Presentation on theme: "Elder Care in New Jersey: Legal and Financial Issues Presented by Donald D. Vanarelli, Esq. Certified Elder Law Attorney Registered Guardian R. 1:40 Qualified."— Presentation transcript:
Elder Care in New Jersey: Legal and Financial Issues Presented by Donald D. Vanarelli, Esq. Certified Elder Law Attorney Registered Guardian R. 1:40 Qualified Mediator
Overview of Government Sources for Long Term Care
A Truth Almost Everyone Must Face Most older people develop physical or mental impairments which at some point prevent them from living completely independent lives.
Long Term Care Long Term Care refers to the kind of care a person needs when he or she is unable to care for himself or herself due to illness, frailty or cognitive impairment.
Long Term Care Long Term Care is different from traditional medical care. Long term care helps one live as he or she is now; it may not help to improve or correct medical problems.
If you cannot live independently, what care options are available? 1. Stay at home - Home Health Care 2. Move in with Family 3. Assisted Living Facility 4. CCRC 5. Nursing Home
The Need for Long Term Care 1 of 2 women and 1 of 3 men who reach the age of 65 will use a nursing home at some point during their lives. 40% of nursing home residents are between 18 and 64 years of age. Average stay in NH - 2.9 years 7 in 10 individuals will need home health care.
The Cost of Long Term Care Average cost of 24 hour Home Health Aides provided by an agency - $4,500 per month, or $54,000 per year. Range of costs charged by Assisted Living facilities - $4,500 - $6,500 per month, or $54,000 - $78,000 per year. Typical cost of Nursing Home care in New Jersey - $8,000 per month, or $96,000 per year.
Who Pays For Long Term Care? 1. Private Pay49% 2. Medicaid44% 3. VA Benefits4% 4. Medicare2% 5. Private Long Term Care Insurance1%
Long Term Care Costs Covered by Medicare 1.Home Health Care 2.Nursing Home Care
Medicare - Home Health Care Aides Covers up to 100 home visits per spell of illness. Preconditions to payment: prior hospital stay of at least 3 days and home health care initiated within 14 days of discharge. Beneficiary must be homebound and need skilled nursing care, physical or speech therapy, NOT custodial care.
Medicare Payment of Nursing Home Care Immediate prior hospital stay of 3 days Admitted to NH within 30 days of hospital discharge Covers, skilled nursing care or rehabilitation only, NOT custodial care.
Custodial Care Custodial Care (sometimes called Personal Care) is the level of care provided in ALFs and NHs. Custodial Care helps one with activities of daily living (ADLs). ADLs include bathing, eating, dressing, toileting, continence and transferring. Medicare does NOT pay for custodial care. Compare: Custodial Care vs. Skilled Nursing Care
How Much Does Medicare Pay? Maximum Coverage - 100 days Day 1-20 - Medicare pays 100% of covered charges Day 21-100 - Medicare pays all covered charges, except coinsurance amount. Year 2008 coinsurance payment = $128/day, or about $3, 840/month Day 101 - on your own
Medigap Policies Medigap policies fill in the gaps in Medicare coverage, but do NOT extend coverage for long term care needs beyond what Medicare provides.
Compare Medicare and Medicaid Medicare is an insurance program. Medicaid is a welfare program. Medicare is for elderly and disabled people regardless of their income or resources. Medicaid is for elderly and disabled people with low income and resources.
Medicaid Joint Federal and State Program Provides medical assistance for financially eligible persons who are aged, blind or disabled.
General Eligibility 1.U.S. Citizen or legal alien 2. New Jersey Resident 3. Age 65 or older, blind or disabled 4. Financial Limitations
Income and Resources Limits Income - all income is counted in determining eligibility Income cap - Community Medicaid programs which pay for home health aides and care in Assisted Living facilities have an income cap. In 2008, the cap is $1,911/month. No cap for Nursing Home Medicaid.
Resource Limits Countable resources - all assets in the sole name of applicant, in the sole name of spouse, or in joint names, either with the spouse or another person. Includes pension and retirement assets of BOTH the applicant and spouse. Resource Limits - $2,000 for an individual and $3,000 for a couple. Excess resources - must be spent down.
Transfer of Resource Rules Instead of spending down excess resources on long term care costs, some have attempted to achieve Medicaid eligibility and preserve assets by making gifts to family members and others.
Transfer of Resource Rules To prevent gifting of assets, Medicaid imposes a penalty period, or period of ineligibility for Medicaid, for all gifts made within the lookback period.
Estate Recovery: The Medicaid Lien Federal and State law requires the States to seek, from the estate of a deceased Medicaid recipient, recovery of all Medicaid benefits paid when the recipient was 55 years of age or older when the Medicaid benefits were received.
Comparing Medicare and Medicaid Coverage for Long-Term Care Costs Medicare: covers home health aides and nursing home costs for many people, but only for a short time. No financial limits. Medicaid: covers home health aides, assisted living facilities and nursing homes, but only for aged, blind and disabled people who meet strict financial limits.
Long Term Care Planning Includes: LTCI Wills Advance Medical Directives Powers of Attorney Trusts Guardianships for incapacitated persons Asset Inventory Restructuring of assets
Estate Planning When A Spouse Is Confronting Health Issues
Estate Planning For The Healthy Spouse When one spouse is a resident of a nursing home or medical institution, the community spouse may utilize various strategies to protect and retain resources for the family without jeopardizing the institutionalized spouses Medicaid eligibility.
Asset Titling-Deeds, Bank Accounts and Life Insurance Transfer Title of Principal Residence to CS- this is an exempt transfer when determining eligibility of IS. -Significant estate planning measure -Home will escape Medicaid lien
Spend Down Pre-Pay Real Estate Taxes Pre-Pay Real Estate Taxes Pre-Pay Homeowners Insurance Pre-Pay Homeowners Insurance Pay Off Debts Pay Off Debts Pay For Services Pay For Services
Convert Countable To Non-Countable Assets Buy household goods and personal effects Buy household goods and personal effects Make home repairs and improvements Make home repairs and improvements Purchase a more expensive home Purchase a more expensive home Purchase life estate from children Purchase life estate from children Purchase a new car Purchase a new car Buy cemetery plot Buy cemetery plot Pre-pay funeral Pre-pay funeral
Retitling of Bank Accounts and Life Insurance Life Insurance Life Insurance Change beneficiary designation to a third partyChange beneficiary designation to a third party Assign policy to funeral homeAssign policy to funeral home Assign policy to childrenAssign policy to children Borrow Cash ValueBorrow Cash Value Bank Accounts Bank Accounts Change bank accounts to exclude name of institutionalized spouseChange bank accounts to exclude name of institutionalized spouse
Changing CSs Will to Exclude Disabled Spouse If institutionalized spouse is named beneficiary of CSs Will and CS passes away first, IS may be ineligible for Medicaid If institutionalized spouse is named beneficiary of CSs Will and CS passes away first, IS may be ineligible for Medicaid Elective Share Issue Elective Share Issue
Durable Power of Attorney with Gift-Giving Power ° POA - Legal instrument which authorizes an agent to perform specific acts documented in the POA on behalf of the principal. ° NJ statute specifically authorizes an agent under POA to conduct banking transactions. ° To execute POA, principal must understand nature and effect of appointing an agent. ° Durable POA is not affected when principal becomes disabled. Must specifically so state in document.
Durable Power of Attorney with Gift-giving Power, contd Plan ahead to avoid guardianship proceeding-In re Keri issues Plan ahead to avoid guardianship proceeding-In re Keri issues Gifting powers must be specifically granted to the agent for purposes of Medicaid planning. Gifting powers must be specifically granted to the agent for purposes of Medicaid planning. Tailor gifting provisions to include other siblings or alternate agent in process to avoid appearance of self-dealing. Tailor gifting provisions to include other siblings or alternate agent in process to avoid appearance of self-dealing.
Exempt Transfers Transfer Home To Transfer Home To CS CS Disabled Child Disabled Child Caregiver Child Caregiver Child Sibling with an equity interest Sibling with an equity interest Transfer Non-Home Assets To Transfer Non-Home Assets To CS CS Disabled Child Disabled Child
Exempt Transfers, contd Transfer To Trust for Disabled Child Transfer To Trust for Disabled Child Disability Annuity Trust Disability Annuity Trust (d) (4) (A) Trust (d) (4) (A) Trust Pooled Trust Pooled Trust
Transfer For Value- No Penalty Purchase Commercial Annuity Purchase Commercial Annuity Spousal Annuity Trust Spousal Annuity Trust Private annuity Private annuity SCIN SCIN Sell Remainder interest in seniors home Sell Remainder interest in seniors home Buy Life Estate in childs home Buy Life Estate in childs home
Transfer For Value, contd Board and Care Agreement Board and Care Agreement Life Care Contract Life Care Contract Family Reverse Mortgages Family Reverse Mortgages Interest-Only Note Interest-Only Note
Countable Transfers - Result in Penalty Large transfer Large transfer Half-a-loaf transfer Half-a-loaf transfer Monthly or Sequential transfers Monthly or Sequential transfers Transfer home, retain life estate Transfer home, retain life estate
Thank You For Your Attention Questions or Comments?