September 12, 2018
Author: Laura J. Jackson
Organization: Jackson & Ojeda, LLC
Understanding Long Term Care.
o When we discuss “long term care” we are generally speaking of care for a person who is mentally or physically disabled to a degree that he or she cannot function, or perhaps live, without assistance from others and that condition is not likely to change in the near future.
o Types of Long Term Care:
- Acute Care. If a person’s medical needs are such that they need to be provided in a hospital, the individual is in need of what is referred to as acute care. Acute care is extremely expensive. The cost typically ranges several hundred to tens of thousands of dollars a day. Fortunately acute care is generally paid for by health insurance for those under 65, and by Medicare and/or Medicare Supplemental Insurance, for those over age 65 or disabled. If there is no insurance or Medicare Supplement, Medicaid may be available depending on one’s age, assets, and level of disability. Also the Veterans Administration may provide assistance to some Veterans through the VA Hospital System.
- Intermediate and Skilled Nursing Care. Intermediate and skilled nursing care is care provided in a traditional nursing home, and is thus referred to by most as nursing home care. The distinction between intermediate and skilled care, is complex, and generally unimportant to the nursing home resident and his family. The cost of nursing home care varies greatly around the nation. In Wyoming the cost typically ranges from a low of about $5,500 per month to about $7,500 per month, with the actual average rate of nursing home care for 2014 being $6,332. However, in other parts of the country the cost can be much more. As discussed below, Medicare and private health insurance typically pay only a very small portion of the cost of nursing home care in the beginning.
Generally payment for this level of care comes from one of three sources; private pay, long term care insurance, and Medicaid. Further, some nursing home care is provided through the VA Hospital and Nursing Home system and the Veteran’s Pension (i.e. Aid and Attendance Benefit) can provide some funding for nursing home care outside the VA system.
- Residential Care or Assisted Living. The level of care immediate below skilled or intermediate care is referred to as residential care or assisted living. This type of care provided in a Residential Care or Assisted Living facility.
o In general persons needing this level of care are persons who do not meet the criteria for skilled or intermediate services but who, need a great deal of supervision and assistance and cannot live alone.
Common examples of persons needing this level of care are early stages Alzheimer’s or dementia patients, individuals who are at high risk of falling and being injured, individuals who need help getting out of bed, or minor assistance in bathing and dressing, individuals who are no longer capable of preparing or obtaining meals for themselves, and individuals who need assistance in medication management. In general, people who are physically or mentally incapable of living alone, and who cannot or do not wish to have someone live with them.
o The primary difference between a nursing home and a residential care or assisted living facility is the reduction in skilled nursing services. Nursing homes are required to have a certain level of licensed nursing staff, based on the number of patients, and provide skilled nursing services to their residents on a daily basis. While most assisted living facilities do have one are more licensed nurses on staff, they are generally not required to do so. Typically any licensed nursing staff is utilized to provide emergency nursing services, drug management, and to assist with assessing resident medical needs.
o The cost of Assisted Living is moderate when compared to nursing home care. While, these costs vary greatly from region to region, they generally run from a low of about $2,500.00 per month to a high of about $5,500.00 per month if advanced dementia care is need. These costs are for a moderate facility and can be much higher in more expensive areas of the country. The cost generally depends on combination of the patient's needs, the type of facility (i.e. basic to luxury), staffing ratios, the type of room or apartment the resident is in, and of course the region of the nation the facility is located in. Medicare will not pay for assisted living, and in many states, neither will Medicaid. Some states, like Wyoming, do provide an Assisted Living benefit through a Medicaid waiver program. Finally Veterans Administration Benefits may be available to assist with this type of care as well.
- Home Care. Home care is really different from previously discussed types of care, because virtually any level of care (perhaps with the exception of acute care) can be provided in one’s home if you have the manpower and/or financial resources to do so. It is possible to obtain skilled nursing assistance through various Home Health Agencies for the client residing at home; if the client meets the certain physical criteria Medicare may even pay for a portion of the cost. Lesser levels of care can be provided by family members, home care businesses, or paid sitters. Also, as additional support for families seeking to keep a family member at home, many communities have Adult Day Care programs. Like day care for children, these are places that provide care for disabled adults, so that a family caregiver can work. The disabled family member must go to the facility, and be picked up by a certain time each day; however, many facilities do provide pick up and drop off services. These facilities are frequently only available during week days. The cost of in home care is all over the board. It really depends on how much care is need, the level of care, the ability of family members to provide support, and available resources to help a family keep their loved one at home. Home care can easily be the most expensive of all long term care. For example if all a person needs is an untrained sitter, but he needs a sitter 24 hours a day, a family could easily expend in excess of $7,500 per month, and that does not cover employer taxes. Consequently for home care, which is what everyone wants maximizing available resources is extremely important.
How is Long Term Care Paid For?
o Providers of long term care do not care how their bills are paid:
– sometimes they will be paid by long term care insurance
– sometimes they will be paid by Medicare
– sometimes they will be paid by the VA
o When those payments for long term care are not or are no longer available, the remaining two options are:
– private pay
– Medicaid
- Private Pay. A lot of long term care is paid for the old fashion way, with a check book. While there is no true accounting of the total cost private long term care, it is significant and at some point unsustainable by the vast majority of families.
? Medicare. While Medicare plays an essential role in the health care system, its part in long term care is minimal. Typically Medicare covers 100% of the first 20 days of rehabilitation in a nursing home or rehabilitation facility following a hospital stay of 3 days or more. After the first 20 days, those with the proper type of Medicare Supplemental Insurance can qualify for an additional 80 days of full coverage. In order to qualify for rehabilitation services the patient must be capable of benefiting from the rehabilitation, and the rehabilitation will be terminated when the patient stops progressing and does not need the rehabilitation to maintain his current condition. Medicare will also pay for some home health services from a licensed home health provider, if the patient qualifies. Beyond this Medicare is largely restricted to doctor, hospital, and drug bills.
- Long Term Care Insurance. Long Term Care insurance is really a subset of private pay. Long Term Care Insurance is sold by a number of insurance companies, and often must be purchased well in advance of a need for long term care. Once you have an illness that is likely to result in long term care, obtaining a policy will be difficult, unless your employer has a group long term care policy. Coverage depends on the terms of the contract. Most policies pay a per day rate, for a set period of time, once the insured begins receiving long term care services. The rate depends on the type of services. Typically there are differing daily rates for home care, assisted living, and nursing home care.
- VA or Veterans Administration Benefits. The Veteran’s Administration runs a number of health care programs for Veterans and their spouse. These programs can be very complex and availability generally depends on a number of factors, including whether one is retired military, rank and disability. However, one program often overlooked is the Improved Disability Pension referred to as Aid and Attendance. This program is available to any veteran or widow of a veteran who was on active duty during a period of war. This includes WWII, the Korean Conflict, The Vietnam Conflict, Gulf War I and Gulf War II. This is a needs based program, and eligibility is determined through an analysis of assets, income, level of disability and medical expenses. Nonetheless, many veterans and widows of veterans who are in need of long term care can qualify for this benefit, and the amount can be significant.
- Medicaid. When all other methods of payment are insufficient for payment of long term care costs, Medicaid is the payer of last resort. For individuals who qualify physically and financially, Medicaid can pay a significant portion of, and sometimes the entire cost, of a person’s long term care. Medicaid can generally be accessed to pay for nursing home care as well as home and community based services
What is Medicaid and Who Can Receive It?
Medicaid is a means-tested health and medical services program for certain individuals and families with low incomes and few resources. It is a federal and state match program. Primary oversight of the program is handled at the federal level, but each state:
- Establishes its own eligibility standards,
- Determines the type, amount, duration, and scope of services,
- Sets the rate of payment for services, and
- Administers its own Medicaid program
• Medicaid helps pay for healthcare services for children, pregnant women, families with children, and individuals who are aged, blind or disabled who qualify based on citizenship, residency, family income, and sometimes resources and healthcare needs. Wyoming’s Medicaid program is ran by the Division of Healthcare Financing for the Department of Health and is known as “Equality Care.” When dealing with the aged population, Wyoming also has a few “waiver” programs through Medicaid.
- Long Term Care
- Assisted Living Waiver Program
- Home Care Waiver Program
MEDICAID IN GENERAL
• Medicaid Applications for Long Term Facility Care
• A successful Medicaid applicant must meet requirements to be eligible for Medicaid benefits to cover long term facility care: (1) medical need to be in a nursing home, (2) income eligibility and (3) asset eligibility:
Basic Eligibility
- Medicaid Eligibility Requirements
o medical assessment that long term care is required
o gross monthly income
o available assets – available for paying for long term care
- Medical Assessment. The medical assessment for Medicaid eligibility is completed by the public health office in each county and the long term care provider will usually contact that office to arrange for the assessment. In Wyoming this is called the LT101.
- Medical need to be in a nursing home: The first requirement toward Medicaid eligibility is evaluating the applicant's medical situation and level of need. Each county in Wyoming has a public health nursing office and one of its nurses evaluates the applicant by a screening tool (known as the LT101) which measures how independently the applicant can perform the activities of daily living. The LT101 is a backwards score: the higher the score the less independently the applicant can perform those activities.
A score of 13 points must be reached before an applicant will be considered eligible for Medicaid benefits.
- Income. Monthly income is determined by gross monthly income:
– gross monthly income means any amounts withheld from income must be added back into the amount of income that is actually received by the Medicaid applicant
– no one can be denied Medicaid benefits because of income
– for this year (2014), a Medicaid applicant with a gross monthly income of no more than $2,163 is automatically income eligible for Medicaid
– if a Medicaid applicant receives gross monthly income of more than
$2,163, an irrevocable income trust (also known as a Miller Trust) must be established to channel income from applicant to his or her long term care provider
– for a married Medicaid applicant, only his or her gross monthly income is considered; his or her community spouse’s income is not considered.
- Income eligibility: The second requirement toward Medicaid eligibility is demonstrating income eligibility. All sources of a Medicaid applicant's income are counted. Income includes Social Security benefits, Railroad Retirement benefits, wages, net earnings from self-employment, payments from sheltered workshops or work activity centers, private retirement pensions, annuity payments, disability benefits, most types of veterans benefits, workers compensation, unemployment benefits, dividends and interest earned by investments and bank accounts, rental income, income from trusts, publication royalties or honoraria, other royalties, prizes, awards, inheritances, alimony, gifts and support and maintenance furnished in cash or in kind.
- Income eligibility for Medicaid benefits is calculated on gross monthly income. Therefore, the Medicare Part B premium that is withheld from most Social Security or Railroad Retirement monthly benefit checks must be added back in as income, as do any other amounts withheld for whatever reason. If a Medicaid applicant has jointly owned income-producing property, only the Medicaid applicant's portion of the income will be counted. All of the Medicaid applicant's income must be calculated on a monthly basis, even if that requires pro rata calculation of income earned by or credited to the Medicaid applicant on a different schedule.
- However, if the Medicaid applicant is married, his or her spouse’s income does not count at all. Only the Medicaid applicant’s gross monthly income determines income eligibility for Medicaid.
- Medicaid has a two-tier system of income eligibility. Monthly incomes between zero and $2,163 (in 2014) fall into Tier I. Medicaid applicants with incomes which fall into Tier I are considered automatically “income eligible” for Medicaid. Monthly incomes over $2,163 (in 2014) fall into Tier II. Medicaid applicants with incomes which fall into Tier II are not automatically income eligible for Medicaid. However, they can be made income eligible for Medicaid through the establishment of an irrevocable income trust (also known as a Miller Trust).
Miller Trust/Irrevocable Income Trust. An irrevocable income trust may be established by the Medicaid applicant, his or her attorney-in-fact or his or her guardian or conservator. However, an irrevocable income trust should not be established until the nursing home resident meets all other Medicaid qualifications and is ready to apply for Medicaid.
o The income trust must be irrevocable and must consist only of the pension, Social Security and other income of the Medicaid applicant. The irrevocable income trust is usually held in the form of a checking account, although it may be held in the form of a savings account. The trustee of the irrevocable income trust may be the only signatory on the account. No other funds should be deposited in the trust account and all interest generated by the account must remain in it.
o Some of the Medicaid applicant's income (for example, a private retirement pension) may be assignable directly to the trust account. However, most major sources of retirement income (Social Security, Railroad Retirement, federal retirement pensions and state retirement pensions) are not assignable. Non-assignable income must first be deposited in the Medicaid applicant’s regular bank account. Then the entire amount of that non-assignable income (as well as the entire amount of assignable income if it continues to be deposited to the Medicaid applicant’s regular bank account) must be transferred to the trust account.
Such transfers will not be considered to be gifts and will not, therefore, generate penalty periods of Medicaid ineligibility.
o The irrevocable income trust must terminate at the death of the Medicaid recipient. It must name the State as the primary post-mortem beneficiary, allowing the State to recapture the amount of Medicaid benefits spent on the now deceased Medicaid recipient. Any remaining trust assets will then be distributed through the now deceased Medicaid recipient’s will or, if he or she had no will, through the laws of intestacy. If initially funded with a small amount of “seed money,” the trust account will be reduced each month to that amount and, upon the death of the Medicaid recipient, that will be all that the State will recover from the irrevocable trust account.
o Once a Medicaid applicant is approved to receive Medicaid benefits, he or she loses control of his or her income. The monthly income of Medicaid recipients may only be spent on certain expenses: $50 for the Medicaid applicant’s personal needs; allowance for dependent family members; health insurance premiums; and current medical costs not covered by Medicaid. The remainder of the Medicaid recipient’s monthly income, if any, is paid to the nursing home as the Medicaid recipient’s client contribution. Medicaid then pays the remainder of the Medicaid recipient’s nursing home bill.
- Miller Trusts in General. A Miller Trust solves a single problem. The problem is that the person applying for Medicaid has too much income. A Miller Trust is not useful for any other purpose. The term “Miller Trust” is an informal name. A more accurate name for this trust is an irrevocable income trust. In the eyes of Medicaid, if the Miller Trust is receiving income, the patient is not receiving that income. This is how the patient solves the excess income problem. Any funds that accumulate in the Miller trust must be paid back to Medicaid upon the patient's death to reimburse the program for the patient's accumulated cost of care.
- Who can create a Miller Trust?
o What if the patient is too disabled, physically or mentally, to sign a trust? If the patient has previously made a power of attorney for finances, the agent under that power of attorney can create the Miller Trust. Medicaid is liberal in permitting this, even if the power of attorney does not explicitly authorize the creation of a Miller Trust. If the patient is too disabled to understand that he or she is creating a trust, and if the patient has not granted a financial power to another, it will be necessary to obtain court conservatorship in order to create the Miller Trust.
o Establishing the Miller Trust Bank Account. Once the Miller Trust is created and signed by the patient or the patient’s agent under Power of Attorney, the next step is to create a bank account in the name of the trust. The tricky part is that the bank account cannot have an opening balance. Most banks hate this requirement and may not accommodate you. Once the bank account is opened in the name of the trust, the next step is to write social security and the pension payers and ask them to direct deposit future checks into the bank account.
- How are the funds in the Miller Trust spent?
o When money begins to flow into the bank account, complex Medicaid rules govern how it is to be spent.
o If all of the patient’s income flows into the trust, the trustee may retain a personal needs allowance for the patient. The trustee may pay the Medicaid approved Minimum Monthly Maintenance Needs Allowance to the community spouse. The trustee may and must pay the patient’s share of cost (if the patient is not at home). The trustee may, with Medicaid approval, pay the administrative fees associated with the trust.
o When the patient dies, any money remaining in the Miller Trust must be remitted to the Medicaid program.
- Miller Trust Timing Issues
- You do not want approval of Medicaid eligibility to be slowed by submission of your Miller Trust. For this reason, it is recommended that at the time you submit your Miller Trust to the eligibility worker, you do two other things. First, obtain from the eligibility worker a form that notifies Medicaid what you expect will be the monthly income and expenses for the trust and fill it out a and submit it immediately. Second, if you are going to assign the patient's social security into the trust, and the patient cannot request that assignment himself, you will need to become social security representative payee through the Social Security Administration. Request that status without delay.
- Asset Eligibility. The third requirement toward Medicaid eligibility is demonstrating asset eligibility. Medicaid considers assets to be either exempt or available. Exempt assets are those the value of which will not count toward Medicaid eligibility. Available assets are those which are not exempt, can be used to pay for nursing home costs and other allowable expenses and will count toward Medicaid eligibility. For a married Medicaid applicant, the community spouse’s assets are included on the list. The easiest way to distinguish between exempt and available assets is to compile a master list of all of the Medicaid applicant’s assets. The master list should include all of the following assets in which the Medicaid applicant has an ownership interest:
- real property (residential and other real property),
- motor vehicles, watercraft, atv’s, aircraft
- bank accounts (checking, savings and money market),
- certificates of deposit,
- investment accounts,
- stocks and bonds,
- annuities,
- life insurance,
- burial funds, and
- burial places.
- The intentional omission of known assets from the Medicaid applicant’s master asset list may not only result in denial of Medicaid benefits, but may also subject both the Medicaid applicant and anyone assisting the applicant complete his or her Medicaid application to a charge of Medicaid fraud.
- Once the master list is complete, exempt assets should be crossed off of it. Exempt assets are those the value of which will not count toward Medicaid eligibility. Exempt assets include:
1. Household goods and personal effects: The applicant’s statement that his or her household goods and personal effects are collectively worth no more than $2,000 will exempt all of his or her household goods and personal effects.
2. One engagement ring is considered exempt, regardless of its value.
3. One wedding ring is considered exempt, regardless of its value.
4. One motor vehicle: Regardless of its value, if it is necessary for employment or treatment of a medical problem, modified for operation by, or transportation of, a handicapped person, or necessary for the performance of essential daily activities. In essence, one motor vehicle, regardless of value, is virtually always considered exempt.
5. Retirement Accounts: To the extent the Medicaid applicant lacks authority to withdraw the cash value of pension plans, retirement funds, Keogh plans, IRAs, etc.
6. Annuities: To the extent they meet Medicaid’s requirements of being \"actuarially sound:\" that is, being irrevocable and non-assignable; for a specific time and for no longer than the Medicaid applicant’s life expectancy as determined by Social Security’s actuarial life expectancy table; and to be paid out equal amounts each month. In addition, if the Medicaid applicant is not married and does not have minor or disabled children, the State must be named as the primary post-mortem beneficiary of the annuity, up to the amount of Medicaid funds spent on the Medicaid applicant/recipient prior to his or her death. If the Medicaid applicant is married and/or has minor or disabled children, they may be named as the primary post-mortem beneficiary or beneficiaries but the State must be named as the second or contingent post-mortem beneficiary of the annuity, up to the amount of Medicaid funds spent on the Medicaid applicant/recipient prior to his or her death.
7. Up to $1,500 of burial fund expenses: Burial fund expenses are what most of us call funeral expenses. A Medicaid applicant is allowed no more than $1,500 for burial fund expenses, whether that is held in a revocable contract, burial trust, cash or cash account clearly designated for burial.
Wyoming law allows for an irrevocable burial trust of up to $5,000, but it appears to be difficult to harmonize these two separate caps: $1,500 and $5,000. The simplest way to provide a pre-need funeral contract is to simply make the contract irrevocable or have it be owned by anyone but the applicant. In either case, the contract will be considered exempt, even if it was purchased with the applicant’s money and even if the contract costs more than $1,500. The community spouse of the applicant is allowed the same options regarding burial fund expenses for him- or herself.
8. All pre-paid burial space expenses: One cemetery lot is exempt for the applicant and one burial plot is exempt for his or her community spouse. Burial space items include the cemetery lot, casket or urn, the cost of opening and closing the grave and the grave marker.
9. Term life insurance policies: Term life insurance policies have no cash surrender value; therefore they are exempt.
10. Assets to which access is blocked by a legal barrier: The value of resources that are unavailable to the Medicaid applicant through no fault of his or her own, are exempt. For example, if the signature of a second person is required on a check and that person refuses to sign the check, the asset is unavailable and exempt. If an asset cannot be sold because a co-owner refuses to cooperate with the sale, it is unavailable and exempt. If a bona fide effort to sell a certain piece of real property has been unsuccessful, it is exempt provided the recipient has been institutionalized, is eligible for Medicaid for six months and has entered into a written agreement to reimburse the State from the proceeds of the (eventual) sale.
Other types of assets that may not be available to the applicant include interests that have transfer restrictions such as limited partnerships, closed corporations, irrevocable trusts, and some annuities. It is important to know that pre-nuptial contracts are not considered legal barriers to assets.
11. Up to $6,000 worth of income producing property: As much as $6,000 of equity in income producing property essential to a Medicaid applicant’s self-employment is considered to be unavailable and exempt, provided it produces at least a 6% annual net rate of return. Even if the property fails to earn a 6% return, it will still be unavailable and exempt if there is a reasonable expectation that it will resume earning a 6% rate within 24 months. Livestock, farm machinery, and tools are also exempt if they are used for self-employment and there is a reasonable expectation the applicant will return to such self-employment within 12 months of their last use. All income producing property used in a trade or business, without limitation, is unavailable and exempt. This exemption is intended to protect small family businesses, farms and ranches. It includes an unlimited exclusion for cash reserves maintained to cover operating expenses. This applies to all states that base Medicaid eligibility on SSI standards (called “SSI states”), including Wyoming
12. Up to $2,000 of any otherwise available asset: The applicant is allowed to exempt up to $2,000 of otherwise available assets.
13. In 2014, the Medicaid applicant’s community spouse is allowed to exempt up to $117,240 as a couple of otherwise available assets. The amount the Medicaid applicant’s community spouse is allowed to exempt is known as the Community Spouse Resource Allowance (CSRA).
- Residential property may be exempt: The primary residential property of the Medicaid applicant (including all connected land and buildings) may be an exempt asset under certain conditions:
1. The applicant’s spouse continues to reside in the family home. So long as the community spouse continues to reside in the family home, it is considered to be exempt.
2. The applicant’s dependent minor child continues to reside in the family home.
3. The applicant’s adult blind or disabled child continues to reside in the family home.
4. Submission of a written statement declaring the applicant’s intention to return to his or her family home. The statement must contain the reason for the applicant’s absence, the intention to return home, and date and signature of the applicant or applicant’s representative. The “intent to return note” does not have to be supported by medical documentation.
The exempt status of the family home is reevaluated every year and a new intent to return note must be submitted if the family home is to continue to be considered exempt. As taxes and insurance must still be paid on the residence, it is usually rented, but a long term lease may vitiate the intent to return note. The rent is considered income to the applicant. If a nonexempted individual is allowed to reside in the residence rent free, it may constitute a gift of the reasonable rental value.
- Under current federal law, a home equity limit of $543,000 is imposed on the value of exempt residential property when the owner is institutionalized and residing in a nursing home. States were given the option of increasing the level of protection to no more than $750,000, but Wyoming has adopted the $543,000 limit. There are, however, two exceptions to the new home equity limit: (1) an applicant’s spouse, minor, blind, or disabled child is living in the home or (2) in the case of a demonstrated hardship.
o Life Estates. Transferring residential property to children or grandchildren but retaining a life estate has always been a reliable estate planning technique for passing property to a younger generation. Each life estate is limited to the life of the person holding it, or some other person, such as the last of a married couple to die. This technique has many advantages: It protects the older generation’s right to live at or use the property and, after the death of the older generation, it avoids probate and allows the younger generation to go clear title with a minimal of effort.
o However, conveying property subject to a life estate is still a transfer for less than fair market value and, for Medicaid eligibility purposes, will generate a penalty period of Medicaid ineligibility. Additionally, Medicaid assigns a value to the retained life estate, based upon its own tables of life expectancy.
- Married Medicaid applicants: Determining asset eligibility for a married Medicaid applicant is somewhat more involved than determining asset eligibility for a single Medicaid applicant. Again, a master list of assets should again be compiled of all the assets in which the married Medicaid applicant and his or her spouse has an ownership interest. This can be very complicated if the Medicaid applicant and his or her spouse are involved in a later marriage and each has joint interests with children from earlier marriages. Again, exempt assets should be crossed off the master list.
- When both spouses are nursing home residents: When both spouses of a couple are nursing home residents, each is treated as a single person for Medicaid eligibility purposes. The exemptions which are only allowed to a community spouse upon Medicaid application are unavailable to either spouse, as neither is a community spouse.
Neither spouse is entitled to a monthly maintenance needs allowance, as neither is a community spouse. Medicaid allows an ineligibility period to be apportioned when both spouses to a marriage reside in a nursing home. Such apportionment may allow the “first” nursing home spouse to continue to receive Medicaid benefits or may allow one of the spouses to become eligible without delay.
- Available Assets. All of the assets that have not been crossed off the master list of assets are considered to be available assets by Medicaid. Available assets are those assets which Medicaid considers available to pay for nursing home care, assisted living facility services or home health care.
- Spousal allowance: Before the Medicare Catastrophic Coverage Act of 1988, community spouses were not allowed to keep any of their institutionalized spouses’ incomes for themselves and were left to pay for their own living expenses from their own sometimes meager incomes. The Medicare Catastrophic Coverage Act of 1988 introduced the minimum maintenance needs allowance (MMNA), which is formula which determines if a community spouse may keep any of his or her institutionalized spouse’s income for his or her own use.
o At the start of each calendar year, CMS provides a dollar amount which has been determined to be the minimum amount of income on which a community spouse can adequately live. In 2014, the amount is $2,931. The MMNA results from the subtraction of the community spouse’s gross monthly income from the CMS generated dollar amount. The result of this subtraction is the amount of the institutionalized spouse’s income which the community spouse may keep for his or her own use.
o The community spouse may be entitled to an increase in his or her MMNA if it is determined at an administrative hearing that exceptional circumstances exist causing significant financial distress. Some such exceptional circumstances are: the community spouse’s income will shrink or disappear upon the death of the institutionalized spouse, the community spouse’s high cost of living, special family circumstances, the cost of home health care or companion aides for the community spouse, the cost of special dietary needs, medications, therapy or other medical care not covered by Medicare or insurance for the community spouse and diagnosis of a progressive degenerative disorder that will result in the community spouse’s needing more care, assistance or medication in the foreseeable future.
o It is important to know that a spousal allowance may be available to the community spouse only after the institutionalized spouse’s Medicaid application has been approved.
- Medicaid Waiver Programs: Medicaid waiver services are available to certain groups of persons who meet very specific non-financial criteria and have limited assets, again, regardless of their incomes.
- Medicaid waiver programs were created about twenty (20) years ago when demonstration projects showed that using Medicaid funds otherwise earmarked for long term care facilities were a win-win situation: The services provided to Medicaid recipients kept them out of institutions for longer periods of time and were less expensive to provide.
- In 1993, the long term care/home and community based (LTHCB) waiver was approved for Wyoming, as it is less costly per recipient than is long term facility care. The LTHCB waiver program services physically disabled individuals, including the elderly and provides a menu of services:
1. case management
2. personal care
3. respite care for the primary caregiver
4. adult day care
5. transportation
6. personal emergency response systems
7. home delivered meals
- In 1994, the home and community based waiver for adults with developmentally disabilities was approved for Wyoming. It is usually referred to as the “adult DD waiver” and defines an adult as someone 21 years or older. The adult DD waiver program offers a menu of services:
1. case management
2. personal care
3. respite care for the primary caregiver
4. habitation (residential, day, prevocational and supported employment)
5. skilled nursing services
6. special medical equipment and supplies
7. physical therapy
8. occupational therapy
9. psychological therapy
10. respiratory therapy
- In 2001, the assisted living facility (ALF) waiver program was approved for Wyoming and it serves disabled adults, aged at least 19 years. The ALF waiver program does not pay for basic room and board, but pays for the service levels charged by the assisted living facility by providing a menu of services for which it will pay:
1. case management
2. personal care
3. homemaker services
4. chore services
5. attendant care
6. companions
7. medication oversight
8. therapeutic programming services
Who is Your Client? Client Identification.
- First, all lawyers have an ethical obligation to make it very clear who their client is. The client is the person whose interests are most at stake in the legal planning or legal problem. The client is the one, the only one, to whom the lawyer has professional duties of competence, diligence, loyalty, and confidentiality. This is especially important in elder law, because family members may be very involved in the legal concerns of the older person and may even have a stake in the outcome.
- It is possible, in some circumstances, for more than one family member to be clients of the same lawyer. This is common with married couples. However, in most cases, the elder or disabled person is the client, regardless of who is paying the bill.
- It is important to ask these three questions for each and every client at your initial meeting:
o Who will be my client?
o When do I choose?
o How will I communicate that decision?
- The typical calls an elder law or estate planning attorney receives:
• I need a power of attorney for my mother. Can you write one up for me?
• My sister is the agent for my parents. I don’t like what she is doing. I want to replace her.
• My mom is in a nursing home. I was told she should transfer her property to me.
• I want to change a will provision that my wife and I agreed on when we last met you.
- Callers need to be screened very carefully and attention to potential ethical concerns must be evaluated. Consider the following questions:
• Does your relative know you are calling me? If not, what are the caller’s motives and goals? Whose interests are being expressed?
• Are you a lawful representative? Does the caller have legal authority to retain a lawyer and act? Are there multiple agents? What are the family dynamics? Do I sense possible undue influence or financial abuse? Should I represent the relative through this particular agent?
• Does the caller have access to verifiable information and data I need to evaluate the issues?
• Does the caller present a potential, or actual, conflict of interest? If I represent both spouses, may I share the private communications of one spouse with the other? Do I represent an estate’s fiduciary, or the beneficiaries, or both?
The attorney should discuss who the client is and how he or she operates their practice. It should be clear who the client is during intake calls, in legal services agreements, at client meetings, and in written communications. Many ethical dilemmas can be avoided by defining and consistently communicating a practice philosophy.
Here is mine:
• My attorney-client relationship extends to the person whose access to long-term health care is at stake, whose money and property is needed to pay for such care, and whose estate planning is affected by these lifetime decisions.
• I spend a lot of time screening callers. I do not accept every matter that comes my way.
• I will work with attorneys-in-fact, after verifying their legal authority, but clearly state in writing that I do not represent the agents individually. I meet my clients to determine their ability to articulate concerns and goals and their capacity to execute legal documents.
• I advise clients about confidentiality and conflicts-of-interest concerns. I require written consents for dual representations, conflict waivers, and client authorizations permitting other family members or parties to participate in their planning.
• I supervise the signing of legal documents that I prepare.
A defined, clearly communicated, and consistent practice philosophy will raise your professional stature, enhance your relationships with clients, and keep you alert to the ethical problems lawyers confront daily.