2/27/2020 1 More Than Just Selling a Long Term Care Policy: Presented by Mary Frances M. Price, J.D. VA Accredited Elder Law Attorney Long, Reher, Hanson & Price, P.A. www.mnelderlaw.com The Story of Bob and Ruth Issue Spotting for Financial Professionals Change in Health Status/New Diagnosis Client behaving differently compared to past practices Loss of a spouse or child Diabetes Heart Issues History of Cancer with radiation and/or chemo Living in the Zone of Danger (to be discussed)
Transcript
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More Than Just Selling a Long Term Care Policy:
Presented by Mary Frances M. Price, J.D.
VA Accredited Elder Law Attorney
Long, Reher, Hanson & Price, P.A.
www.mnelderlaw.com
The Story of Bob and Ruth
Issue Spotting for Financial Professionals
Change in Health Status/New Diagnosis
Client behaving differently compared to past practices
Loss of a spouse or child
Diabetes
Heart Issues
History of Cancer with radiation and/or chemo
Living in the Zone of Danger (to be discussed)
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Getting/Staying Organized
Health Care
Financial
Legal
Health Organization
Identify Providers Identify Care Partner(s) Identify Disease, Condition and/or Diagnosis Use Journaling Medication routine Observations Questions Mood Changes Reactions
Make to update Health Care Directive
Financial
Identify Income Sources
Identify Assets Retirement
Non-liquid
Bank Accounts
Brokerage
Insurance
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Assessment of Needs
Independent Living
Independent Living with Services
Assisted Living
Memory Care
Skilled Care
Home and Community Services
Residential Care Homes
Level Of Care Variances
Assisted Living/Memory Care/Residential Home Hoyer and EZ stand transfers
Feeding Tube Management
Catheter, Colostomy and Ostomy care
Wound Care (generally provided through Medicare Certified Home Care)
Sliding scale diabetic management
Insulin injections
Special diet needs
24 hour nursing, vs nurse on call
Care Suite availability
Hospice and end of life care
Elder Care Continuum
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Zone of Danger
Identify Resources
4 Main Resources for Payment of Housing with Services Expenses
1. Long Term Care Insurance
2. Veterans Benefits
3. Medical Assistance
4. Private Pay
Veterans Benefits
Federal and State Benefits
Service Record Requirements depend on program
Nursing/Memory Care, Day Activity Programming, Home Care and Prescription Drug Benefits
Pension (VBA)
Compensation for Service Connected Injuries/Disability
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Veterans Benefits
Federal Benefits – VHA Veterans Health Administration
Hospitals, Clinics and Nursing Homes
Service Record for Admission: At least one day and other than dishonorable discharge
Service Connected Rating Determination
10% and higher – entitled to compensation
70% or higher – Significant Benefits including MN homestead property tax exclusion and long term care benefits through end of life
At 70% or higher, the veteran and spouse can do traditional estate planning IF the veteran chooses to receive care in the VA System
Veterans Benefits
Federal Benefits – VHA Cont’d Home and Community Based Services Home Care, Day Care, Transportation, Respite
Vietnam – In Country Service a.k.a. “boot on the ground” and Blue Water Navy.
Veterans Benefits
Federal Benefits – VBA Veterans Benefits Administration
Life Insurance, Education Loans, Home Loans and Non-service Connected Pension (referred to as “Aid and Attendance”)
Non-Service Connected Pension Service Record: 90 consecutive, 1 day during wartime or
conflict period, other than dishonorable discharge.
Asset and Income limited
Look-back on gift/transfers imposed in October 2018
When is this beneficial? Look for vets and surviving spouses with higher than average
income and limited assets. See example.
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Pension Service Record
Service Record
90 days consecutive
1 day during wartime/conflict period
Other than dishonorable discharge
DD-214 or equivalent
Proof of Marriage to Veteran for Surviving Spouse
Other Eligibility Factors
Clinical Need
Financial Income
Assets
Clinical Need
Must be rated for Housebound or Aid and Attendance
Rating form 21-2680 is completed by a doctor who has examined the claimant
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Housebound
Housebound is defined as when the veteran is substantially confined to his or her dwelling and the immediate premises … and reasonable certainty that the disability or disabilities and resultant confinement will continue throughout his or her lifetime. 38 CFR 3.351(d)(2)
Financial
• Income• Claimant’s household income must be less than the
applicable MAPR• Applicable means applicable for the client situation: veteran with
one dependent, single veteran, surviving spouse
Pension Rate Table
Maximum Annual Pension Rate (MAPR) Category Amount
If you are a veteran... Your yearly income must be less than...
Without Spouse or Child $13,535
To be deducted, medical expenses must exceed 5% of MAPR, or, $676
With One Dependent $17,724
To be deducted, medical expenses must exceed 5% of MAPR, or, $ 886
Housebound Without Dependents $16,540
Housebound With One Dependent $20,731
A&A Without Dependents $22,577
A&A With One Dependent $26,766
Two Vets Married to Each Other $17,724
Two Vets Married to Each Other One H/B $20,731
Two Vets Married to Each Other Both H/B $23,734
Two Vets Married to Each Other One A/A $26,766
Two Vets Married to Each Other One A/A One H/B $29,764
Two Vets Married to Each Other Both A/A $35,813
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Sample Income Calculation
•
Net Worth Test for Pension
• Net Worth bright line limit is currently $127,061
• This is the federal CSRA prescribed by Congress
• Net Worth is total combined IVAP and the assets of the claimant and dependents(s) when applicable.
• Assets include all property the claimant and dependent(s) own including real and personal property
Net Worth Example for Pension
• Net Worth Example• Married Veteran with IVAP of $1000/month ($12,000 per year)
• Available Assets of $117,000
• Net Worth (=) IVAP (+) Available Assets
• $12,000 (+) $117,000 (=) $129,000
• This claimant has excessive Net Worth because his Net Worth is $129,000 which is over $127,061
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Medicaid (Medical Assistance)
Program for Skilled Nursing Facilities (MA-LTC)
Program for Assisted Living and Memory Care (MA-EW)
Asset and Income Tests
Max Asset Allowance =. $128,640 for Well Spouse; $3000 for Ill Spouse or Single Person
Penalty for gifting: $7960 gifted = 1 mo. Denial
House, car, personal property and funeral exempt
All other assets considered available
Annuity option for well-spouse or Half-a-Loaf Plan
Medicaid (Medical Assistance)
Program for Skilled Nursing Facilities (MA-LTC)
Program for Assisted Living and Memory Care (MA-EW)
Asset and Income Tests
Max Asset Allowance =. $128,640 for Well Spouse; $3000 for Ill Spouse or Single Person
Penalty for gifting: $7960 gifted = 1 mo. Denial
House, car, personal property and funeral exempt
All other assets considered available
Annuity option for well-spouse or Half-a-Loaf Plan
Medicaid (Medical Assistance)
Categorical Eligibility Blind
Disabled (Social Security Administration)
Over Age 65
Medicaid for ABD
Financial Eligibility Asset and Income Tests to determine eligibility
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Medicaid (Medical Assistance)
Assets ($128,640 Well Spouse, $3000 Ill Spouse) Exempt Assets Include: House, Car (1), Prepaid Burial Plan,
Personal Property
Income (for married persons) Income belonging to the Well Spouse in unavailable to the Ill
Spouse (Consider Medicaid Annuity Plan for asset reduction);
The Ill Spouse can make income available to the Well Spouse if Well Spouse has insufficient income (minimum Well Spouse income $2,115; Maximum = $3,216.50)
Medicaid (Medical Assistance)
Permissible Ways to Reduce Assets Transfer more than 5 years before applying for MA
Purchase exempt items
Pay for Care
Fund a Medicaid Qualifying Annuity for the Well Spouse
Half-a-Loaf Plan
Medicaid (Medical Assistance)
Medicaid Qualifying Annuity Example Married Couple has the following assets and income:
House (350K), Well Spouse IRA (80K), Joint Cash and Brokerage (100K)
Well Spouse Income = $2800 from SS and Pension; Ill Spouse Income = $1200 from SS
Ill Spouse has $7500/month in memory care expenses
Asset Reduction Option – Funeral Plans and Medicaid Qualifying Annuity Prepay funeral for both spouses
Purchase a SPIA for the amount over the exemption ($128,640 + $3,000 = $131,640 exempt)
So 180,000-10,000 (funerals) -$131,640 = $38,360 Amount for purchasing annuity
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Medicaid (Medical Assistance)
Half-a-loaf Plan for a single person Example Single person living in the nursing home has the following assets and
income: $48,095 cash/securities
Prepaid burial already in place (exempt)
$3,211/month SS and Pension
Monthly Nursing Home bill = $8,266; So $5,055 per month shortfall
Immediate gift equals $7,960 x 3.7 months = $29,452
The balance ($48,095 - $29,452) $18,643 will be annuitized over 4 months
WARNING: YOU SHOULD WORK AT THE ADVICE AND DIRECTION OF AN ELDER LAW ATTORNEY FOR THIS TYPE OF PLAN. THIS IS AN OVERSIMPLIFICATION!
Assisted Care vs. Skilled Care Facilities
Assisted Care Facilities are licensed differently Housing with Services Establishments
Most Communities require private pay for a period of time Before a resident can be on Medicaid
Imperative to understand these rules and develop a budget/cash flow projection for how to pay
Nursing Homes – if they accept one they must accept any or all Over 65% of NH residents in MN are on Medical Assistance
Summary
Bob and Ruth Gather information about health, legal and financial;
Perform in-home assessment of needs;
Prepare a report/review options based on resources/need
Prepare a Cash Flow/Budget Analysis;
Make decisions based on facts Financially feasible
Acceptable to the family
Where to live, what type of care to receive, what resources to use
Put legal documents in order to support the plan
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MARY FRANCES PRICE, J.D.L O N G , R E H E R , H AN S O N & P R I C E , P. A .
WWW.MNELDERLAW.COMM P R I C E @ M N E L D E R L AW. C O M
952-929-0622
Thank You
Disclaimer: This has been prepared for general information purposes only.This information is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. The information contained in this presentation should not replace the advice of competent legal counsel licensed in your state.
