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2012 Elder Law Numbers

Posted by: Jerold E. Rothkoff Posted Date: Sunday, December 18, 2011 12:27

 

The Centers for Medicare and Medicaid Services (CMS) has released the new Medicare premiums, deductibles, and co-payments for 2011:

· Basic Part B premium: $99.90/month (higher for higher income beneficiaries)

· Part B deductible: $140 (was $162)

· Part A deductible: $1,156 (was $1,132)

· Co-payment for hospital stay days 61-90: $289/day (was $283)

· Co-payment for hospital stay days 91-150: $578/day (was $566)

· All costs for each day beyond 150 days

  • Skilled nursing facility co-payment, days 21-100: $144.50/day (was $141.50)

Individuals with annual incomes over $85,000 and married couples with annual incomes over $170,000 will pay a higher Medicare Part B premium.

CMS has also released the 2012 guidelines for how much spouses of institutionalized Medicaid recipients may keep: 

· Maximum Community Spouse Resource Allowance: $113,640

· Minimum Community Spouse Resource Allowance:  $22,728

· Maximum Monthly Maintenance Needs Allowance:  $2,841 

· Minimum Monthly Maintenance Needs Allowance:  $1,839 (thru June 30, 2012)

· Medicaid Waiver Benefits Income Cap for home care (PA & NJ) and assisted living (NJ only):  $2,094 per month

Veteran’s Benefits (Aid and Attendance, maximum pension):

· Surviving Spouse of Veteran:    $1,094.00 monthly

· Single Veteran:                                     $1,703.00 monthly

· Married Veteran:                                  $2,019.00 monthly

New Jersey Promissory Note Case Casts Doubt on Use of Notes in Medicaid Planning

Posted by: Jerold E. Rothkoff Posted Date: Saturday, July 30, 2011 15:55

Over the past few years promissory notes (loans) have been utilized in complex Medicaid planning cases to assist in paying through an ineligibility period caused by a gift of resources.  At the time excess resources are gifted, some of the remaining resources are loaned to a child. The promissory note provides for a return of the loaned funds in equal payments over a term coinciding with the ineligibility period.  The payments from the loan are then used to pay the nursing home during the period of ineligibility for Medicaid.

Doubt has now been cast on this planning strategy. In Sable v. Velez (U.S. Ct. App., 3rd Cir., No. 10-4647, July 12, 2011), the United States Third Circuit Court of Appeals has ruled that an intra-family promissory note entered into for the purpose of attaining Medicaid eligibility can be treated as a disqualifying resource. The Third Circuit decision is based on its analysis of the provisions of the Social Security Administration’s Program Operations Manual System (“POMS”). Federal law specifies that a state Medicaid program generally may not use eligibility rules that are more restrictive than those used by the SSI program as set forth in the POMS.

The decision upheld a lower court ruling that the notes in the case were not “bona fide” under the POMS because they were entered into with the purpose of attaining Medicaid eligibility rather than to make a good faith loan to a child. This meant that the note could be treated as a “trust like device” which makes it an available resource to the applicant who is therefore not eligible for Medicaid.

Other planning options, including the use of annuities, may noe be used as substitutes for promissory notes.

Community Spouse Minimum Income Allowance to Increase to $1,839 on July 1, 2011

Posted by: Jerold E. Rothkoff Posted Date: Monday, June 20, 2011 16:57

 

            If a married nursing home resident receives Medicaid long-term care benefits, his or her community spouse is entitled to retain a certain minimum level of income called the Monthly Maintenance Needs Allowance (MMNA).  If the community spouse's own income is insufficient to provide this allowance, income is diverted to the community spouse from the institutionalized spouse.

            The MMNA is set at 150% of the federal poverty level for a family of two plus an excess shelter allowance, if applicable. The Pennsylvania MMNA is adjusted on July 1st of each year to keep up with inflation.

            As of July 1, 2011 the minimum MMNA is being increased to $1,839 per month. The actual MMNA can be higher than the minimum if the community spouse has high housing costs and is entitled to an excess shelter allowance. 

            A standard monthly shelter allowance of $552 a month will be built into the minimum MMNA effective July 1. If certain housing-related expenses of the community spouse exceed this standard allowance the MMNA is increased by the amount of these excess shelter costs.  This is the called the "excess shelter allowance."  

            These minimum income allowance rules are part of the federally mandated “spousal impoverishment” protections that were enacted in 1988 to avoid the total impoverishment of spouses of nursing home residents. These protections could be lost if a Medicaid Block Grant proposal were to be enacted at the national or state level. (See below for more on Medicaid Block Grants).

MOST AMERICANS OPPOSE CONVERTING MEDICAID TO A BLOCK GRANT IN ORDER TO REDUCE THE FEDERAL DEFICIT AS PER KAISER FOUNDATION

Posted by: Jerold E. Rothkoff Posted Date: Friday, June 3, 2011 14:04

 

MENLO PARK, Calif. -- Most Americans oppose the idea of converting Medicaid to block grant financing to reduce the federal deficit, and more than half want to see no reductions at all in Medicaid spending, according to the latest monthly tracking poll by the Kaiser Family Foundation.

The May Kaiser Health Tracking Poll finds that 60 percent of people say they would prefer to keep Medicaid as it is, with the federal government guaranteeing coverage and setting minimum standards for benefits and eligibility.  Thirty-five percent would rather change the program so that the federal government gives states a fixed amount of money and each state decides who to cover and what services to pay for.  Only 13 percent of Americans say they would support major reductions in Medicaid spending as part of Congress’ efforts to reduce the deficit, while 3 in 10 would support minor reductions and 53 percent want to see no reductions in Medicaid spending at all.

The findings come at a time of intense public debate in Washington about the future of entitlement programs such as Medicare and Medicaid as policymakers attempt to address rising public concerns about the federal deficit.  While conventional wisdom and recent public opinion polling has suggested that dramatic changes in Medicare would be politically unpopular, the new poll findings illustrate that major alterations to Medicaid also could strike a negative chord with many Americans.

Support for maintaining the current program may be due at least in part to the public’s personal connections to Medicaid and a strong sense of the program’s importance.  About half of Americans say they or a friend or family member has received Medicaid assistance at some point, and a similar share say the program is important to their family.  Among the 20 percent of adults who personally have been covered by Medicaid, reported experiences are positive.

"If you watch the debate about the deficit and entitlements, you would think that almost everyone has a problem with the Medicaid program and wants to change it, or cut it -- or both," said Kaiser President and CEO Drew Altman.  "The big surprise in this month’s tracking poll is that one group who does not want to cut Medicaid is the American people."

"With about 69 million people expected to be covered by Medicaid this year, it is no longer the -welfare-linked program it once was," Altman added.  "Medicaid may not be the lower-hanging fruit that many who want to reduce federal entitlement spending have assumed it is."

Experiences With Medicaid

About half of Americans (51%) report some personal connection to Medicaid, including having received health coverage, long-term care, or Medicare premium assistance from Medicaid themselves (20%), or having a friend or family member who has gotten this type of assistance (31%).  In line with this, the poll finds that 49 percent of the public says Medicaid is "very" or "somewhat" important for them and their family.

Those who see the program as important cite a variety of reasons, including knowing that a safety net exists to protect low-income people (71% say this is a major reason) and feeling they or a family member may need to rely on Medicaid in the future (63%).  Many who view the program as important also cite the fact that they or someone they know has received health coverage (58%) or long-term care services (43%) from Medicaid.

"Medicaid is a complex program that varies considerably from state to state, but the public’s initial reaction upon hearing about proposed spending reductions and structural changes is negative," said Mollyann Brodie, a senior vice president and director of the Public Opinion and Survey Research group at the Foundation.  "Such concerns reflect the fact that the program is important not only to those who have been directly enrolled in it but those with friends and family who have received Medicaid benefits as well."

Among the one in five adults who have personally ever received Medicaid benefits, the vast majority (86%) say that their overall experiences with the program have been positive, including nearly half (45%) who say they were "very" positive.  This is very similar to ratings of their current health plan among those covered by private health insurance (89% positive, including 44% "very" positive).  As Medicaid is poised to expand under the Patient Protection and Affordable Care Act, eight in ten adults (81%) say that if they were uninsured, needed health care, and qualified for Medicaid, they would enroll in the program.

Despite overall positive ratings, some people do report having experienced problems with Medicaid.  Roughly a third (32%) of adults who have ever been on Medicaid say they have had problems at some point finding a doctor or other health care provider willing to accept Medicaid patients.  By comparison, 13 percent of those currently covered by private insurance say they’ve had problems finding a doctor who accepts their current plan.  About a quarter (26%) of those who have ever been covered by Medicaid say they have experienced problems getting Medicaid to cover or pay for health care services, similar to the share of those with private insurance who say they have had this problem with their current health plan (22%).  Although enrollment procedures have changed substantially in the past decade, one in five (21%) of those who have ever been on Medicaid say they have had problems when trying to enroll in the program.

Argument Testing, Partisan Differences

As with other policies tested in Kaiser tracking polls, public opinion about switching Medicaid to block grant financing is somewhat malleable when common arguments for and against it are presented.  For example, when the 60 percent who initially oppose the idea are told that supporters say it will "help reduce the federal budget deficit and give states greater flexibility to tailor their Medicaid programs to match their residents’ needs and their own state budgets," 14 percent of them changed their position, so that support for changing Medicaid climbs from 35 percent to 44 percent.  That results in more mixed opinion overall: 44 percent support the block grant proposal and 49 percent prefer to keep Medicaid as it is.

On the other hand, when the 35 percent who initially supported the block grant proposal are told that opponents say it will "increase the number of uninsured, increase financial pressure on states and health care providers, and cause more low-income people to go without health care and long-term care services, particularly during tough economic times," 26 percent of them changed their position, resulting in a rise in the share who want to keep Medicaid as is from 60 percent to 69 percent. In this scenario, the share supporting a block grant falls to 25 percent.

The poll findings reveal familiar partisan differences in the public’s reactions to questions about Medicaid funding and block grants.  While seven in ten Democrats (69%) and more than half of independents (54 %) want no reductions in Medicaid spending to reduce the deficit, a plurality of Republicans (44%) say they would support minor reductions, and two in ten want major reductions.  On the block grant question, eight in ten Democrats (79%) prefer to keep Medicaid as is, while a majority (57%) of Republicans favors the proposed change.  Independents mirror the public overall, with six in ten preferring the current Medicaid system and 36 percent wanting to change it to a block grant.

Tax refunds exempt from Medicaid for 12 months

Posted by: Jerold E. Rothkoff Posted Date: Sunday, February 27, 2011 09:04

 

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 is best known as the law that extended the Bush-era tax cuts. But several little-noticed provisions fundamentally alter how the Supplemental Security Income (SSI) and Medicaid programs treat tax refunds and other tax credits, making it easier for elders and people with special needs to maintain their benefits.

Pursuant to the new law, tax refunds are not considered countable income for SSI or Medicaid purposes. Furthermore, any money received through a tax refund will not be a countable resource for 12 months following receipt of the funds, and SSI and Medicaid recipients will be under no obligation to segregate the funds from their other resources. The same rule applies to tax refunds received prior to an application for SSI or Medicaid, which means that so long as an applicant can point to funds in his account that are traceable to a tax refund during the previous year, those funds will not be a countable resource until the year has passed.

The new law also changes the treatment of several other important tax credits. Under previous rules, Making Work Pay, Earned Income, Advanced Earned Income, and Child Tax Credits were all excluded as countable income for SSI and Medicaid purposes, but if the income was retained, it had to be spent within nine months of receipt. Now, the 12-month rule applies to all of these tax credits and, furthermore, First-Time Homebuyer Tax Credits that were previously countable as income and as a resource are now exempt and subject to the same countability rules as the other tax credits.

CMS' Informational Bulletin also addresses what happens when an applicant seeking Medicaid long-term care benefits places her tax refund into a trust. According to the bulletin, the law "effectively precludes applying penalties under section 1917(c) of the Social Security Act to individuals who, in applying for long term care benefits under the Medicaid program during the period in which tax refunds or advance payments are not countable either as income or resources . . . dispose of part or all of the refunds or advance payments in a manner that normally would be considered a transfer of assets for less than fair market value."

In one more piece of good news, the law applies to any refunds or credits received after December 31, 2009, which means that, in limited cases, applicants who were initially denied SSI or Medicaid benefits due to receipt of a tax refund or credit may actually be retroactively eligible for benefits.

  PA Department of Public Welfare Releases New Private Pay Rate for Medicaid Long Term Care Eligibility

Posted by: Jerold E. Rothkoff Posted Date: Sunday, February 20, 2011 09:19

 

The PA Department of Public Welfare has increased the average daily private pay rate from $247.06 to $259.76 and the average monthly private pay rate from $7,514.74 to $7,901.03.

The average daily private pay rate is used to compute a period of ineligibility for payment of Medicaid long-term care services when an applicant or the spouse of an applicant has disposed of assets for less than fair market value. The period of ineligibility is determined by dividing the total cumulative uncompensated value of all assets disposed of by the applicant or the applicant’s spouse during the look-back date.

The penalty period starts on the date the applicant would otherwise be eligible for Medicaid based on an approved application for these services.

NJ Federal Court Medicaid Promissory Note Case Decided

Posted by: Jerold E. Rothkoff Posted Date: Sunday, August 1, 2010 15:39

On July 28, 2010, the 3rd Circuit Federal Appeals Court issued its decision in the case of Sable vs. Velez.   The issue in the Sable case was whether a promissory note pursuant to the Deficit Reduction Act (DRA) was considered an available asset to determine countable assets for nursing home Medicaid eligibility.  The NJ Department of Health and Senior Services argued that a promissory note used for Medicaid eligibility purposed was nothing more than a "trust like" device and therefore should be considered a countable asset under Social Security law.

 

The 3rd Circuit remanded the case to the Federal District Court due to an error of law for the lower court to perform a correct analysis under Federal law to determine whether a DRA compliant promissory note was a "trust like" device.

 

The Sable case is considered a victory for nursing home residents and their families. Please contact our office should you have any questions regarding the use of promissory notes for Medicaid eligibility purposes.     

   

 


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