Medicaid Redesign in New York

Guest Blog Post By David A. Cutner, Esq.

Last January, New York Governor Andrew Cuomo appointed a Medicaid Redesign Team and tasked it with reversing a decades-long crisis of overspending and waste in our Medicaid system. The Redesign Team made a variety of proposals, a couple of which would have been devastating to the elderly and their spouses, and to disabled children and their parents.

Fortunately, two of the most problematical proposals were not included in the State budget that was approved on March 30th, but there are some changes in the law that are significant for Medicaid planning.

Probably the most controversial proposal from the Redesign Team was to use the 5-year penalty period in connection with applications for community-based benefits, including Medicaid home care. Since February 2006, as required by Federal law, New York has applied the 5-year look back to Medicaid nursing home applications, and has penalized uncompensated transfers.

The purpose of the 5-year look back is to determine whether the Medicaid applicant has transferred assets that could have been used to pay for care. The penalty calculation involves dividing the amount or value of the transferred assets by the monthly regional rate of nursing home care, yielding a period of time in months during which the applicant is ineligible to receive benefits. For example, a $100,000 transfer divided by the current New York City regional rate of $10,579 yields a 9.5 month Medicaid penalty.

While superficially it might seem logical to apply the look back and penalty to community-based Medicaid, any attempt to do so would be extremely difficult to implement, and very detrimental to patient care in many cases. This is because home care patients have widely-varying needs, and Medicaid does not cover any living expenses. Happily, the Redesign Team's proposal was omitted from the budget.

Many people are unaware that, in New York, there is no look back or penalty for transferring assets when applying for Medicaid home care. This remains the law.

The other highly controversial proposal from the Redesign Team was the elimination of spousal refusal and parental refusal. By eliminating spousal refusal, many applicants would have been ineligible for Medicaid benefits until the couple had spent down virtually all of their savings (including the individual assets of the well spouse) and had contributed a substantial share of both spouses income. Similarly, parents would have been required to spend down all of their savings before their disabled child became eligible for benefits.

Fortunately, this proposal was not accepted either. Spouses and parents need not be forced into poverty in order to secure care for their loved ones. (However, they remain subject to claims by Medicaid for contribution if their resources or income exceed certain limits).

One of the Redesign Team's proposals that was enacted is a revised and expanded definition of an individual's estate for Medicaid purposes. The expanded definition is obviously aimed at giving Medicaid the ability to recover greater amounts from the estates of Medicaid recipients. The expanded definition includes interests that have traditionally never been a part of the probate estate of a deceased person. These include retained life estates, jointly held property, and interests in trusts.

The expanded definition is problematical in certain respects, and at odds with legal precedent. For example, a life estate is extinguished upon death, and the holder of the remainder interest automatically becomes the 100% owner. Similarly, if property is jointly owned with right of survivorship, the survivor automatically becomes the 100% owner. It will be interesting to see how the courts decide Medicaid's estate recovery claims when they collide with these long-established rules.

Until the courts provide clarity regarding the application of Medicaid's expanded definition of estate, Elder Law practitioners will want to carefully consider their use and choice of trusts in Medicaid planning. While grantor, income only, trusts have been extensively used in the past, it may be prudent to consider substituting a family trust where the grantor retains no rights in the trust whatsoever.

Budgetary constraints at the Federal and State levels are going to put continuing pressures on Medicaid benefits, making it increasingly important for seniors and their families to seek advice from an Elder Law attorney and plan ahead.  Understand the costs for senior care and plan for your care before you need it.

Contributed by New York Elder Law Attorney, David A. Cutner. www.lamson-cutner.com

Remember, Medicaid rules and benefits change by state. Learn about your particular state services.

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Financial Steps for Caregivers

Women's Institute for a Secure Retirement provides caregivers with financial planning steps to organize budgets to be able to manage the costs of caregiving.  The institute works to improve the long-term financial security of all women through education and advocacy.

As the majority of senior caregivers are women, we are providing their Financial Steps for Caregivers:

  • Create a Household Budget
  • Considerations when Leaving a Job or Working Part-time
  • Discussing with Your Family the Impact of Being a Family Caregiver
  • Check to See if Saving Enough for a Secure Retirement for Yourself
  • Finding Extra Help for Older Adults
  • Understanding Financial Terms
  • Government and Non-Profit Resources
You may learn more at the Wiser Women's Institute website.  It is always a good idea to begin planning ahead before care services are needed.  You can learn about the costs and ratings of nursing homes in your area and find "by state" services on Caregiverlist.


Caregiverlist's Estate Expert on Good Morning America

Caregiverlist's "Ask the Expert" section allows you to submit your senior care questions to industry experts, including Alexis Martin Neely, an attorney specializing in family law.  Alexis was a guest on Good Morning America today, discussing her recent book "Wear Clean Underwear", along with estate planning.

She also talks about 5 legal documents every family should have on Good Morning America today. 

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Early Warning Signs for Alzheimer's Disease

Senior caregivers know the difficulties of caring for someone with memory loss.  But sometimes when you see someone daily, you do not as easily notice some of the early warning signs for memory loss in the form of Alzheimer's Disease.  The Alzheimer's Association has been promoting their new "Know the 10 Signs" for early detection and early diagnosis of Alzheimer's Disease.

 These 10 signs include:

 

1) Memory changes that disrupt daily life

 

2) Challenges in planning or solving problems

 

3) Difficulty completing familiar tasks at home, at work or at leisure

 

4) Confusion with time or place

 

5) Trouble understanding visual images and spatial relationships

 

6) New problems with words in speaking or writing

 

7) Misplacing things and losing the ability to retrace steps

 

8) Decreased or poor judgment

 

9) Withdrawal from work or social activities

 

10) Changes in mood and personality


As soon as you notice signs of memory loss, it is a good time to make sure the senior has an estate plan in place and to understand the ways to pay for senior care as many years of caregiving are often necessary for those living with memory loss.


 

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Recession Provides Assisted Living Discounts

Today's Chicago Tribune features an interview with Caregiverlist's Senior Living Expert, Lisa Sneddon, discussing how the current economic downturn has resulted in new pricing values at Assisted Living Communities.  Since many seniors cannot sell their homes, their retirement plans to downsize and relocate to an Assisted Living Community have been derailed. 

However, there are now new options available for relocating to a senior community, from bridge loans until the senior's house is sold to waived move-in fees from the senior community. 

Lisa's service is paid for by the Assisted Living Communities as she will provide unbiased information to seniors and their families to give them the scoop on services and amenities at communities beyond just the costs - you know, if you are going to move in to a new community, it is the same as buying a house, you want to know a little about the neighbors and the community activities.  And, it is important to consider the care services that will be available as you age - from dementia care to nursing care.  Lisa will take the senior on a tour and will answer all the questions you might have been afraid to ask if you were shopping on your own.  She helps make sure the move-in will be a success and permanent.

Check out the Chicago Tribune story here.

 

 

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Estate Planning: Caring for Pets

Leona Helmsley, nicknamed "the Queen of Mean", left $12 million in her trust to care for her Maltese dog, Trouble.  Rumor has it that she had few friends, so it was appropriate for her to leave more money to her dog than to people.  She left around $10 million to two grandsons and the rest of her estate, estimated as worth between $3 billion and $8 billion, went to the Helmsley Charitable trust.  She stated that the mission of the trust should be to provide for the care of dogs.  Even though she only owned a dog later in life and gave away another dog which she was given as a gift (named "Double Trouble), because she didn't really like him.  She still decided to change her trust two years prior to death to only provide for dogs and deleted the previous mission which also included caring for "poor children". 

The interesting part of this trust, is that even though it would seem Leona, as a bilionaire, would have had very experienced attorneys, they did make some legal mistakes in writing her will.

First, Leona requests her dog to be buried beside her when it passes away.  However, she is buried in a human cemetery and New York state law does not allow animals to be buried in human cemeteries.  People can be buried in pet cemeteries but not the other way around in New York.  This was an error by her attorney in not checking New York state law regarding pet burial. 

Second, her dog is 9 years old and has a variety of medical issues, which combined with the life-expectancy of a Maltese means Trouble will probably live only another 5 years.  It seems that the attorneys managing her trust could not come up with a way to spend $12 million on a dog (even with the best dog food and spa treatments) in 5 years.  And, Leona didn't specify how the dog should be cared for and what the money should be spent on.  Lawyers managing her trust have decided $2 million will be more than ample for the dog's care (and because the relatives Leona left the dog to actually didn't want the burden of caring for the dog, one of her hotel employees is being paid $5,000 a month to care for Trouble).  The lawyers then arranged for the other $10 million that was left to Trouble to go back to Leona's charitable trust.

According to a recent New Yorker magazine article, only 38 states allow for "pet trusts" in order for people to provide for the care of their pets after they die.  However, the law is still catching up with the nuances these trusts present.  It is probably important to be a little more specific in how the money is to be used when leaving it in a trust to a pet, since the pet cannot effectively communicate their wishes for spending the money.  Especially in Leona's case, since it turns out the people she wanted to care for Trouble did not really want the dog, and the day-to-day care and love from a human owner is probably what a pet most wants when their owner passes away.

A website that assists with pet trusts:  www.mypetprotection.com

 

 

 

 

 

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