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The Medicaid Maze
Gladys Hardin never expected to live to 97 or to outlive her savings, which were solid.
When the widowed homemaker couldn’t live alone, her daughter and son-in-law, Jane and Karl Bren, invited her to live with them.
After about four years, Hardin needed assisted living, which she paid for out of pocket for about two years. Nursing home care followed.
She ran out of money in 18 months.
By then, Jane Bren had researched Medicaid, the joint state-federal health insurance for the poor. When her mother’s assets sank to the qualifying $2,000, they applied. AARP says Medicaid pays for about 70 percent of nursing home residents.
PLAN EARLY FOR MEDICAID
Nancy Lentz, family care coordinator at the Alzheimer’s Association Greater Richmond Chapter, says families can plan legally for Medicaid — and “the sooner the better.”
Medicare, the federal health insurance for most over 65, covers up to 100 days of eligible post-hospitalization rehabilitation and skilled nursing.
Medicaid can pay for at-home and nursing home care for eligible participants who can’t perform two or more of the six Activities of Daily Living — eating, bathing, toileting, dressing, transferring and continence. It doesn’t cover assisted living, the care that bridges home and nursing home care.
Medicaid law and state regulations are extremely complex. Most people with assets should consult with an elder law attorney to plan for late-life care for themselves or loved ones.
THE HOW-TOS OF MEDICAID
The most recent Market Survey of Long-Term Care Costs by MetLife’s Mature Market Institute shows that a nursing home private room in Richmond averages $75,920 annually. Assisted living averages $42,696. What to do?
HELP. Contact the Virginia Insurance Counseling and Assistance Program (VICAP) at 804-343-3014. This free confidential assistance also will help you apply for Medicaid.
You can also get information or help with applications at the Department of Social Services in the locality where the Medicaid applicant lives: Chesterfield, 804-748-1100; Hanover, 804-365-4100; Henrico, 804-501-4001; Richmond, 804-646-7212.
“I think it’s probably advisable” for those with assets to inform themselves of potential pitfalls before applying for Medicaid, said Kathryn Pryor, an elder law attorney at the Virginia Poverty Law Center.
Google this introduction: “When Does Medicaid Pay for Long-Term Care?” by James W. (Jay) Speer, executive director of the Virginia Poverty Law Center.
PLAN. Reputable elder law attorneys who specialize in Medicaid can help legitimately and ethically plan for eligibility. This is especially important if there is a spouse and/or a disabled child still at home.
“For the most part, people are just dealing with a crisis,” said Paul G. Izzo, an elder law attorney. But every action needs to be properly executed and tailored to a specific person and situation. The timing and choice of strategies must be in accordance with federal and state laws and regulations, Izzo said. Medicaid has a 60-month “look back” period when any financial or legal change in assets will be examined.
Available planning options include certain irrevocable income-only annuities; transferring title of your home to a live-in child who supplies care for two years when you otherwise would be in a nursing home; spending assets on allowed expenses; certain irrevocable trusts with no life interest; and Virginia Long-Term Care Partnership insurance.
APPLYING. Before you apply, have things in order, Izzo added. Keep a paper trail for everything you’ve filed. Hand-deliver the application to your local social services office, and get and keep a stamped time/date receipt.
INSURANCE. A long-term care policy generally covers home care, assisted living and nursing home care. Such policies are designed to help pay for disabilities and late-life care and to prevent running out of money. These policies cost more when you’re older, but they can help avoid the need for Medicaid.
Contact Betty Booker, a retired Richmond Times-Dispatch reporter/columnist, at
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Legal Options for Help in Medicaid Planning
CERTAIN IRREVOCABLE, INCOME-ONLY ANNUITY. This annuity must be in the non-institutionalized spouse’s name to preserve the annuity value, which otherwise would be exhausted for nursing care. Such a “Medicaid annuity” must immediately issue payments in equal monthly amounts, be nontransferable and be based on annuitant’s life expectancy. The timing of purchase is critical.
SPENDING. Allowed spending before applying to Medicaid includes paying debts, buying a car, repairing a primary residence and purchasing a Medicaid-compliant funeral contract.
EXEMPT TRANSFER. A parent may transfer a home’s title to a child who has lived there at least two years as the nursing-home-eligible parent’s full-time caregiver. Objective third-party verification is among the requirements.
CERTAIN IRREVOCABLE TRUST WITH NO LIFE INTEREST. Assets transferred to this trust, from which you’ll receive no income, won’t be counted as assets by Medicaid. A five-year “look back” rule applies.
VIRGINIA LONG-TERM CARE PARTNERSHIP. A special long-term care insurance policy may protect assets equal to the amount the insurer pays for your care for purposes of determining Medicaid eligibility. This could help protect resources needed by a surviving spouse and other heirs.
Sources: Paul G. Izzo, elder law attorney; Chip Graumlich, independent insurance agent
--Betty Booker
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