Policy Decisions Affect Medicaid Rules
Clients often feel that the Medicaid rules or certain rules are unfair. The purpose of this article is to discuss what I believe are the policy decisions behind certain rules.
1. Life Insurance Issues – As discussed in Post 3, the cash value of a life insurance policy or policies in excess of $1,500 constitutes a resource. The rationale behind such rule is that if such value were not counted, an applicant or a spouse could use substantial funds to obtain life insurance policies with large cash values that would not be considered for Medicaid purposes.
2. Spousal IRA’s – In Mistrick v. Division of Medical Assistance and Health Services 154 NJ 158 (1998), the Court held that the IRA’s of a spouse are a countable resource. This was a change from the prior law in which a spousal IRA was exempt.
The basis of this decision again was policy so that a spouse would not establish an IRA or would not rollover a retirement distribution to an IRA without limit. Under prior law, an individual could have an unlimited amount in an IRA and this would not preclude Medicaid eligibility.
3. 90-Day Rule – Post 10 discusses the significance of the 90-day rule. As an administrative decision, New Jersey has allowed eligibility if the total amount of resources held by the applicant and the community spouse equal the computed amounts whether they are held by the applicant, community spouse or jointly at the date of eligibility. However, within 90 days, the applicant must meet his or her requirement ($2,000 or $4,000) and the community spouse resource allowance amount must be in the sole name of the community spouse. The policy behind this decision is that if a couple inadvertently have not severed a joint account at the date eligibility is sought, they are not to be penalized. This makes sense in that most adults keep accounts with a spouse held jointly and should not be penalized.
4. Checks Written and Not Cashed – Post 4 discusses the significance of payment of debts and expenses. Examples in this post indicate that if a check is written before the date sought for eligibility, it is irrelevant whether or not such check has been negotiated. The policy reason for such a rule is that an applicant should not be penalized for the inaction of a payee (i.e. negotiating a check).
5. Real Property Owned Jointly With Other Than Spouse – In Post 35, the relevant regulation indicates that real estate owned jointly with a person other than a spouse is an “inaccessible” resource. Therefore, it is not a countable resource for Medicaid purposes unless the other person consents. The rationale behind this rule is that, if the property were treated as a countable resource, such decision would affect an interest in property held by someone not involved in the Medicaid proceeding (i.e. the co-owner).
The above constitutes a very brief summary of some policy positions taken by Medicaid in administering its eligibility decisions. Obviously, the number of examples is infinite.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 49
Thursday, July 30, 2009
Monday, July 27, 2009
Inaccessible Resources
Inaccessible Resources
Inaccessible resources (see Post 35) are treated as excludable resources for Medicaid eligibility purposes (N.J.A.C. 10:71-4.4(b)6).
The theory is that a countable resource is only such that can be converted to monies to pay nursing home costs.
Post 35 discusses in detail that a co-owner of real estate renders the real estate inaccessible if the co-owner (not the applicant) refuses to liquidate.
Similarly, the same regulation treats property in probate as an inaccessible resource. The effect of inheritance by the community spouse (Post 27) and the effect of inheritance by a Medicaid recipient (Post 28) discuss this topic in detail. Basically, the theory is that if an estate has not been administered and, therefore, not distributed, the inheritance only becomes a resource upon distribution. If distribution is delayed, the Internal Revenue Service for estate income tax purposes treats the estate as “closed.” I have not seen Medicaid take this position although it would make sense that an estate cannot be held “in probate” for an inordinate amount of time.
The relevant regulation (N.J.A.C. 10:71-4.4(b)6) treats as inaccessible “the value of resources which are not accessible to the individual through no fault of his/her own.” Therefore, the above are merely examples and the possibilities for inaccessible resources are infinite.
For example, small pieces of real estate, which have no value due to location and zoning are treated as inaccessible in my experience. Similarly, assets that are to be received in the future, such as royalties, would have a similar status.
Monies owed to a community spouse, but not paid because the employer of the spouse is having financial problems, in today’s environment would be a poignant example of an inaccessible resource for purposes of the community spouse resource allowance.
On the other hand, resources available only if a penalty is incurred, are treated as available resources. An example of such a resource would be an annuity subject to penalty if distributed.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 48
Inaccessible resources (see Post 35) are treated as excludable resources for Medicaid eligibility purposes (N.J.A.C. 10:71-4.4(b)6).
The theory is that a countable resource is only such that can be converted to monies to pay nursing home costs.
Post 35 discusses in detail that a co-owner of real estate renders the real estate inaccessible if the co-owner (not the applicant) refuses to liquidate.
Similarly, the same regulation treats property in probate as an inaccessible resource. The effect of inheritance by the community spouse (Post 27) and the effect of inheritance by a Medicaid recipient (Post 28) discuss this topic in detail. Basically, the theory is that if an estate has not been administered and, therefore, not distributed, the inheritance only becomes a resource upon distribution. If distribution is delayed, the Internal Revenue Service for estate income tax purposes treats the estate as “closed.” I have not seen Medicaid take this position although it would make sense that an estate cannot be held “in probate” for an inordinate amount of time.
The relevant regulation (N.J.A.C. 10:71-4.4(b)6) treats as inaccessible “the value of resources which are not accessible to the individual through no fault of his/her own.” Therefore, the above are merely examples and the possibilities for inaccessible resources are infinite.
For example, small pieces of real estate, which have no value due to location and zoning are treated as inaccessible in my experience. Similarly, assets that are to be received in the future, such as royalties, would have a similar status.
Monies owed to a community spouse, but not paid because the employer of the spouse is having financial problems, in today’s environment would be a poignant example of an inaccessible resource for purposes of the community spouse resource allowance.
On the other hand, resources available only if a penalty is incurred, are treated as available resources. An example of such a resource would be an annuity subject to penalty if distributed.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 48
Friday, July 24, 2009
General Discussion of the Medicaid Application Process
General Discussion of the Medicaid Application Process
In applying for institutional Medicaid, there are two basic documents that I present to my clients at the initial meeting. One document is a list of information required by the respective County Board of Social Services. For purposes of simplicity, this article shall relate to a single individual.
I. Typical information requested by a county board might include:
1. proof of age.
2. proof of citizenship.
3. proof of identity (such as driver’s license).
4. proof of marital status.
5. proof of residence.
6. proof of current gross income, which would include pension, social security, veterans benefits, earnings.
7. income tax returns for three years.
8. closed out accounts for the past period of time. The amount of time currently being reviewed by Medicaid increases each month with the initial month being February, 2006, so that for March, 2009, 37 months are reviewed and for April, 2009, 38 months would be reviewed.
9. life insurance policies.
10. prepaid funeral contract (if applicable).
11. health insurance ID information.
12. deed to house (if one is owned).
13. copies of nursing home bills.
14. social security and Medicare cards.
15. power of attorney (if applicable).
II. The second document that I present to the client is the application.
1. The application asks for clarity on much of the information discussed above, but includes questions such as transfers made during the aforementioned respective time periods.
2. Personal information relating to name, veteran status, history of residence, specific asset information, whether you are the beneficiary of someone’s insurance policy, pending lawsuits, medical coverage. Posts that discuss the information in detail are life insurance issues (Post 3), qualifying for Medicaid (Post 16).
III. At the initial meeting I discuss the facts to see if there are any obvious planning possibilities such as surrendering life insurance (Post 3), applicant residing with a caretaker child (Post 6), rules of Medicaid eligibility are reviewed (Post 7), resource limitations for community spouse not limited after applicant receives Medicaid (Post 13), whether a dependent relative resides in the house (Post 14), new transfer rules effective February, 2006 (Post 15), possibility of payment by applicant for care or services provided by child (Post 17), inadvertent disqualification of applicant (Post 21), methods of accelerating Medicaid eligibility (Post 4, 5, 7, 10, 12, and 20).
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 47
In applying for institutional Medicaid, there are two basic documents that I present to my clients at the initial meeting. One document is a list of information required by the respective County Board of Social Services. For purposes of simplicity, this article shall relate to a single individual.
I. Typical information requested by a county board might include:
1. proof of age.
2. proof of citizenship.
3. proof of identity (such as driver’s license).
4. proof of marital status.
5. proof of residence.
6. proof of current gross income, which would include pension, social security, veterans benefits, earnings.
7. income tax returns for three years.
8. closed out accounts for the past period of time. The amount of time currently being reviewed by Medicaid increases each month with the initial month being February, 2006, so that for March, 2009, 37 months are reviewed and for April, 2009, 38 months would be reviewed.
9. life insurance policies.
10. prepaid funeral contract (if applicable).
11. health insurance ID information.
12. deed to house (if one is owned).
13. copies of nursing home bills.
14. social security and Medicare cards.
15. power of attorney (if applicable).
II. The second document that I present to the client is the application.
1. The application asks for clarity on much of the information discussed above, but includes questions such as transfers made during the aforementioned respective time periods.
2. Personal information relating to name, veteran status, history of residence, specific asset information, whether you are the beneficiary of someone’s insurance policy, pending lawsuits, medical coverage. Posts that discuss the information in detail are life insurance issues (Post 3), qualifying for Medicaid (Post 16).
III. At the initial meeting I discuss the facts to see if there are any obvious planning possibilities such as surrendering life insurance (Post 3), applicant residing with a caretaker child (Post 6), rules of Medicaid eligibility are reviewed (Post 7), resource limitations for community spouse not limited after applicant receives Medicaid (Post 13), whether a dependent relative resides in the house (Post 14), new transfer rules effective February, 2006 (Post 15), possibility of payment by applicant for care or services provided by child (Post 17), inadvertent disqualification of applicant (Post 21), methods of accelerating Medicaid eligibility (Post 4, 5, 7, 10, 12, and 20).
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 47
Tuesday, July 21, 2009
The Necessity for Other Professionals
The Necessity for Other Professionals
I have often sought the need of other professionals in representing a client before the various County Boards of Social Services in seeking institutional Medicaid for a client. For example, the client may be coming to New Jersey and the family uncertain as to the appropriate type of facility available and appropriate. In such case, I recommend that the family consult with a geriatric care manager as to whether home, assisted living or institutional care might be the most appropriate place of residence. In this regard, the assessment of a geriatric care manager is necessary.
In preparing caretaker agreements (see Post 17), I seek an analysis by a geriatric care manager providing the prevailing rate for the value of services provided by a child. Pursuant to a properly drafted caretaker agreement, a list of services provided by the child is attached as is a valuation by a geriatric care manager. I have also found a geriatric care manager in conjunction with an accountant helpful in this regard.
An accountant is often necessary in the spenddown process. For example, we may want to prepay income taxes, not only for the spenddown, but also to avoid the situation of an individual or a community spouse having to pay income taxes after the date of qualification for Medicaid.
As discussed in Post 6, I often seek the assistance of a physician in describing the care provided by a child. This is helpful in establishing that a child had provided necessary care for two years in order to allow a transfer of the home (see Post 23).
I particularly seek counsel of lawyers from Legal Services. As a Legal Services volunteer, I have the privilege of having some outstanding Legal Services attorneys available for consult (I even call during a conference). The various benefits available to an individual are continually changing and Legal Services attorneys are generally aware of the status of waiver programs and similar issues.
Finally, but not least, no lawyer should function in the Medicaid area by himself or herself. Anonymously discussing complicated issues with various colleagues in the Medicaid area are often helpful to get another slant on a Medicaid plan. As lawyers are aware, many clients seeking Medicaid representation (and, of course, in other areas) anticipate one answer and that the answer will be simple. In this regard, it is my practice to have a telephone conference with a client before meeting, so that I can ascertain the facts as best as possible, so that the meeting is most productive.
That is, another helpful individual is the client. For instance, I am presently conferring with a client who owns the home as to whether the home should be sold and the client move in with one of her daughters who will provide care and the client will pay for such care pursuant to a caretaker agreement (see Post 17) from the proceeds of the sale of the client’s house. Another possibility is for the other daughter to move into the client’s house in hopes that two years pass so that the house can be transferred to the child as part of the Medicaid planning process (see Post 6). These issues were generated during telephone conference, not for purposes of resolving the issue, but for purposes of the client’s receptivity to discussing these alternatives.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 46
I have often sought the need of other professionals in representing a client before the various County Boards of Social Services in seeking institutional Medicaid for a client. For example, the client may be coming to New Jersey and the family uncertain as to the appropriate type of facility available and appropriate. In such case, I recommend that the family consult with a geriatric care manager as to whether home, assisted living or institutional care might be the most appropriate place of residence. In this regard, the assessment of a geriatric care manager is necessary.
In preparing caretaker agreements (see Post 17), I seek an analysis by a geriatric care manager providing the prevailing rate for the value of services provided by a child. Pursuant to a properly drafted caretaker agreement, a list of services provided by the child is attached as is a valuation by a geriatric care manager. I have also found a geriatric care manager in conjunction with an accountant helpful in this regard.
An accountant is often necessary in the spenddown process. For example, we may want to prepay income taxes, not only for the spenddown, but also to avoid the situation of an individual or a community spouse having to pay income taxes after the date of qualification for Medicaid.
As discussed in Post 6, I often seek the assistance of a physician in describing the care provided by a child. This is helpful in establishing that a child had provided necessary care for two years in order to allow a transfer of the home (see Post 23).
I particularly seek counsel of lawyers from Legal Services. As a Legal Services volunteer, I have the privilege of having some outstanding Legal Services attorneys available for consult (I even call during a conference). The various benefits available to an individual are continually changing and Legal Services attorneys are generally aware of the status of waiver programs and similar issues.
Finally, but not least, no lawyer should function in the Medicaid area by himself or herself. Anonymously discussing complicated issues with various colleagues in the Medicaid area are often helpful to get another slant on a Medicaid plan. As lawyers are aware, many clients seeking Medicaid representation (and, of course, in other areas) anticipate one answer and that the answer will be simple. In this regard, it is my practice to have a telephone conference with a client before meeting, so that I can ascertain the facts as best as possible, so that the meeting is most productive.
That is, another helpful individual is the client. For instance, I am presently conferring with a client who owns the home as to whether the home should be sold and the client move in with one of her daughters who will provide care and the client will pay for such care pursuant to a caretaker agreement (see Post 17) from the proceeds of the sale of the client’s house. Another possibility is for the other daughter to move into the client’s house in hopes that two years pass so that the house can be transferred to the child as part of the Medicaid planning process (see Post 6). These issues were generated during telephone conference, not for purposes of resolving the issue, but for purposes of the client’s receptivity to discussing these alternatives.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 46
Thursday, July 9, 2009
Transfers to Spouse
Transfers to Spouse
An individual shall not be ineligible for Medicaid under the transfer rules to the extent that assets are transferred to a spouse. The theory is that since all spousal resources are deemed available to the Medicaid applicant, such a transfer should not be penalized.
Transfers to the community spouse certainly make sense in terms of management of assets, particularly in light of the fact that the institutionalized spouse could become incompetent. Further, if the income generated by spousal assets could pay for nursing home costs and support of the community spouse with no or minimal invasion of principal, outright transfers to the community spouse could be a viable alternative without any additional planning. Of course, one would have to have substantial assets to generate such income.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post #45
An individual shall not be ineligible for Medicaid under the transfer rules to the extent that assets are transferred to a spouse. The theory is that since all spousal resources are deemed available to the Medicaid applicant, such a transfer should not be penalized.
Transfers to the community spouse certainly make sense in terms of management of assets, particularly in light of the fact that the institutionalized spouse could become incompetent. Further, if the income generated by spousal assets could pay for nursing home costs and support of the community spouse with no or minimal invasion of principal, outright transfers to the community spouse could be a viable alternative without any additional planning. Of course, one would have to have substantial assets to generate such income.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post #45
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