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Nursing Care Crisis & Medicaid Planning
Is your loved one suddenly facing a move to a nursing home due to a catastrophic illness or injury? Perhaps a chronic condition has finally become too difficult to manage at home. A common myth exists that Medical Assistance (Medicaid) is only for “poor people”. If you are a middle class family facing $100,000/year or more in nursing home costs, Medicaid can help YOU!
There are a number of considerations to keep in mind when planning for Medicaid. The first consideration is that Medicaid does not pay for care in a personal care home or assisted living facility. An individual must be receiving care in a skilled nursing facility (nursing home) in order to receive Medicaid. If your loved one is a wartime Veteran, or spouse of a wartime Veteran, there may be assistance available to help pay for personal care. Please see the section about Veterans Benefits for more information.
Medicaid has set guidelines for the amount of total resources that an individual or couple may have in order to be eligible. In the situation of a couple, one person can receive Medicaid when living in a nursing home while the spouse remains in the community. The assets of both will be considered during the application process. Medical or financial professionals may tell you that you have to “spend down” your “excess” resources before you can qualify for assistance, but that is only partly true and could mislead you to overlook an opportunity to preserve a substantial portion of the family estate, even at a time of crisis without advance planning. Current law allows for the use of specialized tools and plans to reallocate some of these “excess” resources for the benefit of the community spouse or family. This reallocation of resources permits the individual desiring the Medicaid benefit to become eligible sooner, saving the family worry as well as thousands of dollars.
Medicaid also has strict rules about “gifting” or giving away money or property. An amount given away in excess of $500 in any one month, over the 5 years previous to the application, is considered a gift and the applicant will be assessed a penalty period during which Medicaid will not pay for care. This situation creates a quandary for families who were unaware of the rules, have already spent most of their resources, and now face bills which will not be reimbursed. Our staff has the ability to plan around gifts that have already been given, providing that all resources have not already been spent. Examples of “gifts” are college tuition payments, selling a car or property to a family member at below market value, or paying “rent” if you are being cared for in a family member’s home (please see the section on Family Caregiver Agreements for more information).
Once an individual qualifies for Medicaid, it must be renewed annually. Certain life situations, such as receiving an inheritance, can result in discontinuation of benefits for a period of time. Specialized planning, which takes into account an individual’s life situation as well as their goals can help maximize government benefits and protect assets. Just as physicians specialize in a particular area of medicine, attorneys can also specialize in the practice of law.
Since the IRS, Veterans Administration, and Department of Public Welfare all have different rules, it is important to make sure that your attorney has specific knowledge about all of these rules and how they interact with each other. At Keystone Elder Law P.C., we can help you understand the impact of all of these rules for YOU, and provide the tools and support to prepare and carry out a plan to improve health care, reduce stress, and save money.
For additional information or questions, give us a call at 717-697-3223
Power of Attorney
A Power of Attorney can be used to give another person the right to sell a car, home, or other property in the place of the maker of the Power of Attorney. A Power of Attorney might be used to allow another person to sign a contract for the maker of the Power of Attorney (the person who makes a power of attorney is called the “principal”). It can be used to give another person the authority to make health care decisions, do financial transactions, or sign legal documents that the principal cannot do for one reason or another. With few exceptions, Powers of Attorney can give others the right to do any legal acts that the makers of the Powers of Attorney could do them themselves. A General Power of Attorney gives the “power of attorney Agent” or simply “Agent” (the legal name of the person who is authorized to act for the principal) very broad powers to do almost every legal act that the principal can do. When Elder Law Attorneys draft general Powers of Attorney, they still list the types of things the Agent can do but these powers are very broad. People often do general Powers of Attorney to plan ahead for the day when they may not be able to take care of things themselves. By doing the General Power of Attorney, they designate someone who can do these things for them.
Normal Powers of Attorney terminate if and when the principal becomes incompetent. Yet many people do Powers of Attorney for the sole purpose of designating someone else to act for them if they cannot act for themselves. It is precisely when persons can no longer do for themselves that a Power of Attorney is most valuable. To remedy this inconsistency, the law created a Durable Power of Attorney that remains effective even if a person becomes incompetent. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the principal’s incapacity. Even a Durable Power of Attorney, however, may be terminated under certain circumstances if court proceedings are filed. Most Powers of Attorney done today are durable.
Yes. At the time the Power of Attorney is signed, the principal must be capable of understanding the document. Although a Power of Attorney is still valid if and when a person becomes incompetent, the principal must understand what he or she is signing at the moment of execution. That means a person can be suffering from dementia or Alzheimer’s Disease or be otherwise incompetent sometimes but as long as they have a lucid moment and are competent at the moment they sign the Power of Attorney, it is valid even if they do not remember signing it at a later date. At the time it is signed, the principal must know what the Power of Attorney does, whom they are giving the Power of Attorney to, and what property may be affected by the Power of Attorney.
Any competent person eighteen years of age and older can serve as an agent. Certain financial institutions can also serve. There is no course of education that agent must complete or any test that Agent must pass. Because a Power of Attorney is such a potentially powerful document, agents should be chosen for reliability and trustworthiness. In the wrong hands, a Power of Attorney can be a license to steal. It can be a big responsibility to serve as an agent.
Medicare is health insurance and covers medical services such as physician appointments, therapy, blood tests, x rays, medical procedures and hospitalization. Medicare will sometime pay for rehabilitation in a long-term care facility for a period of 20 to 100 days, but not longer. In long-term care, Medicaid covers the cost of ongoing support services for daily functioning, such as room and board in a nursing home.
Medicaid is a federal program that is overseen by the Center for Medicare and Medicaid Services (CMS). In Pennsylvania, Medicaid is called Medical Assistance and is administered by the Department of Human Services (DHS).
In Pennsylvania, Medicaid funds are not available to pay for assisted living or personal care.
For Medicaid to pay for care in a nursing home, an individual recipient must be determined to need a nursing home level of care by a physician and the local Office of Aging. An individual whose income is not greater than three times the poverty level may keep up to $8,000 of total resources, but may otherwise keep only $2,400. The cash value of life insurance counts as a resource, but one car and a residential home does not count as a resource.
Empowering Clients with Holistic Planning at
Keystone Elder Law
At Keystone Elder Law, we believe that the physical, social, legal, and financial considerations of our clients all intertwine. We utilize an interdisciplinary approach to evaluate each area, which allows for the creation of a plan that addresses the concerns of the individual as a whole as well as the family. To this end, our model of practice includes a Care Coordinator (usually a nurse or social worker), whose expertise complements our team of attorneys.
When the road of life is smooth, decisions about legal and financial matters are easy to push aside for “a rainy day.” Planning ahead, however, will allow for more options as you view the map of where you’ve been and where you want to go. Don’t let a crisis limit your choices or derail your plans.(717) 697-3223