Sun, 19 October 2008
Many times the children of my elderly clients ask whether they can be held responsible for Mom or Dad’s nursing home bill. My answer always was that there wasn’t anything to worry about unless you take your parents money. That no longer appears to be the case.
A recent case in Connecticut highlights how the new Medicaid laws passed as part of the Deficit Reduction Act of 2005 are really hurting residents and nursing homes alike and now potentially also affecting other family members. In that court case, the nursing home resident’s son signed the admission agreement on behalf of his mother. As in most nursing home agreements Son was asked to sign as responsible party, which he did not do. Nevertheless, Nursing Home advised him verbally that he was the responsible party.
Son then applied for Medicaid benefits on behalf of Mom. Son did not, however, follow through on the application process in a timely manner. He failed to provide all the information and documentation that the State needed and he did not spend down Mom’s assets quickly enough, delaying the application’s approval. As a result, months of benefits were lost, never to be regained, benefits that Nursing Home would have received.
Nursing Home sued Son on a breach of contract claim. It claimed that Son undertook an obligation on Mom’s behalf, when he signed the admission agreement, to promptly pursue Medicaid benefits. Son, in response, argued that he never signed the agreement so there was no contractual obligation on his part. The court sided with Nursing Home, finding that an oral contract was created between the two parties and that Son violated it by not conscientiously following through.
A good result for the nursing home, right? Well, not really, when you account for the time and money it took Nursing Home to get the judgment. It then has to collect on that judgment, assuming Son doesn’t appeal the decision, which will cause the matter to drag on even further. And it certainly wasn’t a good result for son, who lost and now is responsible for paying Mom’s bill.
So how could this have turned out better? If Nursing Home had encouraged Son to retain an elder law attorney to represent Mom in the Medicaid application process. Sure, there is an expense involved in hiring someone. But in the end Nursing Home would have received Medicaid benefits when it should have and Son would not be responsible for paying nursing home. A winning result for all.
Category:Medicaid -- posted at: 1:13pm EDT
Sun, 5 October 2008
When money is running out and the family is faced with the need to apply for Medicaid to pay for long term care the question becomes “should we do this ourselves or should we hire an elder law attorney to help?” Sometimes the hospital or the nursing home tells the family they will qualify without too much difficulty. So they try to do it themselves.
The pitfalls of going it alone are many and varied, especially since the latest round of Medicaid changes effective February, 2006 made the laws and regulations in this area much more complicated. Timing is critical. By that, I mean to say, that when you spend down assets and what assets you have at a certain point in time will have an impact on qualifying for benefits. Let me illustrate by way of example.
John and Mary were in their 80’s and living in their home, which they owned. They had other countable assets of approximately $50,000. John and Mary had done no planning for their long term care needs. John became ill in October, was admitted to the hospital and then to a nursing home for rehabilitative services. His condition was such, that he could not go home and needed to remain in the nursing home on a long term basis, at a private pay cost of $10,000 per month.
Mary was told by various personnel at the hospital and the nursing home that based on their level of assets “John would qualify for Medicaid” in January and they arranged for her to meet with a Medicaid caseworker to make an application for benefits. Being stressed out by the reality that John would not go home and uncomfortable with the complicated process she did not understand that for John to qualify she would have to spend down a portion of their assets to get below a certain dollar amount. In her case that number was $27,000. The caseworker explained this to her at the interview but, quite frankly, she was receiving so much information that she really didn’t fully understand how important that was.
She waited for medical and nursing home bills to come in. She figured she owed the money so it was as good as spent. In other words, in her mind she didn’t have $50,000. They owed $28,000 so she had $22,000 left. Not true under Medicaid rules. Until she wrote those checks, John and Mary were “overresourced”, Medicaid’s term for having too much money to qualify for benefits. If you are overresourced by even $1.00 you won’t get Medicaid for that month. You will never get Medicaid for that month.
Had she paid those bills right away John would have qualified for benefits in January. Instead, she didn’t write those checks until June, meaning John didn’t qualify for Medicaid until July. Great, so Medicaid picked up the nursing home bill in July. There was one small problem. Who was going to pay the nursing home bill for January through June? The answer was John and Mary, and at the private pay rate of $10,000 per month that was $60,000. The shame is that this didn’t need to happen.
This example illustrates the pitfalls of going it alone. The rules are quite complicated and timing is critical. You don’t want to be left with a huge nursing home bill which you can’t pay. The nursing home doesn’t really want to be in the position of suing their residents. Having a knowledgeable elder law attorney representing you can save huge dollars and huge amounts of stress.
So how did John and Mary’s problem get resolved? She hired us to negotiate with the nursing home. We were able to reduce the bill a little bit and since she only had $22,000 in liquid assets and could not afford to pay the bill now, the home agreed to take a mortgage against her home. They’ll get paid when the home is sold. Not the best end result but as good as could be expected.
Category:Medicaid -- posted at: 5:14pm EDT
Wed, 1 October 2008
In show number 10 of his podcast, Elder Law Today, practicing elder law attorney, Yale Hauptman interviews Anthony Aiello, a compliance officer at Commerce TD Bank on the hot topic of FDIC insurance. For many Americans, the collapse of financial giants such as Lehman Brothers, AIG, Merrill Lynch and Wachovia reminds them of other troubled economic times. Many seniors grew up during the Great Depression of the 1930’s and remember the Savings and Loan scandal of the late 1970’s and early 1980’s. The FDIC insurance program was instituted in the 1933 to protect depositors who lost money when their banks went under. Many Americans are now concerned once again about whether their assets are protected.
Yale and Anthony discuss the basics of how this insurance coverage works. Learn about the ways to stretch the amount of insurance coverage well beyond the $100,000 limit which most people assume, erroneously, is the maximum. There are different categories of accounts, which are treated separately for insurance purposes. For example, coverage for IRA and other retirement accounts is now $250,000 per person.
In his “In the News” segment, Yale discusses a recent government inquiry into accusations that a company which owns assisted living facilities in 20 states is kicking out residents once they have run out of money and apply for Medicaid. He also discusses a recent court case which highlights the pitfalls of having a joint owner on a bank account who then applies for Medicaid. In that New Jersey case, the judge sided with the applicant but learn why the fight may not yet be over. Finally, Yale talks about a new federal law effective October 1, 2008, intended to protect Americans from abusive practices in the sale of reverse mortgages to seniors.
show is timely and informative in light of the current turbulent
economic times. Be sure to tune in.
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