Last week we introduced part one of Bill and Sue’s elder care journey, which began when the 68-year-old Sue could not return home from the hospital after a stroke. Instead, Sue was discharged to the Regal Rehabilitation Facility for Medicare-funded rehabilitation. If you want to experience the journey from the beginning, you may read part one of the story here:
Several weeks after being admitted to Regal, Sue was anxious to get home, but she was unable to move well enough to get out of bed without assistance. Bill was concerned about how to pay $375 per day for her care at Regal. He called Keystone Elder Law for a free phone consultation with the care coordinator, and then decided to schedule an appointment to speak with one of the lawyers.
At the initial appointment, Keystone’s attorney explained that Medicaid could be obtained to pay for Sue’s care almost immediately after Medicare coverage would end, but not without some restructuring of Bill and Sue’s financial resources. The process of determining which of Bill and Sue’s resources would be counted for purposes of Medicaid, and which would be excluded, confused Bill. The attorney reassured Bill that he would not lose his house or his personal income, and that the Keystone elder care team could help with everything.
The attorney reviewed Bill and Sue’s current estate plan, which included a revocable living trust (RLT). Bill did not remember why another attorney had recommended the RLT, other than it had something to do with avoiding probate and federal estate taxes. Bill was surprised to learn that only very high net worth individuals pay federal estate taxes, and that no RLT shelters
resources from the cost of skilled nursing care.
Bill and Sue’s financial power of attorney (POA) documents appointed Bill and Sue as one another’s agents, but no back-up agent was designated in the event that something would happen to either of them. Bill expected that this was because his children were much younger when the estate plan was initially completed. He agreed that now, either of his two adult children could be capable agents.
The POA documents did not make a provision to allow for unlimited gifting, as would be needed to accelerate Medicaid eligibility. As is usual and customary, their last will and testaments left everything unconditionally to the other spouse. If either Bill or Sue would die while the other spouse was in a long-term care facility, their present wills would expose their life savings to the cost of care for the surviving spouse, and no funds would remain for their children.
The lawyer explained that, while Keystone’s elder care guidance would first focus on the current and possible care needs of Bill and Sue, proactive estate planning would result in funds remaining for the couple’s children, Joe and Mary. Bill was pleased that it was not too late to save assets, despite the unexpected crisis of Sue needing long-term care that could cost nearly $150,000 per year.
Keystone’s attorney visited Sue in the Regal facility, and explained the estate planning suggestions with her. Keystone’s care coordinator and a Notary accompanied the lawyer a week later on his second visit to Sue to execute the estate planning documents. They also discussed Sue’s care plan.
Two months into the process, Regal’s rehabilitation department told Bill that they wanted to plan a home visit so that Bill could prepare to care for Sue at home. Bill called Keystone’s care coordinator and asked if this was normal, and what he should do. An appointment was scheduled for the Regal staff to meet at Bill and Sue’s home with Bill and the care coordinator.
Quickly, it became obvious that Bill and Sue’s home would require significant modifications to meet Sue’s needs for a wheelchair and hospital bed. Even if the home was modified to be more handicapped accessible, Sue had difficulty supporting her own weight, and required help to get in and out of bed and her chair. Bill was willing to help, but safety concerns were evident for both of them.
Regal suggested that since Bill couldn’t safely manage Sue at home, a discharge to Happy Acres Personal Care Home should be considered as an option. The care coordinator helped Bill object to that discharge on the grounds that Sue would need two people to assist her to get out of bed safely, and that federal regulations say that a need for such a level of care is reason enough to require skilled nursing care.
Regal responded that they “had no long-term care nursing beds available,” only short-term, Medicare-funded beds. Because Sue had adjusted to Regal and the care was excellent, Bill did not want to move her. Keystone staff explained to Bill that Regal had no personal animosity towards him or Sue, but that Regal could lose $50,000 per year in revenue if Sue stayed, since that is the difference between the private pay rate and the Medicaid reimbursement rate.
The lawyer explained how differences in state licensing requirements for skilled nursing facilities and personal care homes meant that Sue would get more staff attention and better care in Regal’s skilled nursing facility than a personal care home was designed to provide. Bill was surprised that, due to Medicaid, he would have less out-of-pocket cost for Sue’s care in the nursing home than in personal care, where Medicaid was not an option.