Archive for the 'Medicaid' Category

Avoiding Probate vs Avoiding Taxes vs Medicaid Eligibility

This morning’s post is kind of a follow up to one of yesterday’s posts where I tried to elucidate the differences between planning to avoid probate and planning to “avoid” taxes.  I was inspired this morning to write this brief follow up by Michael J. Keenan of the Connecticut Elder Law Blog and this post of his from this morning where he writes:

Regardless of whatever your neighbor may have told you, if you divest yourself of assets thereby benefiting someone else (with a couple of exceptions) then it’s a gift and it will trigger a period of ineligibility for Medicaid if it falls within the look-back period.  Whether the money goes outright to someone or into a trust for their benefit the State is going to treat it the same way.

He goes on to, he says,  plug himself and I write to congratulate him on both his post and his “plug.”  Not all estate planning attorneys (those who plan for taxes and probate avoidance) are similarly skilled in the area of Medicaid Planning or other aspects of elder law.  This subgroup of specialized planners is also not to be confused with special needs planners (like myself, my dad and our partners Mike and Sam).  If you need some planning and are getting up there in years, I would contact an estate planning attorney first…  Not everyone needs Medicaid planning so don’t seek that first until and unless you’re sure you actually do need it.

The situation Mr. Keenan addressed in this morning’s post is as follows:

They also told me that they wanted the gifting to go into a trust for their kids’ benefit instead of giving the money outright to the kids, and they wanted to do this for two reasons…

First, they were concerned that their kids would waste the money and/or their kids’ creditors would end up getting the money.  They heard that a trust was a great way to handle this situation, correct?  “Absolutely true,” I said.

Second, they didn’t want to worry about Medicaid’s five-year look-back period regarding gifting and they heard that this was a great way to avoid it, correct?  “Absolutely not true,” I said.

Thanks again Mr. Keenan.

Senate Dems Trying to Block Medicaid Regs Proposed By Bush Administration

Sounds like a turf war to me…

The proposed regulations prevent the states from using federal Medicaid funds to help pay for physician training, place new limits on Medicaid reimbursements to hospitals and nursing homes operated by state and local governments and limit coverage of rehabilitation services for individuals with disabilities and mental illnesses. On Wednesday the House voted 349-62 to approve legislation (HR 5613) that would delay the proposed regs from going into effect for one year, or until April 1, 2009. The vote was 75 more than that needed to override the President’s threatened veto. Can anyone say lame duck?

Delaying the implementation of the rules would cost the federal government about $1.7 billion according to this article in the Washington Times.

The Bush administration says the regulations are necessary to stop states from improperly billing Medicaid for services. HHS spokesperson Kevin Schweers said the House vote “is a victory for budget gimmickry at the expense of U.S. taxpayers,” adding, “The legislation invites states to bill federal taxpayers for what are state responsibilities” (Zhang, Wall Street Journal, 4/24). (see also this Kaiser Daily Health Policy Report.)

Thanks to Professor Dayton for pointing this one out to me.

Doing Away With Mandatory Arbitration Provisions in Nursing Home Admissions Agreements

J. Michael Young writes here on his Texas Probate Litigation Blog about the The Fairness in Nursing Home Arbitration Act proposed by Sens. Herb Kohl (D-WI), the chairman of the Special Committee on Aging, and Mel Martinez (R-FL). According to this article, the proposal is really an amendment to The Federal Arbitration Act of 1925

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Originally designed as a way to allow businesses to bypass judge and jury trials to settle disputes, the Federal Arbitration Act is now also used by many nursing homes to avert costly trials if charges of neglect, abuse or wrongful death are brought against them.

Picking up on Mr. Young’s post and running with it is Deirdre R. Wheatley-Liss who publishes the You and Yours Blawg. Ms. Wheatley-Liss has previously addressed the issue of the need to be very careful when reviewing nursing home admission agreements in this post and continues her good advice:

[…] a careful review of these contracts is a must. A growing concern is that they are drafted to take advantage of a family in the direst of circumstances by using the terms of the the contract to limit their own liability. This can leave a family with no contractual recourse when their loved one does not receive the care they deserve. One example of this is a damages limitation clause to $10,000 – this is obviously inadequate to address damages from a sub-standard level of care. Another favorite is the mandatory arbitration provisions – which eliminates the family’s right to go to court. Instead, any disputes are decided by a panel of industry experts.

These mandatory arbitration clauses are dangerous things for a number of reasons. First, arbitration can be even more expensive than trial since you’re not only paying your own attoryney’s but, as the Plaintiff, you are also paying the arbitors. Additionally, Mr. Young points out that:

Defendants often prefer mandatory arbitration because the arbitrators are drawn from the industry and perceived to be more conservative than a jury in awarding damages. For that reason, mandatory arbitration clauses are often attacked as unfair, particularly when the parties are in positions of unequal bargaining.

According the above article, while the FNHA act would not bar the use of arbitration agreements under all circumstances. It would prevent nursing homes and assisted living facilities from insisting prospective residents sign them as a pre-requisite for care. Mr. Young speculates :

I imagine this bill has a decent chance of passage, but would likely face a veto from President Bush.

What’s that you say?! A sensible bill may fall under the ill-advised veto-pen of our glorious leader? Shocking.

Goodbye Medicare Part D – April 1, 2008?

From the Center for Medicare Advocacy comes the following:

The Social Security Administration (SSA) has begun mailing “SSA Medicare Prescription Drug Assistance Notice of Termination” letters to some beneficiaries who are currently receiving the low-income subsidy (LIS) or “Extra Help.” The letters are being sent to beneficiaries who did not provide SSA with information it requested to determine their continuing eligibility for the LIS. About 76,000 beneficiaries began receiving this mailing during the week of March 2. Beneficiaries who do not act immediately upon receiving the letter to request an appeal will no longer receive the LIS to pay for Part D premiums and cost-sharing effective April 1.

SSA requested information in September 2007 as part of its formal redetermination process. The process, which was completed in February, involved multiple attempts by SSA to contact beneficiaries who were subject to redetermination. SSA indicates that approximately 80,000 people responded to its follow-up contacts; people who responded should not receive the SSA “Medicare Prescription Drug Assistance Notice of Termination” letter being sent out this week. Beneficiaries who believe they are, or even might still be, eligible for the LIS should contact SSA within 10 days of receiving their letter to request an appeal. If they do so, they can continue receiving LIS until their appeal has been decided, regardless of whether it is decided in their favor.

Appeals can be filed after the 10 days but not later than 60 days after receiving the SSA letter, but beneficiaries filing after the first 10 days will not continue to receive LIS pending their appeal. LIS may also continue for beneficiaries who can show good cause why they did not file an appeal within 10 days.

Thanks also to the Elder Law Prof Blog and Professor Kim Dayton.

New Poverty Guidelines Will Affect Medicare/Medicaid Eligibility

As if it wasn’t bad enough already for those relying on Medicare/Medicaid:

New federal poverty level (FPL) guidelines published January 23, 2008 will affect eligibility levels for many public benefits, including health benefits for older people and people with disabilities. 73 Fed. Reg. 3971, (January 23, 2008).

The best part is that “the new numbers are effective when published, but each program that relies on them may use a different effective date.” I don’t know what that means either.

According to Professor Kim Dayton of The Elder Law Prof Blog in this post:

The published poverty levels merely state a dollar figure for different sized family units. They do not address issues of what income is included, what deductions from income are allowed, who is included in a family unit or other use issues. These questions are addressed by the individual programs relying on the poverty guidelines. The amounts given below apply to the 48 contiguous states and Washington, DC. Rates for Alaska and Hawaii are slightly higher. A complete list of FPLs is available here.

Professor Dayton did the research already in her post – check it out here.

Thanks Professor.

Medicare Part D Wins; The Budget Loses

And I’m ok with that.

This good news came out in this post from Mr. Keenan at The Connecticut Elder Law Blog.

Citing this article in the Chicago Tribune, Mr. Keenan says:

Believe it or not, a full year has gone by since the establishment of Medicare Part D (Medicare drug benefit), and after a highly confusing start to the sweeping program, the Chicago Tribune reports in this article that out-of-pocket expenses for patients dropped by 13.1% and prescription use increased by nearly 6%.

The savings was good news for patients in 2006, but it also contributed greatly to a $63.3 billion increase in Medicare spending for the federal government compared to 2005.

This is (imho) what the government should be spending money on – the health care of the poorest among us, so the deficit impact doesn’t worry me that much.

Ohio vs. The Feds re Expanding Medicaid to Cover More Children

According to this article in today’s NYT

“[t]he Bush administration is imposing restrictions on the ability of states to expand eligibility for Medicaid, in an effort to prevent them from offering coverage to families of modest incomes who, the administration argues, may have access to private health insurance. […] State officials in Louisiana, Ohio and Oklahoma said they had discovered the administration’s intent in negotiations with the federal government over the last few weeks.”

The new restrictions mirror those the administration placed on the State Children’s Health Insurance Program in August after states tried to broaden eligibility for it as well. Dennis G. Smith, the director of the federal Center for Medicaid and State Operations argued, “[t]o be consistent and logical, you have to apply the criteria to Medicaid and CHIP[.]”

The federal government has leverage over states, because it pays a large share of the costs for Medicaid and the State Children’s Health Insurance Program, and states have to comply with federal standards to get federal money. The insurance program was created for children whose families have too much income to qualify for Medicaid but not enough to buy private insurance.

On Dec. 20, the Bush administration rejected a proposal by Ohio to expand Medicaid to cover 35,000 more Ohio children. Ohio now offers Medicaid to children with family incomes up to twice the poverty level, or about $41,000 a year for a family of four. The state had proposed increasing the limit to three times the poverty level, to about $62,000.

Ohio was accused of trying to get around the current policy that requires states to enroll 95 percent of eligible children below 200 percent of the federal poverty level before they could expand their programs, a criterion that many state health officials said would be impossible to meet.

Administration officials say government health programs start to “crowd out” private insurance when they cover families with incomes from 250 percent to 300 percent of the poverty level

Who are we trying to help here?

List of Worst Nursing Homes in U.S. Released by Feds

A few days ago Michael J. Keenan of The Connecticut Elder Law Blog posted this story pointing to a list of the worst nursing homes in the US by the federal government’s Center for Medicare and Medicaid Services (CMS).

The homes in question are among more than 120 designated as a “special focus facility.” CMS began using the designation about a decade ago to identify homes that merit more oversight. For these homes, states conduct inspections at six month intervals rather than annually.

With only 120 on the list its a pretty exclusive club. And thankfully not a single facility in Ohio ‘made the cut.’

This list is available here.

MetLife Surveys The Cost of Assisted Living

Deidre Watchbrit previously posted to tell us about MetLife‘s annual efforts to track the cost of assisted living across the severl states. Performed by the MetLife Mature Market Institute® “the numbers can be helpful for families planning to provide for a person with developmental disabilities who may not be able to live without 24 hour care.”

The study is available for download here:pdf_icon.jpg

The Problems of Joint Tenancies

Stan Rule of Kelowna, British Columbia, CA writes, in his Rule of Law Blog about “Another Joint Tenancy Gone Bad.”

It is amazing how many elderly people who, out of genuine concern for their children, transfer the title of their home to a joint-tenancy with their kids. The ostensible logic underlying the transaction is that, if they have to go into a nursing home, or if something else happens to them, they don’t want to lose their home – they want their kids to have it. Sometimes they just want it to pass to their children outside of probate… I wish it were so simple. The first concern, that of losing the home to either the government or a debt collector trying to recover the cost of unpaid medical care, requires a much broader analysis and the solution is almost always more complicated. The second concern is best accomplished with the use of a Transfer-on-Death Deed (something that is not available in all jurisdictions but is in Ohio — and apparently Nevada also).

Mr. Rule has already written a well-considered article on the same subject (applying Canadian law). His most recent post on the subject is about the recent case of Schoennagel v. Schoennagel and Gateway Automotive, 2006 BCSC 1830 which should serve as a useful scare tactic when all other reason and logic has failed to explain why this planning tool is a bad idea most of the time.

Thanks Stan.