As this article in today’s New York Times points out, Medicare is getting the bulk of the attention in this election campaign, while more attention needs to be focused on the problem of Medicaid.
“Medicaid has long conjured up images of inner-city clinics jammed with poor families. Its far less-visible role is as the only safety net for millions of middle-class people whose needs for long-term care, at home or in a nursing home, outlast their resources.”
As Robyn Grant, the director of public policy and advocacy for the National Consumer Voice for Quality Long Term Care points out “More than $80,000 a year on average for a nursing home– who can sustain that?” On Long Island that cost is closer to $150,000 each year on average. She continues to say “We’re forced most of us to go onto Medicaid.” People don’t realize this.
The article also suggests that some lawyers specialize in setting up trusts that shelter certain assets, and that the government has closed some loopholes that allow these trusts.
Sheltering assets through trusts is still a viable option. The loophole is in the length of time needed to fully protect your assets. Currently, that length of time is 5 years before your home and other liquid assets can be protected.
The Inspector General of the U.S. Department of Health and Human Services issued a report this past March, analyzing 35,000 nursing home employee records of nursing homes against criminal records maintained by the Federal Bureau of Investigations (FBI).
92% of nursing homes employ one or more people with a criminal conviction. Nearly half of nursing homes employed people with five or more criminal convictions. Although most of the convictions took place prior to employment, 16% of the convictions were for offenses after being hired.
Although nursing home facilities are prohibited from hiring or employing persons found guilty of abusing, neglecting or mistreating residents, apparently this prohibition does not extend to workers who had previously been found guilty of crimes against property.
The NY Times reported that although most of the criminal convictions were for activities such as burglary or shoplifting, some were for personal crimes such as assault.
Residents in nursing homes are a vulnerable section of our population. These residents are often left alone with aides and supervision is poor. Nursing homes must do a better job in screening employees.
In this survey, New York “only” comes in fifth in the country on the list of most expensive annual cost for a private room at a nursing home. The survey is using median rates, and also averaging the cost of nursing homes throughout New York State. On Long Island, the cost of a semi-private room is right around $430/day. That translates to $146,000 annually. Each year. $146,000.00.
If you find this as shocking as I do, you should contact an elder lawyer who may be able to help you protect your hard-earned assets.
One of the questions I am frequently asked in my elder law practice is “what is the five-year lookback?”
Simply put, if you give away money or property during the five years before you apply for Medicaid, that transfer triggers a penalty period during which you are ineligible for Medicaid.
How Does the Penalty Period Work?
The penalty period is calculated by dividing the amount you have gifted or transferred by the average cost of nursing home care in our area, as published yearly.
The 2011 Nassau and Suffolk County average nursing home cost is $11,445.00
So, for example, if you give $91,560 to family members, at $11,445 a month you wouldn’t qualify for Medicaid for eight months. If you give your home to your children, and retain a life estate, you have also given a gift, the fair market value which is countable towards the transfer penalty.
When Does the Penalty Period Start?
The Penalty period starts the day you apply for Medicaid. New York State will review the Medicaid application to see if any gifts or transfers for less than fair market value are made for the five years prior to the application. In other words, the full five years must pass before the gift is protected. The penalty period does NOT start on the day you transfer the assets.
What Happens After Five Years?
If you need nursing home care, you will be eligible for Medicaid at the end of the five years after the transfer, as long as you have no other unprotected assets. Contacting an elder lawyer while you are still well enough to transfer assets into an irrevocable trust is essential.
The denial of death is one of the strongest of human defense mechanisms. In fact, there’s an entire book about it. We don’t want to think about our end-of-life care wishes. (Although some have instructed, “Wave a martini in front of me — if I don’t respond, pull the plug.”) I don’t like to think about it any more than the next person. But I also don’t like to think about my family and doctors arguing over keeping me on a ventilator when I could have easily told them in advance what I want in that situation. In the past, the only option would be the use of an “advance directive” or health care proxy. That’s still a good idea, but some might wish to also involve their doctors in the discussion. Another technique known as Medical Orders for Life-Sustaining Treatment (or MOLST) is becoming more popular. As a recent article in The Wall Street Journal makes clear, a growing number of states, including New York, are promoting MOLST to help guide physicians with a patient’s specific instructions.
New York is one of the more forward-thinking states in instituting the program known as Medical Orders for Life Sustaining Treatments (MOLST)
MOLST is different from other advance directives such as living wills and health care proxies because it is physician generated instead of client/patient generated. A licensed physician must always sign the MOLST. It is printed on bright pink paper so that hospitals and nursing homes cannot fail to notice it.
While the MOLST is a good addition to helping people get their wishes fulfilled, it is most often employed for the elderly who are in need of life-sustaining care. It should not replace the health care proxy and living will you would create along with your wills and financial powers of attorney.
I found myself filling one of these out several years ago, when we had to check my mother into a nursing home. Despite years of seeing gerontologists and living in an assisted living facility, this was the first time we’d been presented with the option of discussing the MOLST.
You may want to discuss this with your physician or elder law attorney so that you too can participate in your own decisions on your end-of-life care.