Protecting Seniors and People with Special Needs

HIPAA Release as part of Estate Plan in case of Long Term Care

Posted on May 25, 2017 by Jim Koewler — No Comments ↓

Last week’s installment (May 19, 2017) discussed everyone should include a HIPAA Release as part of an estate plan in case of emergency. This week’s installment will discuss the importance of a HIPAA Release when someone needs long term care.

As mentioned last week, a HIPAA release allows a person’s health care providers to share private health information with whomever is named in the HIPAA release. Also as discussed last week, the person’s health care providers may not feel able to share such information even with the person’s Health Care Agent until the patient is unable to make decisions for himself/herself. (Remember, the Health Care Agent is the person appointed in a Health Care Power of Attorney to make health care decisions when the patient, called the Principal for purposes of signing the HIPAA Release.) Fortunately, or unfortunately, the privacy requirements also apply to long term care providers.

The applicability of the HIPAA’s privacy requirements to long term care providers is fortunate because we all should be able to keep our health information private and to expect our providers to keep it private as well. It helps us maintain our dignity (even in the face of the frequent indignities that accompany long term care.)

On the other hand, the applicability of HIPAA’s privacy requirements to long term care providers is unfortunate because it sometimes keeps concerned family members out of the loop. In fact, sometimes long term care providers use the privacy requirements to stifle pushy family members. Concerned family members can (and should) ask questions about a loved one’s care. Concerned family members should try to participate in the quarterly care conferences required for people receiving long term care.

However, when the staff gets tired of the family member’s pushiness, the staff can invoke the HIPAA privacy requirement to explain the need to stop sharing information with the family members. A member of management might apologize for the inconvenience and for the inadvertent sharing of information in the past (“until we realized our mistake.”) Nonetheless, the staff might suddenly invoke the privacy requirements to exclude the pushy family member from care conferences and maybe even day-to-day discussions of the loved one’s care and condition. The staff might even invoke the privacy requirement against a Health Care Agent if the Principal (the loved one receiving care) hasn’t been legally deemed incompetent.

The staff’s real goal might not be adherence to the privacy rules but might be extricating themselves from someone they consider a bother. It may not be fair. It may not be right. Yet, caregiving staff has a tough enough job. Shutting down someone they deem an interference might bring them a little relief. (Not everything that we like or want is fair to others.)

So, people who want their family members and or friends to be able to advocate for them in long term care should execute a broad blanket HIPAA release as part of an estate plan.

HIPAA Release as part of Estate Plan in case of Emergency

Posted on May 19, 2017 by Jim Koewler — No Comments ↓

Powers of attorney are part of a well considered estate plan. Powers of attorney, both “general” powers of attorney and health care powers of attorney, help the principal (the person who signs the powers of attorney and extends his/her authority to someone else) prepare for a time when the principal might not be able to handle his/her own affairs. The principal might have an accident of some sort leaving him/her unconscious, or the principal might suffer from dementia late in life. In any such instance, powers of attorney can put someone in the position to speak for the principal and make decisions when the principal can’t.

A comprehensive estate plan should also include a blanket HIPAA release. HIPAA, the Health Insurance Portability and Accountability Act of 1996 created the health information privacy requirements for providers of health care services. HIPAA’s privacy rules prohibit health care providers from sharing patients’ private health information with anyone whom the patient has not authorized to receive such information.

Now, the agent appointed in the principal’s health care power of attorney is generally considered to be authorized to receive the principal’s private health information when the principal is deemed not able to handle his/her own affairs. That makes sense. We wouldn’t want a health care agent making health care decisions without knowing the principal’s health care situation. That would be dangerous.

Some people believe that the health care agent doesn’t have the right to receive the principal’s private health information until the principal cannot speak for himself/herself. That situation concerns me. What if, as in my example above, the principal is unable to speak for himself/herself because of a car accident or for some other sudden reason? That principal needs health care decisions made in an emergency. Now, of course, emergency medical providers will provider the medical care necessary to deal with the emergency. However, what if the principal has some non-obvious medical condition that the emergency personnel need to know? If the agent has not been able to receive the principal’s health information, then no one might be able to warn the emergency personnel about the principal’s unusual condition.

Of course, the agent might not be available in an emergency situation because the emergency personnel will probably not be able to look for the agent (or even a health care power of attorney document) while trying to attend to the principal’s emergency. Health care professionals won’t withhold emergency treatment while looking for the health care agent. Emergencies don’t usually lend themselves to waiting for legal niceties.

In the aftermath of the emergency, though, medical providers will want permission from the principal or the health care agent to provide follow-on care. This follow-on care will not be “emergency,” but it may be pressing. Because of whatever created the need for emergency care (like a fall, an accident, or a stroke, for example,) the principal may not be able to make a decision or may not be able to communicate his/her decision on health care matters. As a result, the agent may need to make these decisions and, in some circumstances, may need to make these health care decisions quickly. When time is of the essence in a health care setting, I’d hate for the principal’s care to wait while the agent learns for the first time about the principal’s potentially complicated health conditions.

So, I prefer that the principal have thought ahead about the possibility of such an emergency. I prefer that the principal have created a broad HIPAA release to allow the sharing of health information to the agent and the successor agents named in the principal’s health care power of attorney.

In addition, the principal might want to include others that might be involved with the agent at the time the principal needs care, such as the family attorney or an elder law attorney, or a member of the clergy.

Elder Law Attorney Dilemma

Posted on May 11, 2017 by Jim Koewler — No Comments ↓

Sorry for my long absence. I have been deluged with client files coming back from the Medicaid agencies after months of the agencies’ inactivity after a huge computer snafu. Unfortunately, I can’t promise that I will return to my weekly schedule steadily. There is a bit of a secondary backlog of newer applications that has built up as the Medicaid agencies, the applicants, and their attorneys deal with the pre-computer-snafu backlog. Still, for the first time in weeks, here is a new installment of the Protecting Seniors News blog.

What is an elder law attorney’s obligation to the emotional well-being of a client? What does an elder law attorney do after discovering information that might “break a client’s heart” when the client is emotionally vulnerable? Does it matter that the emotionally-charged information has no impact on the legal services?

Before going further, I must give a little background on elder law attorneys. Elder law attorneys talk amongst themselves. We talk amongst ourselves a lot. Elder law attorneys, especially those who focus on long term care issues, know each other and, generally, like each other. In addition, there aren’t many of us. We all face the same or similar issues with our clients and all must navigate the same ever-changing terrain of long term care regulations, health care provider contracts, and family dynamics. We turn to each other as sounding boards, as confidants, and as supporters. In this vein, an elder law attorney sometimes turns to colleagues for ideas on how to handle thorny situations.

One of these thorny situations fell into the lap of an attorney who helped a client qualify for Medicaid so she could move into a nursing home. She had been disabled because of a severe accident in her early 30s. Over time, her health deteriorated to the point that she was bed-bound for 8 years. Her husband worked 8-10 hours per day and then acted as caregiver for her the rest of the day. He also had a great deal of involvement in raising their children during the first years of his wife’s disability until the children were able to move out on their own. After 24 years, the couple sought help qualifying the wife for Medicaid to pay for her care. (They had mistakenly believed that nothing could be done to get her care without costing the couple all of their savings and income.)

The attorney helps her qualify for Medicaid and, at the same time, helps the husband save a great deal of their savings.

A few items of paperwork needed to be done as a follow-up to the Medicaid approval, and the attorney was working with the couple’s daughter. The daughter mentioned something about the husband’s girlfriend.

The attorney didn’t know what to do. The existence of a girlfriend had no impact on Medicaid eligibility. It had no impact on care for the disabled wife.

The attorney understood the husband’s loneliness. He had been more of a caregiver than a spouse for 24 years. At the same time, the attorney understood that the wife might want to know that her husband had not been faithful. Still, telling the wife might do nothing more than break her heart at a time that she already had a pretty bad life.

The attorney sought input from the wife’s social worker at the nursing home, and the social worker asked the attorney not to share the unfortunate information with the wife.

The attorney also sought input from two elder law attorney colleagues. One colleague agreed with the social worker and suggested keeping the information from the wife. The other colleague was concerned about the propriety of an attorney withholding information from the client.

I don’t think the attorney had any better idea of what to do after receiving advice from the social worker and the other attorneys. I’m not sure how I would handle such a sticky situation myself. I’m not sure that there is a good answer.

Medicare, Rehab, and “Failure to Improve”

Posted on March 13, 2017 by Jim Koewler — No Comments ↓

After a hospital stay, Medicare-covered people may need rehab to continue improving from the treatment that the hospital provided. (As discussed in the March 10, 2017 installment, the hospital stay must be at least three days and a full “admission” to the hospital.) In the past, as a way to save money, Medicare would cut off rehab for someone who wasn’t getting better (or wasn’t getting better fast enough.)

BUT, Medicare’s rules don’t allow for a cut-off of rehab for a failure to improve. Medicare got sued to stop using the “improvement” standard. A class action lawsuit was filed in 2011 in Vermont, Jimmo v. Sebelius (Kathleen Sebelius was the United States Secretary for Health and Human Services between 2009-2014.) Jimmo and the other claimants pointed out that the Medicare rules do not set restoration of the patient’s condition as the only goal of rehab. Instead, the rules specifically list the preservation of current capabilities and the prevention of further deterioration as alternate goals if restoration isn’t possible.

Now, restoration is listed in the rules as the goal of rehab when the patient is trying to recover from a malformed body part. Unfortunately, that restoration goal came to be applied to most or all rehab programs, not just to malformed limbs. Using a “failure to restore” the patient’s function test allows payment to be cut off earlier in the rehab process than would using a “preservation of current function/prevention of deterioration” test. Cutting off rehab earlier saves Medicare and its insurance affiliates save a great deal of money when rehab gets shut down early. As a result, bit by bit, most or all rehab patients came to be measured by their progress toward restoration of function, and when the patient failed to improve toward that goal, payment for rehab get cut off.

The Jimmo lawsuit forced Medicare to face its failure to follow its own rules. The Jimmo lawsuit didn’t go to trial but, instead, led to a settlement agreement that Medicare would stop improper use of the “restoration” standard and its “failure to improve” test for ending rehab payments. (The restoration goal still applies to malformed body parts.) The judge approved the settlement as a court order.

Unfortunately, years later, rehab providers and Medicare’s insurers are still applying the failure to improve standard. The Jimmo case went back to court to demand that Medicare follow the settlement agreement. (Based on the resulting court order, it appears that the judge is not happy with Medicare.) Under the new court order that adds to the original settlement agreement, Medicare must undertake an effort to educate the public that the failure to improve test does not apply.

To patients undergoing rehab, the Jimmo case is the basis to argue that rehab should not be ended. The proposed ending of rehab must come in writing with an explanation of the right to appeal. The Jimmo settlement is an argument to present in the appeal.

Unfortunately, many hearing officers are more familiar with the incorrect approach that “failure to improve” is a reason to end rehab than they are familiar with the Jimmo agreement. Appeals about the continuation of rehab may require the help of an attorney who works in Medicare or Medicaid.

Also, the Jimmo settlement does not get rid of the 100-day limit on Medicare payments for rehab. The 100 days of available rehab does not reset unless the patient can go 60 days without needing Medicare’s support for the health issue that led to rehab. If the family is concerned about the patient going 60 days without needing more medical help, the family may not wish to push the Jimmo issue too far. The family may wish to “save” some of the 100 days.

In summary, if a patient seems to be getting pushed out of rehab early and the patient or family wishes rehab to continue, argue that Medicare can’t cut off rehab for a failure to improve. Use the name “Jimmo,” so the care provider, insurer, or hearing officer can look for the agreement.

Medicare, Rehab, and Observation Status

Posted on March 9, 2017 by Jim Koewler — No Comments ↓

Rehab is expensive. No surprise there. Under the right circumstances, the person getting rehab care sees little or no cost. Under the wrong circumstances, the person getting rehab will get stuck with the entire cost.

Just to be sure we all understand, “rehab” is rehabilitation. An example of rehab is the effort to strengthen the legs after a knee replacement.

In our discussion today, rehab follows a hospitalization. Most often, rehab takes place in a nursing home or in a facility similar to a nursing home that has chosen to focus on rehab services. (There is a trend to rehab at home, relieving the insurer from the room and board cost of a care facility.)

To have Medicare or an Advantage Plan cover rehab, the patient must be admitted to a hospital for a three-day period immediately before the start of rehab. If such a hospitalization took place and the patient has Medicare, then Medicare will usually pick up the entire bill for the first 20 days of rehab and all but $165 of the costs for any additional days (up to 100.) The patient or supplemental insurance picks up the $165. If the patient has an Advantage Plan, the plan’s rules will control how the costs of rehab will be handled. (Ed. Note: The $165 amount was inserted on 3/20/2017 after receiving new information.)

Separate from rehab, hospitals have economic pressures to control who gets “admitted” to the hospital. If a Medicare-covered person is re-admitted to the hospital within 30 days, Medicare will penalize the hospital for the first hospitalization for not treating the patient’s malady adequately enough the first time that another hospitalization was needed. The penalty will be a reduction in the Medicare reimbursement for the first hospital stay.

Because the risk of this payment reduction, hospitals tend not to “admit” someone on Medicare if the hospital’s staff isn’t sure that the patient can be cured. Many chronic illnesses of older adults can’t be cured. Perhaps they can be treated, or perhaps the symptoms can be controlled, but the illness may not be curable. The lack of a cure creates a stronger likelihood of the need for more hospital care for the same person for the same medical needs. This risk of more care creates a high risk of a “readmission” for the patient. So, the hospital has a reason to look for a way to avoid admitting someone with an uncurable chronic illness or with symptoms that can’t be completely diagnosed.

Hospitals have started to use “observation status.” Observation status takes place in the hospital in a hospital bed in a hospital room and looks just like an admission to the hospital, but it’s not an admission. A person on observation is “outpatient” for billing purposes. Medicare is billed via Part B rather than Part A. Advantage Plans are billed via outpatient billing codes. But, the patient doesn’t see a difference.

If a patient goes from observation status to rehab, the rehab will NOT be covered by Medicare. Rehab in a nursing home or rehab center can cost $10,000 per month. Unfortunately, someone on observation status may not know that rehab won’t be covered by Medicare or an Advantage Plan until it’s too late.

So, a person on Medicare or an Advantage Plan who is in the hospital (or the person’s loved ones) needs to advocate for full admission to the hospital. When the patient goes into a hospital room (i.e., not in the emergency room any more,) ask if the patient is admitted or on observation status. (Just using the terminology will get the staff’s attention.) If not admitted, demand to know why. Demand to know how to get fully admitted Demand to be fully admitted. Talk to the hospital social worker. Talk to the nurses. Talk to the doctors. Talk to the patient ombudsman. Talk to anyone necessary to get a full admission. (It may not happen, but if you don’t try, it definitely won’t happen.)

Check again everyday. (Status can change at any time.)

Being an advocate isn’t fun (for most people,) but it may be necessary.

Be careful who helps you with Veterans Benefits

Posted on February 24, 2017 by Jim Koewler — No Comments ↓

The United States Department of Veterans Affairs has created a list of people and organizations that are allowed to help with VA benefits.

(Note: The Department of Veterans Affairs used to be called the Veterans Administration or VA before it was elevated to a Presidential Cabinet level department of the U.S. government. Many people, including me, still often call it the VA for short.)

The people and organizations are “accredited” by the VA to help with VA benefits. A list of VA accredited people is available on the VA’s website. (https://www.va.gov/ogc/apps/accreditation/)

Attorneys can be accredited. The are called accredited attorneys. People who are not attorneys can be accredited. They are called accredited agents. All people who get accredited must keep their training on VA benefits up to date to keep their accreditation.

In addition to the accredited attorneys and agents, a person can help someone apply for VA benefits once. Most often, these one-time helpers are children of the applicants.

In addition to accreditation requirements, no one (accredited or not) is allowed to charge a fee to help someone apply for VA benefits. Put another way, no one is supposed to accept money for help applying for VA benefits. The applicant isn’t supposed to have to pay. The applicant’s family isn’t supposed to have to pay. The applicant’s nursing isn’t supposed to have to pay. Plain and simple, it’s supposed to be free.

To be sure, certain people work for organizations that help veterans and their families apply for benefits, and, as employees, these people get paid. The organizations, however, don’t get paid to help with the applications. For example, in many states, certain state or local government employees are paid to help residents apply for benefits. In Ohio, we have county Veterans Services Commissions. These are government employees that receive a paycheck, but their pay does not depend on the number of people that they help. Similarly, many veterans organizations, such as American Legion, Veterans of Foreign Wars, and Disabled American Veterans, help with VA applications, but they do so at no charge to the applicant. These organizations are supported by donations and fundraisers that are completely separate from the help with VA applications.

There are some non-profit organizations set up to help with VA applications for Pension (more often called Aid and Attendance.) Such organizations can’t charge a fee. Some of them, though, explain that they expect a “donation” in return for help with the application. Is this “expected donation in return” a violation of the “no fee for application” rule? I’m not sure. Such a “non-profit” organization once offered to prepare my clients’ VA applications in exchange for a certain dollar amount donation per application. That offer didn’t pass my personal “smell test.”

Now, please remember that the VA Pension benefit is not available to an applicant whose wealth is over a certain limit. (The limit on wealth, comes from a complicated formula rather than a certain dollar figure, so I won’t go into detail on the wealth limit in this installment.) Certain non-profit often speak to residents of assisted living facilities about the Pension benefit, offering free help with Pension applications. Then, when a resident meets with the organization’s representative one-on-one, the resident is told that he/she has too much money to qualify. The residents who have too much wealth are then referred to someone who can help them become “poor enough” to qualify for the Pension benefit. According to the information I have received over the years, the referrals to help someone become poor enough to qualify are almost always to someone who offers to sell an annuity that the VA won’t count as “wealth” because the annuity has a long surrender period.

(Feb. 27, 2017 Ed. Note: I received a comment in response to this post from someone with the Academy of VA Pension Planners explaining that VA doesn’t care about a surrender period for an annuity. If the person can access the funds, the funds count as wealth in the eligibility determination. I admit that I don’t know whether the comment that I received is true or if the position taken by the annuity salesperson that VA won’t count an annuity with a surrender charge is true. BUT, I have witnessed an annuity salesperson claim that VA won’t count annuities with surrender charges. My concerns expressed below about such annuities if the owner would need Medicaid are great enough for me to dislike such an approach no matter VA’s position on them.)

Now, there is nothing inside current VA rules that indicates that a long surrender period annuity violates VA policy. If the person’s income and VA benefit cover his/her care costs for the rest of his/her life, then everything is fine. If the person’s care costs exceed the income plus VA benefit, problems can arise.

If the person needs to go on Medicaid to get all of his/her care costs paid, then the money placed in the annuity is now considered for Medicaid eligibility. (Medicaid doesn’t ignore annuities with a surrender charge the way that the VA ignores them.) The annuity will probably have to be cashed in, and the surrender charge lost, before the person can get Medicaid coverage. Depending on the age of the annuity, that surrender charge can be huge.

Many elder law attorneys help people who want to get VA benefits, and sometimes that help includes becoming “poor enough” to qualify for VA Pension (in the same way that elder law attorneys can help people become “poor enough” to qualify for Medicaid for long term care.) None of the elder law attorneys that I know use the “bait and switch” tactic that these annuity salespeople use. The elder law attorneys that I know do not get your attention with the “free” help with applications as a way to get your attention.

So, when considering VA benefits (especially VA Pension,) if you want help from someone who does many such applications, look for someone accredited and be wary of “free” help and of organizations that you’ve not heard of before that have official sounding names.

My thanks to Craig Hannus of Gateway Advisors in Mentor, Ohio for suggesting this topic.

My apologies for not posting last week. I did not have time to prepare something that I considered satisfactory.

ABLE Accounts for People with Special Needs

Posted on February 9, 2017 by Jim Koewler — No Comments ↓

ABLE Accounts seem to be here to stay.

ABLE stands for Achieving a Better Life Experience. ABLE Accounts are financial accounts through which someone with special needs can spend money for many things that will enhance the person’s quality of life.

In Ohio, where I practice, they are called STABLE accounts. The ST stands for State Treasurer. (A politician can’t help but put his/her name on something.) Oddly, Ohio is one of the leaders in the U.S. in making ABLE accounts available. Ohio is the first state to make them available

These accounts are “special” accounts for people who have disabilities. They receive favorable tax treatment and will not (in most instances) impact the person’s government income (SSI) and health (Medicaid) benefits. In exchange for the tax treatment and lack of impact on government benefits, these accounts will have a number of limitations, so the politicians’ words “enhance the quality of life” and the “better life experience” are bits of puffery.

To be sure, ABLE Accounts will be useful. In fact, there is one particular use of these accounts that is quite a big step forward. Still, despite the highfalutin words of Congress, an ABLE account is not a panacea.

I’ve discussed ABLE accounts before. The February 2, 2015 installment described the federal legislation that created the ABLE account. The April 17, 2015 installment discussed how an ABLE account can be used to help qualify for SSI (Supplemental Security Income) and for Medicaid.

THE BASICS

The person who owns the ABLE account must be disabled or have been disabled before age 26. There is talk of raising the age, but nothing has happened yet.

The person can have only one ABLE account. Not one per state per person – only one per person, nationwide.

Anyone can contribute to an ABLE account. The total of ALL contributions cannot exceed $14,000 per year. This number is pegged to the amount of a gift that does not trigger the requirement to file a gift tax return. As the gift tax exclusion goes up with inflation, so will the ABLE account maximum contribution amount. Unlike the gift tax exclusion, however, the ABLE account deposit isn’t on a per person basis. The maximum is per account per year, not per donor to the account. For example, if Dad deposits $14,000 into child’s ABLE account in January 2017, no one can give anything more to the account until 2018. Deposits are NOT tax deductible, though.

If an ABLE account holds more than $100,000, SSI will be shut off until the value falls back below $100,000. Medicaid will not be shut off, though. With a maximum contribution of $14,000 (unless interest rates really jump or the stock market takes off,) it will be seven years before any ABLE account gets to that amount.

Whatever is left in the ABLE account when the person dies will go to pay Medicaid first (up to the amount that Medicaid spent on the person.) If the person relies on Medicaid for health costs, he/she should not allow the ABLE account to accumulate.

Money in a ABLE account can grow tax-free. (It’s sort of like a Roth IRA that way. The initial deposit isn’t pre-tax money, but the growth of the money in the account is tax-favored.) In fact, if the contents of the ABLE account are spent on disability-related expenses, the growth isn’t taxed. If, though, ABLE funds are used to pay some expense that is NOT disability-related, there’s a 10% penalty on that expenditure. It’s important to take great care when spending ABLE funds.

Ohio’s STABLE account can be invested in mutual funds or in a checking account. There are different mutual fund choices to allow for aggressive investors or cautious investors. (Remember that the ABLE account is a Medicaid-payback account, so these mutual fund options are attractive only to someone who is sure that he/she will NOT rely on Medicaid for care. I suspect that only a few people who are eligible to open ABLE accounts can fairly expect not to use Medicaid.) Because of the likelihood that many or even most people may come to depend on Medicaid during their lifetimes (becuase of the likelihood of people needing long term care,) I cannot stress how bad an idea it seems to allow an ABLE account to accumulate above one’s near-term needs. (Use, if possible, a Wholly Discretionary Trust if trying to allow accumulation of the money.

An ABLE Account is going to be almost as easy to use as a checking account. It can have a debit card as well. Because expenditures from the ABLE account lose their protection if not made for “disability related expenses,” avoid the debit card. The debit card is a mistake waiting to happen.

THE MOST IMPORTANT USE OF AN ABLE ACCOUNT

An ABLE account can be used to pay for housing.

That may not seem important, but it is.

Supplemental Security Income (SSI) is the source of income for a great number of people who are disabled before age 26 (the age by which someone must be disabled to qualified for an ABLE account.) An SSI recipient over age 18 can have his/her payments be reduced if the recipient receives help paying for housing. That reduction can be up to a third of the SSI payment that the person could otherwise receive.

People who are disabled as children tend to live with Mom and Dad for most or all of their lives. Mom and Dad may be well to do, living in an expensive house. The fair market rent to live in an expensive house can easily exceed one third of the maximum SSI payment, $245. (The maximum SSI payment for 2017 is $735.) For that matter, the fair market rent to live in an expensive house can easily exceed the entire SSI maximum of $735. The SSI recipient doesn’t have enough SSI income to pay fair market rent, so the SSI payment gets reduced.

Mom and Dad (or anyone else, for that matter) can place enough money into an ABLE account (as long as the total deposits during the year don’t exceed $14,000) to allow the child to pay his/her fair share of the monthly cost of the house. Then, the child/ABLE account beneficiary pays money out of the ABLE account to pay Mom and Dad for housing.

(Having the disabled person pay fair share of housing avoids tax issues while payment of “rent” runs into those tax issues. Receiving reimbursement for the fair share of housing doesn’t create income. Receiving rent creates income. That rental income can be offset by the cost of keeping up the house, but it still creates a great deal of tax recordkeeping. Collecting only the fair share of costs doesn’t create an income tax issue as long as documentation of the total cost is checked occasionally and the fair share gets adjusted when someone moves out of the house, such as a sibling moving out for college. Despite the ease of the fair share method, when calculating an SSI reduction, the Social Security Administration uses the fair market value approach.)

There are plenty of other disability-related expense that are eligible to be paid by a Wholly Discretionary. An ABLE account’s ability to pay for housing and remove the possible loss of SSI income is, in my mind, the single best use of an ABLE account.

2017 Ohio Medicaid Financial Standards for Long Term Care – Update

Posted on February 1, 2017 by Jim Koewler — No Comments ↓

Okay! I’ve got to stop trying to post an update of this information right after the first of the year. Too many of these financial eligibility limits trickle out during January.

So, here’s an update of my early January 2017 post.

The Medicaid program helps pay for long term care (nursing home, assisted living, or in-home care) for many seniors. The Medicaid rules allow the patient and the patient’s spouse to keep certain amounts of their savings and certain amounts from their monthly income. As of January 2017, Ohio’s Medicaid program allows the following amounts:
Savings patient can keep: $2,000
Savings spouse at home can keep: $24,180 – $120,900
Monthly income patient can keep: $50
Monthly income allowance for spouse: $2,003 – $3,023
Monthly housing allowance for spouse at home: $601
Monthly utility allowance for spouse at home: $513
What Medicaid pays nursing homes each month: $6,570
Limit on equity in home: $560,000
Monthly gross income above $2,205 triggers the need for a Qualified Income Trust (aka Miller Trust)

Note: Because this information is an update of the Medicaid “financial standards,” it also appears on my website’s Medicaid page.

P.S. I’ll try to remember to publish the 2018 values in February next year rather than rushing to publish in early January and then having to correct myself.

Special Needs Trust Fairness Act

Posted on January 26, 2017 by Jim Koewler — No Comments ↓

People with special needs have a new ability to help themselves.

On December 13, 2016, President Obama signed the Special Needs Trust Fairness Act (buried within a larger law titled the 21st Century Cures Act.) The Special Needs Trust Fairness Act allows someone with special needs to create his/her own Special Needs Trust. (For background on Special Needs Trust, read the April 2, 2015 installment of this blog.)

Before adoption of the SNT Fairness Act, only a parent or grandparent of the special needs person or a court could create a SNT. As awful as it sounds, the Congress that first memorialized the concept of a Special Needs Trust must have assumed that all people with special needs lacked the ability to handle their own affairs. Of course, that was a terribly incorrect assumption. Unfortunately, the law that allows Special Needs Trusts wasn’t updated for years. Finally, that oversight is fixed.

So, what does this mean? If a person needs to create a Special Needs Trust, he/she can do it. A parent, grandparent, or court isn’t necessary. The person with special needs now has control that wasn’t available before.

Here’s an example. Some people with special needs have injury claims against someone. (Perhaps the person is the victim of medical malpractice or an industrial accident. Perhaps the injury is even the cause of the person’s disability.) The injury claim can take a long time to pursue through the court system. During the interim, the person may have started to receive Supplemental Security Income for food and housing and Medicaid for medical care. When the court award or settlement payment arrives, it can cause a break in Medicaid coverage (because the new money is “income” during the month it arrives) and long term suspension of SSI payments (because the person will have more “savings” that SSI allows.)

To avoid the loss of these benefits, the person with special needs often places the judgment/settlement award into a Special Needs Trust. Rarely was there a Special Needs Trust waiting for use. The person usually needs a Special Needs Trust set up about the time that the award is going to arrive. Before the SNT Fairness Act, the person needed a parent, grandparent, or court order to create the SNT. Now, he/she can set up the SNT directly.

Ohio Medicaid 2016 Rule Changes – Change of Heart on “Intent to Return” Home

Posted on January 19, 2017 by Jim Koewler — No Comments ↓

Well, the discussion of the 2016 changes to Ohio Medicaid’s rules continues.

The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.) The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system. The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care. The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month. The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust. The July 1, 2016 installment discussed the need to empty the Miller Trust account every month. The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance. The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts. The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document. The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust. The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic. The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust. The August 18, 2016 installment discussed the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums. The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust. The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust. The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice. The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.) The September 22, 2016 installment discussed keeping the house with an intent to return to home. The September 29, 2016 installment discussed keeping the house while a dependent family member lives there. The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.) The October 27, 2015 installment discussed real property that is “essential for self-support.” The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs. The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets. The December 1, 2016 installment discussed Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets. The December 8, 2016 installment discussed the possibility of using a Special Needs Trust to recover from assets given away creating a Medicaid penalty period. The December 15, 2016 installment discussed the use of short-term annuities to recover from a long term care Medicaid penalty period that results from giving away assets. The December 22, 2016 installment discussed the end of the monthly “spend-down” to achieve income eligibility for the type of Medicaid that substitutes for health insurance. The January 12, 2017 installment followed up the September 15, 2016 installment on a 2016 change to how Medicaid views real estate holdings with a discussion of a December 30, 2016 state hearing decision. Following up on the , today’s installment will discuss what appears to be a shift in policy by Ohio Medicaid on the applicant’s “intent to return” home.

Note on real estate: Before the rule changes, Medicaid treated the home differently than it treated other real estate. Now, after the rule changes, Medicaid still treats the home differently than it treats other real estate. However, neither the home nor other real estate is treated the same way now as it was before the rule changes.

If the applicant still lives in the home, its value is not counted toward the applicant’s financial eligibility for Medicaid. Likewise, if the applicant’s spouse or dependent child lives in the home, its value is not counted. These policies regarding home occupancy by the applicant or spouse have not changed during 2016.

Now, however, occupancy by other family members who are dependent on the applicant for support also keeps the house out of the eligibility determination. This is new and a result of the new rules.

If the applicant is not in the house and the house is not occupied by the spouse or a dependent family member, the house’s value is counted toward the applicant’s financial eligibility unless the applicant intends to return home. This is also new and also a result of the new rules. BUT, there seems to have been a switch in the interpretation of the “intent to return” in just the few months since the August 1, 2016 rule change.

Right after the rule change, county Medicaid officials explained that an applicant listing a house for sale shows that he/she does not intend to return and the house’s value should be counted in the eligibility determination. At the time that Medicaid explained its policy that putting a house up for sale showed an intent NOT to return, certain elder law attorneys explained that the applicant may need to move to a more suitable house. (For example, a smaller, one floor house with a larger bathroom and open space under the kitchen counters may be easier to navigate for someone who now needs a walker or a wheelchair.) A more navigable house would, after all, make it easier for the Medicaid applicant to return home. Nonetheless, the county officials explained that planning to move to a different house isn’t actually a “return,” so the house’s value is counted in the eligibility determination.

Now, in a recent public meeting, county Medicaid officials have expressed a change of heart on how it views an applicant’s plan to “return” home but to a “different home.” Now, Medicaid no longer automatically concludes that putting a house up for sale shows an intent not to return. Ohio Medicaid has apparently concluded that making it easier to allow a person receiving long term care to move out of a nursing home or assisted living into a home of his/her own could be a good thing.

After all, most people want to stay in their own homes. Living at home, even if one receives long term care, has certain emotional benefits for some people. It also allows Medicaid to pay for care without also paying for housing.

Assuming that the position expressed by this county official in fact reflects the state policy, it’s a move to make the application process for long term care Medicaid and, even more, the location where one receives the care itself, more favorable to the person.