Just this past week the clients I saw about applying for Medicaid to hit almost all the items on this list. Scroll down and see if any happened to you.
1. The nursing home tells the family: “We have no long term care beds. Your spouse/parent will have go to another nursing home.” (False)
This reason occurs when the person is discharged from the hospital for skilled care (rehab) in a nursing home. It is often a nice, expensive looking facility. After a few weeks the family is told the Medicare rehab is over and you will have to find another.
Why get advice? Because most nursing homes in Metro Detroit have long term Medicaid beds. There are two reasons why the corporate office tells its admission employees there are no Medicaid beds, when in fact the whole facility may be licensed for Medicaid. (It happened last week.)
Reason 1: Medicare pays hundreds of dollars a day more per day than the nursing home gets from long term care patient/residents. (That’s true of “private pay” as well.) So the nursing home strategy is to get people in only for the short term Medicare treatment. They have no intention of serving all residents for long term care.
Reason 2: When it comes to long term care, Medicaid pays “wholesale” not retail. That is Medicaid does not pay the $400 per day the nursing home will charge the resident. It pays perhaps two thirds that rate.
2. The nursing home does not tell spouses about their right to part of the savings and resident income.
Under Medicaid a spouse is allowed a share of the money (assets) and the income of the nursing home resident. Let’s use a hypothetical Smith family. They have $40,000 in savings. Mrs. Smith has social security and pension income of $2,700. His wife has Social Security income of $800.
Savings: In 2019 Medicaid allows a “community spouse” is allowed a minimum of $25,284 (and the resident/applicant is allowed $2,000). The Smiths’ have $40,000 in savings. Their “spend down” is $12,718. They could meet the entire amount by prepaying the resident’s funeral at the maximum allowed by Medicaid. $12,770 (2018). They may more realistically spend about $7,000 and use the other $5,718 on other needs or bills. (Caution, see next paragraph on Income.)
Income: The community spouse is not told about her/his right to income support. Medicaid allows the community spouse a minimum monthly of income of $2,057. The spouse is almost always allowed a few hundreds dollars more by “excess shelter expense.” This includes rent or home taxes, insurance and utility expenses. So let’s say a wife has social security income of $800 and her husband has an income of $2,700. If her calculated monthly income allowance, including excess shelter expense is $2,357 then she would get $1,537 of her husband’s income to get to $2,357. His monthly Medicaid co-pay would be the remainder minus $60 for his personal needs and enough to pay any monthly medical insurance premium. If his monthly insurance premium were $303 a month his co-pay would be $700. (Medicaid calls the co-pay the “patient pay amount.”)
3. The nursing does not tell the family about “retroactive” application.
Families are not told that instead of paying the nursing home they may “spend down” and apply the next month for Medicaid. Medicaid’s rule is if you complete the spend down by the end of the month you are eligible the whole month.
Example: Mr. Smith’s Medicare rehab ends on the 10th. The nursing home tells the spouse they want a check for $14,000 to pay to the end of the month and for the next month. What should Mrs. Smith do? Write no check and inform them she will apply for Medicaid to pay his bill. She would then proceed to do the spend down in number 2 above. After she got all the paper work together she could submit a Medicaid application the next month along with a “retroactive application” (a separate form) and have Medicaid pay the entire bill except his monthly co-pay. She would write a check to cover his co-pay. In 2 above it would be $700 and the next month it would be another $700.
4. The family is told they need to spend down by paying the nursing home. (False)
While it is true that a resident is responsible for getting his bill paid, that duty may be satisfied by applying to Medicaid for payment. As relayed above Medicaid requires “spend down” of assets until the resident is eligible. That spending can be anything for the resident or spouse. It need not be for the nursing home. It could be for prepaying the funeral. It could be to fix up the house so that it could sell for a better price. Almost all homes of elders could use a ‘refreshing.” It could be for the purchase of a new car.
5. The family is not told the resident may pay nothing to the nursing home if he will return to home within 6 months.
As relayed above the resident’s spending not only includes spend down of assets but also a monthly co-pay. That monthly co-pay can be waived if a doctor certifies the resident is likely to return to home within 6 months.
6. Bonus! This article is not legal advice. (Don’t rely on articles like this. Verify your situation. Get advice from an attorney!)
MORAL: Medicaid is such a complicated program that very few people know the allowances it makes for the applicant and family. Get advice, save your hard-earned money for those you love and get your benefit from all those taxes you paid for decades.
And, of course, give us a call if you want to be sure you are saving as much as you can, (Hint: 248-356-3500)
We have had number of educational programs over the past couple years. There is one continuing lesson I want to share with you. I offered to review any attendee’s “estate planning” documents from the Elder Law point of view. The distinction is that elder law focuses on life issues and so we call it “life planning.” Estate planning is about “Death and Taxes.” I analogize the difference to a life guard. The “Death and Taxes” lifeguard will help you after you have drowned. The Elder Law lifeguard will help you while you are struggling.
Many folks have taken me up on the offer to review their existing “estate planning’ documents. I focused on their trusts and powers of attorney. In every case the documents did not grant complete authority to take care of all matters of the client. I had the following report:
They were all inadequate.
What did that mean? That failing could force anybody into life-long probate -guardian or conservator. And that means that the probate court is in charge of every facet of your life. Where you will live, what medical treatment you will receive is all under the control of the guardian. All your finances will be in the public record. The conservator will file and inventory of your property and will file an account every year. The account will detail every dollar that you got and every expenditure that was made on you. Attorneys fees for the public hearings may run into the thousands of dollars. I’ll give you a practical example:if a husband is in a nursing home his wife may have to spend over $50,000 in nursing home bills and attorney fees before the probate court will give her permission to withdraw from his IRA. And, on top of that, the court may open a conservator file and put all of his assets under probate supervision till he dies.
All of that is easily avoidable.All you have to do is have your legal documents tailored to fit your needs. You can be in control even when you must rely upon others to help you. So if you are at all concerned about aging and your long term care needs, just give us a call and let’s get your protection started! And, of course, we will help you with Wills and trusts as you may need. But, still 99% of us folks don’t need to worry about taxes after death so unless you are a multimillionaire you don’t need an attorney expert in estate taxes. An Elder Law focused life plan must, and does, include a will or a trust to carry out your wishes for property distribution after you die. Get started now!
A common scenario in my elder law practice is this: a parent cannot safely live alone and moves into a child’s home. One spouse has died and then the second develops with health problems that need “24 hour care.” It often goes like this
After Dad retired he and Mom continued living in the old home. After many happy years in retirement Dad passed away a few years ago. Mom started needing more help and Jill, the oldest daughter became her “executive assistant.” She’d make the 20 mile drive to visit, take Mom shopping or to her doctor’s appointments. From time to time they talked about Mom moving to a senior apartment closer to Jill’s house but Mom wanted to stay in the house where she lived for almost 60 years. Then Mom fell and broke her hip. After rehab she still could not return to her some so they had her move into a spare bedroom.
Recovery went slowly but eventually she returned home. And then she had her second fall. They went through the same process. This time recovery was even slower. Summer passed, then fall, then winter. They planned Mom would return home in the spring after being away almost a full year.
But then the fire happened. A neighbor saw the smoke and the fire department got it under control pretty quickly. The kitchen is part gone, but the home is fixable. The best guess was that a squirrel got in and chewed insulation off some wires, the wires shorted, overheated and started the fire
They file a claim with the insurance company who summoned the fire report which stated “No injuries. Nobody was living in the home at the time.”
Will the company honor the claim? Likely not.
A recent decision of the Michigan Supreme Court reminds us that we only have insurance according to the strict words of the policy. The case is Yu v. Farm Bureau Insurance Co of Michigan. In that case Mr. Yu was living in Portage and then got a job in Lansing. He and his wife got an apartment near work and visited their home on weekends. One day in winter a neighbor called them reporting big icicles on the side of their house. It turned out they had a broken water pipe in the bathroom and some pretty extensive damage.
The insurance company denied the claim because the home was not “occupied” under the terms of the policy and in fact the Yus’ “vacated” the home. It was not their primary residence. The court agreed and opined they could have gotten insurance as a seasonal or second home.
The moral is this: All homeowner’s policies define the term “occupied.” In fact many policies specify that the home is not “occupied” as the primary residence if the owner is absent for more than six months at a time.
So, if you are going to be absent from your home for an extended period of time, check the homeowner’s policy. You may find the home is uninsured. An insurance company may legally put many restrictions on coverage. You should review your policy and speak with a company representative to be sure you are reading it the same way they do.