NURSING HOMES & MEDICAID MYTHS

Part 1

Myth #1:  I will never need long term care or go to a nursing home.

False:Most studies show that 1 of 4 people will need some type of long term care and                this probability increases with age.  Department of Health and Human Services estimates 70% of all people over the age of 75 will need some type of long term care.

Myth #2:  Medicare will pay for long term nursing home care.

False:If you qualify, meaning you must have had a qualifying hospital stay of three inpatient days or more then Medicare may cover expenses related to your nursing home care in a skilled nursing facility for the first 100 days as follows: For days 1 to 20 of your stay during the benefit period, you pay $0. For days 21 to 100 of your stay, you pay $167.50 per day in 2018 as coinsurance. At day 101 and beyond, you are usually responsible for all expenses associated with your nursing home care.  If at any time during the 100 days Medicare may determine it is no longer medically necessary for the nursing home care and stop payment.  When Medicare no longer pays then you must pay out of pocket or qualify for Medicaid.

Myth #3:  I have enough money to pay for long term care costs and nursing home costs.

False:  Medical care and the costs of long term care will be the greatest threat to your home and your financial resources.  The hourly rate for home health care workers in this area ranges from $18.00 to $25.00 dependent on services provided.  The annual cost of Supporting Living facilities ranges between $45,000.00 to $60,000.00 depending upon the facility.  The annual cost of Skilled Nursing Facilities range between $100,000 to $140,000 per year depending upon the facility and care level. Few individuals have retirement savings sufficient to pay for long term care costs.

Myth #4: There is nothing I can do to protect assets from the risk of future long term care costs.

False:Depending on an individual asset profile and monthly income there are several planning strategies including the purchase of long term care insurance for eligible individuals and Medicaid asset protections trusts for non-qualified retirement assets such as real property, stocks, bonds and certificates of deposit.

Myth #5:  My spouse or parent is in a Nursing Home and private paying and it is too late to implement asset protection planning.

False: If a spouse or parent is in a Nursing Home that accepts Medicaid then there are several crisis planning techniques and strategies for preservation of assets and qualifying for Medicaid.

Attorney Leasa Baugher assists clients with Estate Planning, Medicaid Planning, Elder Law, and Probate throughout Illinois. If you have any questions about this article and would like additional information or to arrange for a no cost consultation please call the Law Offices of Leasa J. Baugher, Ltd. Phone: 630-529-2050.


Medicaid Myths Part 2  

Myth #1: My unmarried or widowed family member permanently resides in a nursing home that accepts Medicaid and is required to private pay $10,000.00 a month until all my family members assets are depleted to $2,000.00 before Medicaid will pay for room and board at the nursing home.

False:If the family member appointed an individual to act as their Financial Power of Attorney then with the assistance of an experienced attorney in the area of Medicaid potentially 50% to 60% of the family members assets could be gifted and the family member will qualify for Medicaid sooner without depleting all assets.

Myth #2: I provide care of my elderly parent in my parent’s home instead of hiring a professional caregiver and my parent is paying me for the care and these payments are allowable if my parent has to apply for Medicaid for nursing home care within the next 5 years.

False:If your parent applies for Medicaid for payment of room and board at a nursing home within the next 5 years then Medicaid will categorize the payments made to you for providing care asa “gift” and not allowable. The Illinois Department of Human Services manual states: “When a person transfers resources to pay someone for services provided, they must show that the services were worth as much as the resource and provide documentation that payment for services was agreed to, in writing, prior to when the services were provided” The Illinois Department of Human Services manual provides the following example: “Mrs.E, in the same month she enters an LTC facility, transfers $30,000 to her daughter. She states this is payment for services; her daughter has been doing grocery shopping, heavy housecleaning and other chores for her mother for 3 years prior to Mrs. E entering the nursing home, receiving no pay. They did not sign a contract  specifying the services the daughter was to perform or what she would be paid. LTC-ADI determines that the transfer is not allowable.”

Myth #3: My parent has been living with me in my home for the last five years andI did not want to be paid room and board while they were living in my home. My parent’s health declined and now they must permanently move to a nursing home and my parent has $100,000.00 in their bank account. It is allowable for me to write myself a check from my parent’s bank account for $60,000.00 representing $1,000.00 monthly rent for the last 60 months my parent was living in my home before moving to a nursing home.

False:Medicaid would state the $60,000.00 check is a nonallowable transfer and your parent would be penalized by Medicaid for the rent payment. If your parent moved in with you 60 months ago and wrote you a check for $1,000.00 at the same time each month with “room/board” noted in the memo section of the check then those payments are allowable because it is paid at the time services were rendered for fair market value.

Attorney Leasa Baugher assists clients with Estate Planning, Medicaid Planning, Elder Law, and Probate throughout Illinois. If you have any questions about this article and would like additional information or to arrange for a no cost consultation please call the Law Offices of Leasa J. Baugher, Ltd. Phone: 630-529-2050.

 
 
 

HOW AN ELDER LAW ATTORNEY HELPS ME PROTECT MY ASSETS?

Elder Law Attorneys provide legal assistance to protect assets in the case you or your spouse must enter a nursing home.  By protecting assets you may qualify for Medicaid benefits sooner without spending all your assets down through private payment to a nursing home.

It is better to meet with an Elder Law Attorney while both you and your spouse are healthy to discuss protecting your assets before entering a nursing home.  Even if you have not planned and a spouse is in a nursing home it may not be too late.

When you meet with an Elder Law Attorney you will be asked questions so the attorney may have an accurate understanding of your monthly income, your assets, your debts, prior gifts you have made in the last five years.  Be prepared to show detailed statements related to bank accounts, investment accounts, life insurance policies, individual retirement accounts and burial plans.  In addition the attorney will need to review existing documents such as your current Will, Trust, Powers of Attorney and real estate documentation. 

Once the attorney reviews all financial and legal documentation then the attorney will explain and present planning options.  Often certain planning options may have benefits in one area while detrimental in another area such as income and capital gains taxes.  The focus of your meeting with an attorney is to become well informed so you may make sound decisions based on current estate, Medicaid and tax laws and not information you hear through well intentioned family and friends. 

An Elder Law Attorney has an understanding of a number of areas of the law including estate planning, real estate, Medicaid laws and rules and tax issues and may provide services such as preparing a Medicaid plan and the Medicaid application; preparing estate planning documents (Wills, Trusts, and Powers of Attorney); preparing Deeds and assisting with real estate closing; and reviewing contracts from a nursing home or assisted living facility.

Many older individuals need the guidance of an attorney who is better able to anticipate issues before they arise.  It is better to receive accurate information so you may sit back enjoy your retirement and know you and your family are prepared for the future. 

If you have questions about this article or would like additional information please call the Law Offices of Leasa J. Baugher, Ltd. 725 E. Irving Park Road, Suite B, Roselle, Illinois Phone: 630-529-2050 to arrange for a no cost consultation.

 

 
 
 
 
 
 

 

To Do List for 2019

60% of Americans die with a Will.  95% of Americans do not have enough food to last 3 days in event of a disaster.

 

Estate Planning:

  1. Do you have a Last Will and Testament?
  2. Do you have a Living Will?
  3. Do you have a Durable Power of Attorney for Healthcare (aka Healthcare Proxy or Surrogate)?
  4. Do you have a Durable Power of Attorney for Finances? A Revocable Living Trust?

Financial:

  1. Do you have a list of the names of all the financial institutions where you have accounts (banks, financial firms, credit unions, and credit card companies), the account numbers, and at least one name and phone number at each institution? 
  2. Have you retained copies of the last 7 years of tax returns, which is the recommended duration to retain these records?
  3. Do you have a list of all of your insurance policies, the company name and contact information and the phone number for claims?
  4. Are your financial records in an organized filing system that you can easily access and maintain?

Medical:

  1. Do you have a list of the names of all of your medical providers, their contact information and what you see them for?
  2. Do you have a list of all of your current medications, over-the-counter and prescription, along with dosages and the purpose of the medication?
  3. Do you have your medical history written down, including allergies, immunizations, prior surgeries, persistent medical problems, and relevant family medical history?
  4. Is your medical information organized and easily accessible to you and at least one other person should you experience a medical emergency?

Vital Records:

  1. Do you have your birth certificate, social security card, military service records, marriage and divorce records, adoption records, passport, forms of identification and other vital records organized and reasonably accessible?

Miscellaneous:

  1. Do you have a copy of the contents of your wallet so that you are prepared should it be lost or stolen?
  2. Do you have your real estate deed(s), title(s), and mortgage documents and homeowners insurance policy organized and accessible?
  3. Do you have a written, photographic and/or video record of your personal property, including a home inventory, so that you can make a verifiable claim in the event of theft, damage or total loss of your property?
  4. Do you have a list of your most important personal and professional contacts that someone else could locate in the event of your incapacity or death?

Emergency Preparedness:

  1. Do you have an emergency evacuation kit with at least 4 days of survival supplies per person in your family?
  2. In an emergency evacuation situation, would you be able to “grab & go” your most critical vital documents and information?
  3. Do you have an evacuation plan which has been coordinated with and is known to members of your family?

Effective Communication with Loved Ones:

  1. Have you shared the information addressed in these questions with at least one trusted family member, friend or professional advisor?
  2. Would at least one person be able to manage your affairs if you became incapacitated, or died unexpectedly?
  3. Have you spoken to your loved ones about your end of life wishes, religious beliefs, funeral or burial preferences and the like?