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(c)2004 Comfort Assurance Group, LLC For Professional Education Only1 Medicaid & LTC Planning Bill Comfort, CSA, CLTC Comfort Assurance Group, LLC St.

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Presentation on theme: "(c)2004 Comfort Assurance Group, LLC For Professional Education Only1 Medicaid & LTC Planning Bill Comfort, CSA, CLTC Comfort Assurance Group, LLC St."— Presentation transcript:

1 (c)2004 Comfort Assurance Group, LLC For Professional Education Only1 Medicaid & LTC Planning Bill Comfort, CSA, CLTC Comfort Assurance Group, LLC St. Louis, MO

2 (c)2004 Comfort Assurance Group, LLC For Professional Education Only2 MediCAID Basics Qualification –Individuals and couples Medicaid Planning –Annuities –Pitfalls Using Medicaid to help sell LTCi

3 (c)2004 Comfort Assurance Group, LLC For Professional Education Only3 Basics Largest payer of LTC services Joint Federal/State program “Means tested” (Not an entitlement) –Welfare medical coverage Benefits subject to estate recovery “Elder Law” Attorney –Natl. Academy of Elder Law Attorneys Certified Elder Law Attorney (CELA)

4 (c)2004 Comfort Assurance Group, LLC For Professional Education Only4 Qualification Medical Financial –Income Pass-through to nursing home Capping –Assets Countable Non-countable Inaccessible

5 (c)2004 Comfort Assurance Group, LLC For Professional Education Only5 Assets Non-Countable (exempt) assets: –Principal Residence (exceptions) –Furnishings –One automobile –Personal items including some jewelry –Pre-paid funeral (irrevocable) –Term life of unlimited value Note: Non-countable does NOT mean “protected,” just not considered for eligibility.

6 (c)2004 Comfort Assurance Group, LLC For Professional Education Only6 The House Non-Countable (exempt), IF: –“Community Spouse,” and/or –Child under 21, and/or –Adult child who is blind or disabled... is living in the home. –Medicaid applicant “intends” to return –*JT owner with sibling in home for one year –*Child lived in home for 2 years & provided care Note: The house is the primary asset most states seek estate recovery from.

7 (c)2004 Comfort Assurance Group, LLC For Professional Education Only7 Assets Countable assets: –Everything else that is not explicitly non-countable. –Cash, stocks, bonds, deferred annuities, IRA, 401(k), 403(b), cash value life insurance if DB >$ Applicant may keep $1,000 - $4,000 –Balance must be “spent down”

8 (c)2004 Comfort Assurance Group, LLC For Professional Education Only8 Spousal Asset Protection Community Spouse Resource Allowance (CSRA) –Greater of $18,552 or 1/2 of non-exempt assets up to max of $92,760 (2004) Total, combined excess must be “spent down” Pre-nups have NO effect –LTCi is required for 2 nd (3 rd ?!) marriages where assets must be protected from inclusion.

9 (c)2004 Comfort Assurance Group, LLC For Professional Education Only9 Income (If you can get to the principal it’s an asset NOT income) Social Security Pension – defined benefit Alimony Annuitized income

10 (c)2004 Comfort Assurance Group, LLC For Professional Education Only10 Income For individuals: –Income goes to the NH, Medicaid pays the difference. What?! The largest Co-Pay your clients will pay Medicaid is NOT “free” For couples (name on the check) : –Institutional Spouse’s income to the NH. –Comm. Spouse keeps own income …

11 (c)2004 Comfort Assurance Group, LLC For Professional Education Only11 Spousal Income Protection Comm. Spouse keeps own income - Unlimited Minimum Monthly Maintenance Needs Allowance (MMMNA) –$1,515 per month minimum Can be increased... $2,319 per month maximum (2004) –Depending on the state, the Institutional Spouse’s income and/or the spend-down assets can be used to meet the MMMNA

12 (c)2004 Comfort Assurance Group, LLC For Professional Education Only12 Income Capping Some states “cap” income for Medicaid eligibility. $1,692/mo (2004) –If income exceeds the cap, no benefits “Miller” trust used to hold excess income to qualify for Medicaid. –Any remainder payable to the state. (AL, AK, AZ, AR, CO, DE, FL, ID, IA, LA, MS, NV, NJ, NM,OK, OR, SC, SD, TX, WY)

13 (c)2004 Comfort Assurance Group, LLC For Professional Education Only13 “Medicaid Planning” Misnomer / Oxymoron –No one “plans” to go on Medicaid. Medicaid planning is reactive once in a care crisis. What works today may not/will not work in the future. Process of taking countable assets and making them inaccessible by giving them away or placing them in a trust.

14 (c)2004 Comfort Assurance Group, LLC For Professional Education Only14 “Medicaid Planning” Give Away Assets? –If gift is made within 3 years (5 years for trusts) of applying (“look back period”) = Penalty – period of ineligibility based on amount given away –Other unintended consequences Taxes (Potentially HUGE costs) Mismanagement Financial aid jeopardy Control

15 (c)2004 Comfort Assurance Group, LLC For Professional Education Only15 “Medicaid Planning” Annuities – Immediate –Convert countable assets into income –Must meet strict guidelines Irrevocable Period certain (no life option) over an impaired life expectancy “Medicaid friendly” –Not so great for individuals –Great for the Community Spouse States are limiting/shutting down

16 (c)2004 Comfort Assurance Group, LLC For Professional Education Only16 “Medicaid Planning” Appropriate for crisis planning - TODAY Annuities are great tools for couples, where still allowed. Some gifting within look-back and penalty periods can protect a portion of assets. The future? Get back to me...

17 (c)2004 Comfort Assurance Group, LLC For Professional Education Only17 Medicaid & LTCi Primary competitor –Idea that government will pay Medicaid is not “free” –Run the numbers, outline a Medicaid plan for prospects using their assets Medicaid eligibility is undergoing massive change – financial pressure Home care “waiver” programs very limited – Primarily pays for NHs.

18 (c)2004 Comfort Assurance Group, LLC For Professional Education Only18 Medicaid Summary –Becoming more restrictive –Requires experienced legal advice –Don’t PLAN on eligibility –Don’t wait for a crisis to plan –Primarily pays for care in nursing home –It’s not “free” –Help families in crisis with info and referrals... sell the others LTCi


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