Should I Worry about Medicaid Estate Recovery?

What is It? The Medicaid Estate Recovery Program (MERP) may be used to recoup costs paid toward long-term care. It’s designed to help make the program affordable for the government, but it can financially affect the beneficiaries of Medicaid recipients.

AOL’s article entitled “What Is Medicaid Estate Recovery?” explains that’s where Medicaid can help fill the void. Medicaid can assist with paying the costs of long-term care for aging seniors. It can be used when someone doesn’t have long-term care insurance coverage, or they don’t have the assets to pay for long-term care out of pocket. It can also be used to pay for nursing home care, if you’ve taken steps to protect assets using a trust or other estate planning tools.

However, the benefits you (or an aging parent) receive from Medicaid are not necessarily free. The Medicaid Recovery Program lets Medicaid recoup or get back the money spent on behalf of an aging senior to cover long-term care costs. Federal law requires states to attempt to seek reimbursement from a Medicaid beneficiary’s estate when they die.

How It Works. The Medicaid Estate Recovery Program lets Medicaid seek recompense for a variety of costs, including:

Nursing home-related expenses or other long-term care facility stays
Home- and community-based services
Medical services from a hospital (when the recipient is a long-term care patient); and
Prescription drug services for long-term care recipients.

If you (or an aging parent) die after receiving long-term care or other benefits through Medicaid, the recovery program allows Medicaid to pursue any eligible assets held by your estate. Exactly what that includes depends on your state, but generally any assets that would be subject to the probate process after you pass away are fair game.

That may include bank accounts you own, your home or other real estate and vehicles or other real property. Each state makes its own rules. Medicaid can’t take someone’s home or assets before they pass away, but it’s possible for a lien to be placed upon the property.

What Medicaid Estate Recovery Means for Heirs. The biggest thing about the Medicaid estate recovery for heirs of Medicaid recipients is that they might inherit a reduced estate. Medicaid estate recovery rules also exclude you personally from paying for your parents’ long-term care costs. However, filial responsibility laws don’t. It is rare, but the laws of some states let healthcare providers sue the children of long-term care recipients to recover nursing care costs.

How to Avoid Medicaid Estate Recovery. Strategic planning with the help of an elder law attorney can help you or your family avoid financial impacts from Medicaid estate recovery. You should think about buying long-term care insurance for yourself. A long-term care insurance policy can pay for the costs of nursing home care, so you can avoid the need for Medicaid altogether.

Another way to avoid Medicaid estate recovery is to remove assets from the probate process. For example, married couples can do this by making certain that assets are jointly owned with right of survivorship or using assets to purchase an annuity to transfer benefits to the surviving spouse when the other spouse passes away. You should know which assets are and are not subject to probate in your state and whether your state allows for an expanded definition of recoverable assets for Medicaid. Speak with an experienced elder law lawyer for assistance.

Medicaid estate recovery may not be something you have to concern yourself with, if your aging parents leave little or no assets in their estate. However, you should still be aware of it, if you expect to inherit assets from your parents when they die.

Reference: AOL (Feb. 5, 2021) “What Is Medicaid Estate Recovery?”

How to Be an Effective Advocate for Elderly Parents

Family caregivers must also understand their loved one’s wishes for care and quality of life. They must also be sure those wishes are respected. Further, it means helping them manage financial and legal matters, and making sure they receive appropriate services and treatments when they need them.

AARP’s recent article entitled “How to Be an Effective Advocate for Aging Parents” says if the thought of being an advocate for others seems overwhelming, take it easy. You probably already have the skills you need to be effective. You may just need to develop and apply them in new ways. AARP gives us the five most important attributes.

Observation. Caregivers can be too busy or tired, to see small changes, but even slightest shifts in a person’s abilities, health, moods, safety needs, or wants may be a sign of a much more serious medical or mental health issue. You should also monitor the services your family member is getting. You can take notes on your observations about your loved one to track any changes over time.
Organization. It’s hard to keep track of every aspect of a caregiving plan, but as an advocate, you must manage your loved one’s caregiving team. This includes creating task lists and organizing the paperwork associated with health, legal, and financial matters. You’ll need to have easy access to all legal documents, like powers of attorney for finances and health care. If needed, you might take an organizing course or work with a professional organizer. There are also many caregiving apps. You should also, make digital copies of key documents, such as medication lists, medical history, powers of attorney and living wills, so you can access them from anywhere.
Communication. This may be the most important attribute. You need communication for building relationships with other caregivers, family members, attorneys and healthcare professionals. Be prepared for meetings with lawyers, medical professionals and other providers.
Probing. Caregivers need to gather information, so don’t be shy about it. Educate yourself about your loved one’s health conditions, finances and legal affairs. Create a list of questions for conversations with doctors and other professionals.
Tenacity. Facing a dysfunctional and frustrating health care system can be discouraging. You must be tenacious. Here are a few suggestions on how to do that:

Set clear goals and focus on the end result you want.
Keep company with positive and encouraging people.
Heed the advice of experienced caregivers’ stories, so you understand the triumphs and the challenges.
Be positive and be resilient.

Reference: AARP (Sep. 24, 2020) “How to Be an Effective Advocate for Aging Parents”

States with Most Affordable Long-Term Care?

Seven in 10 people 65 and older will require some type of long-term care during their lifetime. This expense will vary based on the patient’s required level of care, care setting and geographic location, says Think Advisor’s recent article entitled “15 Cheapest States for Long-Term Care: 2020.”

A recent study by Genworth found that the cost for facility and in-home care services increased on average from 1.9% to 3.8% per year from 2004 to 2020. That amounts to $797 annually for home care and as much as $2,542 annually for a private room in a nursing home.

At the current rate, some care costs are more than the 1.8% U.S. inflation rate, Genworth said.

These findings were taken from 14,326 surveys completed this summer by long-term care providers at nursing homes, assisted living facilities, adult day health facilities and home care providers. The survey encompassed 435 regions based on the 384 U.S. Metropolitan Statistical Areas, as defined by the U.S. Office of Management and Budget.

In a follow-up study, Genworth also found that these factors are contributing to rate increases for long-term care:

Labor shortages
Personal protective equipment (PPE) costs
Regulatory changes, such as updated CDC guidelines
Employee recruitment and retention issues
Wages demands; and
Supply and demand.

Here are the 15 cheapest states for long-term care, according to Genworth with their average annual cost:

15. Utah: $59,704

14. Kansas: $57,766

13. Iowa: $57,735

12. Kentucky: $57,540

11. South Carolina: $57,413

10. Tennessee: $56,664

9. North Carolina: $56,512

8. Georgia: $53,708

7. Mississippi: $52,461

6. Arkansas: $50,835

5. Oklahoma: $50,641

4. Texas: $48,987

3. Missouri: $48,753

2. Alabama: $48,240

1. Louisiana: $44,811

Reference: Think Advisor (Dec. 14, 2020) “15 Cheapest States for Long-Term Care: 2020”

What’s the Key to Saving Money in Retirement?

Of the many expenses for retirees, healthcare can be one of the biggest. There are Medicare premiums and prescription drugs. These healthcare expenses can take up a large part of your retirement savings. Some projections say that the average 65-year-old man today will spend $189,687 on healthcare expenses in retirement, and a typical 65-year-old woman will spend $214,565. These figures don’t include long-term care, such as nursing home expenses.

Motley Fool’s recent entitled “How to Save Money on Healthcare in Retirement” explains that there are steps you can take to decrease your healthcare costs in retirement. Let’s look at a few ways to save money, when you’re limited to a fixed income.

Use Medicare’s free preventive services. Medicare eligibility starts at age 65. Once enrolled, you have access to many no-cost benefits aimed at helping you stay healthy. However, many seniors don’t take advantage of these services and lose an opportunity to get ahead of health issues. Medicare enrollees get a free wellness visit with a doctor every year, and scheduling that could help avoid a separate bill later. Many critical health screenings are also free under Medicare, including mammograms and certain cancer screenings, diabetes testing and depression screenings. Taking advantage of these free services is a great way to keep your health in the best possible shape, which will lower your overall healthcare costs.
Nip health issues in the bud. Small health issues can become big ones, if left unattended. An easy way to save money on healthcare in retirement, is to address medical issues before they get worse.
Look at a Medicare Advantage Plan. One reason why healthcare is so expensive in retirement, is that many essential services aren’t covered under traditional Medicare, like dental care, vision services and hearing aids. If you opt for a Medicare Advantage plan, however, you might save money on these and other critical services. Medicare Advantage typically provides a wider range of benefits, and in some cases, you could wind up paying less for Medicare Advantage than traditional Medicare—with that improved coverage. Medicare Advantage can also save you money, by decreasing your out-of-pocket spending. Most of these plans put a cap on that figure, but traditional Medicare has no limits on your yearly costs.
Compare the Best Prescription Drug Plan. If you take prescription drugs, you need to find a cost-effective plan. If you’re enrolled in traditional Medicare, you’ll need a separate Part D plan to cover your drug costs. However, not all plans are the same. Do some comparison shopping to see which plans offer the best deals, based on the medications you’re taking.
Purchase Long-Term Care Insurance. At least 70% of seniors age 65 and over will require some type of long-term care in their lifetime. That’s why long-term care insurance is needed. The younger you are when you apply, the more likely you’re going to get approved and get the best rates.

Saving money on healthcare in retirement will let your nest egg last longer and buy you more freedom to enjoy your golden years. Learn about healthcare costs, so you’re ready to lower your expenses and avoid the financial stress that so many of today’s seniors face.

Reference: Motley Fool (May 19, 2020) “How to Save Money on Healthcare in Retirement”

What Does Research Say about Senior Well-Being and Living Space Design?

Design’s Impact on Seniors’ Perceptions of Wellness from New York-based architecture firm Perkins Eastman, reviewed the responses of 540 older adults living in three West Coast senior living communities to see how they looked at their own physical, social/emotional and intellectual wellness.

McKnight’s Senior Living’s recent article entitled “90% of senior living residents say design integral to well-being: study” explains that the study started many years before the impact of COVID-19 on the senior living sector. It included responses from residents living in three life plan communities, also known as continuing care retirement communities: MonteCedro in Altadena, CA; Spring Lake Village in Santa Rosa, CA; and Rockwood Retirement Communities in Spokane, WA. The three communities were chosen due to their focus on whole-person wellness and specific design strategies to support that objective.

The residents of these communities completed questionnaires between 2015 and 2017 at certain points of pre-construction, post-construction, and occupancy. The study looked at these wellness strategies used by designers:

Autonomy, control and choice
Design in variety
Promotion of use through location and access
Patterns of movement
Natural connections
Touch of serendipity
Degrees of privacy
Layers of light
Sensory experiences; and
Feelings of home.

The results showed that more than 90% felt that design strategies used in their communities were essential to their overall well-being. Research showed that residents’ perceptions of wellness positively increased or held steady after they began using new or renovated spaces in their communities. The aspects that exhibited the most improvement in physical wellness in all communities was access to physical wellness resources and exercising regularly. In addition, social/emotional wellness, access to resources, a strong support system, and a sense of connection and belonging also improved across all three communities.

The residents’ access to intellectual wellness resources were seen as better, and there were more opportunities for residents to expand their knowledge and explore the creative arts.

The authors of the study said the design strategies in the study should be a “starting point” upon which designers and providers can expand, while developing more strategies and approaches to support “whole-person wellness”.

Reference: McKnight’s Senior Living (Sep. 8, 2020) “90% of senior living residents say design integral to well-being: study”

Does the Netherlands have the Right Idea for Elder Care?

Is the Netherlands getting its money’s worth from its spending, and are they protecting elders from the impoverishing effects of out-of-pocket spending, and their children from the burdens of caregiving?

Forbes’ recent article entitled “Can The Dutch Example Help Us Improve Long-Term Care And Manage Its Costs? Maybe” says that when investigating further, it’s not hard to find articles praising the Dutch approach to eldercare. Its “Dementia Village” has received a lot of press for its patient-friendly approach of creating a secure, “Truman Show”-style community where seniors can spend time at the town square or shopping at the grocery store. They also live in individual homes styled in the manner of their youth.

An expert on eldercare at Access Health International described her experiences in a visit to the country. She said that the organizations she visited focused on well-being, wellness and lifestyle choices. They focused less on the medical aspects of chronic and long-term care. The groups didn’t consider themselves to be part of the curative branch of the healthcare system—these healthcare professionals only focused on patients’ individual capabilities, freedom, autonomy and wellness.

The article took a look at the FICA-equivalent taxes in the Netherlands with data from the Social Security Programs Throughout the World, at the Social Security website. For old age, disability and survivor’s benefits (the U.S. Social Security-equivalent), the Dutch contribute 20% of their pay, to a max of $37,700. Employers pay 6.27% of pay, up to $60,600. For medical, the system is a hybrid one. The workers buy private insurance. Employers pay 6.90% of covered payroll (with no limit), and the government subsidizes the benefits. As far as long-term care, workers pay 9.65% of earnings up to $37,700.

A World Bank consultant gave a more detailed review of the Dutch system in a 2017 paper entitled, Aging and Long-Term Care Systems: A Review of Finance and Governance Arrangements in Europe, North America and Asia-Pacific.

The first social insurance benefit for long-term care, the Exceptional Medical Expenses Act was implemented in 1968. In 2014, 5% of Dutch people received benefits through the program, but the cost of the system had increased. At first, the Dutch government initially tried to control costs with budget caps, until a 1999 ruling outlawed these. As a result, costs grew from EUR 15.9 billion in 2001 to EUR 27.8 in 2014, even though there were cost-control efforts, like increases in copays required from middle- and upper-income families and tightening of eligibility criteria.

In 2015, the Dutch government totally overhauled its system with the Long-term Care Act. This law had a new administrative structure, changes so government pays for more services, more home support instead of nursing homes when possible, and other cuts and freezes in reimbursement rates.

As a consequence, the English-language site Dutch News reported in 2017 that “At least 40% of Dutch nursing homes and home nursing organizations are making a loss and overall profitability across the healthcare sector has more than halved, according to accountancy group EY,” as reimbursement rates drop and (since the less-frail elderly are more often being cared for at home) nursing home residents need more help.

Elder care isn’t free of charge, but the rates are based on income and, at a maximum, are still much lower than American private-pay nursing home or home care costs ($2,500/month). Therefore, copayments by families are 8.7% of total spending. Thus, taxes are higher, but the direct out-of-pocket costs of care in the Netherlands are substantially lower than in the U.S.

The Netherlands’ systematized provision of home care and attempts to provide home-like nursing homes are appealing. However, it’s still not known if the country’s 2015 reform will control costs to ensure its programs are sustainable in the long run. Further, the fact that this reform was required supports the notion that an expansive government program isn’t as simple as its proponents would like it to be.

Reference: Forbes (Sep. 1, 2020) “Can The Dutch Example Help Us Improve Long-Term Care And Manage Its Costs? Maybe.”

New Survey Conducted on Keeping the Elderly Safe in the Pandemic

Those in our oldest generations, who were recently surveyed, were found to be more distrustful of senior living and care operators than younger generations.

Nearly half (49.5%) of baby boomers said they don’t trust senior living and care providers to keep residents safe, while 43.9% of the Silent Generation reported the same distrust.

Younger people are more trusting: 42.3% of Generation X reported distrust, 31.8% of millennials and 38.2% of Generation Z.

McKnight Senior Living’s recent article entitled “41% don’t trust assisted living, nursing homes to keep residents safe during pandemic: survey” notes that 43.1% of baby boomers responded that they trust facilities “somewhat,” as did 51.4% of the Silent Generation respondents.

Some of this mistrust may come from the extensive media coverage of coronavirus deaths in nursing homes because senior residents are especially vulnerable to the illness.

Some say that it goes further than that: the quarantine and social distancing has added to families’ stress and anxiety over the safety and mental well-being of the seniors who live in these facilities because they aren’t able to visit as often as they want.

An online survey from ValuePenguin.com and LendingTree of more than 1,100 Americans recently found that COVID-19 has generated a rush of loneliness and worry among older adults.

According to the results, 36% of older adults feel lonelier than ever. In addition, more than 70% of seniors said that they have worries about the virus’ effects on their younger relatives. Those concerns were equally expressed by younger generations for their older relatives. Almost 50% of both age groups are worried that their relatives will catch the virus.

However, the pandemic looks to have a silver lining for family communications. An overriding sense of concern for the mental and physical health of elderly loved ones has led to more contact since the pandemic began.

Nearly 44% of the younger survey-takers stated they’ve spoken to their older relatives more frequently during the pandemic, about 25% of young people reported visiting their older relatives in person more frequently.

The top request from respondents aged 75 and older to their loved ones, is to call more frequently.

Reference: McKnight Senior Living (Sep. 11, 2020) “41% don’t trust assisted living, nursing homes to keep residents safe during pandemic: survey”

How Do I Keep My Assets from the Nursing Home?

If you don’t have a plan for your assets when it comes time for nursing home care, they can be at risk. Begin planning now for the expenses of senior living. The first step is to consider the role of Medicaid in paying for nursing home services.

WRCB’s recent article entitled “How to Protect Your Assets from Nursing Homes” describes the way in which Medicaid helps pay for nursing homes and what you can do to shield your assets.

One issue is confusing nursing homes and skilled nursing facilities. Medicare does cover a stay in a skilled nursing facility for convalescence. However, it doesn’t pay for full-time residence in a nursing home. For people who can’t afford to pay and don’t have long-term care insurance, they can apply for Medicaid. That’s a government program that can pay nursing home costs for those with a low income. People who don’t have the savings to pay for nursing home care and then require that level of care, may be able to use Medicaid.

For those who don’t qualify for Medicaid when they need nursing home care, they may become eligible when their savings are depleted. With less money in the bank and minimal income, Medicaid can pay for nursing home care. It is also important to remember that when a Medicaid recipient dies, the government may recoup the benefits provided for nursing home care from the estate. Family members may discover that this will impact their inheritance. To avoid this, look at these ways to protect assets from nursing home expenses.

Give Away Assets. Giving loved ones your assets as gifts can help keep them from being taken by the government when you die. However, there may be tax consequences and could render you Medicaid ineligible.

Create an Irrevocable Trust. When assets are placed in an irrevocable trust, they can no longer belong to you because you name an independent trustee. The only exception is that Medicaid can take assets that were yours five years before you died. Therefore, you need to do this as soon as you know you’re going into a nursing home.

Contact an experienced estate planning, elder law, or Medicaid planning attorney to help you protect your assets. The more you delay, the less likely you’ll be able to protect them.

Reference: WRCB (Dayton) (Sep. 4, 2020) “How to Protect Your Assets from Nursing Homes”

How Do I Find a Great Elder Law Attorney?

Elder law attorneys specialize in legal affairs that uniquely concern seniors and their adult children, says Explosion’s recent article entitled “The Complete Guide on How to Find an Elder Law Attorney.”

Finding the right elder law attorney can be a big task. However, with the right tips, you can find an experienced elder law attorney who is knowledgeable, has the right connections and fits your budget.

While, technically, a general practice attorney will be able to handle your retirement, Medicaid and even your estate planning, an elder law lawyer is deeply entrenched in elder law. This means he or she will have extensive knowledge and experience to handle any case within the scope of elder law, like the following:

Retirement planning
Long-term care planning and insurance
Medicaid
Estate planning
Social Security
Veterans’ benefits; and
Other related areas of law.

While a general practice lawyer may be able to help you with one or two of these areas, a competent elder law lawyer knows that there’s no single formula in elder law that applies across the board. That’s why you’ll need a lawyer with a high level of specialization and understanding to handle your specific circumstances. An elder law attorney is best suited for your specific needs.

A referral from someone you trust is a great place to start. When conducting your elder law lawyer search, stay away from attorneys who charge for their services by the hour. For example, if you need an elder law attorney to work on a Medicaid issue, they should be able to give you an estimate of the charges after reviewing your case. That one-time flat fee will cover everything, including any legal costs, phone calls, meetings and court fees.

When it comes to elder law attorneys, nothing says more than experience. An experienced elder law lawyer has handled many cases similar to yours and understands how to proceed. Reviewing the lawyer’s credentials at the state bar website is a great place to start to make sure the lawyer in question is licensed. The website also has information on any previous ethical violations.

In your search for an elder law attorney, look for a good fit and a high level of comfort. Elder law is a complex area of law that requires knowledge and experience.

Reference: Explosion (Aug. 19, 2020) “The Complete Guide on How to Find an Elder Law Attorney”

Will Medicare Cover Everything?

Actually, far from covering all your healthcare needs, Medicare may leave you with thousands of dollars in expenses for which you’ll be responsible.

The recent article in The Mooresville Tribune entitled “3 Reasons Medicare Coverage Isn’t as Comprehensive as You Think” provides three reasons why:

Medicare has expensive deductibles and coinsurance. There are different parts to Medicare. Part A covers hospital care. Part B pays for outpatient care. Each one has deductibles and some coinsurance expenses. Let’s look at these examples:

Medicare Part A has a $1,408 deductible per benefit period this year. If you are in the hospital more than 60 days during a benefit period, you’ll owe coinsurance costs starting at $352 per day, based on how long you remain in care.
Part B has a $198 deductible in 2020, and you’ll pay coinsurance costs of 20% of the Medicare-approved amount for medical services after you meet the deductible. You’ll also owe monthly premiums.
Part C (Medicare Advantage) takes the place of traditional Medicare (Parts A and B) with private insurance. Coinsurance, copay and premium costs vary by plan.
Part D (prescription drug coverage) has several plans with varying premiums and coverage rules.

As a result, with only Parts A and B, you could wind up paying thousands of dollars out of pocket. That’s especially true, if you’re hospitalized for a long time during the year or if you need extensive outpatient care.

Coverage exclusions. In addition, there are some items of care that Medicare doesn’t cover at all. For example, Medicare doesn’t cover routine dental care, eye exams, contacts, hearing aids or glasses.
Medicare doesn’t cover long-term care in most circumstances. A major Medicare exclusion is long-term care insurance. Medicare covers care in a skilled nursing facility under a few circumstances, such as after a long hospital stay when you need assistance from a medical professional to recover. However, the program doesn’t pay for “custodial care,” either at home or in a nursing home. Thus, if you require someone to help you with routine aspects of daily living, like getting dressed, eating, or using the bathroom, you’ll have out-of-pocket costs.

It’s important to know that long-term care can be very costly. The median monthly costs of home health aides are roughly $4,300, and a semi-private room in a nursing home costs about $7,500 in 2019, according to Genworth. Since Medicare won’t pay for any of this in most circumstances, you’ll need another way to pay for it.

Don’t assume that Medicare will cover all your needs as a retiree. So, prior to retirement, examine what Medicare will actually cover. That will help you determine the amount you’ll need to save for healthcare costs. You can also consider Medigap or Medicare Advantage Plans or look into long-term care insurance.

Reference: Mooresville Tribune (Aug. 10, 2020) “3 Reasons Medicare Coverage Isn’t as Comprehensive as You Think”

Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

Should I Worry about Medicaid Estate Recovery?

How to Be an Effective Advocate for Elderly Parents

States with Most Affordable Long-Term Care?

What’s the Key to Saving Money in Retirement?

What Does Research Say about Senior Well-Being and Living Space Design?

Does the Netherlands have the Right Idea for Elder Care?

New Survey Conducted on Keeping the Elderly Safe in the Pandemic

How Do I Keep My Assets from the Nursing Home?

Will Medicare Cover Everything?

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Should I Worry about Medicaid Estate Recovery?

How to Be an Effective Advocate for Elderly Parents

States with Most Affordable Long-Term Care?

What’s the Key to Saving Money in Retirement?

What Does Research Say about Senior Well-Being and Living Space Design?

Does the Netherlands have the Right Idea for Elder Care?

New Survey Conducted on Keeping the Elderly Safe in the Pandemic

How Do I Keep My Assets from the Nursing Home?

Will Medicare Cover Everything?

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