Effective IMMEDIATELY, New York State has "EXPANDED" Medicaid Estate Recovery.
- Life Estates
- Revocable Trusts
- Certain Irrevocable Trusts
Everyone with a Life Estate or Irrevocable Trust needs to take action to ensure that their assets are protected.
The time to act is NOW!
- Contact us Immediately for a Consultation
- Attend one of our Free Seminars
- Participate in our Free Webinars
New York State has implemented new regulations effective September 8, 2011 that have “Expanded” Medicaid Estate Recovery.
In the past, New York State (NYS) was limited to recover against the estate of the Medicaid recipient as to assets passing under a Will or by intestacy (when there is no will). As a practical matter, generally, Medicaid recovery would occur when a Medicaid recipient retained ownership of his or her home while receiving Medicaid benefits. There are other restrictions on NYS as to Medicaid estate recovery which is not covered in this article.
The Deficit Reduction Act of 2005 (DRA) is not part of a natural evolution of the Medicaid program that was created along with Medicare and the Older Americans Act in 1965 in order to prevent the elderly from living their final years in poverty. Instead, the DRA is an unnatural partisan product of those determined to scare boomers and their parents into purchasing long-term care insurance. It contains the most regressive and punitive changes to the Medicaid program since its creation. These new rules will hurt seniors, the nursing home industry, and may or may not drive boomers to purchase long-term care insurance out of fear from what their parents are about to experience. That remains to be seen. And certainly the ethical question of denying care to chronically ill older Americans and people with disabilities in order to strengthen the demand for a private sector product must be evaluated by policy makers and the American people in the years ahead.
As reported in Newsday on March 20, 2011, the Henley family continues to struggle financially as they provide loving care to Mike at home.
Unfortunately, navigating through the broken long term health care system is an overwhelming burden placed on the family. For today, the Henley's problem is that Mike is on both hospice and Medicaid home care for additional services necessary to properly take care of him at home. But Medicaid only lets the family keep about $1,100 of Mike's income to pay for his care while the excess amount has to be spent down on for his care. Mike’s wife, Karen not only takes care of Mike but works full time and she has two children to take care of. This is a travesty but there are no hardship rules for Karen.
One step that can be taken is for Mike's excess income to be paid into the NYSARC Pooled Income Trust so that money can be used for Mike's living expenses instead of being spent down. Unfortunately, you have to have the right Durable Power of Attorney to establish this special account with NYSARC. Now, the Henley's are facing commencing a guardianship proceeding. To compound the problem, there is a now an outstanding bill with the home care agency. Thank goodness for the Alzheimer's Association Long Island Chapter (Mary Ann Ragona, Executive Director) who have stepped in to help Mike and his family.
I was privileged to have Karen and her two children, Courtney and Brandon on my TV show, Family Comes First. To get to know the Henley Family more personally, you can go to:http://www.familycomesfirst.tv/families/2010-season
Several little-noticed provisions of the recently-enacted law that extended the Bush-era tax cuts fundamentally alter how the Medicaid and Supplemental Security Income (SSI) programs treat tax refunds and other tax credits, making it easier for people with special needs to maintain their benefits.
Under the new law, tax refunds are no longer considered countable income for Medicaid or SSI purposes. Furthermore, any money received through a tax refund will not be a countable resource for 12 months following receipt of the funds, and SSI and Medicaid recipients will be under no obligation to segregate the funds from their other resources (SSI recipients can only keep $2,000 of resources and still qualify for benefits). Because of the change in the law, an SSI beneficiary can now retain his tax refund, even if it puts him over the $2,000 resource limit, for up to one year from the date of receipt, which is welcome news for beneficiaries who usually have to count every penny in order to avoid a disruptive loss of benefits.
The new law also changes the treatment of several other important tax credits. Under previous rules, Making Work Pay, Earned Income, Advanced Earned Income, and Child Tax Credits were all excluded as countable income for Medicaid and SSI purposes, but if the income was retained, it had to be spent within nine months of receipt. Now, the 12-month rule applies to all of these tax credits and, furthermore, First-Time Homebuyer Tax Credits that were previously countable as income and as a resource are now exempt and subject to the same countability rules as the other tax credits.
In one more piece of good news, the law applies to any refunds or credits received after December 31, 2009, which means that, in limited cases, applicants who were initially denied SSI or Medicaid benefits due to receipt of a tax refund or credit may actually be retroactively eligible for benefits. The Centers of Medicare and Medicaid Services have also indicated that seniors and other people seeking Medicaid coverage for long-term care will not be subject to transfer-of-asset penalties if they give away their tax refunds or credits during the 12-month grace period.
A Break Thru - On Reverse Mortgages
Seniors want to live at home and independently and why not? In our experience, the most important and valuable asset is one's home. So, how does one protect the home while also accessing Medicaid for long term care and a Reverse Mortgage for living expenses?
Ask The Expert
Thanks to Lynn Brenner of Newsday for her column, Ask the Expert. On November 5, 2010, she responded to a question regarding how to protect mom's home if mom needs Medicaid nursing home care. The daughter informed Ms. Brenner that her mother is 93 years of age, in failing health and her daughter has lived in mom's house since 1995.
Seniors want to live at home and independently and why not? In our experience, the most important and valuable asset is one’s home. So, how does one protect the home while also accessing Medicaid for long term care and a Reverse Mortgage for living expenses?
When meeting with seniors, one of the most valuable planning tools in our tool kit is the use of the Medicaid Asset Protection Trust.
Lenders have been unwilling to provide a reverse mortgage when the home is owned by this type of Trust, but we have just learned that at least one lender is willing to approve reverse mortgages even when the home is in this type of trust.
If the senior is uninsurable or can not afford the premiums of Long Term Care Insurance, then the only program available to pay for long term care is the Medicaid Program.
With the Medicaid Asset Protection Trust, seniors are able to place their home in the trust and still continue to receive all the benefits of ownership including the exclusive use of the home during their lifetime while accessing Medicaid. They have also taken a step to protect their home from estate recovery if they later need Medicaid nursing home care. Of course, the transfer will have to be greater than five years from the time Medicaid is applied for in order to be eligible for Medicaid nursing home care.
Now, if seniors need additional income to meet their living expenses, they will be able obtain a reverse mortgage and protect the home. It is very important to analyze if the reverse mortgage is the best choice for the senior before the senior takes this step.
For more information on these strategies, please contact Vincent J. Russo & Associates, P.C. at 1-800-680-1717.
My mom is 93 and in failing health. She has fallen twice in the past, and recuperated after 100 days in a nursing home. I've lived in her house with her since 1995. Recently, I've had to enlist a live-in attendant to care for her. What are the rules governing house ownership if she has to go into a nursing home? I have her health-care proxy.
Your mother can take legal steps that will preserve...
2010 Newsday Ask the Expert Nov 5Are you in need of home care services but are afraid to get the necessary care because of cost! Are you aware that you may be able to access the Medicaid Community Based Home Care Program (Medicaid Home Care) for these services?
Medicaid Home Care – The Basics
Medicaid is a major provider of home care services in New York State through the personal care aide program. A Medicaid application is often triggered by the need for home care by a person who is no longer able to function independently. He or she needs assistance with activities of daily living.
Under the Medicaid Home Care Program, personal care aides provide unskilled services under the supervision of nurses. Medicaid provides these services via home care agencies which ultimately provide the licensed personal care aides.