October 2009 Archives

Don't Let Medicaid Take Your Home!

Can the state take away your home? I want to tell you a sad but true story that happened just last week. Only the names have been changed to protect people’s privacy.
Robert called my office in a panic. His wife of 50 years had died, after spending the last couple of years in a nursing home. They had spent down their life savings until nothing was left, then his wife had gone on Medicaid.After his wife’s death, Robert had signed two contracts, one selling his current home, and the other buying a trailer which was to be his new residence. The sale price for his current home was about $35,000, and the proceeds were needed to pay for his new property.Both deals were set to close the next week. So why was Robert in a panic? He had just been told that he wasn’t going to be able to get the $35,000 from the sale of his home. The money would have to be placed in escrow, because the State had recorded an Affidavit against the property saying that Robert owed the state more than $100,000 for his wife’s Medicaid. And since he wouldn’t get the money from the sale of his home, he couldn’t buy the new property.So here’s what Robert was facing: in several days his home would be sold, and he’d have to move. But he couldn’t get the money to pay for his new trailer, so his purchase would fall through. He’d have no money, and no place to live. All because his wife went on Medicaid.There was only one problem: The state’s action was illegal. The State of Ohio could not legally take Robert’s home, or the home’s sale proceeds, while Robert was alive. Ohio has an estate recovery law that allows the state to take a person’s home and sell it in order to reimburse the State for previous Medicaid payments. But under both state and federal law, that cannot be done until you’ve died. And Robert’s case demonstrates the reason why: we don’t want people thrown out onto the street just because a spouse became ill and needed nursing home care.Now, Robert’s stay has a happy ending. Our office called the Attorney General’s office and explained that the state was acting illegally. And the problem was immediately corrected. Robert got his money and bought his new trailer.But what about all the “Robert’s” out there whose homes are being wrongfully threatened? And who don’t know to call a lawyer?Don’t let this happen to you. Don’t let the state illegally take your house!

Medicaid Coverage For Expensive Nursing Homes At Risk in OHIO--The Rest of the US Better Watch Out!

If you or a loved one must enter a nursing home, be ready for some "sticker shock." The monthly cost for nursing home care can easily wipe out your life savings at a rate of $6000 to $9000 per month. The one governmental program available to cover nursing home costs is Medicaid. It is a federal health care safety-net program, administered by the states, to provide coverage for the middle class for long-term care costs. As a welfare program, it is hard to protect any of your life savings and receive Medicaid benefits.
Bank accounts, stocks, bonds, IRAs and even the cash value of life insurance policies are countable assets. A single person may keep only $1500 of assets in order to qualify for Medicaid. A married couple can keep a home as long as one spouse is living in it, and one-half of the countable assets, up to a maximum of just under $110,000 ( in 2009, this amount is indexed annually). The excess assets have to be "spent down." In the past, it was relatively simple to keep and protect these allowable assets from Medicaid. However, the state of Ohio has Medicaid regulations that make it terribly hard to obtain benefits in the first place and then pass the allowable assets on to children or other heirs.For example, Medicaid lets a married couple keep a home as long as one spouse is living there. However, if at the time the first spouse enters the nursing home, the couple has their home in a revocable living trust (very common for probate avoidance and perfectly legal), the house is NOT exempt and becomes subject to spend-down. Additionally, assuming Medicaid is available for the nursing home spouse, if the healthy spouse dies first and the house is left back to the ill spouse, it will be lost to nursing home costs. Under previous Medicaid law, in order to protect the house, we disinherited the ill spouse and left the house to the children, without a problem. Now, Medicaid takes the position that the healthy spouse could have and should have left the home to the ill spouse. Therefore, if we use the same planning, when the home passes to children, it is as though the ill spouse GAVE AWAY the home and he or she is disqualified from getting Medicaid benefits for a period of time because a gift was made at death. In fact, Medicaid now even forces the house to remain in the healthy spouse's sole name as long as the ill spouse is receiving Medicaid. Any attempt to change the title during the lifetime of the ill spouse will create a gift at the time of the title change and disqualify the ill spouse from Medicaid immediately!Another punitive regulation is the procedure when a mistake is made in the application process. Mistakes are common because, typically, the person in the nursing home cannot apply on his own. A family member is handling the application. In the past, mistakes were handled simply and easily. The caseworker allowed the spend-down of any additional funds and Medicaid continued. Now, when a mistake is made, the mistake is presumed intentional, Medicaid fraud has occurred and the person can be turned over to the prosecutor's office for prosecution.Medicaid planning is very complex. Note that this article includes OHIO rules, and every state is different. In order to protect yourself and your assets, you need to consult an attorney who is well versed in Elder Law issues, including Medicaid eligibility.  If you need help in Ohio, or for more information, please see our website at http://www.budishandsolomon.com/

What Medicare pays for Alzheimer's

I saw this article and thought it was important information for people to know. Don't get surprised by what Medicare WON'T pay if you have a loved one with Alzheimer's in a medical facility.http://www.gilbertguide.com/articles/avoiding-surprises-services-covered/

Senate Finance Committee completes markup of America's Healthy Future Act bill. Includes Elder Justice Act, http://ping.fm/itxkx

Make sure you protect your special needs child!

You're taking care of your disabled child and hopefully, you?re doing okay. But what will happen when you're gone? If you plan ahead, you should be able to make sure your child is protected. Is it enough to leave an inheritance for your child? No, not if you want to protect your child after you?re gone. There are two big problems with leaving money or property to an adult child with disabilities.First, can the child manage the inheritance? If the disability is mental or emotional, that could be a major problem. If the disability is physical, managing money could still be a problem, particularly if the child is not mobile!Second, is the inheritance enough to provide for all of the child's needs for life? If not, leaving money outright to a disabled child may be a bad idea. Here's why: if your disabled child has money, he or she cannot obtain any public benefits, such as Medicaid, SSI or food stamps. The child will have to spend the inheritance until it's gone. Once the inheritance has been used up, then the child may receive those public benefits. But public benefits don't cover a lot of comforts of life. They are very basic. For example, they may pay for a nursing home, but not for other housing options. They may pay for basic food needs, but not for transportation, telephone, or cable.How can we protect a disabled child? For many people, the answer is a special needs trust. With this trust, you can leave an inheritance for a child and place someone you trust in charge of managing the money. Perhaps the money should be managed by another one of your children, or by another trusted family member, or even a trusted friend. If there?s no one, you could name a professional manager, such as a bank trustee.Any other benefits to a special needs trust? Yes. A Special Needs Trust can be used to preserve a child's eligibility for public benefits. So even though you've left an inheritance, the child can still get Medicaid, SSI and food stamps.And since public benefits only provide very basic support, the trust funds can be used to supplement the public benefits, providing more of the comforts of life. It's a wonderful way to protect a disabled child.Is a special needs trust just the same as a regular living trust? No. A regular trust will not protect a disabled child adequately. A Special Needs Trust is a very specialized trust that must satisfy a number of legal requirements for it to work. Where do we get a special needs trust? A Special Needs Trust is only part of the planning that may be needed to protect a child with a disability. To get help, you should seek the services of a lawyer experienced in dealing with the needs of people with special needs. Make sure you have prepared for the day you'll no longer be able to care for your disabled child.

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