11/19/2017










How to Pay for Nursing Home Care on Long Island

The cost of a Nursing Home in Long Island is generally $12,000 – $15,000 per month. This cost can deplete savings very quickly. As a result, proper planning is extremely important.

There are three ways to pay for a Nursing Home. First, one can use their savings. Clearly not a great plan – especially if your spouse must rely on that money to live. Second, one can purchase Long Term Care Insurance. Unfortunately, not many people can afford the premiums and the policies do not always cover the entire cost of care.

The third way to pay for Nursing Home Care on Long Island is Medicaid. Medicaid is a federal program which is administered by the States. In 2006, the Deficit Reduction Act of 2005 (DRA) was passed, making it more difficult – NOT IMPOSSIBLE – to qualify for Medicaid benefits. There are two ways in which the DRA made qualifying for Medicaid more difficult.

First, it extended a look back period on assets transfers from 3 years to five years. This means that when applying for Institutional Medicaid to pay for the Nursing Home, the local Department of Social Services will review your bank statements for the previous five years. If you have transferred any assets to a non spouse, they will impose a penalty period, during which the resident of the Nursing Home is responsible for payment. At the conclusion of the penalty period, Medicaid will “pick up” the cost of care.

The second way that the DRA affected eligibility is that he penalty period now begins when who enter the nursing home and apply for medicaid. Under the old law, the penalty period began when the asset was transferred. Therefore, under the old law, even if you made a large transfer within the 3 year look back, there is a possibility that the penalty period is over when you enter the nursing home. Under the DRA, the penalty period does not begin until one applies for Medicaid. Therefore, if there was a transfer of assets within the 5 years, there will always be a penalty period.

This does not mean that you cannot apply for Medicaid when you enter a Nursing Home. To the contrary it means that YOU MUST APPLY IMMEDIATELY because you want the penalty period to begin as soon as possible. Additionally there is a planning strategy that can cut the penalty period almost in half.

The above only applies to those who do not have spouses. If a Medicaid Applicant has a spouse, they can transfer their assets to the spouse and that transfer is not considered in the look back period – hence there would be no penalty period. The spouse simply signs a form called a “Spousal Refusal” and Medicaid will not impoverish the well spouse. There are certain limits to this, however. if the Community spouse has over $100,000 in assets, Medicaid can seek a contribution from them. Fortunately, the contribution is often minimal.

Proper planning can alleviate many concerns and protect assets against the high cost of care at Nursing Homes on Long Island. However, even if planning has not occurred, it it possible to protect some assets should you require Nursing Home Care. It is advisable to seek the advice of an Elder Law Attorney in Long Island as soon as your spouse or family member enters a nursing home. Getting a jump on the application process can save you a month or two of nursing home costs.

With questions about how to apply for Nursing Home Medicaid benefits, please call this office for a free consultation at 516-605-0625.

Long Island, NY Veteran’s Aide and Attendance Program

An additional pension for qualifying veterans

Recently I have had many clients come to my office with a similar problem. They have had to hire a home health aide for their parents or place them into an assisted living facility. The problem that my clients, typically the adult children of a disabled senior, have is that their parent’s income does not cover their living expenses with an aide or the monthly cost of the assisted living facility. When I am confronted with this problem, I have been asking my clients whether one of their parents was a veteran. If one of the parents was in fact a veteran and require the assistance of a home health aide or reside in an assisted living facility, they may be entitled to an additional pension via the Veterans Administration’s (VA) Aid and Attendance Program.

The Aid & Attendance pension provides benefits for veterans and surviving spouses who require the assistance with the activities of daily living (ADL’s). This includes regular attendance of another person to assist in eating, bathing, dressing and undressing. Assisted care in an assisting living facility also qualifies.

The requirements to qualify are as follows. First, it must be established by your physician that you require assistance with the above mentioned activities. Importantly, you do not need to show that you require assistance with all of these activities – only that you cannot function completely on your own.

Second, you must provide the VA with proof of your net worth, net income (including social security, other pension and IRA distributions) and complete breakdown of your monthly expenses, including the cost of the aide, assisted living and other medical expenses.

Qualifying applicants may be entitled to receive up to $1,632 per month to a veteran, $1,055 per month to a surviving spouse, or $1,949 per month to a couple. It should be noted that not every applicant will receive the same pension. The VA will compute the actual needs of the applicant in determining the pension amount. The pension is not contingent on a “service related” injury or condition.

The VA has made it illegal to hire someone to file the application on your behalf, but you can hire an Aid and Attendant Consultant to offer you advice on how to file the claim. You can also contact this office for questions about the program and advice on how to file a claim.

Deficit Reduction Act of 2005 – Impact on Medicaid

By Andrew M. Lamkin, Esq.

On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005 (DRA). The Act reduces federal entitlement spending for Medicaid, among other federal programs. The Medicaid program pays for services for disabled seniors who meet the eligibility requirements. Most commonly, Medicaid pays for the cost of home health aides and nursing home care.

The effects of the Deficit Reduction Act on Medicaid are significant, especially when applying for nursing home benefits. First, the look back period on asset transfers has been increased from three to five years. When an uncompensated transfer, or gift, is made during this look back period, Medicaid will impose a “penalty period.” The “penalty period” is the length of time during which Medicaid will not pay for the cost of nursing care, during which time the family of the applicant is responsible. At the end of the penalty period, Medicaid will pick up the cost of care. Due to this change in the law, the goal when establishing an estate plan is to protect assets five years before having to apply for Medicaid. Unfortunately, it is difficult to anticipate when a family member may be forced to enter a nursing home. To ensure you are eligible for Medicaid should the need arise; it is advisable to plan well ahead of time.

The second major change as a result of the DRA, is in regard to the start of the penalty period. Under the old law, the penalty period began on the date when the assets were transferred. Depending on the fair market value of the transfer, the penalty period may have expired by the time the application was filed. Therefore, an applicant who transferred assets within the three year look back may have qualified for Medicaid before the time they apply.

Under DRA, however, the penalty period begins when the applicant applies for nursing home benefits. Therefore, any transfer made within the 5 year look-back period will certainly result in a penalty period. This is a drastic change and many applicants will be ineligible for a longer period of time. This will require applicants to pay for the cost of the nursing home with their savings, and perhaps require the sale of the family home.

A common misconception is that if proper planning has not occurred by the time a person enters a nursing home; there is no option other than to exhaust his savings. In reality, this is not the case. The opportunity to protect all of the assets may be lost, but by utilizing a strategy known as “Reverse Rule of Halves,” it is possible to protect up to one-half of the applicant’s assets. In order for this strategy to work, it is vital to transfer assets as soon as the person enters the nursing home.

It is also important to note that there are a few exceptions to transfers made during the look-back period. Transfers made within the look back period to a spouse or disabled child do not result in a penalty period. Furthermore, an applicant can transfer his home to a “caretaker” child. This exception applies only in a situation where a child of the applicant has been residing with the applicant in the applicant’s home for at least two years. In this situation, the applicant can transfer the home to the “caretaker” child while, retaining a life estate.

Fortunately, the eligibility requirements for Community-based Medicaid, where a home health aide is provided, are more lenient than nursing home based applications. Most importantly, there is not a look-back period on assets transfers. Hence, an applicant for Community Medicaid may transfer assets for the purposes of qualifying without the imposition of a penalty period. Therefore, an applicant can transfer assets to anyone in March and be eligible for Community Medicaid in April.

A big concern with community based applications is the “spenddown” requirement imposed on income over $767.00 per month. Any income over this amount must be “spent down” on the cost of care and Medicaid will pay for the remaining cost. For example, if an applicant receives Social Security benefits and a pension totaling $2,500 per month, he is allowed to keep only $767.00 per month. He is required to contribute the difference of $1,733 per month to the cost of the home care aide. If the aide costs more than $1,733 per month, Medicaid will pick up the difference. However, with proper planning and the use of a Pooled Income Trust, it is possible to protect 100% of the applicant’s income and he will not have to contribute to the cost of the home care aide. Therefore, by utilizing a Pooled Income Trust, Medicaid will pay for the entire cost of the home care aide.

Overall, the Deficit Reduction Act makes it more difficult for those in need to qualify for Medicaid benefits. The new provisions are complex and can be difficult to navigate. With these changes, it is even more important for the protection of your family to have a plan in place.

Taking time to speak with an Elder Law attorney can help to devise a plan that will insure that your loved ones receive the necessary care they need, while at the same time protecting their income and assets for their use.




Like us on facebook

Attorney Andrew Lamkin on G +