A Word about the PAS (Part 2)
Last week I wrote about the medical part of Medicaid eligibility. The preadmission screening (PAS) process requires the state to certify that the applicant needs nursing home level care. Nursing home level care means needing assistance with at least 3 of the activities of daily living. Those activities are transferring (eg. in and out of bed or chair), dressing, bathing, toileting, eating and incontinence. Before COVID in the case of an applicant for Medicaid benefits at home, the State would send out a nurse to the applicant’s home to do the evaluation. Now, however, these evaluations are being done by teleconference but expect delays. Additionally, we have seen many instances where the PAS request is not being processed until the actual application has been filed. This is problematic for a number of reasons. Since both financial and medical eligibility are required for approval, any delay in obtaining the medical PAS will obviously delay the receipt of benefits. While the PAS can be issued retroactively in the case of nursing home Medicaid (ie. approval back to the date of the request), this is not the case for the community Medicaid programs so timing is critical. This creates another potential problem for married couples where one spouse is applying for Medicaid benefits. The healthy
A Word about the PAS
When talking to clients about achieving Medicaid eligibility, we spend most of our time focused on the financial requirements. That includes an asset test and an income test and transfers that are potentially subject to a Medicaid penalty. However, I always tell families that we can’t forget about the medical test. If we do everything right on the financial side of the equation but the applicant fails to meet the medical test - as determined by Medicaid by way of an exam and reflected on a form called a Preadmissions Screening or PAS, then the application will fail. Because there are 3 distinct Medicaid programs that cover nursing home level care - in a nursing home, in an assisted living facility and at home - the rules of each are not exactly the same. If the applicant is in a nursing home or an assisted living facility and applying for Medicaid, the facility makes the request for the PAS. This triggers an evaluation by Medicaid to determine if the applicant meets the test of needing assistance with at least 3 of the activities of daily living. Once the facility is informed of the intention of the applicant to file a Medicaid application, it is the facility’s
Withdrawing IRA Funds Before Year End – Part 2
This year has been unlike any other. The pandemic has resulted in hundreds of thousands of deaths and many Americans continue to face economic hardships caused by the government imposed shutdowns and restrictions. At the same time Congress did pass a relief package back in March called the CARES Act. As I said last week, this act provided some changes to the rules governing retirement accounts for 2020. As we approach the end of the year let’s review them. Congress suspended the required minimum distribution rules for 2020. That means Americans over 70 and 1/2 years of age do not need to meet their RMD amount for this year. If you already took your RMD for the year before the law was passed you could put it back without having to pay tax on it (but you had to do this by 8/31/20). Additionally, for certain qualified individuals who are younger than 59 and 1/2, the 10% early withdrawal penalty was suspended for 2020 if they withdraw funds from their retirement accounts. You are a qualified individual if you or your spouse was diagnosed with COVID-19 or you experienced economic hardship as a result of the viruses (as defined in Section 2022 of the Act). But let’s go back to
Withdrawing IRA Funds Before Year End – Part 1
As we get to the close of the year, many seniors if they haven’t done so already must withdraw enough from their retirement accounts to meet required minimum distribution requirements. The tax deferred status of these accounts can increase their value substantially, however, eventually the government wants its share in taxes. The RMD rules force that to happen. For most, RMD doesn’t apply until the account owner reaches age 70 and 1/2. Two years ago the tax laws were change to raise the age to 72 and 1/2 for anyone not already taking RMD. Failing to take enough RMD can cause a pretty hefty penalty of 50% on top of what should have been taken but wasn’t. Everything this year, however, is different because of the pandemic. There were some changes to retirement accounts contained in the CARES Act, the comprehensive law passed in March to provide economic relief to Americans from the effects of COVID. That includes the RMD rules (which were suspended this year). Next week we’ll review what those change are.
The Problem of Unexplained Deposits – Part 2
Last week I wrote about how unexplained deposits have the potential to be more damaging to a Medicaid application than unexplained withdrawals. That’s because deposits must be explained or the application is denied for being incomplete and those same deposits must be explained in any new application unless the deposit then falls outside of the 5 year Medicaid lookback period. Often these deposits are a result of an inheritance. They could be from a spouse or another family member or friend but can come in many different ways. If the Medicaid applicant receives an inheritance by way of a last will, the Medicaid caseworker will ask to see the will as well as an accounting of all the assets of the estate. For example, the will may leave the Medicaid applicant 1/3 of an estate. Let’s say there is a deposit of $50,000 into the applicant’s account coming from that estate. This amount does not establish by itself that the applicant received everything he or she was entitled to. It is possible that some portion of the estate was disclaimed, a written statement that the person is declining to receive what he or she is entitled to. A disclaimer is the equivalent of giving the assets away - what Medicaid calls
The Problem of Unexplained Deposits – Part 1
More and more of the Medicaid applications we handle these days involve issues surrounding assets received by way of the death of a family member. More often than not it will be a spouse who died, however, it may also be a parent or other relative. As part of Medicaid applications now, the State routinely asks for documentation of withdrawals from the applicant’s accounts but also for deposits into these accounts which can be more difficult to explain. Because Medicaid rules require a 5 year look back, some of these transactions may be difficult to recall, especially if the applicant is the only person who knows. A little bit of detective work and knowledge of probate procedures can be especially important. I have always said that unexplained deposits can be more damaging than unexplained withdrawals. That’s because unexplained withdrawals will result in an approval with a Medicaid penalty. Once the penalty expires Medicaid benefits will begin. On the other hand, unexplained deposits will cause an application to be denied for lack of verification. In essence, the application is denied because it is incomplete. You can immediately refile but if you can’t explain the same unexplained deposits that caused the first denial you’ll end up with the same result - at