when estate planning and medicaid planning collide

[youbet]

The issue with Medicaid patients from a nursing home and nursing home patient pov is that the state doesn't pay enough to adequately staff the needs of patients. I would not ever make an estate plan that anticipates using medicaid.

+1

It shows up particularly at NH's with sizable percentages of Medicaid patients. We researched and worked hard to get MIL into a predominantly private-pay place with an a priori agreement she could stay when she ran out of money. She is attended to by the same staff that attended to her as when she was private-pay.

I think the fact either DW or her brother visits almost 7 days a week might play into it too.

During our search, we visited a high-percentage-Medicaid NH and it just didn't cut it on a number of fronts. We wondered how they could attract any private-pay clients at all.

 

[MichaelB]

The issue with Medicaid patients from a nursing home and nursing home patient pov is that the state doesn't pay enough to adequately staff the needs of patients. I would not ever make an estate plan that anticipates using medicaid.

+2

I think this is one of those issues that is talked about more than practiced, and then only by people with few financial assets.

Nursing homes that are not SNF are not desirable places to live, and residents live there when they have no option. Home care or ALF with a high level of assistance are preferred options, and if nursing care is required, a private pay NH is usually a more desirable choice, and has a higher aide to bed ratio.

There are exceptions, mostly in states like Mass, but otherwise, I think this issue of people shielding real wealth to go to Medicaid funded homes is not substantial.

 

[marko]

The problem, with Medicaid paying for nursing care, is that you likely get sub-standard or minimal care. That's why most here, when trying to qualify for ACA subsidies, want to avoid medicaid.

When you pay more, you get more. Even in a nursing home. With money brings choices - no matter what purchase you are considering.

This seems to vary state to state. From personal experience I've found that Mass seems to make no distinction between payers and Medicaid. My brother (self paying at $600 a day) shared a room with a Medicaid drug addict who was hit by a car. What was different was that the drug addict got more therapy.

His therapists urged me to try and get him on Medicaid. "We'd be able to give him so much more time; he shouldn't be paying!"

IIRC, 97% of NH patients in Mass are paid by Medicaid, hence, few, if any NH's make the distinction.

YMMV.

 

[Blue Collar Guy]

This seems to vary state to state. From personal experience I've found that Mass seems to make no distinction between payers and Medicaid. My brother (self paying at $600 a day) shared a room with a Medicaid drug addict who was hit by a car. What was different was that the drug addict got more therapy.

His therapists urged me to try and get him on Medicaid. "We'd be able to give him so much more time; he shouldn't be paying!"

IIRC, 97% of NH patients in Mass are paid by Medicaid, hence, few, if any NH's make the distinction.

YMMV.

+1, When I went to the social services office at the hospital, to arrange for a private "nurse"(aide) for mom, the lady told another patients family, "get medicaid, its the gold standard. They pay for everything". Maybe they got a nurse for free, I had to settle for an aide that we pay for. BTW the term Gold Standard was her words not mine.

 

[mathjak107]

Ozanam Hall, nice and clean. Run by the nuns.

If i ever get time to leave my house I'll give Fatoullah a call. A poster said he has over 5 million and another that has 20 million and they sleep well at night gaming ACA subsidies. And that maneuver "made them smart". Thats peanuts compared to what one can save by gaming medicaid. I want to thank them for pointing this out, Now maybe Ill game the medicaid game , I'd like to be smarter.

i am familiar with ozanam .in fact it would be a choice . i highly recommend fatoullah . he is tops in his game .

 

[gayl]

I plan on being able to afford to age in place so I don't need to worry about trying to make myself medicaid-eligible as medicaid does not pay for aging in place

 

[Blue Collar Guy]

I plan on being able to afford to age in place so I don't need to worry about trying to make myself medicaid-eligible as medicaid does not pay for aging in place

It does in New York

 

[Backpacker]

The part I struggle with the most is when there's a spouse left with no funds available. Seems very hard on them to not only watch their spouse suffer through nursing home care and spending down of assets, now they have to face who knows how long with limited or no assets. I watched my grandmother tried to care for my grandfather at home so that their money would last. He ultimately ended up in the nursing home for 2 to 3 years. Luckily her stay in the nursing home was fairly short and remaining assets were adequate to cover her stay.

My boss tries to take the moral High Ground, his mother had plenty of assets but her husband died at a very young age so no trailing spouse to worry about. He likes to Crow about how proud he and his family are that she was able to pay for her own Healthcare. however this is the same guy who would twist and wiggle out of $10 on a contract. I think if the situation was different and one of his parents was still left after spend down of assets he would have a much different approach. It is ultimately a moral question.

Many moral questions of a similar nature. How about those that divorce continue living together so they can claim higher Social Security? Had a previous co-worker that strategically did just that.

Another (probably non- popular) issue is tithing. My personal feeling is morally everyone should tithe however it is a moral question I certainly don't think less of folks that don't.

As to the Medicaid question, perhaps if there is a trailing spouse assets can be protected for that spouse but not just to pass the kids? Might make the Social Security Gamers think twice about divorcing if their assets are at risk.

 

[athena53]

The part I struggle with the most is when there's a spouse left with no funds available. Seems very hard on them to not only watch their spouse suffer through nursing home care and spending down of assets, now they have to face who knows how long with limited or no assets. I watched my grandmother tried to care for my grandfather at home so that their money would last. He ultimately ended up in the nursing home for 2 to 3 years. Luckily her stay in the nursing home was fairly short and remaining assets were adequate to cover her stay.
<snip>
Many moral questions of a similar nature. How about those that divorce continue living together so they can claim higher Social Security? Had a previous co-worker that strategically did just that.

My uncle is in a nursing home with Alzheimer's; my Aunt took care of him at home as long as she could but it became too much. The money they have is what's left of an inheritance from her family and it will likely be spent down to the Medicaid minimum. She's got advance colon cancer so, sadly, may not last long anyway, but this scenario is one of the reasons I'll never remarry unless the guy can provide for his own LTC.

On the SS dilemma- when my Grandpa and his second wife married (both widowed), Grandpa wanted the priest to marry them but not report it to the state because their combined SS benefits would be higher. Apparently that's illegal. They had a church ceremony.

 

[bingybear]

As to the Medicaid question, perhaps if there is a trailing spouse assets can be protected for that spouse but not just to pass the kids? Might make the Social Security Gamers think twice about divorcing if their assets are at risk.

There are protections for the trailing legal spouse. However, if the trailing spouse does not understand them and does not engage someone who does, they could make the wrong choices.
At least in may states the community spouse can keep the house and a larger amount of $ than the medicaid spouse. This amount in my mind is not enough to support the community spouse long unless there is other income.

There is another thing called a Medicaid Annuity. Not because is screws medicaid, but because it complies with medicaid laws. IIRC that community spouse can fund this with assets, it is an immediate single payment annuity, must pay out at least over the expected lifetime of the community spouse, and the primary beneficiary must be medicaid. This way medicaid has a potential of recovering expenses before the heirs. However, if the community lives their normal life expectancy or longer, medicaid would loose out.

 

[gayl]

Blue Collar Guy, did not realize that! Thought it only covered medical and nursing ..... not social visits and meal delivery. But it makes sense as its cheaper to supply meals in someone's home than pay for a nursing home

 

[ncbill]

Note......

Medicaid NH results seem to vary from state to state. Some of what you're saying for NC is NOT true for Illinois. It really pays to research your own state and keep the state to state variability in mind when ready comments on this, or other on-line forums.

And by Illinois you mean Chicago.

Sure, in the largest, wealthiest cities like Chicago, NY, LA there will be private-pay only nursing facilities (not talking about assisted living)

But the reality is most skilled nursing facilities (SNFs) simply can't survive without Medicaid dollars even when many of the residents started out private pay.

And SNFs often are not avoidable. Here a resident must leave an assisted living facility for a SNF once they need more than a certain level of assistance.

I bet that's even more the case in those states that are more heavily-regulated than mine.

 

[marko]

+1, When I went to the social services office at the hospital, to arrange for a private "nurse"(aide) for mom, the lady told another patients family, "get medicaid, its the gold standard. They pay for everything". Maybe they got a nurse for free, I had to settle for an aide that we pay for. BTW the term Gold Standard was her words not mine.

It gets even weirder:
Let's say that you're in a SNF and getting therapy.

Once your insurance stops paying for therapy (maybe you're not progressing fast enough), in Massachusetts it is against the law for you to self pay for therapy. No therapy for you! The SNF cannot accept any self pay for therapy at any price once insurance stops paying for it.

(Believe me, I tried. The law was explained to me and in an extremely convoluted logic only someone from Mass could come up, with I can see the reasoning)

If, on the other hand, you come into the SNF on Medicaid (aka MassHealth), your therapy is covered for a long as you are SNF eligible.

Again every state is different. YMMV

 

[youbet]

This seems to vary state to state. From personal experience I've found that Mass seems to make no distinction between payers and Medicaid. My brother (self paying at $600 a day) shared a room with a Medicaid drug addict who was hit by a car. What was different was that the drug addict got more therapy.

His therapists urged me to try and get him on Medicaid. "We'd be able to give him so much more time; he shouldn't be paying!"

IIRC, 97% of NH patients in Mass are paid by Medicaid, hence, few, if any NH's make the distinction.

YMMV.

Sounds like we should all be investigating residency requirements and other factors to qualify for LTC via Medicaid in Mass!

 

[youbet]

How about those that divorce continue living together so they can claim higher Social Security? Had a previous co-worker that strategically did just that.

Yes! If you divorce but continue to live together, the SS folks triple your payments and give you the keys to a luxury condo in the Virgin Islands for the winter! What a scam! We should all divorce but continue to live together for these immoral benefits.......

 

[Brat]

It gets even weirder:
Let's say that you're in a SNF and getting therapy.

Once your insurance stops paying for therapy (maybe you're not progressing fast enough), in Massachusetts it is against the law for you to self pay for therapy. No therapy for you! The SNF cannot accept any self pay for therapy at any price once insurance stops paying for it.

(Believe me, I tried. The law was explained to me and in an extremely convoluted logic only someone from Mass could come up, with I can see the reasoning)

If, on the other hand, you come into the SNF on Medicaid (aka MassHealth), your therapy is covered for a long as you are SNF eligible.

Again every state is different. YMMV

I understand that Medicare can no longer cut a patient off from therapy because they plateau. The court found that it is normal for progress not to be in a straight line.

 

[youbet]

And by Illinois you mean Chicago.

But there amongst the hills and hollers don't you just render a hog and bite the heads off a few chickens to pay for LTC? Or maybe sell the tanned hides from a few relatives?

But the reality is most skilled nursing facilities (SNFs) simply can't survive without Medicaid dollars even when many of the residents started out private pay.

That's my point. Here, better NH's want you to start out as private pay and many only accept patients who begin as private and can show resources that will allow them to be private pay for some time, usually at least a couple of years. Of course if some folks live long enough to run out of money, the NH accepts Medicaid for the balance of the time. But the point is that in better NH's (here at least) the limited number of Medicaid beds in better facilities are occupied by folks who started as private pay and outlived their money. The "Medicaid from the get-go" folks wind up in facilities that have a high percentage (up to 100%) Medicaid beds and operate at lower standards because they have much less income to work with.

If you're in a situation where you can hide your assets and qualify for Medicaid LTC and not be at a disadvantage vs. the private pay folks in finding top quality care, you're fortunate. Here, it's really a challenge to be broke, need full NH care and get the same quality as folks with the ability to private pay do.

When NH shopping, it really helps to be able to private pay for at least a couple of years or to have some source of ongoing income, such as a pension, that covers a significant portion of the cost.

 

[gayl]

Yes! If you divorce but continue to live together, the SS folks triple your payments and give you the keys to a luxury condo in the Virgin Islands for the winter! What a scam! We should all divorce but continue to live together for these immoral benefits.......

I guess you're being sarcastic because as you know, it does not work that way! The primary earner gets his full social security check. The divorced spouse or the wife gets half of what he gets. It does not decrease his amount and it does not increase her amount when one is divorced. You get the same amount as if you were married. The only time Social Security pays out more is if spouse A remarried spouse C. Let's say A&B get a divorce, and A marries C. If A's amount is the highest, then A gets full SSA, B&C each get half of that amount provided that is more than what they would gain by claiming on their own account. You don't double up

If you're still talking about making yourself medicaid-eligible, the way it works in California is that I heard there is still a look back. However the spouse gets to shield $53,000.

The real thing that keeps me puzzled as why would anybody want to go into a Medicaid facility?

 

[mathjak107]

in these parts we don't have specific medicaid facilities . in fact the homes we spoke to said if you are a paying patient for 2 years they will take medicaid assignment .

 

[Scuba]

I guess you're being sarcastic because as you know, it does not work that way! The primary earner gets his full social security check. The divorced spouse or the wife gets half of what he gets. It does not decrease his amount and it does not increase her amount when one is divorced. You get the same amount as if you were married. The only time Social Security pays out more is if spouse A remarried spouse C. Let's say A&B get a divorce, and A marries C. If A's amount is the highest, then A gets full SSA, B&C each get half of that amount provided that is more than what they would gain by claiming on their own account. You don't double up

If you're still talking about making yourself medicaid-eligible, the way it works in California is that I heard there is still a look back. However the spouse gets to shield $53,000.

The real thing that keeps me puzzled as why would anybody want to go into a Medicaid facility?

Because most private pay SNF's also accept Medicaid. I believe in order to get Medicare dollars, the SNF must also take Medicaid. As other posters have said, most SNF's can't survive on private pay alone. Staffing and treatment of patients is the same regardless of payer source, or maybe even better if Medicaid covers some benefits that private pay/insurance doesn't.

I know one couple who divorced as a strategy to cover LTC expenses. They are not wealthy but the wife gets s decent pension, not nearly enough to pay for a SNF plus an independent person's expenses. They divorced, husband is in a SNF with Medicaid paying, former wife lives off her pension and pays for former husband's incidentals not covered by Medicaid. This strategy works well for them. Not sure if this is viable for couples with large portfolios as it might be difficult to justify why one half of the couple is destitute while the other half has seven figures.

 

[athena53]

I know one couple who divorced as a strategy to cover LTC expenses. They are not wealthy but the wife gets s decent pension, not nearly enough to pay for a SNF plus an independent person's expenses. They divorced, husband is in a SNF with Medicaid paying, former wife lives off her pension and pays for former husband's incidentals not covered by Medicaid. This strategy works well for them. Not sure if this is viable for couples with large portfolios as it might be difficult to justify why one half of the couple is destitute while the other half has seven figures.

This was a strategy DH and I discussed but never implemented. When we married, he as 65 and I was 50, and I brought nearly all of the invested assets into the marriage and continued to work FT for 11 more years. The nightmare scenario for both of us was that DH could linger for years in an expensive nursing home, endangering my financial security.

I suspect the 5-year lookback would apply to divorces so you'd have to plan ahead.

 

[mathjak107]

in most states medicaid divorces are out . here in ny they can't be used at all for the most part .

it isn't easy to get what is called a medicaid divorce in many states which is usually what is done when a major health event happens .

two very powerful laws here in ny have been upheld and according to our estate attorney who is one of the biggest in ny there are very very few medicaid divorces .

all court actions are now pretty much based on right of refusal .

our two laws that pretty much killed off medicaid divorce are :

(1) Section 5-311 of the General Obligation Law which provides that except as provided in Section 236 of the Domestic Relations Law, a husband and wife cannot contract to relieve either his or her liability to support the other in such a manner that he or she will become incapable of self support, and therefore likely to become a public charge; and

(2) Family Court Act Section 415 which provides that the spouse or parent of a recipient of public assistance or care, or of a person liable to become in need thereof, or a patient in an institution in the department of mental hygiene if of sufficient ability, is responsible for the support of such a person. The Court has the discretion to require any such person to contribute a fair and reasonable sum for such support (child up to 21 years of age).

also if it is eventually determined that a divorce is to be pursued, the divorce needs to satisfy all of the requirements of the Domestic Relations Law, such as establishing one of the requisite grounds for a divorce. This may be difficult to accomplish because of the illness or disability of one spouse