Long-Term Care Costs and Your Estate Plan
Long-Term Care Costs and Your Estate Plan.

Long-Term Care Costs and Your Estate Plan

Long-Term Care Costs and Your Estate Plan.

There are many misunderstandings about long-term or nursing home care and how to plan from a financial and legal standpoint. The article “Five myths about nursing home costs and estate planning” from The Sentinel seeks to clarify the facts and dispel the myths. Some of the truths may be a little hard to hear, but they are important to know.

Long-Term Care Costs and Your Estate Plan.  Myth One: Before any benefits can be received for nursing home care, a married couple must have spent at least half of their assets and everything but $120,000. If the person receiving nursing home care is single, they must spend almost all assets on the cost of care, before they qualify for aid.

Fact: Nursing homes have no legal duty to advise anyone before or after they are admitted about this myth.

Several opportunities to spend money on items other than a nursing home, include home improvements, debt retirement, a new car and funeral prepayment. An elder law attorney will know how to use a Medicaid-compliant annuity to preserve assets, without spending them on the cost of care, depending on state law.

There are people who say that an attorney should not help a client take advantage of legally permitted methods to save their money. If they don’t like the laws, let them lobby to change them. Experienced elder law and estate planning attorneys help middle-class clients preserve their life savings, much like millionaires use CPAs to minimize annual federal income taxes.

Long-Term Care Costs and Your Estate Plan. Myth Two: The nursing home will take our family’s home, if we cannot pay for the cost of care.

Fact: Nursing homes do not want and will not take your home. They just want to be paid. If you can’t afford to pay, the state will use Medicaid money to pay, as long as the family meets the eligibility requirements. The state may eventually attach a collection lien against the estate of the last surviving homeowner to recover funds that the state has used for care.

A good elder law attorney will know how to help the family meet those requirements, so that the adult children are not sued by the nursing home for filial responsibility collection rights, if applicable under state law. The attorney will also know what exceptions and legal loopholes can be used to preserve the family home and avoid estate recovery liens.

Long-Term Care Costs and Your Estate Plan. Myth Three. We’ve promised our parents that they’ll never go to a nursing home.

Fact: There is a good chance that an aging parent, because of dementia or the various frailties of aging, will need to go to a nursing home at some point, because the care that is provided is better than what the family can do at home.

What our loved ones really want is to know that they won’t be cast off and abandoned, and that they will get the best care possible. When home care is provided by a spouse over an extended period of time, often both spouses end up needing care.

Long-Term Care Costs and Your Estate Plan. Myth Four: I love my children equally, so I am going to make all of them my legal agent.

Fact: It’s far better for one child to be appointed as the legal agent, so that disagreements between siblings don’t impact decisions. If health care decisions are delayed because of differing opinions, the doctor will often make the decision for the patient. If children don’t get along in the best of circumstances, don’t expect that to change with an aging parent is facing medical, financial and legal issues in a nursing home.

Long-Term Care Costs and Your Estate Plan. Myth Five. We did our last will and testament years ago, and nothing’s changed, so we don’t need to update anything.

Fact: The most common will leaves everything to a spouse, and thereafter everything goes to the children. That’s fine, until someone has dementia or is in a nursing home. If one spouse is in the nursing home and receiving government benefits, eligibility for the benefits will be lost, if the other spouse dies and leaves assets to the spouse who is receiving care in the nursing home.

A fundamental asset preservation strategy is to make changes to the will. It is not necessary to cut the spouse out of the will, but a well-prepared will can provide for the spouse, preserve assets and comply with state laws about minimal spousal election.

When there has been a diagnosis of early stage dementia, it is critical that an estate planning attorney’s help be obtained as soon as possible, while the person still has legal capacity to make changes to important documents.

The important lesson for all the myths and facts above: see an experienced estate planning elder law attorney to make sure you are prepared for the best care and to preserve assets.

Reference: The Sentinel (May 10, 2019) “Five myths about nursing home costs and estate planning”

 

Medicaid to Pay for Caregiver Services
Medicaid to Pay for Caregiver Services.

Medicaid to Pay for Caregiver Services

Medicaid to Pay for Caregiver Services.

If you have a loved one who needs caregiver services, you might be looking for ways to help the person pay for the care. Your state might offer assistance with more services, or might not cover some of the items in this article, but here is a general overview of government programs that can pay for some caregiver services.

Short-Term Caregiver Services and Medicare

If your loved one is eligible for Medicare, he might get a limited amount of short- term care through Medicare. The requirements for these services include:

  • He is recuperating from an injury or illness.
  • His doctor expects him to return to his previous level of health.
  • He meets the Medicare eligibility criteria.
  • His doctor created a plan of care for him.
  • The services are reasonable and necessary to treat his illness or injury.
  • He only needs the services on a temporary basis.

If your loved one does not need medical treatment or needs services 24 hours a day, Medicare will not provide an aide. Medicare does not give assistance for personal services only. Help with preparing meals, dressing, bathing and similar items are personal care and not covered under Medicare in the absence of necessary medical treatment.

Long-Term Care to Stay Out of the Nursing Home

The government realized it can be far less expensive to provide services that allow a person to continue living at home, rather than pay for residence in a nursing home. When a person lives at home, she pays for her housing, utilities, insurance, food and other expenses.

One such plan is the Program of All-Inclusive Care for the Elderly (PACE). If your loved one is a Medicare or Medicaid enrollee, he can get nursing-home level care in his own home. The recipient does not have to pay a deductible or copayment for the services, medical treatment, or even prescription drugs. PACE can provide skilled nursing, hospice and an in-home caregiver. It is whatever his PACE health care team decides he needs.

The PACE requirements include:

  • Enrollment in Medicaid or Medicare
  • Being 55 years or older
  • Meeting his state’s certification rules for needing nursing home-level care
  • With PACE services, he can live safely in the community.
  • He lives in an area that PACE serves. Some states do not participate in the PACE program.

If your loved one is not on Medicare or your state does not offer the PACE program, he might qualify for Home and Community-Based Services (HCBS), also called the waiver program. This program can help your loved one get a high level of care at home, so she does not have to move into a nursing home or another institutional facility.

The requirements for and services of the Medicaid waiver program vary from state to state. In general, she needs to:

  • Be enrolled in Medicaid.
  • Meet her state’s criteria for level-of-care and functional eligibility.
  • Have a plan of care from her doctor.
  • Meet the income and asset restrictions for her state.

Once she qualifies, depending on the circumstances, she can get a home health aide, skilled nursing, hospice, adult day services and personal care. Some states offer meal programs, transportation to medical care, case management and help with shopping, bill paying and other services. There are other needs that must also be addressed. 

Medicaid to Pay for Caregiver Service. References:

AARP. “Need Help Paying for Your Loved One’s Caregiver?” (accessed June 12, 2019) https://www.aarp.org/caregiving/home-care/info-2018/help-paying-for-caregiver.html?intcmp=AE-CAR-LEG-EOA2

 

Worried about a Spouse Needing Nursing Home Care?
Worried about a Spouse Needing Nursing Home Care?

Worried about a Spouse Needing Nursing Home Care?

Worried about a Spouse Needing Nursing Home Care?

The six-figure cost of nursing home care is worrisome for those who are married, when a spouse has to go to a nursing home. Lets take an example, Tom has had some major health issues in the past year and Louise is no longer able to care for him at home.

In this case, the couple live in Pennsylvania, where nursing home care statewide is $126,420 a year ($342.58 per day). The state has a Medical Assistance program that is a joint state-federal program that will pay for nursing facility care, if a person meets both the medical and financial criteria.

Tom has met one of the major Medical Assistance threshold requirements, because he is “nursing home facility clinically eligible,” which means that a doctor has certified that due to illness, injury or disability, Tom requires the level of care and services that can only be provided in a nursing home.

What will happen to their assets?

In 1988, Congress passed the Medicare Catastrophic Coverage Act, which created a process of allocating income and resources between a spouse who needs to live in an institutional setting and the spouse who can continue to remain in a community setting.

Tom and Louise’s resources are divided into two buckets: one that is exempt and the second that is non-exempt.

The family home, care, and pre-paid funeral, if that has been done, are exempt or non-countable assets.

Everything else, whether they own it together or individually, is considered non-exempt. In Pennsylvania, Louise’s IRA is the exception. However, that is not the same in every state.

Louise is entitled to keep one half of what they own, with a maximum of $126,420, as of January 1, 2019. This is her “community spouse resource allowance.”

Anything else they own, is used to pay for Tom’s nursing facility care or purchase a very select group of “exempt” assets, like a replacement car or the cost of a prepaid burial.

They would have needed to give away their resources, at least five years preceding an application for Medical Assistance. If they have given money away in an attempt to preserve some of their assets, that would have changed the timeline for Tom’s being eligible for care.

Louise needs income to live on, so that she is not impoverished. She is entitled to a monthly minimum maintenance needs allowance of $2,058 and a maximum needs allowance of $3,150.50. These numbers are federally adjusted and based on inflation.

The numbers that must be examined for Louise’s income are her Social Security benefits, Tom’s Social Security benefits, any pension either of the two may have and any other income sources. She can keep her income, as long as she does not go over a certain level.

Worried about a Spouse Needing Nursing Home Care? Sounds scary? It is. This is why it is so important to do advance planning and have an ongoing working relationship with an attorney with experience in estate planning and elder law. There are changes over time to address the changing circumstances that life and aging presents.

Reference: Pittsburgh Post-Gazette (April 29, 2019) “Married and concerned about one of you going to a nursing home?”