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What Did the Supreme Court Say about Medicaid Work Requirements?

The Trump administration had asked the Supreme Court in July to reinstate its historic approvals of state work requirements waivers. It contends that these rules may assist certain beneficiaries in transitioning to private policies and may result in improved health and to help states conserve financial resources to provide coverage to others in need.

MSN’s article entitled “Supreme Court agrees to consider Medicaid work requirements” reports that lower courts have struck down the Department of Health and Human Services’ approvals, holding that Medicaid’s primary purpose is to provide health care coverage.

The National Health Law Program, one of the consumer advocacy groups that brought the original lawsuits, said it thinks it will win at the Supreme Court.

“HHS’s action was properly vacated because Secretary [Alex] Azar failed to account for the significant loss in health coverage that these approvals would produce,” said Jane Perkins, legal director at the National Health Law Program. “Tens of thousands of people would lose their Medicaid coverage and become uninsured.”

The Supreme Court’s decision to take up the cases follows a panel of federal appellate judges that struck down the Trump administration’s approval of work requirements in Arkansas in February. The unanimous decision, written by Judge David Sentelle, a Reagan appointee, affirmed a district court ruling that found the administration had failed to analyze whether these programs would “promote the primary objective of Medicaid — to furnish medical assistance.”

New Hampshire stopped its roll-out of work requirements last year after the same district judge, James Boasberg in DC, set aside the administration’s approval in that state.

In an unprecedented step two years ago, the Trump administration started granting state requests to mandate that certain Medicaid beneficiaries work to receive benefits. Republicans have long wanted to have that requirement with Medicaid, which insures more than 75 million low-income Americans.

There were 12 states that received waivers, although four were set aside in court, according to the Kaiser Family Foundation. Another seven state requests are awaiting federal approval. Work requirements are not in effect anywhere, after states stopped their efforts because of the legal rulings and the pandemic.

In Arkansas, more than 18,000 people lost coverage in 2018, before the court intervened. Judge Boasberg had also canceled Kentucky’s approval. That move blocked work requirements from being implemented in the state. However, Kentucky withdrew its waiver request after a Democratic governor won election in 2019 and dismissed its appeal.

The judge blocked work requirements in Michigan earlier this year.

Reference: MSN (Dec. 5, 2020) “Supreme Court agrees to consider Medicaid work requirements”

transfer a house

Is Transferring House to Children a Good Idea?

Transferring your house to your children while you’re alive may avoid probate. However, gifting a home also can mean a rather large and unnecessary tax bill. It also may place your house at risk, if your children get sued or file for bankruptcy.

You also could be making a mistake, if you hope it will help keep the house from being consumed by nursing home bills.

There are better ways to transfer a house to your children, as well as a little-known potential fix that may help even if the giver has since died, says Considerable’s recent article entitled “Should you transfer your house to your adult kids?”

If a parent signs a quitclaim to give her son the house and then dies, it can potentially mean a tax bill of thousands of dollars for the son.

Families who see this error in time can undo the damage, by gifting the house back to the parent.

People will also transfer a home to try to qualify for Medicaid, but any gifts or transfers made within five years of applying for Medicaid can result in a penalty period when seniors are disqualified from receiving benefits.

In addition, transferring your home to another person can expose you to their financial problems because their creditors could file liens on your home and, depending on state law, take some or most of its value. If the child divorces, the house could become an asset that must be divided as part of the marital estate.

Section 2036 of the Internal Revenue Code says that if the parent were to retain a “life interest” in the property, which includes the right to continue living there, the home would remain in her estate rather than be considered a completed gift. However, there are rules for what constitutes a life interest, including the power to determine what happens to the property and liability for its bills.

There are other ways to avoid probate. Many states and DC permit “transfer on death” deeds that let homeowners transfer their homes at death without probate.

Another option is a living trust, which can ensure that all assets avoid probate.

Many states also have simplified probate procedures for smaller estates.

Reference: Considerable (Sep. 18) “Should you transfer your house to your adult kids?”

keep assets

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”

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