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Joe called me because he had just taken over Dad’s finances and the management of care from his brother, Jim.  That’s when he made a discovery that troubled him and caused him to reach out to us. Dad was still living at home alone but his health was declining.  Joe began looking at assisted living facilities.  At a cost of approximately $4000 per month, Joe was concerned about whether Dad could afford it.  So I started to ask him about Dad’s assets and income. Joe told me Dad has about $300,000 in assets but he then went on to explain that Jim had transferred almost $500,000 out of Dad’s name.  He explained that Jim bought and sold investments in Dad’s account so the income was being taxed at Dad’s income level, which was lower than Jim’s.   “Is that a problem”, he asked. “It could be”, I told him.  If Dad runs out of money and needs to apply for Medicaid, he’ll have to produce 5 years of records and that’s where the problem lies.  They’ll see the money going back to Jim.  As I always explain, Medicaid works differently than the criminal system.  In the criminal system you are innocent until proven guilty,

Last week I was discussing the recent New York Times article, which profiled a World War II veteran, Henry Schaffer.  Mr. Schaffer, according to the journalist, paid a VA accredited attorney to get him VA benefits, only to find out that he doesn’t qualify because his income is too high.  But is that really true? First, we have to look at some inaccuracies in the article.  The NYT journalist, Jessica Silver-Greenberg, has completely misunderstood the VA’s income limits.  The VA calculates what it calls “income for VA purposes ( IVAP)”, in its determination as to whether someone qualifies for a pension or not.  Ms. Silver-Greenberg only tells us what Mr. Schaffer’s income is from Social Security.  The VA subtracts “recurring unreimbursed medical expenses” from that income to get the IVAP number. Silver-Greenberg suggests that he won’t qualify because he has too much income but that’s not true.  The VA doesn’t have a strict income cap like Medicaid.  His “problem” is that he doesn’t have enough medical expenses.  If he had medical expenses that would reduce his IVAP below $12,465 then he could qualify for a pension. Silver-Greenberg goes on to point out that “[m]ore money is available for veterans who are unable to

Two weeks ago there was a front page New York Times article titled, “Winning Veterans’ Trust and Profiting From It”.  The article profiled a World War II veteran, Henry Schaffer, who was told by a VA accredited attorney that he could qualify for a VA pension that would help him pay the cost of his senior living complex. He paid the attorney a few thousand dollars only to find out after he moved in that he did not qualify for the benefit and now is worried that he will be evicted because he can’t afford the cost of the facility without the VA benefit.  The article goes on to describe what is commonly known as the VA Aid and Attendance benefit, which can provide more than $20,000 a year to wartime veterans. But, the writer states that it is only available to veterans who have an annual income less than $12,465.  (That number was increased on Dec 1, 2013 and is now $12,652).  Mr. Schaffer’s Social Security income exceeds that amount so he can’t qualify.  The article goes on to state that more money is available to veterans who can’t “cook or bathe on their own” but Schaffer doesn’t qualify for that

Last week we were discussing the long term care partnership program which was reinstated as part of the last round of changes to the Medicaid laws in 2006. Now let’s answer some frequently asked questions. Purchasing a “partnership policy” allows you to protect an additional dollar amount in assets above the Medicaid limit equal to the amount of benefits paid out under the policy.  “But what happens if I move to another state?”  This refers to what is called reciprocity. Currently, there are 40 states that offer long term care insurance partnership programs.  All but one, California, offer reciprocity.  For example, if you purchase a policy in New Jersey and then move to New York and apply for Medicaid there, you’ll be able to invoke the asset disregard provision. Say you bought and used a $100,000 long term care policy, meaning the insurance company paid $100,000 of benefits on your behalf for nursing home care.  You’ll be able to protect an additional $100,000 in assets whether you apply for Medicaid in New Jersey, New York or any other state that participates in the reciprocity program.  If you move to California, it will not honor your policy unless it was a California partnership policy.  

Is it possible to purchase long term care insurance and be able to protect more than the minimum number of assets that Medicaid allows to qualify for benefits?  The question is a reference to something called the Long Term Care Partnership program. The partnership program is designed to encourage people to purchase long term care insurance and thereby reduce the reliance on Medicaid to pay for long term care.  Very simply, this is the way it works.  For every dollar of benefits paid out under your insurance policy, you can protect a dollar more in assets above Medicaid’s asset limit, should you apply for Medicaid benefits. If your policy pays out $100,000 and then you exhaust the policy limits and need Medicaid, you can keep $100,000 of your own assets.   Not every state participates in this program and not every long term care insurance policy qualifies.  Currently more than one half the states offer partnership programs. The program was instituted in the 1980’s but only 4 states - New York, Connecticut, Indiana and California – offered them when the federal government eliminated the program in the 1990’s.  The most recent Medicaid changes under the Deficit Reduction Act of 2005, however, brought the program

Many of the programs that, as elder law attorneys, we deal with daily, such as VA Aid and Attendance and Medicaid, are adjusted annually to account for changes in the cost of living ie. inflation. The Social Security Administration announced that Social Security recipients will receive a 1.5% in benefits starting in January.  Many of the Medicaid and VA numbers will increase by the same percentage.  Here are some of the important numbers you need to know for 2014. The Medicaid income cap will increase by $33 to $2163 per month.  This number is the limit on income per month needed to qualify for many Medicaid programs.  The Community Spouse Resource Allowance is now up to $117,240.  That is the maximum amount a healthy spouse may keep in countable assets (provided the married couple have at least that amount times 2 at the time the “snapshot of assets” is taken). VA Aid and Attendance pension benefits will also increase by 1.5% in 2014.  This means that a single veteran can receive a maximum of $1758 per month, a married veteran can receive as much as $2085 per month and the widowed spouse of a veteran tops out at $1130 per month in VA