Getting the Government to Pay for you to care for Mom

Mom needs assistance and you are always there to help. Wouldn’t it be great if you could get the government to pay you an hourly rate for what you are doing already? In New York State, the Consumer Directed Personal Assistance Program (CDPAP) provides a unique approach to personal care that allows consumers to choose and direct their own care providers, including family members or friends. In this article, we’ll discuss how CDPAP works and how it can help someone whose mother needs assistance.

What is the Consumer Directed Personal Assistance Program (CDPAP)?

The Consumer Directed Personal Assistance Program (CDPAP) is a program in New York State that allows individuals who are eligible for Medicaid to choose and direct their own personal care services. Under CDPAP, the consumer, or their representative, can hire and manage their own personal care aide, including family members or friends, who are paid by Medicaid.

How does CDPAP work?

To participate in CDPAP, an individual must be enrolled in Medicaid and require assistance with activities of daily living (ADLs) such as bathing, dressing, grooming, toileting, transferring, and ambulation. The consumer, or their representative, must also be capable of directing their own care or have a designated representative who can do so on their behalf.

Once enrolled in CDPAP, the consumer or their representative can hire a personal care aide of their choice, including family members or friends, to provide care. The personal care aide must meet certain qualifications and undergo training, but they do not need to be certified or licensed. The consumer, or their representative, is responsible for managing the personal care aide, including scheduling, training, and supervision. The personal care aide is paid by Medicaid through a fiscal intermediary, who also handles payroll and taxes.

How can CDPAP help someone whose mother needs assistance?

CDPAP can be an excellent option for someone whose mother needs assistance with activities of daily living. By allowing the consumer or their representative to choose and direct their own personal care aide, CDPAP can provide a level of flexibility and control that is not available with traditional home care services.

One of the biggest advantages of CDPAP is that it allows family members or friends to provide care, which can be especially beneficial for elderly individuals who prefer to be cared for by someone they know and trust. Additionally, family members or friends who provide care under CDPAP can be paid for their services, which can help alleviate financial burdens and provide a source of income.

CDPAP can also be beneficial for individuals with complex medical needs or disabilities. By allowing the consumer or their representative to choose and direct their own personal care aide, CDPAP can provide a more customized approach to care that is tailored to the individual’s unique needs and preferences.

Call our office to find out how to get your parent eligbile for Medicaid and how you can get paid for care.

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February 26, 2023

Medicaid

Will Gifting Conflict with Medicaid?

Gifting – People usually make gifts for three reasons—because they enjoy giving gifts, because they want to protect assets, or minimize tax liability. However, giving a gift in one’s elder years can have expensive and unintended consequences, as reported in the article “IRS standards for gifting differ from Medicaid” from The News-Enterprise.

The IRS gift tax becomes expensive, if gifts are large. However, each individual has a lifetime gift exemption and, as of this writing, it is $12.06 million, which is historically high. A married couple may make a gift of $24.12 million. Most people don’t get anywhere near these levels. Those who do are advised to do estate and tax planning to protect their assets.

The current lifetime gift tax exemption is scheduled to drop to $5.49 million per person after 2025, unless Congress extends the higher exemption, which seems unlikely.

The IRS also allows an annual exemption. For 2022, the annual exemption is $16,000 per person. Anyone can gift up to $16,000 per person and to multiple people, without reducing their lifetime exemption.

People often confuse the IRS annual exclusion with Medicaid requirements for eligibility. IRS gift tax rules are totally different from Medicaid rules.

Medicaid does not offer an annual exclusion. Medicaid penalizes any gift made within 60 months before applying to Medicaid, unless there has been a specific exception.

For Medicaid purposes, gifts include outright gifts to individuals, selling property for less than fair market value, transferring assets to a trust, or giving away partial interests.

The Veterans Administration may also penalize gifts made within 36 months before applying for certain VA programs based on eligibility.

Gifting can have serious capital gains tax consequences. Gifts of real estate property to another person are given with the giver’s tax basis. When real property is inherited, the property is received with a new basis of fair market value.

For gifting high value assets, the difference in tax basis can lead to either a big tax bill or big tax savings. Let’s say someone paid $50,000 for land 40 years ago, and today the land is worth $650,000. The appreciation of the property is $600,000. If the property is gifted while the owner is alive, the recipient has a $50,000 tax basis. When the recipient sells the property, they will have to pay a capital gains tax based on the $50,000.

If the property was inherited, the tax would be either nothing or next to nothing.

Asset protection for Medicaid is complicated and requires the experience and knowledge of an elder law attorney. What worked for your neighbor may not work for you, as we don’t always know all the details of someone else’s situation.

Reference: The News-Enterprise (Aug. 6, 2022) “IRS standards for gifting differ from Medicaid”

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September 10, 2022

Medicaid

How Is New York Strengthening Its Medicaid Program?

Medicaid – Beginning next year older, disabled and blind New Yorkers can make up to 138% of the federal poverty level and still qualify for taxpayer-funded health care coverage.

That would increase the maximum monthly income for those groups from $934 a month to $1,563 a month, reports WBFO’s recent article entitled “New York State budget expands Medicaid eligibility for older adults.”

The maximum assets those groups can have and still qualify will also nearly double, from $16,800 to $28,134. For couples, the allowable maximum assets will go up from $24,600 to $37,908.

Medicaid is a federal and state program that helps with healthcare costs for those with limited income and resources.

Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services.

The primary difference between the two programs is that Medicaid covers healthcare costs for people with low incomes, while Medicare provides health coverage for the elderly.

Under the current limits, many people must spend-down much of their assets to qualify for Medicaid. However, younger recipients, who are not subject to an asset test, also lose their coverage once they move into the older, disabled, or blind categories.

The increase will help protect those who have some retirement savings from being forced to totally deplete their income and assets, in order to qualify for Medicaid.

One in three New Yorkers, or roughly 7.4 million people, are currently on Medicaid. That number has increased by about a million since the COVID-19 pandemic began.

That is when the economic recession made more people eligible and federal laws barred states from terminating coverage for most enrollees during the public health emergency.

In December, the state Division of Budget had projected enrollment to return to pre-pandemic levels of just over six million by 2024.

The state already has the second-largest Medicaid budget of any state in the nation, with total spending at $72.8 billion in 2020. Only California, with a $97.8 billion Medicaid budget, spent more.

Reference: WBFO (April 24, 2022) “New York State budget expands Medicaid eligibility for older adults”

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May 20, 2022

Medicaid

Is a Medicaid Annuity a Good Idea?

What happens when one spouse needs nursing home care? Medicare typically does not cover long-term care. The current median monthly cost of a private room at a nursing home is about $8,000, according to the recent article “A ‘Medicaid annuity’ may be a useful option when your spouse needs nursing home care” from CNBC. For people with limited assets and income, Medicaid will pay.

However, what about families who have some assets but are not wealthy enough to be able to pay for their care without leaving the well spouse impoverished? It is a common situation, which requires advance planning. Elder law attorneys work with families to determine what options are available.

For some families, spending down assets by paying off debt or making purchases to qualify is one way. For others, buying a Medicaid Compliant Immediate Annuity is another. This allows the couple to convert countable assets for Medicaid purposes into an income stream for the well spouse.

Medicaid Compliant Annuities are complex financial instruments and are not for everyone. They are often used in a crisis situation, when there are no other options.

Medicaid has a five-year look-back period in most states. The program reviews all assets and transactions from the prior five years to make sure assets were not transferred out of ownership solely so the person can qualify for Medicaid.

All assets are counted, whether they are owned by the ill spouse or the well spouse. The limits on assets, which include cash, investments and bank accounts, among others, vary slightly by state. However, they can be as low as $2,000. An experienced elder law attorney helps to navigate this process.

For a married couple, in some states, the healthy spouse may have up to $137,400 in total assets. Anything above that is considered available to use for long-term care. Some states have limits on income, while other states do not count the healthy spouse’s income.

If a couple has $100,000 above the state’s asset cap, they can purchase an annuity payable to the well spouse, based on their own life expectancy. For the annuity to be Medicaid compliant, it must meet several requirements. The state has to be named the remainder beneficiary for at least the amount Medicaid paid for the sick spouse’s nursing home care. The annuity must be an immediate annuity, meaning the income stream begins immediately, and it must be irrevocable.

Medicaid programs are run by the state, so each state has its own rules, asset limits, etc. A detailed conversation with a local elder law attorney with experience with Medicaid will be necessary. There are some states that do not allow the use of annuities for Medicaid planning.

Reference: CNBC (Jan. 26, 2022) “A ‘Medicaid annuity’ may be a useful option when your spouse needs nursing home care”

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March 9, 2022

Medicaid

What’s a Medicaid Annuity?

Medicare does not cover long-term care. While Medicaid is available when a senior’s financial resources are minimal, some couples face the possibility of depleting their own assets to pay for nursing home care and leaving the healthy spouse in a precarious financial situation.

CNBC’s recent article entitled “A ‘Medicaid annuity’ may be a useful option when your spouse needs nursing home care” says that some seniors are in a difficult position because they have extra cash that will keep them from qualifying for Medicaid initially. While some couples “spend down” their assets — paying off debt or making purchases that will not inhibit their Medicaid eligibility to qualify, another option may be to purchase a Medicaid annuity. This lets you convert countable assets (for Medicaid eligibility purposes) into an income stream for the healthy spouse — and not have it factored into the calculation.

Note that when you apply to have Medicaid cover the cost of institutional care, Medicaid takes a snapshot of your assets to determine eligibility. Assets are generally viewed jointly, even if they are in your spouse’s name. The specific limits on those assets (including cash, investments, bank accounts, etc.) depend on the specific state, but can be as low as $2,000 for an individual. However, for married couples, many states allow the healthy (“community”) spouse to keep up to $137,400 in assets (i.e., cash, investments, bank accounts) that do not count toward the eligibility calculation. Assets above that threshold are considered available to pay for the other spouse’s care.

In addition, Medicaid has a five-year “look-back” period in most states. That means they can review the previous five years to be sure any assets were not transferred to family members, just so the person could qualify for Medicaid.

An individual’s income also is a concern, since most states have a limit, typically about $2,500. However, the healthy spouse’s income generally is not counted. That is where a Medicaid annuity comes into play. If a couple has $100,000 above their state’s asset cap, they would buy an annuity with it that is payable to the healthy spouse, based on their own life expectancy.

The annuity must meet certain requirements, such as the state generally must be named as the remainder beneficiary for at least the amount that Medicaid paid for the ill spouse’s nursing home care.

It also must be an immediate annuity (it begins paying the income stream right away instead of being deferred) and be irrevocable.

Ask attorney who specializes in elder law about a Medicaid annuity for your situation.

Reference: CNBC (Jan. 26, 2022) “A ‘Medicaid annuity’ may be a useful option when your spouse needs nursing home care”

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February 25, 2022

Medicaid

Gift-Tax Exemptions are Treated Differently by IRS and Medicaid

Different government agencies have different rules for the same things. It’s a hard lesson, especially for those who try to use their $15,000 annual gift tax exemption for asset protection for long term care. The results are not good.

A recent article from The News Enterprise makes it clear: “Medicaid and IRS don’t view gift-tax-exemption in same way.”

To understand the exclusion better, let’s start by looking at what the amount is being excluded from. The IRS generally allows each person to gift a total of $11.7 million in gifts during their lifetime and after death without incurring a gift tax. There are exceptions, but this is true in most cases. However, that first $15,000 given to each person within each calendar year is excluded from the total amount.

If a woman gives her three children $15,000 each per year for five years, she has given away a total of $225,000. However, this amount is not deducted from the $11.7 million that she is allowed within her lifetime non-taxable gift amount.

However, if the same woman gave her children $16,000 each for five years, the extra $3,000 per year must be deducted from her lifetime non-taxable gift limit. Unless she reaches the $11.7 million after her death, her estate will still not pay taxes on the gifts. She will be required to file a form every year letting the IRS know that she is reducing her limit.

The $15,000 exclusion each year simplifies the ability to give gifts without cumbersome reporting requirements. However, it creates huge—and costly—problems when used in an attempt to become eligible for Medicaid. This federally funded program was created to help low-income people pay for medical and nursing home care. A person’s assets and any financial transactions made within a five-year lookback period are considered when determining eligibility.

What most people don’t know is that Medicaid does not allow the gift tax exemption to be used for the lookback period.

Remember the woman who gave her three children $15,000 each year for five years? If she goes into a nursing facility in the fifth year, after giving her final set of gifts, the IRS won’t count any of those gifts made against her lifetime gift tax exemption. However, Medicaid will count the full amount—$225,000—as if those assets were available to pay for her care. The penalty period will make it necessary for her or her family to pay for care, possibly for five years.

To take advantage of the annual gift tax exclusion safely when Medicaid may be in the future, an estate planning attorney can create an Intentionally Defective Grantor Trust to hold assets. This is a hybrid trust used to separate assets from the grantor just enough to begin the five-year lookback period while holding property within the grantor’s taxable estate, allowing for a continuing opportunity to take advantage of the annual gift tax exclusion without triggering a new five-year look back at each gift.

The IRS and Medicaid work under different rules and understanding what each agency requires can protect the family and those needing nursing home care without creating expensive and stressful results. In addition, some Medicaid planning techniques may work in some states but not in others.

Reference: The News Enterprise (Sep. 14, 2021) “Medicaid and IRS don’t view gift-tax-exemption in same way”

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October 13, 2021

Medicaid

Seven Items Medicare Doesn’t Cover

AARP’s recent article entitled “7 Things Medicare Doesn’t Cover” talks about some needs that aren’t part of the program — and how you might pay for them.

Opticians and eye exams. Original Medicare will cover opthalmologic expenses like cataract surgery, but it doesn’t cover routine eye exams, glasses, or contacts. In addition, it’s usually not covered by Medigap plans (supplemental insurance available from private insurers to augment Medicare coverage). Some Medicare Advantage plans cover routine vision care and glasses. As such, it may be wise to purchase a vision insurance policy for a few hundred dollars a year for the expense of glasses or contact lenses.
Hearing aids. Medicare covers ear-related medical conditions, but original Medicare and Medigap plans won’t pay for routine hearing tests or hearing aids. You may need to purchase insurance or a membership in a discount plan that helps cover the cost of such hearing devices.
Dental care. Original Medicare and Medigap policies don’t cover dental care like routine checkups, dentures, or root canals. Some Medicare Advantage plans offer dental coverage, but if yours doesn’t, or if you opt for original Medicare, you may want to get an individual dental insurance plan or a dental discount plan.
Care When Overseas . Original Medicare and most Advantage plans offer next to no coverage for medical costs incurred outside the U.S. However, there are a few Medigap policies that cover certain overseas medical costs. However, if you travel a lot, you might want this option. In addition, some travel insurance policies provide basic health care coverage. You should also look at medical evacuation (medevac) insurance for your time abroad. This is an inexpensive policy that will transport you to a nearby medical facility or back home to the U.S. in an emergency.
Podiatry. Routine medical care for feet, such as callus removal, isn’t covered. Part B does cover foot exams or treatment, if it’s linked to nerve damage because of diabetes, or care for foot injuries or ailments. Therefore, you may want to set up a separate savings program for this expense.
Cosmetic surgery. Elective cosmetic surgery isn’t included in Medicare. This includes procedures, such as face-lifts or tummy tucks. However, Medicare will cover plastic surgery in the event of an accidental injury. So, if you face these costs, you also may want to set up a separate savings program for them.
Nursing home care. Medicare pays for limited stays in rehab facilities. This may be a situation where you have a hip replacement and need inpatient physical therapy for a few weeks. However, if you become so frail or sick that you must move to an assisted living facility or nursing home, Medicare doesn’t cover your custodial costs.

Reference: AARP (Oct. 1, 2020) “7 Things Medicare Doesn’t Cover”

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May 28, 2021

Medicaid

Are Death Settlements Subject to Medicaid Liens?

Are Death Settlements Subject to Medicaid Liens?

There are two types of claims for death caused by a third party due to negligence or other wrongful conduct, says nj.com’s recent article entitled “Can Medicaid take money from a death settlement?”

Negligence is a failure to take reasonable care to avoid causing injury or loss to another person. This action or inaction of the person or organization in the circumstances failed to meet the standard of care, which a reasonable person would meet in the circumstances (also known as breach of duty).

A survival action is brought to recover damages to the deceased person. This type of claim allows the estate of the decedent to be awarded damages the deceased incurred from the moment of the injury until the time of death.

The other type of claim is a wrongful death action that is brought to recover damages for the survivors of the deceased person.

A wrongful death suit asks that the estate to be awarded damages for the beneficiaries of the deceased.

Wrongful death lawsuits are governed by state law, so each state has its own specific deadlines and procedures. However, there are a few issues common to all states’ wrongful death laws, including:

Who can file a wrongful death lawsuit on behalf of the deceased’s estate
How a person gets appointed to represent the estate; and
The kinds of damages allowed in a wrongful death case.

Wrongful death settlements aren’t subject to Medicaid liens because the injured parties are the survivors.

However, settlements of survival actions are subject to Medicaid liens because the injured party is the deceased person.

If you have questions about these types of claims, you should talk to an experienced attorney to look at the issue based on the specific facts of your case.

Reference: nj.com (April 23, 2021) “Can Medicaid take money from a death settlement?”

Suggested Key Terms: Elder Law Attorney, Medicaid, Assisted Living, Nursing Home Care, Medicaid Planning Lawyer, Disability, Elder Abuse, Survivor Action, Wrongful Death

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May 21, 2021

Elder Law / Medicaid

Victory Against Medicaid Penalty for Adults Caring for Parents at Home

A New Jersey Appellate Division recently reaffirmed the state’s regulation that allows older adults to transfer their homes to adult caregiver children without Medicaid penalty, reports an article titled “Major Victory for Adults Who Provide Home Care for Parents” from The National Law Review. The regulation permits the home to be transferred with no Medicaid penalty, when the adult child has provided care to the parent for a period of two years. This allows the parents to remain at home under the care of their children, delaying the need to enter a long-term care facility.

New Jersey Medicaid has tried to narrow this rule for many years, claiming that the regulation only applies to caregivers who did not work outside of the home. This decision, along with other cases, recognizes that caregivers qualify if they meet the requirements of the regulation, regardless of whether they work outside of the home.

The court held that the language of the regulations requires only that:

The adult child must live with the parent for two years, prior to the parent moving into a nursing facility.
The child provided special care that allowed the parent to live at home when the parent would otherwise need to move out of their own home and into a nursing care facility.
The care provided by the adult child was more than personal support activities and was essential for the health and safety of the parent.

In the past, qualifying to transfer a home to an adult caregiver child was met by a huge obstacle: the caregiver was required to either provide all care to the parents or pay for any care from their own pockets. This argument has now been firmly rejected in the decision A.M. v. Monmouth County Board of Social Services.

The court held that there was nothing in the regulation requiring the child to be the only provider of care, and the question of who paid for additional care was completely irrelevant legally regarding Medicaid Penalty.

It is now clear that as long as the child personally provides essential care without which the parent would need to live in a nursing facility, then the fact that additional caregivers may be needed does not preclude the ability to transfer the home to the adult child.

The decision is a huge shift, and one that elder law estate planning attorneys have fought over for years, as there have been increasingly stricter interpretation of the rule by New Jersey Medicaid.

While Medicaid is a federal program, each state has the legal right to set its own eligibility requirements regarding Medicaid Penalty. This New Jersey Appellate Court decision is expected to have an influence over other states’ decisions in similar circumstances. Since every state is different, adult children should speak with an elder law estate planning attorney about how the law of their parent’s state of residence would apply if they were facing this situation.

Reference: The National Law Review (March 22, 2021) “Major Victory for Adults Who Provide Home Care for Parents”

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April 19, 2021

Elder Law / Medicaid

How Can I Prep for a Telehealth Appointment?

Caring Bridge’s August 2020 article entitled “5 Tips to Prepare for a Telehealth Appointment” shares five steps to prepare for a virtual doctor’s appointment that will allow you to get the most out of your telehealth experience.

Check your Technology. You need a computer, smartphone, or tablet with a camera for a telehealth appointment. Without a camera, it’s just a phone call, which may not be as effective, since your doctor can’t observe any physical symptoms or your physical expressions during the chat. Get the software and test it out beforehand.
Get Your Medical Info Handy. You may be asked to fill out and return symptom and history forms by the day before your appointment. You should also be sure to write down notes for yourself for the predictable questions you’ll be asked during the visit itself like: When did this start? What makes the pain or issue better or worse? Don’t waste time trying to think through the answers to these questions on the spot.
Be Ready to Do Your Own Physical Exam. Be ready to participate in your own physical exam. You may want to get a good scale, thermometer and blood pressure monitor to conduct your own exam. If you are able, on the day of your call, measure and document your blood pressure, heart rate, temperature, respiratory rate, and weight. You should also wear clothing that will make it easy to do the necessary show and tell during the call.
Make a List of Your Questions. Create this list for the doctor in advance of your telehealth visit and be sure to prioritize them to make sure your main issues are addressed first. If all your questions aren’t covered, ask for a follow up telehealth visit.
Sit in a Comfortable Spot. A typical telehealth visit takes about 20 minutes. Use the bathroom beforehand and have a glass of water handy, so you don’t have to get up. Create a comfortable, quiet space.

Remember, telehealth visits aren’t a replacement for ALL visits. You should be seen in-person if you believe you or a loved one are experiencing a heart attack, stroke, a head injury, trauma, or bleeding.

Telehealth is a terrific way to deliver medical care, provided we know its limitations.

Make the most of your visit by following these tips.

Reference: Caring Bridge (Aug. 18, 2020) “5 Tips to Prepare for a Telehealth Appointment”

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March 26, 2021

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