Entry #1 2014

Hello, and welcome to the he Medicaid Pitfalls blog. You may notice a paucity of entry's over the last two years,  and for that I apologize. When I started the Medicaid Pitfalls blog, like many new and interesting things in my life's work, I worked at a frenzied pace. The goal was to have a place where consumers wanted to get straight answers about Medicaid, they would have a place to go.

After having the he blog up for about a year, I realized that the rules of blogging had not yet been established - the social etiquette rules and the rules of attorney ethics.  So I consciously decided to wait a while. Knowing what I now know, simply taking down the blog would not erase the existing entries from the planet's external hard drive that is the internet.

After exhaustive research and study, I now know "the rules."  So here we go, entry #1:

Understanding the Affordable Care Act:

For purposes of understanding the Affordable Care Act, let's break the law down into two parts.

Part 1:   Changing the Insurance Playing Field. Just the way a baseball team can modify the dimensions of it's field, the Affordable Care Act changed the insurance playing field.

The major changes are:

1. No pre-existing conditions exclusion.
2. No lifetime limits.
3. Uniform health insurance plans, with standard covered services.

Part 2: Giving people incentives to buy insurance.

The Affordable Care Act uses positive and negative tools in order to get people to buy insurance. The negative tool is a tax on people who do not buy insurance. The positive tool is financial subsidies for those who could not otherwise afford to buy insurance.

The final question is - What is the role of insurance companies? Insurance companies sell the health insurance plans directly to consumers.

Did you know that Harold L. Grodberg, Esq. is a nationally recognized Elder Law Attorney and Commenter? You can read Mr. Grodberg's comments on MSN MONEY© about a Pennsylvania state law that permits a nursing facility to sue the child of a patient for outstanding charges by clicking here. SMARTMONEY.COM© also sought out Mr. Grodberg to comment on the increasing incidents of Senior Citizens having their Social Security Retirement benefits garnished as a result of guaranteeing their grandchildren's defaulted student loans. Click here for the story.

Filial Responsibility

A recent case in Pennsylvania held a son responsible for his mother's nursing home costs. The case is very controversial and caught the attention of the national news agencies. Cut and paste this link into your browser to view an article about Filial responsibility on MSN Money where I am quoted: http://money.msn.com/retirement-plan/will-you-get-dads-nursing-home-bill-weston.aspx

Assisted Living- Income Eligibility

As long as I have been a practicing elder law attorney, I advocated for clients in nursing facilities. However, over the last two years more and more clients have come to me seeking advice regarding Assisted Living facilities. I attribute the shift in client needs to three factors 1) the proliferation of Assisted Living facilities in New Jersey, 2) the substantial lack of regulation of Assisted Living facilities, and 3) baby boomers entering the Assisted Living communities. My greatest concern for any person entering an Assisted Living facility is their long term financing plan. Many facilities have a formal or informal requirement that a patient pay for at least 2 years before receiving Medicaid benefits. However, for numerous reasons, paying for 2 years does not necessarily mean that the patient will get the Medicaid benefit. My next few blog entries will address the most common reasons why patients do not get those Medicaid benefits, but this entry deals with something called the "Income Cap." Medicaid home care benefits (which include assisted living benefits) are subject to a monthly income cap of $2,094. That means a person whose monthly fixed income exceeds $2,094.00 cannot get Medicaid benefits in an Assisted Living facility under current law. This is not true in a nursing home environment. As a result of the income cap, many Assisted Living patients have no choice but to go to a nursing home when they run out of private pay funds. However, there may be good news on the income cap front. Last week I attended the 14th annual Elder Law Retreat. A decision maker with State was in attendance. She advised the lawyers present that the State has requested the federal government to allow a "waiver" of the income cap. Even though the State plan has not been finalized, but the current proposal individuals with income over the cap can get Medicaid home care and Assisted Living services by paying a premium equal to the difference between their fixed income and the current cap of $2,094. So, for example, if I have monthly fixed income of $3,000.00, I would pay a monthly premium of $906.00 and I would then be eligible for Medicaid. We do not know who the premium will be paid to, but this issue should be resolved in July of 2012.

Making a Gift That is Not a "Gift" For Medicaid Purposes

One way to eliminate a Medicaid penalty period is to prove that a gift was not intended to protect assets from nursing homes. The State Courts have been reluctant to enforce as specific administrative code section that details when a gift is not considered a gift for Medicaid purposes.

An Administrative Law Judge is a case arising out of Hudson County, has recently issued one of the rare rulings indicating a gift was not made for Medicaid purposes.

In the case, a healthy man, while he was still working, loaned money to a child who was about to loose her house. The man then had a stroke, and other illnesses which required long term nursing care.

The Court ruled that the financial circumstances surrounding the gift, and the sudden onset of disability, merited a ruling that the gift should no result in a Medicaid penalty.

The case will be reviewed by the Director of the Division of Medical Assistance and Health Services, and if the Director acts consistently, the decision will be reversed.

Spousal Resource Figures for 2011 to remain unchanged at 2009 level

Although no official word has been given, a source at the Centers for Medicare and Medicaid Services has informed as my information source, that for the second year in a row the agency will not be increasing the community spouse resource allowances (CSRA). Spousal impoverishment figures for 2009 will remain in effect.

The 2009 minimum CSRA was $21,912 and the maximum was $109,560.

Payments to Agents under Power of Attorney are Considered Gifts (appeal pending).

Payments to a child or children who are the “agent(s)” or more commonly understood as power of attorney for a parent are often examined when applying for Medicaid. In order for a payment to be not considered a gift, the power of attorney document must specifically allow compensation for the agent. In addition, the compensation has to be similar to what a person would pay a third party to do the same tasks. Compensation should not be in lump sums and the recipient should report the payments as income on their State and Federal income tax returns.
A case currently on appeal in New Jersey deals specifically with payments to a child/power of attorney.
In V.M. v. Division of Medical Assistance and Health Services, et al., OAL Docket No. 5769-09 (March 22, 2010, Union County). A New Jersey administrative law judge ruled that a Medicaid applicant's payment to his adult children for services rendered under a power of attorney was properly considered a gift and subject to a penalty period.
V.M., an elderly widower, executed a power of attorney, appointing two of his four adult children as co-agents. In January 2008, after having been admitted to a nursing home and approved for Medicaid nursing home benefits, V.M. sold his former home and received approximately $202,748 in net proceeds. The co-agents reported the sale and receipt of the proceeds to Medicaid. Later they filed an action in superior court seeking compensation of $102,555.55 for services they had rendered over the preceding five or so years, including taking their father to family gatherings, doctor visits, the bank and to dinner, plus $24,400 for expenses incurred on their father's behalf. Medicaid was not notified of the action. As the matter was uncontested, the superior court eventually awarded the co-agents the amounts they had requested.
Subsequently, Medicaid terminated V.M.'s nursing home benefits, concluding that the payment to his adult children for services rendered under the power of attorney was actually a gift. V.M. appealed, asserting that because the superior court had authorized payment to the co-agents for the services, the agency was precluded from treating the payment as an uncompensated transfer and denying benefits.
An administrative law judge (ALJ) disagrees and affirms the denial of Medicaid benefits. The ALJ notes that the superior court had not ruled on Medicaid eligibility but rather on compensating agents under a separate state law. Accordingly, the ALJ concludes that the agency is entitled to consider the payment to the co-agents in the context of the Medicaid eligibility rules and to thereby find that in light of the lengthy time that the co-agents were not compensated for their services, the payment was actually an uncompensated transfer.