Long Term Care - Chapter 4

A. Medi-Cal, within the state of California, is a joint program and it is supported equally with both federal and state funding. Medi-Cal is California’s version of Medicaid. Medicaid is a joint program of the federal and state governments supported by the taxpayers, and it is available to those with little income and few assets.

A. Medi-Cal pays for health care and also provides long-term nursing care for residents of California who meet the strict criteria and eligibility requirements. Medicaid/Medi-Cal pays for physician-approved hospital, medical, prescription drug and nursing home charges. Coverage is required for Inpatient hospital services (except for tuberculosis or mental diseases):

• Inpatient hospital services and rural health clinic services;
• Laboratory services and X-rays;
• Physicians’ services provided in a doctor’s office, hospital, skilled nursing facility, at the patient’s home; or medical and surgical services furnished by a dentist where state law permits either doctors or dentists to perform such services,
• Skilled nursing facility (SNF) care for individuals 21 or older (except for tuberculosis or mental disease),
• Limited home health-care services, and
• Transportation to medical facilities.

A. Medicaid does pay for certain types of long-term care, but primarily only in skilled nursing facilities. Medicaid does not cover custodial home care, personal care, or community-based services. Medi-Cal covers the basic medical and assisted-living costs of the poor. Medi-Cal, like Medicaid, requires that people have very few assets to qualify. Eligibility for long-term care in a skilled nursing facility is generally covered under Medicaid/Medi-Cal when the individual:

• Has personal income and assets under the Medicaid/Medi-Cal financial limits;
• Cannot perform at least two of six activities of daily living (ADL’s), not including ambulation (walking).

A. Medicaid represents the single largest expenditure by the states for long-term care, while one of three Medicaid dollars goes toward long-term care.

A. Yes! The Medicaid law looks at all assets of both spouses when one spouse needs nursing home care.

A. Prenuptial agreements are not binding on Medicaid eligibility questions.

A. When you are legally married the spouse will be responsible for all costs until the couple’s estate meets Medicaid spend-down rules.

A. Assets that exceed the ceiling must be spent down on the institutionalized spouse’s care.

A. The following changes implemented:

• The look-back period, once 36 months has been increased to 5 years (60 months); the new asset transference rule applies a waiting period to qualify if money or property was transferred within five years of applying for help.
• The timing of the disqualification period is now changed to the date of admission to the nursing facility forward,
• The purchase of annuities will disqualify Medicaid eligibility unless the state is named as the remainder beneficiary.
• Home equity exceeding $500,000 will disqualify Medicaid eligibility under the new bill.
• The community spouse will not be allowed to keep excess resources because income will not be attributed before assets, and the purchase of a life estate in a home by way of promissory notes and loans results in disqualification.

A. The term “qualified long-term care services implies necessary diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services and maintenance or personal care services;

• As required by a chronically ill individual,
• As provided pursuant to a plan of care prescribed by a Licensed Health Care Practitioner.

A. A provision was implemented that disqualifies, from Medicaid-paid care, those who have transferred assets to others in order to qualify for Medicaid within five years of needing care.

A. It is intended for the express purpose of eliminating many of the Medicaid-planning loopholes that have been used for years by those wishing to avoid using their assets to pay for their long-term care.

A. By the year 2050 the number of Americans with dementia could hit 16 million bankrupting not just families, but the health care system as well, according to the Alzheimer’s Association. Because of the stupendous costs of nursing home care and government dependence our Medicaid system is already overburdened.

A. Because care is so expensive more than half of nursing home residents end up qualifying for Medicaid assistance either immediately or in a few months after they’ve burned through their savings and/or the alternative funds provided for long-term care. Most states require nursing home residents to spend virtually all of their assets down to $2,000 before they can qualify. Married couples have higher asset allowances as long as one spouse is healthy enough to remain at home.

A. A growing number of companies that run assisted-living or nursing homes are offering an array of non-medical services to seniors who want to remain in their houses.

A. Non- medical services include trained caregivers, personalized care plans, which include tasks such as bathing and dressing, activities designed to stimulate the mind, such as, memory games and art projects.

A. Some distinctions between assisted-living facilities and nursing home facilities are the levels of care. A nursing home is an entity that provides skilled nursing care and rehabilitation services to people with illnesses, injuries or functional disabilities. Not just for the elderly, some nursing home facilities provide services to younger individuals with special needs, the developmentally disabled, mentally ill, and those requiring drug and alcohol rehabilitation. Whereas assisted living facilities are for people requiring assistance only with activities of daily living. These people live as independently as possible for as long as possible.

A. Many facilities accept only private pay, although some states offer assistance with payment, such as Medicaid, or a comparable plan.

A. A continuing care retirement community is often connected with assisted-living facilities, with independent living residencies and nursing homes.

A. Medicaid pays for certain health services and nursing home care for older people with low incomes and limited assets. Medicaid pays for some long-term cares services at home and in the community. Who is eligible and what services are covered vary from state to state. Most often, eligibility is based on your income and personal resources.

A. The term “qualified long-term care services” refers to services that are necessary diagnostic, preventive, therapeutic, curing treating, and mitigating and rehabilitative services, and maintenance or personal care services.

A. Yes. In order to avoid a recovery against the home the title must be removed from the Medi-Cal recipient names prior to their deaths.

A. It takes up to 45 days for Medi-Cal to process and application. If anything is not completed correctly, or even if Medi-Cal loses the form the process must start over.

A. The assets and property tests that apply to Medi-Cal specify that a single individual cannot have more than $2,000 of available, non-exempt real and personal property: for a couple, that amount is $3,000.

A. Exempt property is property that does not count as an asset under the property tests.

A. Yes. People on public assistance or Supplemental Security Income are automatically eligible for Medicaid.

A. No. Medi-Cal does not have any restrictions as to marital status, age, disability or veterans status. It also does not discriminate as to sex, religion, race, color or national origin.

A. Medicaid/Medi-Cal pays for physician-approved hospital, medical, prescription drug and nursing home charges. All states are required to cover:

• Inpatient hospital services (except for tuberculosis or mental diseases).
• Outpatient hospital services and rural health clinic services.
• Laboratory services and X-rays.
• Physicians’ services provided in a doctor’s office, hospital, skilled nursing facility, at the patient’s home
• Medical and surgical services furnished by a dentist where state law permits either doctors or dentists to perform such services.
• Skilled nursing facility (SNF) care for individuals 21 or older (except for tuberculosis or mental disease).
• Limited home heal-care services.
• Transportation to medical facilities.

A. Medicaid/Medi-Cal allows the spouse who does not need long-term care to keep a certain amount of income and assets to keep that person from becoming impoverished.

A. The spouse who does not need long-term care, that person (called the “community spouse”) could keep half the couple’s combined assets, form a minimum of $19,020 (called the “floor”) to a maximum of $99,540 (called the “ceiling”).

A. Yes, the advantage of qualifying for Medicaid is that your long-term care costs will be paid for by Medicaid.

A. The disadvantages include, but are not limited to:

• Accepting Medicaid benefits opens your estate to state recovery of benefits at your death.
• Eligibility for Medicaid by divesting assets means loss of control of your assets.
• Depending on the method of qualifying, additional tax liability or other undesirable consequences may follow.
• As of 1997, knowingly disposing of assets to qualify for Medicaid is a federal crime.

A. Yes, there are several programs for in-home and community care available to Medi-Cal beneficiaries. These include:

• Personal Care Services Program
• In-Home Supportive Services
• Multipurpose Senior Services Program

A. The care must be “restorative” and physician-ordered. If not, the individual must pay all costs for any care that is provided at the skilled-nursing facility.

A. Applying for Medi-Cal has its own set of challenges. There is a huge packet of forms to fill out, and it has to be done perfectly. Medi-Cal wants to know everything about you. They ask about your bank accounts, property, stocks and bonds, jewelry, and burial plans. Medi-Cal carefully reviews your financial history.

A. It takes up to 45 days for Medi-Cal to process the application. If anything is not completed correctly, or even if Medi-Cal loses the form, you have to start all over. You cannot send a copy of the application an entire original new form has to be resubmitted.

A. More than 40 percent of long-term care costs in the United States are paid for by Medicaid/Medi-Cal. That may be because many individuals consider Medicaid a last resort for financing long-term care. People would prefer to have the government pay their long-term care expenses if it becomes necessary. When the actual benefits are provided the recipient may realize too late that the bargain was not all it appeared to be.

A. People who have more assets than Medicaid/Medi-Cal allows must spend those assets down on their own care before they can qualify.

A. In the past, many people gave their assets away or transferred title to family members so that they would not have to spend virtually everything they had on long-term care.

A. The government severely restricts this practice and has become very vigilant in tracking such transfers down. There are also severe penalties for people who intentionally transfer assets to fraudulently collect these government benefits.

A. The first major provision of the Deficit Reduction Act of 2005 makes it much more difficult for Americans with significant assets to use estate planning techniques to qualify for long-term care services. Specifically, the new law changes Medicaid’s transfer-of-assets rule by extending the look-back period from three to five years and by denying Medicaid coverage of nursing home care to any person with home equity exceeding $500,000(some states may elect an amount up to $750,000)

42. How does the Deficit Reduction Act of 2005, this very important piece of legislation, provide Americans with a new tool to protect their nest eggs and plan for financially secure retirements?

A. The Deficit Reduction Act also allows for the expansion of the public/private LTC partnership product beyond the fours states in which it is currently available (Connecticut, California, Indiana and New York as of April, 2005).

A. The provisions will allow a new qualified long-term care insurance contract to qualify as a partnership if it includes minimum inflation protection and meets other standards identified in the law. Also, owning a partnership policy will allow the policyholder to qualify for Medicaid, once partnership policy benefits are exhausted, without needing to spend down all of his or her assets.

A. The American Council of Life Insurers (ACLI) helped to shape the provisions of the partnership product, but the partnership has now moved to the Department of Health and Human Services (HHS) to set some parameters.

A. Several programs for in-home and community care are available to Medi-Cal beneficiaries. These include the Personal Care Services Program, In-Home Supportive Services and the Multipurpose Senior Services Program.

A. Personal Care Services Program provides chore worker and personal care services at home for those who are eligible. Personal care includes assistance with bodily hygiene, personal safety and activities of daily living.

A. In-Home Supportive Services provides non-medical services to eligible aged, blind and disabled people who are unable to remain in their homes safely without this assistance. Services include menu planning, meal preparation, cleanup, laundry, heavy cleaning and shopping.

A. The Multipurpose Senior Services Program is a case management program that links older people who are eligible for Medi-Cal and who need placement in a nursing home with various health and social services in their community.

A. For information on Medi-Cal, including eligibility guidelines, specific income and asset limits, and special programs, contact the county Department of Social Services.

A. Personal assets account for 51% of all assisted care expenditures. Medicaid accounts for 41% of expenditures on assisted-care while long-term care insurance is specifically designed to pay for assisted care.