MA No Comments

Advisor Alert: Learning Medicaid Planning Can Keep You From Getting Sued

There was a time when I knew nothing about Medicaid Planning. Nada. Zip. Zilch.

I remember asking the person who said he did Medicaid Planning a very basic question: “How do you make any money helping poor people get health insurance?”

That question betrayed my lack of understanding of how Medicaid is more than just a health insurance program for the poor, it is a financial backstop for the elderly in need of long-term care services. The LTC Medicaid side of the coin is a complex set of rules about what assets are exempt, what can and can’t be given away and to whom it can and can’t be given. In order to qualify, an applicant must have typically spent down most of their life savings.

But if you don’t know or understand any of this, a few things can happen. The first is very obvious. If you are advising someone who is in need of long-term care and does not have adequate insurance, failing to understand their options can lead to giving poor advice. More legal and financial advisors give BAD advice in the area of the long-term care spenddown than there are advisors giving GOOD advice. Most of that comes from a simple lack of understanding, which can be easily fixed.

The second negative impact on advisors working with elderly clients is the risk of a lawsuit. With the number of people needing advice concerning the long-term care spenddown, there is a growing volume of legal and financial advisors giving poor advice, often leading to Medicaid ineligibility periods (also known as penalty periods) or a dramatic and fully preventable loss in assets. This proliferation of bad advice has created a growing field of litigation: LTC Medicaid eligibility malpractice.

Every legal or financial advisor who works with seniors exposes themselves to LTC Medicaid eligibility malpractice from failing to understand how the advice that they give impacts or hinders Medicaid eligibility. Bad advice can have negative consequences. If those consequences cause the person receiving advice to be adversely affected, the legal or financial advisor can be sued and held accountable for the damage they caused.

This damage can manifest itself in one of two ways.

The first is for someone to be ineligible for Medicaid when they would have been eligible or become eligible sooner, but for the advisor’s bad advice. A good example of this is when a financial advisor tells a client who inquires about gifting that they can gift up to $15,000 per year per person.

In a recent case I saw this happen where the advisor had dispensed this advice but failed to mention that the gift limit, he was referring to was for the gift tax only and did not apply for Medicaid. The client had gifted over $80,000 within the last two years before having a stroke and going in the nursing home. Her family filed her Medicaid application thinking those gifts were exempt from the lookback, only to have Medicaid penalize the applicant for a full year of ineligibility.

The second way to incur liability in this area and cause damage is to give advice that causes a patient to spend more money on the cost of care that the law requires. Under the current Medicaid rules, you can actually easily overspend your assets on the cost of care. Most legal and financial advisors do not understand the asset limits, how they are different for single or married applicants, and how to calculate the resource limit.

Over the next decade, you will hear countless stories of legal and financial advisors who were successfully sued because they did not understand how their advice conflicted with LTC Medicaid eligibility and spenddown rules. Don’t let one of those stories be about you!

Our whole Medicaid Planning support program is developed around the idea of helping people with scant knowledge of long-term care and the Medicaid spenddown system become knowledgeable advisors. Even if you don’t intend to do Medicaid Planning full time, a good understanding of LTC Medicaid and allowable asset protection techniques under the rules can be very helpful.

When I started out, I didn’t understand much and had to spend years piecing it together. That’s why I created our training system that provides continuing legal education and professional education to help raise awareness, the largest textbook on the subject ever written, and direct practice mentoring and support for legal and financial advisors. It’s like putting Miracle Grow on your Medicaid Planning practice and is the best prophylactic against getting sued for lack of knowledge ever developed.

For more information visit: https://medicaidplanning.org/services/

MA No Comments

Learning Medicaid Planning Just Got Easier

If you’re in one of the countless estate planning practices that has seen a drop-off in interest over the last few years, you’re not alone. With the increase in the estate tax exemptions and the proliferation of online document vendors, many estate planners’ practices have gotten stagnant or harder to maintain.  This has led to huge interest in adding Medicaid planning to an existing estate planning practice.

Most people in need of long-term care planning services reach out first to the estate planner that helped them craft their will, trust and powers of attorney.  More often than not, the estate planner chooses to pass those cases on to a Medicaid planner instead of helping the clients themselves – missing out on critical business and often losing the client relationship.

The biggest reason many estate planners don’t do Medicaid planning is the complexity of the long-term care Medicaid eligibility rules and the high stakes of not getting the planning right.  That risk is real, but can be heavily mitigated if you want to add a vibrant and growing need to your estate planning practice.

In most cases, long-term care Medicaid planning is done in a crisis situation where there is an active need to reposition assets to minimize the exposure to the Medicaid spend down.  The art of Medicaid planning starts with a firm understanding of both the spenddown rules, asset classifications, and allowable transfers. Most Medicaid planners do not have the time to apprentice newcomers into the field because anyone doing this kind of work has more clients than they have time to help them all.

There is a huge need for more Medicaid planners and a great opportunity if you are looking to add Medicaid planning to your practice.

Your Name (required)

Your Email (required)

Subject

Your Message

MA No Comments

The Iron Throne Is Replaced With A Wheelchair

SPOILER ALERT: If you are one of the few people who have not seen the Game of Thrones Finale yet, read at your own risk.

Disability advocacy rarely gets the attention it deserves. But in a true sign of the times, one of the most iconic symbols in a decade – the Iron Throne – was literally replaced with a wheelchair as a result of the Game of Thrones finale. The death of the Mother of Dragons in the throne room led her remaining dragon to torch the Iron Throne until literally melted in a pool of hot magma. Whoever was left to sit on the throne would need a new throne.

As the leaders of Westeros convened to determine the future of the seven kingdoms, it was suggested that Brandon Stark be elected by the lords to be the new king. He reluctantly accepted the position, but only after his weaknesses as paraplegic were openly discussed. Henceforth in Game of Thrones lore, the new king of the six kingdoms (the North remained independent) is known as Brandon the Broken, First of His Name. In a modern world, he would be known as Brandon the Handi-Capable King.

Being disabled does not me being “lesser than,” even though that was the way society has portrayed people with disabilities in the past. Even FDR, our modern version of Bandon the Broken, was keen not to be photographed in a wheelchair for fear of the negative stigma of weakness it would convey to the public.

Game of Thrones showed that even a paraplegic, in the world of brute force, can ascend to the highest throne in the land. And with the Iron Throne reduced to nothing, it’s good that the new king of Westeros doesn’t need a throne. He comes with one in the form of a wheelchair. Of course, it’s not likely that King’s Landing is WDA (Westeros Disability Act) compliant. So the upside to the Mad Queen torching the city is that new reconstruction of King’s Landing can include long overdue wheelchair ramps, bathrooms and doors wide enough for a wheel chair to fit through, and maybe even a new elevator to help King Brandon get to the upper spires of the rebuilt Red Keep.

As one of the highest watched shows in history, Game of Thrones has now in one quick instance become the most pro-disability show ever. And to everyone struggling with a disability who feels like the world does not work easily for them as it does others, they can remember that if Bran the Broken can replace the Iron Throne with a wheelchair … so can anyone else.

MA No Comments

The Advantage of Becoming a CMP™

The Advantage of Becoming a CMP™ Webinar
Thu, May 2, 2019 3:00 PM – 4:00 PM EDT

Learn how to become a Certified Medicaid Planner™ and how this can improve your practice.

Medicaid Planning is a growing practice area for law firms and financial advisors who are committed to helping clients navigate the long-term care spenddown. Much like the US Tax Code, the Medicaid Code is complex and difficult for most seniors to understand. A Certified Medicaid Planner has demonstrated the proven skill to help clients like that with a deep understanding of the complexity of these rules and their practical application.

MA No Comments

Medicaid Planners Find Huge Advantage in Becoming a CMP™

Medicaid Planners Find Huge Advantage in Becoming a CMP™

If you haven’t heard about the Certified Medicaid Planner™ designation by now, it’s one of the fastest growing accredited designations in the country.

The focus of the CMP™ designation is to demonstrate a planners’ high skill and experience in Medicaid Planning, as well as a planner’s commitment to both high standards and high ethics. The CMP™ Governing Board was established nearly a decade ago to help set standards in the field of Medicaid Planning and devise a testing system to validate skill in the field. No other multi-discipline organization is committed to this goal.

Medicaid Planning is a growing practice area for law firms and financial advisors who are committed to helping clients navigate the long-term care spenddown. Much like the US Tax Code, the Medicaid Code is complex and difficult for most seniors to understand. A Certified Medicaid Planner has demonstrated the proven skill to help clients like that with a deep understanding of the complexity of these rules and their practical application.

Families are often dealing with the Medicaid spenddown at the same time as a crisis health care situation that caused the loved one to enter the nursing home. With the high cost of care, a Medicaid Planner’s role is vital to ensuring that the patient does not spend more on the cost of car than the law requires.

The high cost of long-term care is the single biggest risk to retirement assets ever in the history of the United States. Uninsured patients needing long-term care services are unable to get the financial help they need without relying on the Medicaid system. Advanced Medicaid Planning will always maximize savings for the patient and his or her spouse, making the work of the Certified Medicaid Planner™ invaluable and providing the planner and the planner’s clients with a huge advantage.

If you want to learn more about becoming a CMP or how certification will help you, join us The

Advantage of Becoming a CMP™ Webinar Thursday, May 2, 2019 3:00 PM – 4:00 PM EDT

Click on the following link to sign up:

CLICK HERE TO REGISTER FOR FREE WEBINAR

Seats Still Available for Upcoming Medicaid Planning Courses

If you missed the recent Medicaid Planning course in Las Vegas, you have several opportunities coming up to learn Medicaid Planning. The Nuts & Bolts of Medicaid Planning course is the most comprehensive course on Medicaid Planning ever developed and designed to help any professional advisor add Medicaid Planning to your practice.

This course, taught by one of the leading long-term care Medicaid Planning experts in the country, will give you the insight you need to add Medicaid Planning to your practice or help solidify your Medicaid Planning skills. With the growing number of seniors needing long-term care, you need to know this material to be an effective estate or asset protection planner.

The course has become a hit among estate planning law firms wanting to grow their practice and service aging clients though the addition of Medicaid Planning services. In addition to a powerhouse 2-days of Medicaid Planning immersion, the course is approved for 9 credit hours of continuing legal education.

The small-group intensive format allows for interaction with the presenter.

If you were unable to attend the Las Vegas course, there are other upcoming courses available that may fit your schedule even better:

Cleveland, OH June 6-7, 2019

San Diego, CA July 22-23, 2019

Los Angeles, CA September 24-25, 2019

Washington, DC October 10-11, 2019

Your Name

I would like to discuss

Your Email (required)

Your Phone Number

MA No Comments

Congress Missed Deadline to Extend Medicaid Spousal Impoverishment Protections

When married couples seek home care paid for through Medicaid, each state runs a Home and Community Based Services (HCBS) program that provides coverage. Prior to the enactment of the Affordable Care Act (ACA), there was no uniformity among the states as to whether to apply the traditional spousal impoverishment rules for nursing home Medicaid to HCBS Medicaid. Spousal impoverishment protections allow for the protection of resources and income for the benefit of the well spouse safe from contribution towards the infirmed spouse’s cost of care.

The ACA rectified that problem and mandated that all states apply the spousal impoverishment protections of the long-term care institutional Medicaid program to the HCBS home care programs. The only catch, it contained a sunset clause that expired on December 31, 2018.

Congress put a temporary band-aid over this problem at the end of the year with a 3-month extension signed by President Trump. This was done in an effort to give Congress the time to debate and deliberate on a permanent extension.

The temporary extension ran out a few days ago on March 31, 2019. Without additional congressional action, the provision sunsets and states will be able to ignore spousal impoverishment protections for tens of thousands of married seniors receiving HCBS care, potentially exposing considerable amounts of community spouse assets to depletion or forcing seniors to move from home into skilled nursing homes where the spousal impoverishment protections are absolute.

A bipartisan bill introduced by Michigan Reps. Debbie Dingell (D-MI) and Fred Upton (R-MI), would be a permanent solution to this problem. The Protecting Married Seniors from Impoverishment Act has not yet received an up or down floor vote in the US House. We will be keeping close tabs on this and looking to see if states start taking liberty with home care eligibility requirements.

MA No Comments

Free 2019 Medicaid Planning Desk Reference

Get Up To Date With New 2019 Medicaid Numbers

The Centers for Medicare and Medicaid Services (CMS) have issued new annual spousal impoverishment figures for 2019.  You can download a complimentary FREE 2019 Medicaid Planning Desk Reference.   The full numbers are contained in the Desk Reference, which you can download for free by clicking the link at the bottom of this article.

Here is a quick recap of the new figures and what they mean:

2019 ASSET LIMITS

The New minimum Community Spousal Resource Allowance (CSRA) is $25,284. The new maximum CSRA is $126,420.

To get your FREE 2019 Medicaid Planning Desk Reference, click here.

Reminder, in the straight deduction states like Florida and California the Max CSRA is the pure asset cap.  Any asset amount below that is sufficient to qualify for long-term care Medicaid.  For example, if a couple has $100,000 in countable assets, then in the straight deduction states they do not need to spend down any further.  Also, in straight deduction states the minimum CSRA is never a factor in planning.

In the one-half deduction states like Michigan, Pennsylvania, Kansas and Ohio, the minimum and maximums CSRA limits are both used.  For example, take the couple with the $100,000 in resources on the “snapshot” date (i.e., the date of admission to the nursing home or the hospital when the state requires a valuation of all assets available by the couple for the spenddown).  In a one-half deduction state, the CSRA calculation would assess one-half of the total countable resources as the CSRA.  Take total countable resources of $100,000 and divide by 2 to yield the CSRA of $50,000.

Where the maximum is used in a one-half deduction state is when the countable resources exceed twice the maximum.  For instance, a couple with $300,000 would only be able to set aside $126,420 for the CSRA.  The remaining assets would be exposed to the Medicaid spenddown.

The minimum CSRA is a floor and only factors in when one-half of the total amount of countable assets falls below the minimum threshold.  For example, if a couple has $40,000, then the CSRA would not be $20,000 because that’s below the minimum.  The CSRA in that case would default to the new minimum $25,284.

Also note: In most states the new CSRA limits apply to snapshot dates in 2019 only. Typically, if an applicant’s snapshot date is 2018 but they apply in 2019, the CSRA amount will be based on the CSRA for snapshot date in 2018 and not the application date of 2019.  If you are looking for a prior year’s CSRA limits, please contact our office and we can help you locate the appropriate and applicable CSRA limit.

2019 INCOME LIMITS

The Minimum Monthly Maintenance Needs Allowance (MMMNA) is $2,057.50 (for all states except Alaska and Hawaii).  The new maximum amount is $3,160.50.  These allowance limits are set mid-year and these numbers remain in effect until July 1, 2019.  This figure is used as part of a formula to determine how much of the patient’s income a community spouse can keep to live on.

The new Community Spouse Monthly Housing Allowance is $617.25 (for all states except Alaska and Hawaii).  This figure factors into the spousal allowance formula to determine if excess shelter expenses can be used to boost the MMMNA.   For example, if the community spouse has a large rent or mortgage payment or is in independent or assisted living, the excess costs for shelter can allow the community spouse to keep more of the institutional spouse’s income to help cover the expenses.  Like the MMMNA, this number also changes mid-year and remains in effect until July 1, 2019.

2019 HOME EQUITY LIMITS

The new minimum Home Equity Limit is $585,000.00.  In the handful of states that have adopted an upper limit, that amount is $878,000.00 for 2019.  NOTE: This limit does not apply if the patient is married; but if the community spouse dies and the home automatically becomes owned by the patient spouse as a result of joint ownership on the deed, it could cause the patient to become ineligible for Medicaid.

ADDITIONAL INFORMATION

If you want more information on how to calculate the CSRA or how to maximize the conversion of excess assets to income you should consider purchasing the Medicaid Planning Guidebook or taking the Medicaid Planning Course. We provide a full range of support for advisors of all varieties to assist with their Medicaid Planning cases, including advisor mentoring and case design services.  We also have live training courses coming up that will enable you to add long-term care Medicaid Planning to your practice.  Make 2019 a more profitable year by helping your clients long-term care Medicaid eligibility and asset protection – we’ll show you the way!

FREE DOWNLOAD

To get your FREE 2019 Medicaid Planning Desk Reference, click here.

MA No Comments

Interest in Certified Medicaid Planner Designation Grows as VA Benefit Rules Get More Strict

For nearly the past decade, the Certified Medicaid Planner designation has been awarded to competent advisors seeking to set themselves apart in the planning field as the best of the best. Interest in this designation has grown substantially in the last few weeks, partly as a result of new rules issued by the Veterans Administration (“VA”).

The new VA rules greatly impinge upon the ability of veterans to get the VA Improved Pension, also referred to commonly as the VA Aid & Attendance benefit. This is a little-known benefit that can be used to help pay for care at home, in a nursing home or in an assisted living facility. While the benefit is typically not as hefty as Medicaid’s assistance, it is paid to the claimant a cash payment. The claimant can be the veteran, the veteran’s spouse, or the veteran’s widow, provided that the veteran served during a period of wartime. The benefit is means tested, but until recently it was rather easy to reposition assets to qualify.

Much like the evolution of Medicaid eligibility over the years, the VA has moved to further restrict access to the benefit by punishing those who give away assets to qualify. Medicaid has had some version of this since the late 80’s when it started with a 30-month lookback, then moved to a 36-month lookback in in the 90’s and eventually to a 60-month lookback in 2006. The VA is attempting to mimic Medicaid in several aspects by adopting a 36-month lookback on asset transfers, but starting the penalty the month after a transfer is made. It has also taken the Medicaid’s maximum protected amount for community spouses and adopted that as a bright-line asset test for applicants, currently $123,600.

The complexity of the new eligibility requirements will mean that fewer veterans and their families will be able to tap the benefit. For planners, it will drive some out of the business similar to how restrictive rules did with Medicaid planners years ago. Those who choose to continue on with VA benefit planning will need to learn the new rules and start thinking like a Medicaid planner.

For some, it has meant to move their practices into Medicaid planning. In the last few weeks, the CMP Governing Board has seen a sizable uptick in interest with many advisors active in the VA benefit arena looking to grow their businesses by adding Medicaid planning. We have resources that can help you add Medicaid planning to your practice, including the largest textbook ever written on the subject, online and in-person educational programs that are second to none, real-time practice mentoring and case development, and back-office Medicaid application services to support your practice. Many planners choose to enhance their practice by getting the nationally-accredited Certified Medicaid Planner designation.

To learn more about the CMP designation, click here for a free download of the “How to Become a CMP” brochure.

 

 

MA No Comments

More States Request End to Retroactive Medicaid Coverage

Medicaid, as a general rule, will allow for coverage for up to 3 months prior to the month of the application. The applicant would have to have been otherwise eligible in those prior months and just not have filed the application.

This is helpful for many families who seek Medicaid coverage for outstanding medical bills under the general health insurance side of Medicaid. It is also helpful for those who are in nursing homes because many, especially those cases with a community spouse, do not realize that they have overspent blow the asset limit and can oftentimes file for Medicaid several months after they have become financially eligible.

In a move to find ways for states to reduce their coverage and costs under the Medicaid program without legislation, the Centers for Medicare and Medicaid Services (“CMS”) are encouraging and allowing the approval of a waiver of the retroactive Medicaid coverage rule. This allows states to apply to CMS for approval to stop providing coverage during that 3-month period immediately preceding the Medicaid application.

Several states have taken advantage of this, including Florida, Indiana, Arizona, Arkansas, Kentucky (which is tied up in court), New Mexico, and New Hampshire. Arkansas, Indiana and New Hampshire only apply to adults who have gained health insurance under the ACA’s Medicaid expansion, while the other states eliminate retroactive coverage for all programs, including the long-term care program.

The most common usage for retroactive coverage in the long-term care application process is usually to make up for poor processing of applications. For instance, if an applicant applies for nursing home Medicaid coverage and 2 months into the process they get an improper denial for whatever reason, they have 2 choices: request a fair hearing which could take months or refile the application and reopen the file. The later choice is typically the most expedient even though it requires abandoning the previous application date. The 2 intervening months are typically just covered under the retroactive coverage and this can get an approval without the high cost and delay associated with a fair hearing.

For those in states that eliminate retroactive coverage, that process is no longer available. This will force more applicants into fair hearings that would otherwise be unnecessary. Applicants facing back medical bills for long-term care will have to utilize a little-known provision that allows for the allocation of future monthly nursing home co-pays towards pre-eligibility medical bills. This works well, but can usually only be implemented after Medicaid is approved.

Each month instead of paying the monthly liability to the nursing home, the patient’s income is used to satisfy outstanding medical bills – even the back balance at the nursing home. That at least gives those without retroactive coverage some backup plan to cover high bills incurred prior to the actual application, but does nothing to help community spouses recoup money they spent after they became financial eligible.

This also means that more people should seek assistance when filing their Medicaid application. Help with an application can avoid the need to have to re-file because a novice makes a mistake during the application process. Those mistakes can be costly and can be avoided with expert help to guide the applicant.

 

MA No Comments

Beat the Medicaid Income Limit: Can a Miller Trust Help Your Clients with Medicaid Eligibility?

In the world of long-term care Medicaid, a nursing home patient can get assistance if they meet certain basic eligibility requirements. One of the most confusing requirements is the income limit.

In essence every state imposes an income limit. In the majority of the states, the basic premise is that the nursing home patient doesn’t have enough monthly income to cover the cost of care. If you have enough income each month to pay the nursing home, you don’t need or qualify for assistance. If you don’t and you meet all the other eligibility requirements (i.e., your assets are spent down below the state reserve limit) then you can get help.

There are a certain number of states that use an income limit much lower than the cost of care. These are known as “income cap” states. In an income cap state, if the applicant’s income exceeds the state income limit for Medicaid, they are automatically disqualified and cannot get Medicaid to help pay for their long-term care expenses, even if they are completely broke and do not have enough income to cover those expenses directly.

The state income cap is set at 300% of the federal poverty income. For 2018 this amount is $2,250. In every state with an income cap, the cost of a nursing home is more than double (and in most cases more than triple) the state income cap.

Many seniors have incomes that exceed the income cap, but do not have enough income to cover the cost of a nursing home once they have depleted all other resources. Fortunately, there is a way to beat the Medicaid income cap!

Federal laws on the creation of trusts under Medicaid allow for defeating the income cap for everyone and here is how it’s done.

There is a special type of trust formally called a “Qualified Income Trust.” Most states do not use that term. Instead it is known as either and “Income Cap Trust” or a “Miller Trust.” The later name as a result of a court case in Colorado (Miller v. Ibarra) that established the right of Medicaid applicants to use the trust as a way to overcome the limitations imposed by a state income cap when faced with the high cost of long-term care.

The biggest problem with the Income Cap Trust is that most people don’t know they exist or how they are used. This was highlighted recently when I received a question from someone who asked what other help they could get with nursing home expenses since they didn’t qualify for Medicaid because their income was too high. They had never heard of an income cap trust. Once they learned about what it was, they wished that they had learned about it when the couple had spent down enough to be asset-eligible for Medicaid.

How the income cap trust works, depends on the state in which you use it. All follow a basic format for their trusts and nearly all states provide a template form for Medicaid applicants to use to create the trust. They are typically 3 or 4 pages in length. Once the trust is executed, the trustee of the trust creates a trust checking account where funds can be deposited. Whoever is in charge of the patient’s finances either takes income from the patient’s regular checking account and deposits it into the trust or arranges to have the source of income (i.e., Social Security check, pension, etc.) directly deposited into the income cap trust.

In most states, you must only put the amount of income that exceeds the income cap into the trust. For example, if the Medicaid applicant has $2,750 a month in income, they would need to contribute the difference between the income cap and the monthly income to the trust. After the applicant deposits $500 into the trust, the applicant is considered “income eligible” for Medicaid. Alternately, in a state like Arkansas, they require that all of the applicant’s income be placed into the trust.

Ultimately, the funds in the trust are spent on the patient’s monthly share of cost or diverted to the patient’s spouse as part of the family allowance, the same as in non-income cap trust states. While it’s more work to achieve Medicaid eligibility, the good news is that the income cap is truly nothing more than a harmless scarecrow only meant to make you think you can’t get help when you really can.

If you want to be a savvy advisor, consider learning the subject of Medicaid Planning trough our upcoming Continuing Legal Education course. For more information, click here.