by Jim Schuster, Certified Elder Law Attorney
1. An Assisted Living Facility Is Not a Nursing Home
It used to be that if an elder moved out of the home for health reasons, the move was to a nursing home. Not any more. Many families find very nice “assisted living” facilities that charge almost as much per month as a nursing home. While these may be appropriate placements for some people, they are not nursing homes. Assisted living means a room in a secure environment with basic living services provided, such as meal preparation, cleaning and supervision. No medical treatment is provided since the facility is not medical care facilities. For the same reason there is no payment support from Medicare or Medicaid.
Every aspect of the nursing home resident relationship, from admission to discharge, is regulated by law. All phases of the medical care are regulated from physical plant to staffing. All of the following services are provided and covered by regulation: (a) Admission, discharge, and transfer of patients; (b) Clinical records; (c) Physician and Nursing services; (d) Dietary services;(e) Rehabilitative services; (f) Pharmaceutical services; (g) Dental services; (h) Podiatry services; (i) Social services.
Not all nursing homes are the same. You can find nursing homes in an area by Visiting Medicare.gov find nursing home and compare section. There you can review the annual state inspection report. Visit and observe how residents are treated. It is best to visit at least twice and one of those should be either on the weekend or in the evening when staffing is lower. Speak with family/friends who are visiting a resident and ask them for their opinion. Take a checklist with you. If you don’t have the ability to do an on-site investigation you can hire a Geriatric Care Manager to help. See www.CareManager.org.
An admission agreement is a contract. Michigan law allows a “responsible party” to sign the contract for the patient without incurring personal financial liability. However, some contracts have language hidden in paragraphs that impose legal obligations on the signor. While the law forbids the requiring of a personal guarantee of payment, the law allows a person to guarantee payment. A person who signs a contract, even as POA Agent for another is presumed to have read and understood what s/he signed. The signor may be vindicated only after an expensive trial in court.
If a person has a bed in a nursing home, he is already admitted. He may not be discharged for failure to sign a contract. If you are pressured into signing, have your elder law attorney review the contract.
In this conservative, pro-business era, corporations are flexing their muscles. Compulsory pre-dispute arbitration agreements are being inserted in more and more consumer contracts. This includes nursing homes. An arbitration agreement means the resident agrees to give up the right to a jury trial. Any dispute will be handled in the more business friendly environment of arbitration. There are times when arbitration provides an advantage to all but that can be determined after a dispute has arisen. When serious issues arise such as your family member dying of neglect, you will want a public trial by jury. If you as agent for a resident is presented with an admission agreement that has an arbitration clause, do not sign it. Make an immediate appointment with an attorney to review the contract.
If signing the presented agreement is the only way to get into your chosen nursing home, then try to have the admission person review the paperwork with the resident who would then sign or not. If the resident is not competent to understand the contract then the compulsory arbitration agreement may be voided by a court if a serious legal dispute arises.
Under the Nursing Home Reform Law residents have extensive rights, under the law the facility is their home. Included in their rights is the right to: control their plan of care including choice of doctor, to accept or refuse treatment; accommodation to their preferences in food, activities and daily schedule; to privacy, dignity, and to be free from abuse and restraint.
A resident has a list of rights as long as his arm, but the resident needs a patient advocate to protect and enforce those rights to good care. A patient advocate must be authorized in writing by a designation or healthcare power of attorney.
Medicare only pays for a maximum of 100 days post-hospital skilled care, though many folk only get about four weeks. Skilled care means services over and above the basic medical provisions of the nursing home and involves either skilled nursing and/or skilled rehabilitation.
Medicaid has its own unique rules of eligibility that are as complicated and confusing as any tax law. The rule of thumb is that the applicant may have a home, car and $2,000. That does not mean that all other assets must be used to pay the nursing home bills. Get professional advice to take advantage of credits, allowances and exemptions to save your dollars.
Contrary to some opinions expressed in national magazine or newspaper articles, almost all nursing homes participate in Medicaid. It is illegal to discriminate between residents who paying out of their own funds and those for whom Medicaid pays. Treatment staff is not informed who is a Medicaid patient. However, some families notice a big difference in the transition from Medicare coverage to long term care – whether private pay or Medicaid. The reason is that Medicare pays for additional skilled service identified above.
Have a question about a medical decision or the quality of care? Hire a professional such as a nurse or social worker to review and evaluate. Have a question about patient rights, Medicare or Medicaid? Hire an elder law attorney.
Want More Information?
Call (248) 356-3500 for a copy of our Patient Advocate Guide to good care in a nursing home. It has over 80 pages of information the patient advocate needs to know about patient/resident rights, Medicare, Medicaid and a listing of all nursing homes in Southeast Michigan.
FAQ: Healthcare Power of Attorney
Save Money, Time and Stay in Control
Jim Schuster, Certified Elder Law Attorney
Offices in Southfield and Farmington Hills, Michigan
248.356.3500 www.JimSchuster.com
copyright 2019
It is a document executed by a competent person (the principal) giving another person (the agent) the authority to assist in making health care decisions or actions for you. This action may happen if you are unable to communicate such decisions yourself or if you merely choose to have assistance in making a decision or taking an action such as signing a contract. For example you may have your Agent make an appointment for you, talk to the pharmacist about your prescription, discuss treatment options with a specialist.
An advance directive is a document in which you give instructions about your health care if, in the future, you cannot speak for yourself. You can give someone you name (your “patient advocate” or “agent” ) the power to make health care decisions for you. You also can give instructions about the kind of health care you do or do not want. This the document that gives authority for end of life medical decision making.
If you cannot make or communicate decisions because of a temporary or permanent illness or injury, the Advance Directive helps you keep control over health care decisions that are important to you. In your Advance Directive, you state your wishes about any aspect of your health care, including decisions about life-sustaining treatment, and choose a person to make and communicate these decisions for you.
A word of caution: A statutory “Designation of Patient Advocate” is designed for end-of-life treatment decisions. It requires the examination and determination by two doctors that you cannot make medical decisions yourself. That’s why this form is not good for management of routine medical matters.
These documents may be referred to as a Healthcare Power of Attorney, a Designation of Patient Advocate, Health Care Advance Directive, an Advance Directive or Living Will. You may correctly understand that because they have different names they are not the same. Each has a particular role to play in medical matters.
If we are speaking about a true “Living Will” then the answer is yes. Technically a Living Will, or Advance Directive, only addresses end of life medical treatment.
The Healthcare Power of Attorney is not limited to cases of terminal illness. Whether it is “immediately effective” or “springing” the document authorizes the Agent to handle any matters that may come up. These may include appeals of insurance coverage denials, making an appointment for a specialist, reviewing complicated medical information with a doctor or hospital.
End of life treatment options are controlled by the Advance Directive. You will want your wishes to be known about whether you should be kept alive by machines. By executing an Advance Directive Healthcare Power of Attorney, you ensure that the directions that you have given your patient advocate will be carried out in the event you are not able to give instructions.
In case you ever become incapacitated, even temporarily such as after surgery, it is important that someone has the legal authority to communicate your questions and instructions concerning medical treatment. You may want somebody to talk to your doctor or a specialist about your treatment plan. Many people say they just don’’t understand why the doctor is recommending a particular treatment.
If you become incapacitated and a serious medical decision must be made, your family will have to go to the probate court and have the judge appoint a “guardian.” This process can be expensive and can take time. In addition, the judge may not appoint the person you would choose. The judge may appoint a stranger, whom you will pay for their service. Finally once you have a guardian you and the guardian will be under the supervision of the probate court.
Since your patient advocate is going to have the authority to make medical decisions for you in the event you are unable to make such decisions yourself, it should be a family member or friend that you trust will follow your instructions. Before executing a Healthcare Power of Attorney, you should talk to the person you want to name as your patient advocate about your wishes concerning medical decisions, especially life sustaining treatment.
First you appoint an Agent who will assist you when you wish. Second, you give the Agent instructions that state the Agent’s scope of authority.
Your instructions to the agent must in a “clear and convincing manner” identify when medical treatment will be withheld. You may not delegate decision making without any guidelines, saying for example “my patient advocate knows my wishes.”
No. You may give instructions to your Patient Advocate orally, but written is better. If there is any question or disagreement about your instructions the probate court will have to decide the question. For example, two people may recall you saying different things about medical treatment. The Michigan Supreme Court ruled in such a case that when a man said he did not want to be kept alive by machines, he was referring to a coma state. It happened that he had an accident and was kept alive by machines and could not communicate his wishes. But he was not in a coma. The court did not allow termination of the medical treatment.
Yes. Most forms, whether provided by hospitals or by most attorneys, do not allow the agent to act until two doctors examine and certify that the patient cannot make informed decisions. That is very unhelpful for the elder who is relying on a spouse, friend, or child to handle routine medical matters. In addition most do address psychiatric treatment or consent to psychotropic medications. A person who has a history of treatment for mood disorders will want to have an Agent authorized to accept or reject treatment, to accept or reject hospitalization. In cases of dementia thought or mood problems are a common. Surviving spouses often experience debilitating depression. If the document does not specially authorize mental health treatment the Agent has no authority to consent or oppose.
No. The mere diagnosis of any condition that limits a person’s ability to make decisions does not remove the person’s ability to make legal documents. The legal issue is whether the person has “capacity” to understand what they are doing. For example, can a parent say and understand “I want my daughter to speak to the doctor for me and help me make medical decisions.” If so, then the parent has the “capacity” to appoint the daughter as agent. It is possible to have the capacity to appoint an agent and not have the capacity to make an advance directive or Living Will. End of life medical treatment decisions are complex and hypothetical. That is why it is very important to take care of the document as soon as possible on the diagnosis of a chronic degenerative condition.
The conditions of effectiveness are stated in the document. A Healthcare Power of Attorney may be immediately effective or it may “spring” into effect upon certification of two doctors that you are unable to participate in medical decision making . For example, you may require medical treatment and are unable to communicate your wishes. Your Agent or Patient Advocate would make the necessary decision. But, could they do so or would you first need to arrange two doctors to examine you and certify you cannot make the decisions?
Yes, you can cancel or change your Health Care Advance Directive by telling your agent or health care provider in writing of your decision to do so. Destroying all copies of the old one and creating a new one is the best way. Make sure you give a copy of the new one to your physician and anyone else who received the old one.
If you had to have the probate court appoint a guardian for you then you will have to go back to court and have a hearing to determine if the judge will cancel the guardian’s appointment.
If your agent is acting under a Healthcare Power of Attorney then You will again make your own decisions as you choose.
If your agent is acting under an Advance Directive, which means the authority sprung into effect on the two doctors’ certification, then you may need to doctors to certify you are again unable to participate in medical decision making.
You should have the original document. Your patient advocate should have a copy and medical office where you receive treatment should have a copy with your medical records.
Upon certified improvement of your condition, revocation, court order of divorce, annulment or separate maintenance, and upon death.
Easy. Give us, Jim Schuster, Certified Elder Law Attorney’s office, a call at (248) 356-3500. Make an appointment and come on in. We’ll be very happy to help you.
Medicaid For Single Seniors
Hello representative of a nursing home resident: I’m Jim Schuster, Certified Elder Law Attorney. This page is for the person who has a parent or friend in the nursing home and is worried about financial ruin because of the crushing bills. Worry no more. We have helped hundreds of families maintain their financial security and get good care in the nursing home. First some news I know you will like:
You can have a money back guarantee. For a small extra fee we will give you your money back if we do not get your application approved. It is that simple. You can have no risk. See our money back guaranty page. More
Yes. Medicaid is the result of laws that Congress passed. It surprises some people, but the law does provide for asset protection. Like the income tax, Congress left ways for a person to save money in the Medicaid law. A Single applicant can save 70 to 90% of assets. Medicaid will pay the bill after the resident has spent down his or her money to $2,000.00. We help you save as much as we can out of the rest. You have probably heard you cannot save anything, it must all go to the nursing home. Many people are free to give advice. Let me ask you a question about these people. Are they attorneys? Have they gone through law school and sat for a bar exam? Have they taken the extra step to be tested and certified as an elder law attorney? Can you sue them for malpractice if they are wrong?
Even if your loved on is in the nursing it is not too late to act. Here’s how:
First: secure a bed in your chosen nursing home. Almost every nursing home in Michigan participates in Medicaid. Some claim to have a two year wait for a Medicaid certified bed. Not true. However some nursing homes do have a limited number of Michigan Medicaid approved beds. When these open they are first offered to residents who have already applied for Medicaid. Until a resident is in a Medicaid bed, Medicaid will not pay the bill even if the application is approved. The resident will be transferred out of the nursing home to another that has an open Medicaid bed. So how does a resident apply for Medicaid and pay for until a Medicaid certified bed opens? You need a plan that complies with Medicaid rules and allows for payment of the nursing home until a Medicaid certified bed opens. You need an elder law attorney to make this work. Whatever is left will be available for savings, also known as “asset protection.”
Second: sensible spend down. Buy things that make good sense. Take care of your family member in the nursing home. Purchase personal items that will be needed and much appreciated. Medicaid only allows $60 per month for personal items, so stock up on clothes, shoes and grooming needs. Prepay the funeral and burial of the resident. Medicaid provides nothing. The resident may also purchase burial spaces for family members.
Repair or improve the resident’s property. Make sensible repairs or improvements to the home. You do not need to overspend. Look for expenditures that will improve the value or the salability of the home. Replace the worn out carpet, freshen up the walls with new paint and update the kitchen. Be sure to get estimates and keep a complete record of work done and charges. The same goes for the car. You and other family members may be paid for these services but only if your proof meets Michigan Department of Human Service standards. Contact us for a consultation to be sure you are on the right track.
The Michigan Medicaid annuity can be used when there is no other way to save money. Note that if the probate court has appointed a guardian or conservator, you will have to have a public hearing in probate court to see if the judge will approve purchase of the Medicaid annuity. As a rule of thumb the Michigan Medicaid annuity can save more than half the remaining money.
We offer other strategies such as DRA compliant promissory notes that work in special cases and some that we can only cover in consultation because of the changing rules and application. With a combination of strategies we can save as much as 90% of the money that would otherwise go to the nursing home.
No. With few exceptions, nursing homes in Michigan participate in Medicaid’s guaranteed payment program. It is illegal for a nursing home to segregate residents for whom Medicaid is paying the bill from other long term care residents. It is permissible to have short-term Medicare patients in their own area. If you spot a discrimination in care contact us or the Michigan Long Term Care Ombudsman immediately.
You need not spend all the residents money on nursing home bills. Congress has provided residents with the right to save in the Medicaid laws. As we have observed the rights are not self operating. You, the resident’s patient advocate, must act. You must exercise those rights, nobody else will. You must seek professional advice to access all the protections Congress granted. Your resident can have the savings he or she worked so hard for go for the benefit of family. Just give me a call at 248-356-3500.
All the best,
Jim Schuster
Note: this article is based on the hypothetical situation of a child applying for Medicaid for a parent who is in a nursing home. The comments below may be applied to other situations. In any case you must first have the authority to take any action described below. A complete elder law – not estate planning – power of attorney should give you the authority you need.
Yes. Medicaid is the result of laws that Congress passed. It surprises some people, but the law does provide for asset protection. Like the income tax, Congress left ways for a person to save money in the Medicaid law. A Single applicant can save 60 to 90% of assets. Medicaid will pay the bill after the resident has spent down his or her money to $2,000.00. We help you save as much as we can out of the rest. You have probably heard you cannot save anything, it must all go to the nursing home. Many people are free to give advice. But, are they attorneys? Are they responsible if they give you wrong advice? Have they gone through law school and sat for a bar exam? Have they taken the extra step to be tested and certified as an elder law attorney? Can you sue them for malpractice if they are wrong?
Even if your loved on is in the nursing it is not too late to act. Here’s how:
First: secure a bed in your chosen nursing home. Many nursing homes claim they are only a post-hospital, short term care facility. But, if they are licensed as a nursing home and offer post-hospital Medicare rehab services, then they are a nursing home. They cannot limit their residents to short term stays. Residents have the right to stay in the nursing home as long as they need nursing home level of care and they arrange to have the bill paid.
Almost every nursing home in Michigan participates in Medicaid. Some claim to have a two year wait for a Medicaid certified bed. Not true. However some nursing homes do have a limited number of Medicaid certified beds. When these open they are first offered to residents who have already applied for Medicaid. Until a resident is in a Medicaid bed, Medicaid will not pay the bill even if the application is approved. If no Medicaid certified bed is open the resident will be transferred out of the nursing home to another that has an open Medicaid bed. It is up to the Patient/resident’s Advocate to be sure that the resident is transferred back when a Medicaid certified bed opens.
But, what if you believe that the movement to another nursing home and back again will be too traumatic for your patient? The best answer is to apply as early as possible and have a fund to private pay until a bed opens. That kind of “Medicaid planning” requires the assistance of an experienced elder law attorney.
Second: exercise sensible spend down. After you have secured the nursing home of your choice you are ready to allocate the remaining funds for “spend down.” First priority in spending is to buy things that make good sense. You need not spend on medical care. Take care of your family member in the nursing home. Purchase personal items that will be needed and much appreciated. Medicaid only allows $60 per month for personal items, so stock up on clothes, shoes and grooming needs. Prepay the funeral and burial of the resident. Medicaid provides nothing. The resident may also purchase burial spaces for family members.
Repair or improve the resident’s property. Make sensible repairs or improvements to the home. You do not need to overspend. Look for expenditures that will improve the value or the salability of the home. Replace the worn out carpet, freshen up the walls with new paint and update the kitchen. Be sure to get estimates and keep a complete record of work done and charges. The same goes for the car.
You and other family members may be paid “fair market value” for services but you will need to surmount the Michigan presumption gratuitous service and the Medicaid hostility to paying family members for services. Payments are deemed to be divestment of assets unless you can fall in an exception. In other words, your proof must meet Michigan Department of Health and Human Service standards. Contact us for a referral so you can consult with an experienced Elder Law attorney to make sure you are on the right track.
The Medicaid annuity can be used when there is no other way to save money. Note that if the probate court has appointed a guardian or conservator, you will have to have a public hearing in probate court to see if the judge will approve purchase of the Medicaid annuity. As a rule of thumb the Michigan Medicaid annuity can save more than half the remaining money. Once again, this an application strategy to save assets. Do not purchase an annuity unless you are in the process of preparing an application.
There are other strategies such as DRA compliant promissory notes that work in special cases and some that we can only cover in consultation because of the changing rules. With a combination of strategies it is possible to save as much as 90% of the money that would otherwise go to the nursing home. Remember the first point: make sure you have the nursing home you want lest you find your patient transferred because there are no Medicaid certified beds available. And if transfer is a possibility go back to the first point about a patient’s rights in the event of transfer.
No, you do not. The nursing home has a duty under the law to help you, if you ask. Indeed a nursing home is under strong financial pressure to be sure you get the application in and approved. After all, if your application is successful they get paid. But, the nursing home does not have the authority to review your application. That is a confidential matter between you and the Department of Health and Human Services (Medicaid). The nursing home does not have the authority to tell you how to spend your money.
However, when spending the money of another, here a relative or a friend in a nursing home, you must be careful to avoid prohibitions against financial elder abuse. Following the advice of an Elder Law attorney is good protection.
No. With few exceptions, nursing homes in Michigan participate in Medicaid’s guaranteed payment program. It is illegal for a nursing home to segregate residents for whom Medicaid is paying the bill from other long term care residents. It is permissible to have short-term Medicare patients in their own area. If you spot a discrimination in care between private pay and Medicaid long term care residents contact the Michigan Long Term Care Ombudsman immediately.
You need not spend all the resident’s money on nursing home bills. Congress has provided residents with the right to save in the Medicaid program. As we have observed the rights are not self operating. You, the resident’s patient advocate, must act. You must exercise those rights, nobody else will. You must seek professional advice to access all the protections Congress granted. Your resident can have the savings he or she worked so hard for go for the benefit of family. Just give us a call at 248-356-3500 and we can connect you with an experienced Elder Law attorney.
All the best,
Jim Schuster
A Collection of Plausible, But False, Propositions
By Jim Schuster, Certified Elder Law Attorney
Southfield and Farmington Hills, Michigan 48150 (248) 356-3500, Copyright 2019
Medicaid is one of those programs most people do not know about for the very simple reason that the only time they will need it is to pay the nursing home for long term care. When that happens they need information now. So, folks will ask the nursing home employees, friends and neighbors and almost anybody else about Medicaid. And, they very often get misinformation. Here are some of the most common “myths” about Michigan Medicaid.
1. Myth: “Medicare will cover my nursing home bill.”
The Truth: Medicare pays for a maximum of 100 days of skilled care. The requirements for this post-hospital benefit are: 1) hospital admission; 2) for at least three days; and 3) discharge with a skilled care order. The benefit is not automatic. During the period the patient is evaluated for continuing need for skilled care. Many do not get the full 100 days. Premature terminations can be appealed. A $148.00 per day co-pay is usually picked up by Medigap supplemental insurance or by a Medicare Advantage plan that includes the co-pay benefit (not all do). After discharge from skilled care the nursing home resident may pay out of savings, by long-term care insurance, or Medicaid.
2. Myth: ”Only substandard nursing homes participate in Medicaid.”
The Truth: Only a few Michigan nursing homes do not have Medicaid certified beds. The vast majority do. Experiences teaches that nursing homes offering Medicaid certified beds are no different from any other. The true measure of good care is not the payment source but the people who provide care and the patient advocate who monitors care.
3. Myth: “I will get better care if I private pay.”
The Truth: It is illegal to give better care to private pay patients than to Medicaid recipients or to discriminate against Medicaid patients. There may be no “Medicaid wing” and no public identification of a “Medicaid bed.” Typically, the staff does not know which patient is a Medicaid recipient.
4. Myth: “If I enter a nursing home as a private pay resident, I must use my money to pay the nursing home before I can get Medicaid.”
The Truth: Some nursing homes try to make you believe that you must private pay for a period of time before applying for Medicaid. Such a requirement is against the law. The resident -acting through his agent – can use the money for any bill or purchase – provided it is not “divestment” of assets or gifting to others. He may apply for Medicaid as soon as he is eligible, which might even be the same month.
5. Myth: “I can only ‘spend-down’ my assets on medical or nursing home bills.”
The Truth: Medicaid requires the applicant to “spend down” assets to $2,000. The spending need not be on nursing home care. You do have spending and saving options. Informed people seek advice from an elder law attorney to decide if they wish to have Medicaid pay the bill before having spent a significant part of their assets.
6. Myth: “I can find out all I need to know about Medicaid from the nursing home or the Medicaid agency.”
The Truth: The Medicaid laws, rules and regulations are very complex and counter-intuitive. The Medicaid law was written by Congress, after all! The nursing homes and Medicaid agencies do not have lawyers to interpret the law in your favor. The workers’ job is to process the application, not give advice.
7. Myth: “I have to lose my home and everything I own to get Medicaid assistance.”
The Truth: A person is permitted to own “exempt property” and be eligible for Medicaid. This includes a home, even if return is unlikely, and a car, even if the patient will not drive. Some assets are simply not counted by Medicaid, at application. In addition, the “community spouse” has the option of keeping all of the assets.
However: While Medicaid does not require sale of the home at application that does not mean your home is not at risk. After death of the Medicaid recipient Michigan will want to “recover” the cost of care from the recipient or spouse’s estate. Avoiding probate becomes even more imperative since that avoids the state claim. You must get advice from an elder law attorney with knowledge about the Medicaid rules. Otherwise you can lose it all. The bottom line is, you don’t need to lose everything to get your Medicaid benefits.
8. Myth: “I can keep all of my separate property and my inherited property when my spouse gets Medicaid.”
The Truth: When a married person applies for Medicaid, the Medicaid agency considers assets owned individually, jointly by both spouses and assets owned by a spouse and another person. This includes second marriages, even where spouses have pre-nuptial agreements promising to keep assets separate and unavailable to each other. It also includes property not the result of marital enterprise, inherited property for example.
9. Myth: “If I put my property into my spouse’s name, I will be eligible for Medicaid.”
The Truth: All assets are counted, regardless of which spouse is “the owner.” If either spouse’s name is on the property, it is included. This includes, by way of example, IRAs, inheritances, property jointly owned with children, and insurance policies.
10. Myth: “I must spend half of our assets before I can get Medicaid for my spouse.”
The Truth: A community spouse can keep half, up to $120,900 (2017), in countable assets. Any more than that will either be spent or converted into non-countable assets. This is the “spend down” process. The community spouse can save the “spend down” by putting the excess assets in a “sole benefit trust” and the money will be available only for the community spouse’s financial security. Call us at 248-356-3500 for details.
11. Myth: “I can hide my assets and become eligible for Medicaid.”
The Truth: Intentional misrepresentation in a Medicaid application is a crime and can be costly. The IRS shares any information concerning income or assets you have with the Medicaid agency. These reports include interest income and the sale of stocks or bonds. You or whoever applied may have to pay Medicaid back to avoid prosecution. The point is you cannot hide assets but you can shelter them. Call us for more.
12. Myth: “I can give away $10,000 per year under Medicaid rules.”
The Truth: This is a rule under federal gift tax law, which refers to how much per year a person may give to another without liability for gift tax. This figure used to be $10,000 per year. It is adjusted for inflation and it is $15,000 per year now. Since taxpayers have over $11 million lifetime exemption for the federal estate and gift tax few need to be concerned about gift tax liability. The gift tax has nothing to do with Medicaid.
13. Myth: “I can’t give anything away and get Medicaid.”
The Truth: The Medicaid rules provide that a person can be disqualified for giving away property. It depends on what is given away, to whom, and when. So, again, it is complicated. Some asset transfers are not penalized under the Medicaid rules. Some Medicaid strategies involve giving away assets.
14. Myth: “I have to wait 5 years after giving anything away to get Medicaid.”
The Truth: Five years is the Medicaid “lookback” period. The applicant must disclose all asset transfers made within the lookback. Transfers of property, including sales for less than market value made during the lookback period may cause a divestment penalty period. During the penalty period Medicaid will not pay the nursing home even if the applicant has no money. The penalty period for a transfer could exceed 5 years. There is no disqualification or “penalty period” for some transfers Most divestment problems can be fixed or “cured.”
15. Myth: “My power-of-attorney has the power to do whatever I want, if I ever need Medicaid.”
The Truth: Most powers of attorney do not grant asset protection authority and in fact the default is no authority to shelter assets. Authority to make gifts must be expressly stated in the document. A complete general durable power of attorney, made as a part of careful and considered elder law life-plan, will allow all needed action. Medicaid planning requires a broad and comprehensive grant of agent authority. Necessary powers include access to retirement accounts, creation or dissolution of trusts; sale or transfer assets from your name or your trust; purchase exempt or income producing assets; compensation of family members; and the power to make gifts. Without these expanded powers, your agent is limited to spending your money on your bills and selling your assets to generate cash to pay your bills.
16. Myth: “My income will be used to pay my spouse’s nursing home bill.”
The Truth: The community spouse is not required to contribute any of his or her income to the cost of care and may be allowed some or all of the nursing home spouse’s income.
17. Myth: “Medicaid requires all of my spouse’s income must be used to pay the nursing home.”
The Truth: Medicaid allows the community spouse a minimum monthly income of $2,057.50 (2019). That means if the spouse’s income is less than this, Medicaid will allow the nursing home spouse’s income to the community spouse to meet this number. In addition to this allowance, the community spouse may be entitled to an “excess shelter allowance” if the cost of maintaining the home exceeds the “shelter standard.” Need more? The at-home spouse’s allowance may be increased by an administrative fair hearing or by an order of the probate court.
18. Myth: “I know about Medicaid because I put my mother in a nursing home years ago.”
The Truth: Medicaid rules change every year. The agency posts updates every quarter. One thing you can rely on is that the rules change and almost never for the better. You need advice from an attorney who is up to date.
19. Myth: “I can do nothing for my family, I have to spend it all.”
The Truth: Medicaid allows family members to be provided for as a part of “spend down.” For example, parents may arrange for the transfer of property to, or the creation of trusts for, disabled children. An applicant may transfer the home to a child live-in caregiver under specified circumstances. Children may be paid for commercially valuable services. These transfers are not “divestment.” There are other expenditures that benefit the family as well.
20. Myth: “All attorneys know the Medicaid law.”
The Truth: Most attorneys focus or specialize their practice on a few areas of the law. Very few are familiar with Medicaid. See your certified elder law attorney.
Bonus! 21: “I can do it myself.”
The Truth: No matter how much research anybody does, including attorneys, their first application Always has mistakes. Mistakes run from what was done wrong before spend down, what was done wrong in spend down, what was done wrong on the application, what was not included with the application, taking too long to get the application in and finally not recognizing a mistake of an inadequately trained Medicaid worker.
I think you can see that Medicaid is a complicated, contradictory and confusing program that you need to master immediately. Your best, safest and cheapest course of action is to hire an experienced elder law attorney attorney who knows the law and local Medicaid office policies. A good, safe choice is an attorney who is certified as an Elder Law Attorney by the National Elder Law Foundation. The Foundation’s website is www.nelf.org. If the attorney is not certified ask how long the attorney has worked in this area, how many people he or she has advised about Medicaid, and what articles he or she has written about the Medicaid Program.
There is a simple moral. Get good competent advice and save your time, money and a boat-load of stress!
All the best,
Jim Schuster, Certified Elder Law Attorney