In a perfect world, when seniors who grow old they would have sufficient help from family members and friends to allow them to stay in their homes and live with dignity. Unfortunately, this is not always the case. A long term stay in a nursing home is extremely expensive. This can wipe out the savings a family has accumulated over a lifetime. It can causes the nursing home to place liens against the family’s house and destroy the equity in the house.
Nursing home care is sometimes necessary. Statistics show that almost half of all seniors at sometime during their life require nursing home care. Nursing homes in the metropolitan New York area cost approximately between $10,000 and $15,000 per month. This is a huge expense for most families. Families can pay for nursing home care from savings. There is also the alternative of having long term care insurance which is also called catastrophic medical insurance.
Another alternative is qualifying for Medicaid benefits. Individuals who qualify for Medicaid benefits can have Medicaid bear the cost of the nursing home care. Medicaid’s original intention was to provide medical care for poor people. The Medicaid program first came into existence in 1965. It has been changed, modified and altered many times since then.
Seniors should be careful not to mix up Medicaid and Medicare. Medicare is a government sponsored program that provides medical insurance for our senior population. Seniors may qualify regardless of how much money they have, whether they are working or have homes or other fixed assets.
Medicaid is a program that has a "means test". One must meet the financial requirements of the means test to qualify for Medicaid benefits.
Under certain circumstances, Medicare can pay up to 100 days for rehabilitation care. The large majority of individuals spending more than 100 days in a nursing home seek to have Medicaid bear the cost for this care. The Medicaid program is funded by a combination of funds from federal, state and local governmental entities. In New York State, the program is administered by the county that you reside in or the City of New York.
There are very complicated rules and regulations concerning an individual’s ability to obtain Medicaid benefits. There are significant issues with regard to preserving a families’ assets that should be dealt with by an elder care attorney prior to submitting a Medicaid application. Elder Care Attorneys have training and experience in dealing the myriad problems involved with Medicaid applications.
Generally speaking, to qualify for Medicaid benefits for nursing home care, an individual must have "spent down" his or her assets. The individual should have no more than $13,500, as of 2009, left in assets. In addition, there are exemptions related to prepaid funeral plans and life insurance.
Spousal Protection Provisions
The Medicaid law has "spousal protection provisions". This provision’s purpose is to avoid forcing the community spouse (the party that is not in the nursing home) to spend all of their assets on their spouse who is in the nursing home. Within the New York metropolitan area, the community spouse can retain their home and between $74,820 and $104,400 in other assets.
The community spouse may also retain $2,610 of monthly income and the spouse who is receiving the nursing home care may keep $50 per month. Unfortunately, the death or disability of the community spouse may cause all assets of both parties to be forfeited.
Often seniors come to our office and say "I want to give all of my assets to my children" or "I want to hide all my assets before I apply for Medicaid". This is not the appropriate way to deal with the situation. These types of transfers will backfire. The children may have financial difficulties of their own. Issues such as divorce, loss of employment, bad financial investments, bankruptcies and car accidents are some of the problems that impact on the assets you have given to your child. Your children’s creditors and his or her spouse, in a divorce, may be able to seize the assets you transfer to your children for your protection.
Elder Care Planning
One of the elder care planning methods commonly used to make individuals Medicaid eligible involves the preparation of irrevocable trusts. These trusts allow you to use the income from your investments or your property for your benefit while the assets are sheltered from nursing home expenses. These types of trust also protect your assets from your creditors. There is currently a look back period of up to five (5) years that effects how trusts are evaluated by Medicaid. This five (5) year look back period went into effect in January, 2006, when President Bush signed a law commonly known as DRA 2005 which was a Deficit Reduction Act that effected various types of governmental benefits including Medicaid and Medicare.
New York Elder Law Attorneys
The key to maintaining one’s assets when facing nursing home expenses is to consult an experienced elder law attorney. Careful planning can preserve a family’s assets. You should never undertake to submit a Medicaid application without obtaining legal advice from a qualified elder care attorney. Our New York City and Long Island Elder Law Attorneys are available to meet with you and answer your questions.
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