Retirement News : Seniors : Elder care law is easily misunderstood

Elder care law is easily misunderstood

Date Added: 14-06-2005

June 13, 2005) — Qualifying for Medicaid eligibility is quite a complex process; one court called it "unintelligible to the uninitiated."

As a result, a significant part of elder law involves counseling clients about those rules and assisting them with the actual Medicaid application.

Federal laws governing Medicaid contain many protections for nursing home residents and their spouses, but they also contain traps for the unwary.

One protection for the spouse who remains at home (known as the "community spouse" under the Medicaid regulations) is that he or she will be allowed to retain, in addition to the family home and automobile, half the couple's savings. That half can have a minimum of $74,820 and a maximum of $95,100.

Many people believe that they or their spouse are not eligible for Medicaid if they have more resources than that. Others are concerned that if they apply for Medicaid, their application may be denied or that they might for other reasons not qualify. That is not always correct.

Under law, the community spouse may file a "spousal refusal" statement with the Medicaid application. Spousal refusal refers to the right of one spouse to decline responsibility for the other. The local government, however, retains a right to seek reimbursement through the courts. Red tape and a lack of information can be a problem. In one case, Medicaid refused to honor a late spousal refusal application even though the spouse was unaware of some of the technicalities.

Family members also are protected under the "transfer of assets" rules. When Medicaid nursing home coverage is sought, any gifts made during the prior 36 months may affect eligibility. The so-called "penalty period" is computed under a formula that, in this area, currently provides for the loss of one month of eligibility for each $6,981 that is given away, starting the month after the gift was made.

While some people view this as a loophole, it reflects a balancing of competing social values. On the one hand, we believe that you should take care of yourself if you can afford it. But we also want to leave something for our children and get something back for the taxes we pay.

The transfer of assets rule balances all this by requiring that people be responsible for any care they need for up to three years, while potentially protecting about half their assets for their children if an appropriate gift plan is used. This rule also is easily misunderstood. I recently had a case in which both spouses were in the nursing home, and two months after the Medicaid application was filed, some gifts were made by the spouse who did not need Medicaid. The result, six months later when the case was processed, was that these gifts made the other spouse ineligible for about seven months of coverage.

Even though that is the general rule, it had not occurred to anyone that the gift by the spouse who did not need Medicaid would affect the other spouse. Fortunately for this family, the rule is different when both spouses are in the nursing home and only one needs Medicaid. It took a state hearing to straighten this out, with attendant cost to the family for legal fees when the result should have been clear from the outset.

While the elderly have good Medicare coverage for some diseases, Medicare provides virtually no help for other diseases that require nursing home care, such as Alzheimer's.

Until there is more uniform coverage, attorneys will need to help clients with Medicaid's complexities.

For More Information:

http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=/20050613/OPINION02/506130302/1039/OPINION