Elder Law: Frequently Asked Questions & Answers
What is the cost of long-term care?
In Pennsylvania, the average monthly cost of a private room in a nursing home facility for 2021 is $11,099, or $133,188 annually.
What is the difference between Medicare and Medicaid?
Medicare is a health insurance program that primarily covers seniors aged 65 and older (and disabled individuals of any age) who qualify for Social Security. Medicare is an entitlement program, and as such is not “means-tested”, but is instead based on an individual’s work history. An individual’s assets and/or income are irrelevant to qualifying for Medicare. Anyone who works 10 years or longer at a job that pays Medicare taxes will generally qualify for Medicare. Medicare generally does not cover long-term care.
Medicaid is a health insurance program that is designed to help cover medical costs for people with limited income and financial resources. Medicaid is “means tested”: An individual must have limited resources (assets) and income in order to qualify for Medicaid. Medicaid generally does cover long-term skilled nursing care. Note: In Pennsylvania, Medicaid funding is referred to as “Medical Assistance.”
Why do I need Medicaid?
The most obvious reason for the importance of Medicaid qualification is that it is the only ongoing source of public assistance to pay for the costs of long-term care; and that once an individual qualifies, the Department of Human Services – the agency that administers Medicaid in Pennsylvania – generally covers all of the costs of long-term care throughout the individual’s lifetime (assuming the individual continues to qualify for Medicaid for the rest of his/her life). Another reason that Medicaid qualification can be critically important to applicants and their families is that it limits the nursing homes’ right to collect from others for services rendered to a nursing home resident. In other words, as a condition to the nursing home’s right to receive Medicaid funding from the Commonwealth of Pennsylvania, the nursing home cannot also collect against a qualified Medicaid applicant or members of the applicant’s family.
How do I qualify for Medicaid?
In general, a number of requirements must be met in order for an applicant to become eligible for Medicaid to pay for the applicant’s long-term care. They include requirements pertaining to an applicant’s categorization, citizenship, state of residence, health status, and financial state. Among the most important of these requirements are those pertaining to an individual’s medical condition and financial circumstances.
See also: How Do I Qualify for Medicaid?
Also, a more detailed analysis can be found here.
What is the 5-year look-back period for Medicaid?
A look-back period meant to prevent Medicaid applicants from giving away assets or receiving less than fair market value in order to meet Medicaid’s asset limit. All asset transfers within the look-back period are reviewed by the Department of Human Services. Any transfer over $500 in a month is deemed completed in anticipation of qualifying for Medicaid. This presumption applies regardless of amount or recipient. This presumption can be overcome by providing reason and documentation for each potential violation. More details on the 5-year look-back period can be found here: What Is the 5-Year Look-Back Period for Medicaid?
My loved one is already in a nursing facility. Is it too late to preserve assets?
No. The federal government passed the Spousal Impoverishment Act in 1988 that allows the community spouse to retain up to $137,400 of the family assets along with some excluded assets such as the principal residence and a vehicle.
Additionally, the federal government has provided other programs that allows families to use Medicaid Compliant Annuities to preserve assets. Each individual situation will be unique and is best discussed with an experienced Elder Law attorney.
Does a nursing facility resident on Medicaid receive the same quality of care as a private pay resident?
Medicaid recipients are entitled to the same quality of care as other residents. Nursing homes are not required to accept Medicaid residents, but if they do, they must agree not to discriminate against residents based on how they are paying.
A nursing home that accepts Medicaid cannot evict residents solely because they qualified for Medicaid (although it can refuse to accept more Medicaid patients once the number of Medicaid patients reaches whatever the facility has set as its maximum).
Should I transfer my home to my child?
Note: Each situation is recommended to involve an experienced Elder Law attorney.
When a Medicaid applicant has transferred any asset without receiving reasonable compensation, the transfer will be considered a gift. The Medicaid applicant will be subject to an Ineligibility Period based on the value of interest transferred. Given that the primary residence is an exempt asset, up to a limit of $603,000, there may not be a need to transfer the home to a child or add them as a joint owner.
Should I have my child co-sign on my bank accounts?
If you would like the convenience of having one of your children co-sign on your bank account, it may be a good option. However, you should be aware of how this asset will be treated by Medicaid. The Medicaid program assumes that any account which is jointly titled with a non-spouse will be available for the Medicaid recipient to spend on care. There is a presumption that the purpose of adding a joint owner is to avoid having to spend down that account to become Medicaid eligible. If the account can be proven to be funded solely by the owner not seeking Medicaid eligibility then it may be considered unavailable.
You should also be aware that the co-owner will inherit the account at your death. If that account is needed for estate administration or should be split among multiple heirs, the account will be unavailable for those purposes. Consulting with an experienced Elder Law and/or Estate Planning attorney can help identify and rectify these issues.
What can I do to protect my assets from long-term care costs?
Each situation is unique. Techniques for asset protection include spending down assets, using Family Caregiver Contracts, converting assets into exempt resources, using trusts, re-titling assets, and more. See more information here or contact one of our Elder Law attorneys.
Do I need long-term care insurance?
Maybe. A long-term care insurance policy helps to cover costs of care that a policyholder requires when they have a chronic medical condition, disability or disorder. The policy can help pay for services provided in the policyholder’s home, an assisted living facility or a nursing home. Regular health insurance will not cover long-term care and Medicare will only cover limited amounts of skilled nursing care. A long-term care policy will help the insured pay when no other insurance plan covers the needed services. The alternative is to privately pay for the needed services until the person reaches the eligibility point for Medicaid. However, this will be after the vast majority of available assets have been exhausted by medical bills. More details can be found here: Long-Term Care Insurance: The Basics
Why do I need an elder law attorney?
Elder Law attorneys have experience with a myriad of elder law issues, most of which involve a complex system of governmental regulations. As the older population becomes larger due to the Baby Boomer generation, the area of Elder Law increases in importance as more people are seeking to preserve their assets or apply for Medicaid.
Elder Law attorneys are well-versed in navigating Medicaid issues, estate planning and asset protection considerations, social security, guardianships, and more. Nearly 75 percent of those turning 65 will require long-term care in their lifetimes, and the costs continue to rise. Knox Law's Elder Law group is experienced with helping clients use tools to preserve and protect the wealth that has taken a lifetime to earn and still receive the appropriate level of medical care required.
When should I start planning for long-term care issues?
It is never to early to consider planning for long-term care issues. Seniors who safeguard their assets before skilled care is imminent feel much more protected and secure than those who wait until it is too late. By arranging to preserve your assets now, you can minimize your costs later. Planning will give you peace of mind that you have protected your family.
What happens if I become incapacitated?
It is important to have an executed Durable General Power of Attorney that names a trusted Agent to serve on your behalf in the event of incapacity. Ensuring that the Power of Attorney has the "Durable" designation allows the Agent to continue managing your finances if you need help in the short or long term. The Durable General Power of Attorney is a vital piece of any estate plan along with a Last Will and Testament and Healthcare Power of Attorney. Our attorneys can help you explain the importance of these estate planning documents and ensure your Agents and wishes are accurately represented.