I Take Care of My Mother. Can I Legally Get Paid for That?

As the number of family members providing care for aging parents increases, the solutions to find help with loss of income because of time off from employment for caregiving has become a major concern for many. The demands on both the time and energy needed to provide the needed care can make it impossible to maintain both a full time job with full time caregiving.

Angela is a registered nurse. Her mother, Renee, has been experiencing a gradual decline in her health due to her Alzheimer’s and stroke and recently moved in with Angela. Angela is taking more and more time off from work to give Renee the care she needs. Sometimes she misses out on important overtime that her household finances depend on. Angela started paying herself out of her mother’s account for the care that she gives Renee. She pays herself some weeks, and doesn’t on others, even though she is providing the same care.

It is understandable that Angela would want to be paid for the care she is giving her mother, especially when it is interfering with her current job. Also if it wasn’t for this care, Renee would be in a nursing home. But, Angela must be sure to go about getting paid correctly.

The National Family Caregiver Support Program was created by the federal government to support family caregivers. While reviewing this site, Angela found out where she can get respite care for Renee, so she can take a much needed vacation with her husband. She also discovered how she may get paid, without feeling bad about her mother’s dwindling funds, and how these payments can continue after her mother runs out of money.

Often overlooked, the Veteran’s Aid and Attendance pension benefit is a great source of money to pay family caregivers to provide care at home. This money is available to veterans who served during a period of war. Pension money is also available to the widows of these veterans. This benefit, under the right circumstances, can provide up to $1,949 a month in additional income to pay family members to provide care at home. Luckily, Angela’s late husband was a WWII veteran and she qualifies for aid. However, she must have a professionally drafted caregiver contract in place, get a medical evaluation, meet income and asset qualifications, and have proof of medical expenses and care needed.  

Alternatively, or sometimes in addition to, a long term care insurance policy covers home care and payment to the care giver from this source could be arranged. Some policies require the care provider to be through a licensed home care agency, but others will pay for individual aides certified as such. This would require some training by the family member to become certified, unless they had a nursing background, like Angela. Renee did not have a long term care insurance policy in place. However, there are policies that pay a daily benefit amount to the insured to use as they want to pay for their care.

In some cases the elder has the funds to pay for their own care. If a family member is giving care it is very important that a professionally drafted caregiver contract be in place. Without one, any payments could disqualify the elder from certain MassHealth/Medicaid long-term care payments. Lump sum payments for care and/or retroactive payments are never a good idea.

A caregiver contract prepared by an elder law attorney like Attorney Kristina R. Vickstrom, will be a signed and dated agreement will outline the services provided as well as the amount of pay for these services. The contract will eliminate questions about what is expected from both parent and caregiver as well as providing a legitimate contract and a clear and consistent payment record of services to qualify for MassHealth/Medicaid. The contact will be treated as an employer/employee relationship and payroll records must be kept with taxes paid. Retroactive payments for care-giving are almost never allowed when applying for MassHealth/Medicaid.

The family member providing such care, like Angela, can not only save their loved one from needing nursing home services outside of the home, but also could protect assets in the event that long-term care is needed in the future. Please contact Vickstrom Law to set up a consultation if you are interested in learning more about the right way to get paid to take care of your loved one.

Protecting the Family Cottage from a Medicaid (MassHealth) Spend Down through an Irrevocable Trust

An irrevocable trust is an excellent tool when preplanning for Medicaid benefits.  Anything that is put into the irrevocable trust is protected from a Medicaid spend-down if five years pass from the date of the transfer.

For example, Alice Smith, a 77-year-old widow, wants to protect her family cottage from potential long-term care nursing home bills and preserve it for the benefit of her four children and their immediate families.  To do so she would need to establish an irrevocable trust, fund it with the cottage property, and have five years pass from the date of the transfer.  Additionally, to ensure her children have sufficient funds to maintain the family cottage, Alice also simultaneously transferred $250,000 of cash assets into the trust.  Finally, in order to bullet-proof the plan in the event of an accident, Alice purchased a traditional long-term care insurance policy which will provide her with five years worth of long-term care benefits, including home health, assisted living, and nursing home care.  The long-term care insurance policy also offered a full return of premium rider in the event that she passed away without using any of the coverage.  After such an event, the annual premiums would be refunded to her revocable living trust.

With the above plan in place, Alice was confident that her wish to have the family cottage remain in the family for many years to come would be long lasting.  Notwithstanding the above, Alice understood that when the maintenance funds ran out that a financial problem may soon develop.  However, to avoid a point of impasse among her children, Alice designed the trust so that if a financial problem persisted for more than 90 days, the trustee was directed to sell the property, giving each child an equal share of the sale proceeds.

This week’s blog originally appeared in a blog from Kraus Financial Services and can be viewed here.

Applying for MassHealth: Is the No-Cost Solution Really “No-Cost”?

Medicaid, or MassHealth as it is referred to in Massachusetts, is an avenue available for funding long-term nursing home care. To qualify, you must meet asset thresholds that many elders exceed. Additionally there are income requirements for MassHealth/Mediciad. Adequate understanding of MassHealth/Medicaid law and proper strategizing is a critical component of any plan for the future. With the proper planning of an elder-law attorney, you can protect your property, spouse, and assets.

After attempting to cope with his mother’s diagnosis of dementia for several months, Joe has finally decided to research local nursing homes for his mother. However, he is concerned about the cost while protecting his mother’s multiple properties, which have been in the family for generations. During a vist, Lindsay, a social worker from the facility, reached out to Joe, offering to complete a MassHealth application for his mother at no-cost. While Joe likes the concept of this free service, he can’t help but wonder if there is a catch involved.

Employed by the nursing home, social workers and other nursing home advocates focus on the rights of the nursing home and not the resident. The nursing home has a vested interest in keeping someone on “private-pay” for as long as possible because their private pay-rates are much higher than the amount received in MassHealth/Medicaid reimbursement. This means more out-of-pocket costs for residents than may be necessary.

Further, even if nursing home advocates do have the best of intentions, the MassHealth/Medicaid process is riddled with complex rules and regulations that are difficult to navigate for those not educated in the eligibility requirements and advantageous planning opportunities available under MassHealth/Medicaid. For instance, an individual encouraged to apply too soon might be ineligible for an extended time period and have to pay privately for a longer duration. Alternatively, the “advocate” may not inform the family that they can pre-pay for funeral expenses as part of a spend down, thereby reducing the burden on family members when the applicant passes.

Individuals that enlist family members to fill out their MassHealth applications or file themselves may face similar problems. Unfamiliar with eligibility requirements and liable to miss prime planning opportunities, these individuals are likely to encounter harsh penalties or confusion when faced with the application process, as well as income and asset verifications. Once they receive their denial notice in the mail, it will be much more expensive to get an Elder Law attorney involved at that point. Additionally there are strict time periods that must be adhered to in order to have any change at being sucessful in a MassHealth/Medicaid appeal.

Nursing home advocates and family members, although the cheapest solution up front, do not have the requisite knowledge, skills, or ability to compose trusts, devise appropriate estate plans, and represent you in an appeal setting if the need should arise. Rectifying the mistakes of an advocate or self-handled application may be more costly than a properly executed plan formulated a skilled elder law attorney. By hiring an elder law attorney to guide the MassHealth application process, you will ensure that your savings, your spousal support, and your family’s inheritance will not be jeopardized by lost opportunities in a last minute planning strategy.

Hiring a lawyer to handle your MassHealth application is a necessary investment. Elder law attorneys can save clients and their family members an amount greater than the cost of their legal services. If you are interested in learning more about the MassHealth application process or long-term care planning, contact Vickstrom Law today!

What Do You Mean Medicare Won’t Pay for Dad’s Nursing Home Stay?!

A three-day hospitalization often serves as a gateway for a senior citizen’s transition into a skilled care facility. When the patient is discharged to a skilled care facility for occupational, physical, or speech therapy, the patient’s health insurance (Medicare) will continue to finance treatment for up to 100 days per stay (as long as the person continues to benefit from rehab). Medicare coverage ultimately ends, and when it does, the patient must pay from income, savings, long-term care insurance, Medicaid, or a combination of these resources.

Jo-Ann’s ninety year-old father, Ed, recently suffered a massive stroke. After spending four days in the hospital, Ed was transferred to the Odd Fellows Home in Worcester, Massachusetts for round the clock skilled care. Medicare covered the entirety of Ed’s expenses for the first 20 days of his stay, and Ed fronted a $95 copayment for days 21-100. It is now day 101. Medicare refuses to pay for Ed’s care because the program contends coverage has ended and that Ed now must meet his skilled care expenses from another source.  Ed has been primarily dependent on monthly Social Security checks after running through his savings a few years ago. Jo-Ann is a single mother of four children who fears that she won’t be able to keep her father in a nursing home due to her financial inabilities and his exhausted savings. She thought that since Ed paid taxes his whole life it would have guaranteed him government-funded nursing home care. What are Ed’s options?

It is easy to confuse Medicare with Medicaid. Medicare is a federal health insurance program. Anyone who has paid their taxes and meets specific qualifications (is over the age of 65, or who has been blind or disabled for the past two years) is entitled to Medicare coverage. Hospitalization, immunizations, medical equipment, and physician visits are covered by Medicare, while deductibles and co-pays are often covered by a form of supplemental policy. Medicare applies regardless of financial need but will not pay for nursing home care except in extremely limited circumstances, and then only for small durations.

Ed might benefit from applying for Medicaid, or MassHealth in Massachusetts. A joint federal and state program for individuals with certain medical needs who are financially needy, Medicaid/MassHealth is often the chief financier for nursing home care. An applicant may have no more than $2000 in countable assets (cash, savings, mutual funds, retirement accounts, houses) before requesting Medicaid/MassHealth. To achieve Medicaid/MassHealth payouts, many individuals will seek to transfer their assets to loved ones to demonstrate financial need. It is important to note that the transfer of assets for less than their fair market value will result in a corresponding ineligibility period for Medicaid/MassHealth coverage of nursing home care.

The average cost of a nursing home in Massachusetts is an astounding $11,000 per month. If you or a loved one has exhausted all means of paying for skilled care, it is important to contact an Elder Law attorney to discuss your options. After recommending Medicaid/MassHealth, an Elder Law attorney may suggest ways to set aside funds and assets for your family without jeopardizing the patient’s medical care and “spend down” ideas which benefit the patient.

Medicaid/MassHealth rules are complex and confusing. Further, nothing in this area is concrete or insulated from legal or policy change. Vickstrom Law can help explain the interrelationship between Medicaid/MassHealth and nursing homes and can assist with protecting and preserving assets for a spouse or other family members.

No, You Can’t Just Give It Away! The Dangers of “Gifting” when Considering Long Term Care

Hardly a day goes by when I don’t have a client who tells me that they can give away a certain amount of money free and clear, avoiding look-back periods for long-term care planning. They inform me that their neighbor, friend, or cousin told them that this is allowable. I then have the unfortunate task of telling them that they are wrong and that most states that have enacted the Deficit Reduction Act. After February 8, 2006, the rules relative to gifts changed.

Regardless of the amount, any gift that is made is a transfer and is subject to a look-back period of five-years for MassHealth (Medicaid) purposes. This doesn’t mean that the State will take that money, but rather, that the State will not pay for the donor’s long-term care costs until the five-year look-back is exhausted, or in the alternative, until all the gifts that have been transferred are used to pay for the institutionalized person’s care.

The sum that most clients feel that can be gifted (erroneously) without a look-back is $10,000. This amount actually relates to a past year’s annual amount that could have been gifted on an annual basis to as many individuals as the donor wishes without the need to file a GIFT TAX return. This has NOTHING to do with the look-back period when applying for MassHealth (Medicaid) coverage of a nursing home. However, the exemption in 2010 for gift giving on an annual basis is $13,000 per donee per year. Again, this is only a tax amount gift, and is not a Medicaid or asset protection plan exempt amount. A gift of $13,000 from a parent to a child will constitute a non-taxable gift, but this gift will carry with it a waiting period of five-years relative to MassHealth (Medicaid) qualification.

Far too often, family, friends, and other non-professional advisors provide well-intended but erroneous advice that can lead to significant adverse consequences if relied upon. If in doubt, it is always appropriate to contact a professional accountant, geriatric care manager, attorney, or other financial advisor for the appropriate and up to date laws relative to gifts, Medicaid planning, taxes, etc.

If you are unsure about how to find a qualified elder law attorney contact the National Academy of Elder Law Attorneys.

I drafted a follow-up to this blog, dealing with the exceptions to the gifting rule. It can be found here.

This blog was modified from one originally posted by Attorney Hy Darling from Bacon Wilson, Attorneys at Law in Springfield, MA. Its original version can be found here.

Proposed Massachusetts Legislation Could Change the Way Assets are Counted for MassHealth

How often do you feel like you know what your state legislators are doing? The whole process can be mysterious and confusing. This week I would like to shed some light on the subject and tell you about a potentially helpful piece of legislation currently pending in the Massachusetts state legislature.

The proposed law would change the way assets are counted when determining whether a spouse in a nursing home, or certain other institutions and community based programs, is eligible for medical assistance through MassHealth (Medicaid). For MassHealth purposes, the spouse in the nursing home is called the “institutionalized spouse” and the spouse still living at home is referred to as the “community spouse.” Currently, under Massachusetts General Laws, chapter 118E, subsection 21A, many different types of income and asset types of both spouses are considered countable for purposes of determining eligibility. The total amount of countable income and assets are major factors the Division of Medical Assistance takes into account when determining if the institutionalized spouse is eligible for medical assistance from the Commonwealth (MassHealth/Medicaid).

The proposed legislation, sponsored in the State House by Representative Alice Peisch, and sponsored in the State Senate by Senator James Eldridge, would alter the language in the statute to make some assets that are currently countable, no longer countable. The proposals in both houses are identical. The proposed legislation would make any money held by the community spouse in an IRA, Keogh plan, or other pension fund non-countable assets as long as regular income distributions are made from the fund OR the community spouse is employed. This means that those assets would not affect the institutionalized spouse’s eligibility for medical assistance. This would come in handy in lots of potential situations, but especially in situations like a spouse in their 50’s suffering from early onset dementia, where the community spouse is still working. Many spouses in their 50’s, 60’s, and even early 70’s still work and more importantly have to work to make ends meet.

This change in the law would also be hugely beneficial to aging couples who have worked hard and diligently saved their money. If one spouse is institutionalized, the community spouse still needs to have the means for adequate support. No one should be penalized for following their financial planner’s advice and putting money away for retirement. In this system, frivolity and impoverishment would no longer be the only path to assistance from MassHealth.

The proposed legislation has been referred to the Joint Committee on Health Care Financing, and a public hearing is scheduled for June 3, 2010, at 1:00, in Hearing Room B1. If you are interested in learning more, contact State Senator James Eldridge. He represents parts of Middlesex and Worcester county. Most importantly, if you would like to see this legislation passed, contact your own local representative and express your support.

MassHealth to Update Regs to Include Same-Sex Marriage Language

The Executive Office of Health and Human Services, Division of Medical Assistance, commonly known as MassHealth is making a much overdue amendment to their existing regulations. Finally same-sex marriages, which have been recognized in the Commonwealth since late 2003, will be officially recognized by MassHealth. Governor Deval Patrick also signed the MassHealth Equality Bill nearly one year ago.

So what does this mean to spouses in same-sex marriages? They can now receive the same benefits as heterosexual marriages when applying for MassHealth for longterm care, meaning their assets can be considered jointly for eligibility purposes and MassHealth will also not penalize transfers between spouses in same-sex situations, as they currently do for traditional marriages. The definition of “family member” is also slated to be amended under the change.

The full text of the memo can be found below.

COMMONWEALTH OF MASSACHUSETTS

EXECUTIVE OFFICE OF HEALTH AND HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE

NOTICE OF PROPOSED AMENDMENT OF REGULATIONS

The Division proposes to amend its regulations under the authority of M.G.L. c. 118E, ss. 7 and 12 and pursuant to M.G.L. c. 30A, s. 3. The Division describes the substance of the proposed actions as amendments to regulations found at 130 CMR 408.000: Adult Foster Care; 130 CMR 414.000: Independent Nurse; and 130 CMR 422.000: Personal Care Attendant.

On July 31, 2008, Governor Deval Patrick signed into law the MassHealth Equality Bill, which requires MassHealth to recognize state marriage laws when determining member eligibility for MassHealth programs. Accordingly, as stated in recently issued Eligibility Operations Memo 09-02, the definition of “spouse” in MassHealth regulations at 130 CMR 501.001 and 515.001 has been revised to include persons in same-gender marriages.

As a result of the above changes, a revision to the definition of “Family Member” for Adult Foster Care regulations under 130 CMR 408.000 and for Personal Care Attendant regulations under 130 CMR 422.000 is required, as is the definition of “Caregivers” for Independent Nurse regulations under 130 CMR 414.000. These revisions adjust the definition of “Family Member” and “Caregiver” to include a spouse “as defined at 130 CMR 501.001 and 515.001.”

It is anticipated that these amendments will not go into effect before September 1, 2009.

All persons desiring to submit data, views, or arguments concerning these proposed actions may submit them in writing to the Medicaid Director, EOHHS, One Ashburton Place, Room 1109, Boston, Massachusetts 02108, or e-mail them to masshealthpublicnotice@state.ma.us. E-mailed comments should contain the sender’s name, mailing address, and organization or affiliation, if any. Comments will be accepted through July 31, 2009.

All persons desiring to review the current draft of the proposed actions may go to http://www.mass.gov/masshealth/proposedregs or request a copy in writing or in person from the MassHealth Publications Unit, 600 Washington Street, Boston, Massachusetts 02111.

The Division may adopt a revised version of the proposed actions taking into account relevant comments and any other practical alternatives that come to the Division’s attention.

By Order of the Division of Medical Assistance

TOM DEHNER, MEDICAID DIRECTOR July 10, 2009