October 2008 "New Medicaid Rules Aggravate Long-Term Care Crisis"
PLANNING FOR WEALTH & SECURITY
By attorneys Jennifer & Jeff Hawkins
NEW MEDICAID RULES AGGRAVATE LONG-TERM CARE CRISIS
The Indiana Family and Social Services Administration (FSSA) has proposed rules that will crush many honest Hoosier families’ hopes of passing inheritance to their children after December 1 this year. FSSA is responsible for the Indiana Medicaid system that pays for most Hoosier nursing home residents’ health care. It is the same agency that is still trying to fix the publicity fallout of its messy privatization of the Medicaid system after it turned much of its responsibility over to an IBM-lead private contractor group.
Here are some scary statistics about nursing home care for context:
The FSSA determined this year that the average nursing home resident pays $4,456 per month, or $53,472 per year to live in a nursing home. According to records of the National Center for Health Statistics and the U.S. Census Bureau, more than 1 out of 20 of people over 65 years old lived in nursing homes in 2003-04. The same national records indicate that the nursing home admission rate jumped to more than 1 out of 10 for people over 75 years old.
The proposed rules properly cause Indiana to comply with federal requirements passed by congress almost 3 years ago such as:
Stretch to 5 years how far back in time you must report gifts that you made (Christmas, birthday, graduation, anniversary, etc.).
Eliminate allowances for small gifts (even $10 Wal-Mart gift cards must be reported).
All gifts during the 5 years before Medicaid application, regardless of how small, are added together as one big gift and the disqualification is 1 month (including fractional months) for every $4,456 of gifts.
Delay old folks’ disqualification for Medicaid until after they spend the rest of their money on nursing home care (that’s right, Medicaid waits until you are broke and incapacitated before it starts stiffing the nursing home).
Here are some of the really awful things that the new rules will do beyond the authority of federal law:
You can’t pay family members to take care of you or keep watch over your nursing home care unless you sign a written care contract before you get sick (a person with a POA cannot sign for you).
You can’t sell a farm to family on contract because the family must pay for the farm before you are expected to die (FSSA expects an 85 year old man to live 5.19 years).
You get no relief from Medicaid punishment if people return your gifts to you unless everyone returns all of your gifts.
THIS ARTICLE DOES NOT CONSTITUTE LEGAL ADVICE OR ESTABLISH AN ATTORNEY CLIENT RELATIONSHIP.
© 2008 by HAWKINS LAW PC, Estate, Trust & Business Attorneys. All rights reserved.