, while preparing for care you may need in the future?

Start by building a community. Without an extended social network, seniors can find themselves isolated and lonely as friends die or move in or near their grandchildren. By strengthening ties with the remaining relatives and cultivating new friends, especially those who are younger, it’s possible to build a new network. The same thing applies to making friends with neighbors, the people you see in the coffee shop every day and other acquaintances. You don’t need to be best friends with everyone. However, a big network of what are called “weak tie relationships” can be powerful.

Be smart about where you live. A walk-up in a five-story building may be great when you are in your thirties, forties or even fifties. However, at some point, that’s just not a good idea. If you live in the suburbs, what will happen when you can’t drive anymore? Not everyone wants or can afford to live in a planned community. There are some cities that have organized villages for aging in place, where there are services available for seniors, including local transportation to and from the local senior centers. Co-housing is another option, where people build clusters of homes around shared spaces. In some communities, there are “naturally occurring” retirement communities where residents socialize and look out for each other. They might crop up in any kind of living situation, from apartment buildings, condos, townhouses, etc. Don’t overlook the “Golden Girls” lifestyle—sharing a home with other seniors.

Either enlist or if need be, hire future guardians. Estate planning attorneys recommend that all adults have documents in place that permit someone else to make decisions, in case of incapacity at any age. However, for solo seniors, it is especially important to have powers of attorney for finances and health care. Without these documents, someone else who may not even know you will be given control over your finances and health care. Becoming a ward of the court is not an ideal situation for anyone, especially a vulnerable senior.

Choosing someone to take on these roles is not always easy. It may be a younger friend or a trusted relative (preferably younger) may be willing. In California and Arizona, it is possible to hire a licensed fiduciary for this role. Your estate planning attorney may be able to put you in touch with an appropriate professional.

Reference: Market Watch (Aug. 9, 2019) “Who watches out for childless retirees? How ‘solo agers’ can stay happy and safe”

How to Plan for Long-Term Care Costs

The odds are that most of us will need long-term care. At least 52% of those over age 65 will need some type of long-term care at some point in our lives, according to a study conducted by AARP. As most of us are living longer, we’ll probably need that care for a longer period of time, as reported in the article “It’s best to plan for long-term care” from the Times Herald-Record.

Here’s the problem: ignore this issue, and it won’t go away. This is a fairly common response for people 55 and older. The size of the problem makes it a bit overwhelming, and the cost to tackle it seems unsolvable. However, not addressing it becomes even more expensive. How can we possibly pay for long-term care insurance?

Here’s a simple example: a 64-year-old woman who broke her ankle in three places. She was healthy and mobile. However, a badly broken ankle required extensive rehabilitation and she was not able to stay in her home. She has been living at a rehabilitation center and the costs are mounting. What could she have done?

There are two basic ways (with a number of variations) to pay for long-term care.

The first and most obvious: purchase a long-term care insurance policy. Only 2.7 million Americans own these policies. They are wise to protect themselves and their families.

Most families put off buying this kind of insurance, because it’s expensive at any age and stage. The average cost is about $2,170, according to the Kiplinger Retirement Report, for about $328,000 worth of insurance. That rate varies, and it should be noted that if you have a chronic condition, you may not be able to purchase a policy at all.

If a local nursing home costs $216,000 per year and you have $328,000 of coverage, you’ll run out of coverage. The average nursing home stay is about two years. As boomers age, the cost of long-term care insurance is rising, while benefits are becoming skimpier, says Kiplinger.

There are some alternatives: a hybrid life insurance plan that includes long-term care coverage.  However, those can be more expensive than regular long-term care insurance. Try about $8,000 a year for a 55-year-old, about $13,000 for a 65-year-old.

Another choice: a Medicaid Asset Protection Trust. You’ll need to work with an estate planning attorney to create and fund this trust long before you actually need it. Your assets must be placed in the trust five years before an application to Medicaid, which will then pay for your care. You don’t have to live in poverty to do this. If the care is for one person, the applicant is permitted to keep about $15,450 of assets. The spouse may also keep a home worth up to $878,000 and assets up to about $120,000. In New York State, you can keep the principle of retirement funds like an IRA or 401(k), as long as you are taking the required distribution withdrawals.

However, what if you have money to pay or need long-term care before you put assets in trust? If you live in New York, Florida and Connecticut, you have what is called “spousal refusal.” The spouse of the person in long-term care can choose not to pay for their cost of care. This can get complicated, and Medicaid will try to get funds for the care. However, an estate planning elder law attorney can negotiate the amount of payment, which may leave the bulk of your estate intact.

These are complicated matters that become very costly, often at a time when you are least able to deal with yet another issue. Speak with an estate planning attorney before you need the care and learn how they can help you protect your spouse and your assets.

Reference: Times Herald-Record (July 22, 2019) “It’s best to plan for long-term care”