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In my blog post last week I began to highlight the differences between nursing homes and assisted living facilities. Understanding the differences is especially important when one has limited assets and Medicaid benefits will be needed to pay for care at some point. The private pay rate for care for both types of facilities is much higher than what they are permitted to bill for their Medicaid residents. For that reason, many facilities have private pay minimums. In the case of assisted living facilities, it is pretty standard. With limited exceptions, the private pay requirement is 2 years. This means one must pay the facility at the private pay rate for 2 years before it will make a Medicaid slot available. Most ALFs make 10% of their beds available for Medicaid so getting approved by the State must be coupled with an available slot. One without the other won’t get you Medicaid benefits. Nursing home private pay rates are more varied. Some have no minimum while others have anywhere from a few months to a year or more. People tend to focus on the lower rate for ALFs vs. nursing homes, however, if one factors the longer 2 year private pay time

I’ve written a number of blog posts over the years about the failure to recognize the the differences between nursing homes and assisted living facilities. A number of recent cases in our office highlight the point and the mistakes that can be made, specifically with regard to the impact on Medicaid. When a client has a limited amount of money and Medicaid is going to be needed, families need to understand how choosing a nursing home vs. an assisted living facility for their loved one could impact the ability. First of all, many people don’t understand that while many assisted living facilities do have memory care units that focus on caring for advanced dementia and other residents who need nursing home level care, they are licensed as assisting living facilities and not nursing homes. That means that while choosing such a facility may be the solution, it is also possible that care needs may exceed what the assisted living facility can provide. Nursing home care might then be necessary. In other words, there is a “higher” level of care option. With limited funds available the private pay requirements of the facility before Medicaid eligibility are important to understand as well. We’ll discuss

At the end of 2019 Congress passed the SECURE Act which contained a number of changes to retirement accounts that I detailed in several blog posts in 2020 and then again in 2021 and 2022 as follow up regulations addressed some unanswered questions. Congress continued to tinker with IRAs and retirement plan rules with SECURE Act 2.0 which was passed by Congress as part of a $1.7 trillion spending package last week. While the new law contains incentives designed to encourage more employers to offer 401ks and other tax deferred plans to its employees and to encourage more employees to participate in such plans, it also contains changes that impact the rules with regard to withdrawing funds from retirement accounts. SECURE Act 1.0 raised the required minimum distribution age (RMD) from 70.5 to 72. That is the age by which an account owner must start withdrawing funds from his/her retirement account. SECURE Act 2.0 increases the age further. Starting in 2023 account owners must start taking RMDs when they turn 73. In 2033 the age goes up again to 75. The new law also allows, beginning in 2024, the withdrawal of up to $1000 from certain retirement plans for emergency expenses while waiving

In this third post of three I finish telling you about the estate recovery problem we encountered with one of our clients. As I explained last week, when the client died and we asked the State what it was seeking to recover, what we got back was an amount triple what we expected. When I examined the State's printout it was immediately clear why. Medicaid was reimbursing the facility at the ventilator patient rate which is approximately triple the private pay rate for nursing residents who are not on a ventilator. My client, however, had never been on a ventilator. Clearly there had been a mistake in communication between the State and the facility. Getting the answers and more importantly getting it straightened out would take time. We had to get it corrected because as I related to you last week, the proceeds from the sale of my client's house had been placed in a special needs trust (SNT). Now that my client died, the State needed to be paid back all the benefits it paid out, or at least what was left in the SNT, if not enough to cover the full amount. If

Last week I started to tell you about the Medicaid estate recovery process in which the State attempts to recover from the estates of deceased Medicaid recipients, benefits it paid out. The process is usually pretty routine. The State runs a printout, which shows the dates and amounts it paid. When a Medicaid recipient is in a facility, the cost charged by the facility is at a reduced Medicaid rate. Additionally, the Medicaid beneficiary must apply most of his or her income to the cost, so the State rarely pays the full amount of that rate. In order to be Medicaid eligible, an applicant must have less than $2000 in assets to his or her name so you would think that the State's effort to recover money is a fruitless effort. There are, however, many ins and outs to the Medicaid regulations. In our particular case, because our client was under age 65, we were able to place his home into a special needs trust without spending it down towards care at the much higher private pay rate. This strategy allowed him to qualify for Medicaid's reduced rate. After death some of the proceeds from

Medicaid's estate recovery law requires state Medicaid offices to attempt to recover paid benefits from the estates of Medicaid recipients after they die. New Jersey takes an expanded definition of estate, which includes probate assets (those passing by way of a will or otherwise thru the estate administration process) and non-probate assets such as those held in certain trusts. A Medicaid applicant must have less than $2000 in assets to his/her name to qualify for and maintain Medicaid eligibility, so you might think that there shouldn't be much to attempt to recover. You'd be wrong. The Medicaid laws, rules and regulations are complicated and there are many exceptions under which assets that are subject to estate recovery do not prevent a person, while alive, from qualifying for Medicaid. At the same time, once the estate recovery process is reached there are no real disputes as to what the State should be looking to recover. For the first time in our office, however, we discovered that a mistake did happen when we got to the estate recovery process. Next week I'll share more.