The attached slide show illustrates Medicare and Medicaid programs and planning strategies in Rockland County, New York as of February of 2011, and may be construed to be Attorney Advertising.
1. Attorney AdvertisingMedicaid Planning& Medicare Benefitsin Rockland County, New York Daniel Timins and Michael LaMagna. Timins & LaMagna, LLP 399 Knollwood Road, Suite 300 White Plains, New York 10603
7. Types of SNTs FIRST PARTY:The Beneficiary’s money is used to fund the Trust Upon death trust funds MUST be used to pay back Medicaid before remaining funds are transferred to desired contingent beneficiaries Individual Trusts: The individual’s excess assets and “spend down” income can go into this Trust To avoid Transfer Penalties (1) the funding Beneficiary must be under 65 years old, (2) individual must be “Disabled” under Social Security Laws, (3) must be established by a parent, grandparent, legal guardian or court order, and (4) there MUST be a payback provision to Medicaid Pooled Trusts: Available to people who are over 65 and have no one to establish the Trust (#3 above) THIRD PARTY:An outside individual’s money funds the Trust Upon the Beneficiary’s death any remaining funds go to the contingent beneficiary NO Medicaid Payback is required (because the Trust was never the Beneficiary’s property) HOWEVER, a Spouse cannot avoid support obligations
10. Income Only Trusts (a “Medicaid Qualifying Trust”) These Trusts are used to distribute income or hold property (including a primary residence) in Trust to avoid Medicaid from attaching assets The Creator chooses the residuary beneficiaries The Creator can be the recipient, spouse, the recipient’s Power of Attorney or an Administrative body The Beneficiary and his/her spouse can ONLY receive income (NO principal) from the Trust The 5 Year Lookback DOES apply if the recipient needs nursing home care, so these may not be a good idea if Nursing Home care is imminent The Trust is Irrevocable / cannot be amended
11. What About the “Well” Spouse? The “Community Spouse” is entitled to some assets and income, but they are limited If spouse is in a Nursing Home: $2,739 of income per month $74,820 - $109,560 of resources If spouse has Home Care: Combined income of `$1,120 per month During the Medicaid Application process the well spouse may exercise a “Spousal Refusal” to avoid inclusion of his/her assets and income Medicaid may accept this, but will have a claim against the well spouse when he/she dies
12. Things to Remember If a Trust is created it is essential to have future gifts / estate transfers go to the TRUST Example: Father dies, leaving funds to disabled daughter Dora in Dora’s name, NOT her SNT Dora is now over Medicaid’s $13,8000 limit and is taken off Medicaid. His Will should have left his estate to “The Dora Supplemental Needs Trust” If a person is on SSI they automatically qualify for Medicaid (the person still needs to apply to DSS for Medicaid) Several other exceptions and exemptions exist If DSS denies you Medicaid you are entitled to a “Fair Hearing” in front of an administrative law judge Plan early: New York has some of the most favorable Medicaid benefits, but many require time and planning Hire an Attorney: This is tough stuff! There are multiple pitfalls, and many exceptions to the rules presented here. Mistakes cost time and valuable money; you will usually make back the legal fees in 1-2 months of benefits
13. Medicare: Part A PART A - Inpatient Hospital Care (Only) What is Covered? Operating expenses, Semi-private room and meals, Nursing services, Social services, Use of hospital equipment, Rehabilitation services, Diagnostic testing Skilled Nursing Facility for up to 100 days Physician must certify rehab is needed for a hospital treatment in last 30 days There is an ~ $130 per diem charge for day 21 – 100 Home Health Care Pays for full cost up to 100 home visits, but MUST occur after a hospital or skilled nursing facility stay Recipient MUST be confined at home PART B may cover additional expenses What is NOT covered? “Luxury” and Elective surgeries Most services performed outside of US Procedures performed in federal facilities
14. Medicare: Part A How is coverage calculated? Covers hospital expenses for up to 90 days for each “benefit period” (spell of illness) A “benefit period” ends only AFTER recipient has been out of a hospital OR skilled nursing facility for 60 consecutive days At that time a new benefit period begins First 60 days of benefit period are paid in full with an ~ $1,000 deductable Next 30 days of benefit period are paid in full with an ~ $260 coinsurance charge for EACH day Also, there is an additional 60 “lifetime reserve days” over an individual’s lifetime Recipient can choose when to use these days Example: Gertrude goes into the hospital for 45 days, goes home for 2 weeks, and returns to the hospital for 80 days. Gertrude’s 125 days of hospitalization will be considered to be within one benefit period because there was not a gap of 60 days between hospital visits. She is covered for 90 days under this benefit period and in addition, if she chooses, Gertrude has also used 35 of her lifetime reserve days (leaving her with only 25 more during her lifetime). 90 Days + 35 Days = 125 Days.
15. Medicare: Part A Eligibility for PART A (I.e. at NO cost) (1) Everyone aged 65 and older who is receiving a monthly Social Security retirement benefit (including survivor’s benefits), or (2) People aged 65 and over who have deferred receiving Social Security retirement benefits (must apply for Medicare; others in “pay status” are automatically enrolled), or (3) 65 year old civilian employees of the federal government who did not elect into the Social Security system under the 1983 law, or (4) People who receive or are eligible to receive railroad retirement benefits, or (5) Any spouse aged 65 and over of a fully insured worker who is at least aged 62 What if I am not eligible for PART A? You have to pay for it! If insured worked for less than 30 quarters of his or her life: Can voluntarily enroll by paying premiums of approximately $400 per month Premium can increase monthly If insured worked between 30 and 39 quarters of his or her life Can voluntarily enroll by paying premiums of approximately $240 per month Premium can increase monthly Any person enrolled in PART A can enroll in PART B for ~ $95 per month Enrollment in PART A and PART B is automatic at age 65 If you do not want PART B you must reject it in writing within 2 months of receiving Medicare Notice
16. Medicare: Part B PART B – Supplemental Medical Insurance What is Covered? Physician and Surgeon fees, Diagnostic tests in hospitals and Dr. offices, Physical or occupational therapy, Radiation therapy, Medical supplies and devices, Ambulance service, Pap smears and one yearly mammogram, Flu and pneumonia vaccinations, Emergency room care, Drugs that CANNOT be self-administered What is NOT covered? Custodial care, routine physical, eye & hearing exams and tests, Eye glasses and hearing aids, Routine foot care and orthopedic shoes, Immunizations, Cosmetic surgery ,Dental care & dentures How is coverage calculated? PART B pays 80% of approved medical expenses after an ~ $150 annual deductable
17. Medicare: Part C PART C – Managed Care Under Medicare Participants can elect to have Medicare benefits provided by a managed care plan I.e. an HMO, PPO or insurance company (but MUST use a preferred provider unless an emergency) The Participant still pays PART B premiums, and usually pays more for PART C… …BUT deductibles are usually eliminated and copays are lowered to reasonable amounts A Medigap policy may not be necessary (because coverage is often redundant) Benefits must be at least equal to (and sometimes better than) those available under Medicare Additional Benefits: Prescription drugs Eyeglasses and hearing aids routine physical exams
18. Medicare: Part D PART D – Perscription Drug Benefits You MUST have PART D unless you have supplemental health insurance A voluntary program available to all people entitled to PART A and enrolled in PART B Run through private plans that develop a list of covered drugs Plans do NOT need to cover EVERY prescription drug… …BUT must cover at least TWO in each therapeutic category and class Premium is approximately $50 per month (depending on the chosen plan) Costs and Coverage: Annual deductable = ~ $250 After deductable Plan pays 75% of next $2,000 of prescription drug costs covered by the plan Benefits then CEASE until total drug costs reach ~ $5,100 Plan then pays for 95% of all additional drug costs This means that you have to pay $3,600 ($250 + ($2000 x 25%) + $2,850) out of pocket BEFORE you reach 5% prescription copays
19. Final Comments “Planning” is best done in advance (1) Fixing problems in the future may cost 5x as much as completing the process earlier. (2) Benefits are subject to change in the future Coordinate designing an Estate Plan with any Medicaid Planning Well crafted Powers of Attorney and Health Care Proxies avoid future Guardianship Proceedings Ask you doctors if they accept Medicaid (some don’t), and treat them kindly – a doctor is your greatest asset for receiving government benefits Choose the correct Medicare Part C program based on your physician’s insurance participation Apply for SSI/SSDI and Medicaid correctly the first time ~70% of Medicaid applications are denied the first time because the desired recipient makes an avoidable mistake “Fair Hearings” are expensive, sometimes time consuming, and are opposed by SSA & DSS When possible, include spouses, parents and other potential donors in the process Spousal participation allows the “well” spouse to feel like a husband/wife and not a caregiver Parental participation allows continued program benefits in addition to eventual estate distributions Consider letting children know your desires (but not always) Figure out people you trust to determine your fiduciaries and future caregivers