Medicaid Update: 2015 Medicaid Income and Resource Levels

The New York State Department of Health has released important information about the new Medicaid income and resource levels for 2015, which will take effect on January 1, 2015.

Medicaid 2015

The following lists the updated Medicaid income and resource levels for 2015:

  • Income level for one person: $825 for 2015 (Was $809 for 2014)
  • Income level for two people: $1,209 for 2015 (Was 1,192 for 2014)
  • Resource level for one person household: $14,850 for 2015 (Was $14,550 for 2014)
  • Resource level for household of two people: $21,750 for 2015 (Was $21,450 in 2014)
  • Minimum monthly maintenance needs (income) allowance: $2,980.50 for 2015 (Was $2,931 for 2014)
  • Maximum community spouse resource allowance: $119,220 for 2015 (Was $117,240 for 2014)

Remember, there is still a 5 year look back. For a free more info on how planning for Medicaid can protect your assets, feel free to contact us.

medicaid@raphanlaw.com or 212-268-8200

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5 Tips for Arranging and Paying for a Home Health Aide:

-By Emily Garnett, Associate Attorney at Brian A. Raphan, P.C.

Finding oneself or a family member in need of home care can be a tough pill to swallow. It is often difficult to accept that you or a loved one is no longer able to safely do many of the activities of daily living that you once could. At that point, it may be time to bring in a home health aide for assistance with a wide variety of activities of daily living.

1. How to Arrange Help and Payment: Many people choose to privately pay for home health aides. If you choose to go this route, you can utilize a long-term home health care program (LTHHCP). These are agencies accredited by the state that provide home health aides. They manage the staffing and payroll. However, you can also choose to select aides that are privately paid, and work outside of an LTHHCP agency. For these aides, you would have to manage staffing and payroll issues yourself, or utilize the expertise of an elder law attorney or geriatric care manager to manage these details.

Medicaid Planning

2. Using Medicaid to Pay: If you are unable to privately pay for home care, you have the option of applying for Medicaid to obtain coverage for long-term home care. It is advised that you work with an elder law attorney or other professional to facilitate this process, as it can be complicated, and the regulations are frequently changing. In order to qualify for Medicaid, the applicant must meet certain requirements for income and assets. The current Medicaid asset limit is $14,550.00, and the monthly income limit is $809.00. Unlike nursing home Medicaid, there is no look-back period for community Medicaid, meaning that Medicaid is not going to investigate past money transfers like they would for an application for nursing home coverage. There are several ways to address the income and asset limits required for Medicaid acceptance, the most common being the use of pooled trusts to shelter those funds. Pooled trusts are frequently used to meet the Medicaid spend-down, which is the requirement that an applicant reduce his or her available income so that it remains under the Medicaid limit.

3. Shelter your Income: Once an individual applies for Medicaid coverage, he or she can join a third party pooled trust to shelter the excess income and meet the spend-down. These trusts allow the individual to use the funds sheltered in the trust for personal needs outside of the Medicaid coverage, including expenses like rent, utilities, and phone bills. If this arrangement is not made, the applicant runs the risk of rejection by Medicaid or having to privately pay for some part of his or her home care each month.

4. Enrollment for Managed Long Term Care: Once you have applied for and been approved for Medicaid, you will work with your elder law attorney or specialist to enroll in a managed long-term care program (MLTC), which will provide home care services. The first step in this process is assessment by a new program, the Conflict-Free Eligibility and Enrollment Center (CFEEC), sometimes also referred to as “Maximus”. This assessment takes about two hours and provides a determination to Medicaid that the consumer is eligible for home care services. At that point, the consumer selects a managed long term care plan to enroll in. The MLTC plan then schedules a second assessment, also lasting about two hours, in which the specific care needs of the consumer are assessed. At the conclusion of this assessment, the nurse performing the assessment will submit the information to Medicaid, who will ultimately determine the number of hours of home care needed each day by the consumer. This process is very time-sensitive, so work closely with your Medicaid attorney assisting with the application process, to avoid costly and unnecessary delays.

5. Keeping Your Ongoing Benefits: Once the application process is complete, your home care will likely start on or around the first of the following month. At that point, your obligations as a consumer are to maintain the income and asset limits, including utilization of a pooled trust if needed. You will be required to annually re-certify with Medicaid that you have maintained these levels. Should you have questions at that point, please don’t hesitate to reach out to your Medicaid planning attorney, rather than risk losing your Medicaid benefits. It is worth noting, however, that occasionally delays arise in various points of the application process through no fault of the attorney or applicant. Should you find yourself in such a position, understand that these issues do arise, and make sure to cooperate with your attorney or specialist’s advocacy efforts towards resolution.

Emily Garnett, Esq.

The Law Offices of Brian A. Raphan, P.C. 7 Penn Plaza, Suite 810 New York, NY 10001 T: (212) 268-8200

“Helping Senior New Yorkers for over 25 Years”

Legal DIY Web Sites Are No Match for a Pro, Consumer Reports Concludes

After road testing three leading Web sites that help you create your own will, power of attorney, and other important legal documents, Consumer Reports has concluded that none of the will-writing products is likely to entirely meet your needs unless those needs are extremely simple.

Consumer Reports

The independent non-profit testing agency evaluated three online services: LegalZoom, Nolo, and Rocket Lawyer. Using online worksheets or downloads, researchers created a will, a car bill of sale for a seller, a home lease for a small landlord, and a promissory note. They then asked three law professors — including Gerry W. Beyer of Texas Tech University School of Law, who specializes in estates and trusts — to review in a blind test the processes and resulting documents.

In his evaluation of the will-making programs, Prof. Beyer said that two of them could create good simple wills but he found deficiencies in all three, including features that could lead a user to add clauses that contradict other parts of the will.

Consumer Reports’ verdict?   “Using any of the three services is generally better than drafting the documents yourself without legal training or not having them at all. But unless your needs are simple—say, you want to leave your entire estate to your spouse—none of the will-writing products is likely to entirely meet your needs. And in some cases, the other documents aren’t specific enough or contain language that could lead to ‘an unintended result,’ in [a professor’s] words,”

An article on the study, titled “Legal DIY websites are no match for a pro,” appeared in Consumer Reports.  To read it, click here.

Consumer Reports’ findings accord with ElderLawAnswers’ own evaluation of online estate planning programs. For their White Paper on these programs, click here.

For a FREE DOWNLOAD : GUIDE TO ESTATE PLANNING click here.

WHY IRREVOCABLE TRUSTS VS OUTRIGHT GIFTING

People often wonder about the value of using irrevocable trusts in Medicaid planning. Certainly gifting of assets can be done outright, not involving an irrevocable trust. Outright gifts have the advantages of being simple to do with minimal costs involved.

Brian Raphan, P.C.

So, why complicate things with a trust? Why not just keep the planning as simple and inexpensive as possible?

The short answer is that gift transaction costs are only part of what needs to be considered. Many important benefits that can result from gifting in trust are forfeited by outright gifting. These benefits are what give value to using irrevocable trusts in Medicaid planning.

Key benefits of gifting in trust are:

  1. -Asset protection from future creditors of beneficiaries. Preservation of the exclusion of capital gain upon sale of the Settlors’ principal residence (the Settlor is the person making the trust).
  2. -Preservation of step-up of basis upon death of the trust Settlors o Ability to select whether the Settlors or the beneficiaries of the trust will be taxable as to trust income.
  3. -Ability to design who will receive the net distributable income generated in the trust.
  4. -Ability to make assets in the trust non-countable in regard to the beneficiaries’ eligibility for means-based governmental benefits, such as Medicaid and Supplemental Security Income (SSI).
  5. -Ability to specify certain terms and incentives for beneficiaries’ use of trust assets.
  6. -Ability to decide (through the settlors’ other estate planning documents) which beneficiaries will receive what share, if any, of remaining trust assets after the settlers die.
  7. -Ability to determine who will receive any trust assets after the deaths of the initial beneficiaries.
  8. -Possible avoidance of need to file a federal gift tax return due to asset transfer to the trust.

If you have questions about any of the above items, please call me, Brian A. Raphan, Esq at 212-268-8200 or 800-278-2960. There are additional measures available and your individual situation should be assessed before making any financial decision.

What Happens to a Medicaid Recipient If the Spouse at Home Dies First?

Senior Couple Square

When one spouse is in a nursing home and applying for Medicaid, planning has to take into account the possibility that the spouse who is not in the nursing home (called the “community spouse”) may pass away first. This is because the community spouse’s death may make the spouse in the nursing home ineligible for Medicaid.

In order to qualify for Medicaid, a nursing home resident can have only a limited number of assets. Careful planning can allow the resident’s spouse to maintain some assets. However, if that community spouse passes away first and leaves those assets to the nursing home resident, the resident suddenly would be over Medicaid’s asset limit.

While the community spouse can write a will that disinherits the Medicaid resident, most states have laws that allow spouses to claim a portion of their deceased spouse’s estate regardless of what the will says. This is called the elective or statutory share. The amount the spouse can claim varies from state to state.

A spouse can disclaim his or her elective share, but if a Medicaid recipient disclaims the inheritance, it is considered an uncompensated transfer of assets and the recipient may receive a period of Medicaid ineligibility. To avoid this, the community spouse will most likely need a will that addresses this issue. One option is for the community spouse to create a will that leaves the nursing home spouse exactly the amount of the elective share. Another option may be to create a special trust that contains the elective share. You should talk to your elder law attorney to determine the best course of action for you and your spouse.

For more information about Medicaid, including a FREE GUIDE to Medicaid’s Asset Transfer Rulesclick here.

This month we are offering AARP members discounted rates and free initial phone consultation to help determine if you can benefit from medicaid planning. Email: medicaid@RaphanLaw.com

Regards, Brian

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