To answer that question, we must first define what Medicaid is. Although it may pay for medical expenses, in the context of the chronically ill, such as the elderly, it is the payor of last resort for long term care. Medicaid pays for custodial care – at home, in some assisted living facilities and in a nursing home. So the right time to apply for Medicaid will be determined by the individual’s needs, or more succinctly, when he becomes unable to perform certain activities of daily living, such as walking without assistance, transferring from bed to chair, toileting, showering, preparing meals, dressing, etc.
Since qualification for Medicaid assistance is dependent upon meeting certain income and resource thresholds, the right time to figuratively apply for Medicaid, may be years before the need arises, when undertaking a Medicaid plan to qualify in the future!
I have never met with a client who told me he is planning to go into a nursing home. Instead I have been told that the children will take care of me at home, or just simply, I will never need such care. Unfortunately, I have practiced long enough to know that such denial and lack of planning” leads to complicated and chaotic last minute planning, which often means spending down resources instead of preserving them for supplemental care when it is needed most. The best scenario is when a client is willing to plan for Medicaid, hence applying essentially years before submitting an application.
While clients and their children may have every intention of keeping their parents out of a nursing home, life is unpredictable, and doesn’t always play out the way one intends. Unforeseen circumstances arise, and sometimes nursing home care becomes necessary-which means Medicaid becomes necessary. This actually happened in one case in which a family, against my best advice, chose to protect their home with a life estate. The daughter intended to actually care for her mother at home, and mom told me she would never go into a nursing home. Of course, the worst scenario occurred years later when the daughter became disabled and mom’s Medicaid needs could not be met at home. Mom had to be transferred to a nursing home from the hospital The home could not be rented since the disabled daughter could not oversee its management and it had to be sold. Although the home had been protected with the passage of time, once the home was sold, the mom’s life estate became cash in hand and available to Medicaid. In the end, we did last minute planning, but instead of protecting the whole, we protected the half. When and how you should apply for Medicaid in New York involves planning with these considerations since you often have no control.
The need to apply for Medicaid Assistance oftentimes occurs unexpectedly. You may have a fall, or an incident in which you are injured. You are taken to a hospital by ambulance, you are admitted, you are given tests, you are diagnosed and suddenly, you have a situation you must face. You’ll be released from the hospital as soon as you are stable but you may not be ready to go home. Often, people in that situation find themselves in a wing of a nursing home known as subacute care or rehabilitation, where they will stay for a period of time.
If you already have Medicare, it pays for 100 days of subacute care or rehab, with the first 20 days being paid at 100%. Day 21 to day 100 require a co-pay, but you may have supplemental insurance, often referred to as a Medi-Gap policy, that might cover the co-pay cost for those 80 days.
Having said that, if you are in a nursing home and you are not able to go home, then you will find that you are doing last-minute planning to make yourself Medicaid eligible, if you haven’t done planning before. This all relates back to the idea that it is better to do planning earlier than later, and better to get it done before you have an incident, before you are ill, and before you have no other choice.
It is at the rehab center where the family will meet with the staff about the status of their family member, whether there may be a safe discharge and whether long term care will be needed, at home or in a nursing home. IT IS AT THIS POINT, when the reality of applying for Medicaid becomes most evident. Since nursing home care on Long Island may range between $14,000 – $19,000 per month, it becomes clear to the family that they will need assistance to pay for this kind of care. Even home care Medicaid is pricey, with many agencies charging $30 per hour for a personal care aide.
Hopefully, if you or your family ever find yourselves in that situation, you will have already protected your assets so as to qualify for Medicaid, then apply and not lose what you own.
What Tools Are Useful When It Comes To Medicaid Planning In New York?
Asset protection trusts are useful tools to protect either investments or homes or both in one or two or even three trusts. You can do this in advance of ever needing to apply for Medicaid.
Powers of attorney are also important and useful tools for Medicaid planning. They empower the agent to apply for Medicaid on the applicant’s behalf and undertake last minute planning with additional transfers or exempt purchases. Bear in mind that NYS Statutory Powers of Attorney that have not been modified by an Elder Law attorney will not provide for the transfers needed for this kind of planning.
Healthcare proxies are also extremely useful tools, since they empower the proxy to make medical decisions on an applicant’s behalf. Together with the Statutory Powers of Attorney these two powerful documents will enable your agent to act on your behalf and avoid the need to apply for a Guardianship in Court.
Another last-minute tool is pre-paying funeral expenses (which is an exempt purchase and/or transfer for Medicaid). You may pay for a pre-plan for yourself, for your family, and for your extended family as a means of reducing what you own.
In the end, the success of your planning all relates back to the legal documents you have in place. Bottom line: whether you are applying for Medicaid now or 20 years from now, as long as you have done some initial planning and you have legal documents in place to enable someone you trust to stand in your place and prepare the Medicaid packet with its planning, you should minimize the havoc and chaos which often result with last minute planning and applying for Medicaid.
What Additional Estate Planning Tools Should I Have If I Am Ageing Alone?
If you are in that situation, you should have the basic estate planning documents in place. That is, you should have your power of attorney, healthcare proxy, living will and Will executed. Prudent planning also involves asset protection with the implementation of the irrevocable income only trusts to protect the resources that are important to you.
If you are aging alone at home, the question is whether you will need assistance to carry out your daily tasks and live with dignity and safety. You can either privately pay for that sort of care, or you will be applying for Medicaid.
In these articles, however, we have yet to discuss commercial long-term care policies, or the New York State Partnership Program. In 1992, the Partnership Program was offered to each of the states as a result of the Robert Wood Johnson Foundation initiative. It created a public-private program that offered long-term care policies that would protect all of your resources without having to transfer assets out of your name. Once the long-term care policy is purchased and utilized to the full extent, then the insured will be eligible for Medicaid automatically without having to transfer any assets at all. All income would nevertheless have to be paid or spent down.
When it was initially offered in 1992, only four states in the US signed up for the Partnership Program. New York was one of them. So, New York can offer 100% asset protection with the purchase of their policies. However, with a change in the Federal law in 2006, partnership policies were now offered to individuals of other states, however not to the extent of 100% of their assets. Therefore, if someone is aging alone at home and owns this kind of policy, then the individual could utilize it to hire aides for assistance. Once the policy benefits are exhausted, then the individual may apply for Medicaid and become Medicaid eligible without having his assets being counted or transferred out of his name. Depending on the individual’s status at that time, he would be able to either stay at home or transfer to an assisted living facility paid for by Medicaid.
There are a few of these facilities in Suffolk County and a few in Nassau County. If you are on the Community Medicaid Program, you may be able to access those facilities through the aforementioned policies. You can get yourself on their waiting list, and as soon as they have a room available, you will , go in and your needs of care will be met. Your household needs, your food, your laundry, your residency, your room, social activities, anything you can think of will all be paid for by the Community Medicaid Program. It should be noted that these facilities are limited, but if you can get into them; they do provide a good option for people aging alone.
Purchasing a long term care policy should be accomplished at a younger age and before you need assistance. A commercial long term care policy does not protect your assets from being counted by Medicaid, but it will pay for the assistance you need, during which time you could undertake a Medicaid asset protection plan. The chronic care program has a five year look back period and the community Medicaid program now has a thirty month look back. You would seek a long term care policy that would pay for your care during these look back periods.
Having said that, these long-term care policies, along with the appropriate legal documents are another option in the tool box to provide for an individual’s long term care without having to spend down his assets.