More Medicaid Changes Coming?
April 25, 2011
Readers of my blog know that I have written often of the need to plan ahead because nobody, especially the government, is going to bail you out. The last round of changes to the Medicaid program were made more than 5 years ago and have had a dire impact on many Americans who need long term care. There are indications from Washington that perhaps even more drastic changes are yet to come.
The numbers are staggering. The federal government spent $216 billion on Medicaid in 2009, about 7% of the overall budget. States spend, on average, 22% of their budgets on Medicaid. Those numbers are increasing at a rate of 6 to 7%, outpacing the rate of inflation. The government realizes it must do something to rein in the cost. As usual, the battleis drawn along political lines. Republicans are pushing to turn Medicaid into a block grant program. Democrats are fearful that services will be cut and costs won’t be curtailed if that happens.
So, what would a block grant program mean? First of all, under the Republican proposal, there would be set funding levels, rather than open ended funding as there is now. Less federal funds would be provided to the states, but that would mean more control for them. Now, all states must follow certain guidelines and offer Medicaid to specific categories of people. However, they can offer additional programs, provided they apply for a waiver from the federal government. If Medicaid is converted to a block grant program states would be able to entirely set their own Medicaid rules. Some state governors feel that their hands are tied in terms of their attempts to “rein in” Medicaid because of the federal restrictions. A block grant program would “release” those strings.
What would the change look like? It’s hard to say specifically, but it is reasonable, in light of tough economic times and government budget deficits, to expect that it will be more difficult to qualify for benefits. And when can we expect these changes? The House of Representative passed a proposal but political experts believe the Senate will reject it and President Obama has said he opposes it. Even if it fails this time around, the issue won’t go away and another presidential election looms in 2012. A transfer of power could change the political landscape considerably so stay tuned.
A Long Term Care Story Close to Home
April 18, 2011
Many of the stories I tell are from clients and prospects that call our office. This one is more personal, about our marketing director, Amy’s grandparents, Julius and Julia. Julius was a World War II veteran who died in 1986. Julia lived independently until 2003, when at age 83 she moved to an assisted living facility.
Julia lived in that facility for almost 7 years actively participating in events and socializing with other residents. It was at that point, however, that Amy’s family moved Julia to a nursing home. They were worried that if she did not have the private funds to pay for her care in a nursing home of their choosing, but applied for Medicaid just before entering a facility, they could not be sure that she would be placed in a suitable nursing home. So they moved her before she ran out of funds. She is now 91 and has not handled the move well. Her health is rapidly deteriorating. She no longer socializes with other residents and rarely speaks, even to family members who visit.
Amy’s family was unaware of the VA’s Aid and Attendance program, which Julia could have qualified for back in 2003 upon her move to the assisted living facility. She has lost out on nearly $90,000 in benefits over that 7 year period. That money could have kept Julia in the place where she had thrived, for possibly 2 more years, before a move had to be made.
Who knows? Maybe her dementia would not have progressed as far if she stayed in the environment in which she had grown accustomed. It’s also possible that she may pass away within those 2 years without ever having to move. Unfortunately, Amy didn’t know enough about the situation (her family lives out of state), or soon enough, to be able to direct them to an elder law attorney who could have helped them qualify for these benefits. But she wanted me to tell her family’s story because it illustrates how we can help guide families through the elder care journey if we get to them early enough. By tapping into any and all possible sources of payment we can often keep your loved ones in the safest and best environment for them, and reduce the likelihood that you are forced to make a decision purely because you are out of money.
Of Alzheimer’s Disease and Government Shutdowns
April 11, 2011
A new survey by the MetLife Foundation indicates that Alzheimer’s Disease is more feared by adult Americans than any other disease except cancer – and in a few years that just might change. Approximately 1000 Americans were interviewed last fall. 31% indicated they most feared Alzheimer’s Disease, ahead of heart disease, stroke and diabetes. 41% said they most feared cancer. Interestingly, 4 years earlier 38% said they feared cancer most vs. 20% for Alzheimer’s. With babyboomers entering retirement, presumably the gap will continue to close. The survey also confirmed some other suspicions.
Nearly 1 in 4 interviewed said they were concerned about needing to provide long term care for a loved one with Alzheimer’s. Less than 1 in 5 said they had made any plans for the possibility of getting Alzheimer’s. Only 2 in 5 people said they have had discussions with their families about Alzheimer’s. 4 in 5 adults admitted that they have made no financial arrangements for the cost of care should they develop the disease. And here’s one final stat. 63% of those surveyed acknowledged they know little or nothing about Alzheimer’s Disease.
One thing is clear. While the average American is concerned, he/she is not doing anything about it. The problem isn’t going away and will only continue to intensify. The government isn’t going to help either if this week’s developments are any indication. Congress and the President only avoided a government shut down at the 11th hour when they reached tentative agreement on federal budget cuts. The message is clear. You’ve got to look out for yourself and your family. Others won’t do it for you. To start taking action, visit our website www.livingstonmemorylawyer.com/
Failing To Tie Up Loose Ends
April 4, 2011
Tying up legal loose ends is so important. Mary and John had been divorced 15 years ago. They had split their assets, with John keeping his retirement account and Mary keeping the house. John now needs nursing home care. “It shouldn’t be a problem”, I told Mary. “He’ll need to spend down his assets and then qualify for Medicaid.” Then Mary revealed her problem. John never legally transferred title to the home to Mary. The deed still reads “John and Mary, his wife”.
This situation is actually more common than you might think. Mary and John’s divorce wasn’t too complicated because their children were adults and they didn’t have much other than the house and retirement account, which were close to equal in value. Mary hired an attorney to “put the divorce through” and John represented himself. For reasons Mary doesn’t recall, John never signed a deed transferring ownership.
This could be a real problem for both Mary and John. That’s because unless John can prove he legally no longer owns the home it could be countable and part of a required spend down towards long term care. One of two things could happen. If the house is sold then ½ of the proceeds may need to go towards John’s care. If the home is not sold the state could put a lien on the home for Medicaid benefits it pays out on John’s behalf during his lifetime. “But didn’t he give the home to Mary in the divorce?” Well, yes, but he has to prove he received equal value back and he has to actually complete the transfer, which to this point he hasn’t done.
As long as Mary (or John) can produce a written agreement showing the exchange of the house for the retirement account that won’t be a problem. Mary assured me it’s in writing. She just has to dig it up. I told her now would be a good time to do that. The longer she waits the harder it may be to locate and the State won’t take her word for it. They will want the physical evidence.
She then asked me about preparing a deed. “Would we need to back date it 15 years,” she asked. “Absolutely not”, I told her. The signing date should never be backdated. “Won’t Medicaid treat the transfer as occurring now, making it subject to the 5 year look back?” I told Mary that isn’t an issue. As long as she can prove there was an equal exchange it won’t be subject to a Medicaid penalty and the deed signing is a formality anyway. Legally she acquired ownership 15 years ago.
Mary was relieved but she did learn a lesson. Better to take care of those loose ends now and not allow them to remain untied. A lot can go wrong in 15 years and her home is essentially all she has. When she does sell it she’ll need to make the money last. It would be a tragedy if she were to lose any of it.
