How would you choose long-term care?
Usually, LTC recipients of Medicaid are usually those who are aged or from the disabled group, but there are only a handful who receive SSI and yet opt for LTC.
What are the assets exempted under Medicaid and LTC?
The following are Medicaid exempt assets:
- A house but only when you (the applicant) are likely to return home. Your home may also be among Medicaid exemptions if your spouse, or a child under the age of 21 years or a child over the age of 21 years but disabled, or a brother/sister owning part of the house and having resided there for at least 1 year continues to live in that house.
- Essential items like furniture, appliances etc.
- Personal items like jewelry, clothing etc.
- Burial plots
- Funds for burial up to $1500 each in case you are married and $1200 if you are a single applicant.
- A cash surrender value in a life insurance. This is possible only when the face value of the policies together is less than $1500. However, term life insurance does not have a cash surrender value and hence is totally exempt.
Related readings:
There are 25 states with Long Term Care Partnership Programs.
This is significant legislation as a person can now LEGALLY exempt their assets from nursing home and Medicaid spend down by simply obtaining Long Term Care insurance.
Click HERE to read Florida Statute 409.9102.
(b) Provide a mechanism to qualify for coverage of the costs of long-term care needs under Medicaid without first being required to substantially exhaust his or her assets, including a provision for the disregard of any assets in an amount equal to the insurance benefit payments that are made to or on behalf of an individual who is a beneficiary under the program.
(4) The Department of Children and Family Services, when determining eligibility for Medicaid long-term care services for an individual who is the beneficiary of an approved long-term care partnership program policy, shall reduce the total countable assets of the individual by an amount equal to the insurance benefit payments that are made to or on behalf of the individual.
States with Partnership Legislation:
Arkansas
Iowa
NorthDakota
Colorado
Maryland
Ohio
Florida
Massachusetts
Oklahoma
Georgia
Michigan
Pennsylvania
Hawaii
Missouri
Rhode Island
Idaho
Montana
Virginia
Illinois
Nebraska
Washington
New York
Indiana
Connecticut
California
Posted: Wed May 26, 2010 05:18 pm Post Subject: trust excludibility
what are rules re excluding trust
Posted: Wed May 26, 2010 11:47 pm Post Subject:
To be able to exclude an asset from one's estate via a trust, it must be placed into some form of an "irrevocable" trust to demonstrate to the IRS that the former owner is giving up all "rights and incidents" of ownership. Doesn't mean he can't live in the property, but it's no longer "his" property.
As far as Medicaid is concerned, the "lookback" period to find assets removed from a person's estate for the possible purpose of avoiding the spend-down test, the period is now 60 months. For estate tax purposes, the lookback period is only 36 months.
Posted: Thu May 27, 2010 04:14 pm Post Subject: death in nursing home
If a person lived and died in nursing home and had life insurance with named beneficaries. Are the benefits from the policy to be returned to the state?
Posted: Thu May 27, 2010 08:27 pm Post Subject:
Proceeds payable to a named beneficiary are not subject to the claims of creditors of the decedent, nor are they subject to claims of the beneficiary's creditors prior to funds being distributed to the beneficiary.
However, if policy proceeds end up in the decedent's estate, the state is third in line, behind employees (wages) and the federal government (taxes, penalties), to attack the estate for Medicaid asset recovery in addition to its own unpaid taxes and penalties.
ALWAYS HAVE A NAMED BENEFICIARY ON A LIFE INSURANCE POLICY!
Posted: Thu Jun 03, 2010 06:46 pm Post Subject: ASSETS
WHILE ON MEDICADE, THE HOUSE BECOMES THE PROPERTY OF THE STATE OF MISSOURI. WHAT HAPPENS TO THE CONTENTS IN THE HOUSE? CAN HEIRS REMOVE ITEMS, OR CAN THEY BE SOLD BY HEIRS?
Posted: Thu Jun 03, 2010 06:51 pm Post Subject:
CAN CONTENTS OF HOUSE BE REMOVED/SOLD BY HEIRS???
Posted: Thu Jun 03, 2010 07:15 pm Post Subject:
WHILE ON MEDICADE, THE HOUSE BECOMES THE PROPERTY OF THE STATE
Never heard of this before. A lien on the property perhaps, but I doubt the state has a right to take possession of one's home while living. Something unconstitutional lurking in there. But, then again, I'm not from Missouri, so you'd have to show me, too.
CAN HEIRS REMOVE ITEMS, OR CAN THEY BE SOLD BY HEIRS?
Does this mean that a once-living Medicaid beneficiary has died, and the property is being claimed under the Asset Recovery laws? If for some reason the state has in fact taken possession of the property (meaning land and structures), it is unlikely that personal property would be confiscated. But the "asset recovery" laws do not go far in describing exempt assets, so if the real estate property is not valuable enough to satisfy the state's claim, it could then turn to other non-excluded assets, which could mean certain things of value inside the home.
For further explanation, you would want to look at the list of "excudable assets" under the Medicaid spend down test. Things like personal jewelry, one car, business assets . . .
Posted: Mon Jun 14, 2010 07:33 pm Post Subject: Is term life insurance considered an asset
My Mom recently passed away after a brief illness. She had Medicaid and Medicare. I just received a letter from State of NJ for a claim and lein against the assets of my Mom.
I have to fill out a 5 questionaire letter, should her Term Life insurance be added in her assets along with bank account balance?
Posted: Wed Jun 16, 2010 04:44 am Post Subject:
Life insurance proceeds are not subject to asset recovery if payable to a named beneficiary, but become part of the estate cash assets if there was no named beneficiary. The claim against her estate for Medicaid payments by the state of New Jersey is limited to the value of benefits received after age 55.
If there are sufficient cash assets in the estate, the state has a legitimate claim to them. If there are insufficient cash assets, the state can also claim hard assets such as a home or auto -- but not in excess of the actual benefits received. Personal assets such as jewelry are exempt from asset recovery.
Anyone can offer to pay the state the amount of the lien in lieu of the state seizure of estate assets. Family members (or others) could combine their personal resources to pay the state's claim and later file a claim for reimbursement with the administrator of her estate during probate. This would allow for a more orderly liquidation of estate assets and probably provide a better benefit to the estate.
Be sure to carefully review and evaluate the state's claim. An authorized representative of the estate can obtain access to medical billing records if they cannot be located among your mother's effects. You may also be able to negotiate a settlement with the state for less than the lien amount, but you will not be able to escape the lien entirely, because it is mandated under federal Medicaid rules.
There is no claim/lien against the estate for Medicare payments.
Posted: Fri Jun 25, 2010 02:12 am Post Subject: Medicaid Eligibility (Spend Down)
My father (aged 87) has been in a rehabilitation facility for a few months and was originally classified as requiring "skilled care" which meant he was covered by Medicare and his private supplemental insurance. As of a couple of weeks ago, he is no longer considred requiring "skilled care" and therefore is not covered by Medicare and his supplemental insurance. Since he suffers from dementia, seizures and kidney problems, he is unable to care for himself and my mother (aged 83) is unable to care for him at home. He has been denied by Medicaid because of a life insurance policy that has a face amount of $12,000 and a cash surrender value of $6,700. We have been told that if he takes the cash value of the policy he can only spend-down $3,500 for burial which would leave him still above the $2,000 countable resource limit for Medicaid. The cost for him to remain at the facility is $6,000 a month, which we can not pay. What can we possibly do to get him eligible for Medicaid?
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