long term care

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.

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.

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.

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.

Ohio Medicaid 2016 Rule Change on Real Property may not Stick

Posted on January 12, 2017 by Jim Koewler — No Comments ↓

I thought I had finished the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program for 2016-2017 with my installment on December 22, 2016. A recent ruling in an administrative appeal, however, might reverse one of the August 1, 2016 rule changes.

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. Today’s installment will follow up the September 15, 2016 installment on a 2016 change to how Medicaid views real estate holdings with a discussion of a recent state hearing decision.

Appeal number 3148728, in a decision dated December 30, 2016, resolved a conflict between one of the 2016 changes and a longstanding Medicaid eligibility concept regarding “availability” of the applicant’s “resources.” (Remember, Medicaid calls “resources” what most of the rest of the world calls “assets” or “life savings.”)

The 2016 rule change at issue was the repeal of Ohio Administrative Code section 5160:1-3-05.15 which provided that real property was exempt from the resource calculation for a Medicaid recipient/applicant if the property was up for sale through a broker or agent. When that rule was rescinded, elder law attorneys concluded that the Ohio Department of Medicaid wanted to make the ownership of real estate a bar to eligibility to long term care Medicaid even if the applicant was trying to sell the real property.

The resource “availability” test for counting resources is set forth in Ohio Administrative Code 5160:1-3-05.1(B)(7), the definition of “resources.” This rule defines “resources” as “cash, other liquid asset, personal property, and real property an individual and/or the individual’s spouse has an ownership interest in, has the legal ability to access in order to convert to cash (if not already cash), and is not legally prohibited from using for support and maintenance.” The language from this rule that is important to our discussion is “has the legal ability to access in order to convert to cash.”

In the application that led to the December 30, 2016 state hearing decision, the applicant had listed three parcels of real property for sale in June 2016, two to three months before applying for Medicaid on August 29, 2016. The initial asking price for the real properties was the value as listed in the county’s property tax records. After some time passed with no sales (but before the Medicaid application,) the seller reduced the asking price for each parcel. The state hearing decision ruled that, because the properties had not been sold despite the attempts to do so, they were not “available resources” because they could not be converted into cash.

As a result, the applicant was able to get Medicaid coverage for long term care despite continued ownership three parcels of real property. This result seems directly to contravene the apparent intent of rescinding Ohio Administrative Code section 5160:1-3-05.15.

Now, the state hearing decision is rather brief. It is not clear whether the same result would have been reached if the real properties would have been listed for sale for a time period shorter than the two to three months. Likewise, it is not clear whether the same result would have been reached if the asking prices had not been reduced. (The initial asking prices set at the county appraised value was important because any higher asking price would be viewed as an attempt to avoid a sale.)

Similarly, Ohio Medicaid has a spotty history in recognizing the precedential value of state hearing decisions in later applications, so this individual decision may not lead to other similar decisions.

Nonetheless, the first case that looked at the conflict between the new real property rules and the “availability” requirement was decided in favor of the Medicaid applicant. It’s a good sign.

2017 Ohio Medicaid Financial Standards for Long Term Care

Posted on January 5, 2017 by Jim Koewler — No Comments ↓

Note: There was no blog post last week (December 30.) Happy 2017!

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: $23,844 – $119,220
Monthly income patient can keep: $50
Monthly income allowance for spouse: $2,003 – $2,981
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: $552,000
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.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – No more Monthly “Spend Down”

Posted on December 22, 2016 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017. 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. Today’s installment will discuss the end of the monthly “spend-down” to achieve income eligibility for the type of Medicaid that substitutes for health insurance.

The Medicaid that has no more monthly spend-down is NOT Medicaid for long term care. It’s the Medicaid that provides financial support for doctor visits, prescriptions, hospital visits, etc. for the Aged, Blind, and Disabled population that has no more monthly spend-down. In other words, there’s no more monthly spend-down for the Medicaid that is available to Aged, Blind, and Disabled people who need Medicaid because they can’t afford privately purchased health insurance. We’ll call this “health-insurance-Medicaid” (as opposed to the “long-term-care-Medicaid about which I usually write.)

Obviously, a statement that a monthly spend-down is no longer available means that there used to be a monthly spend-down. That’s right. There used to be a monthly spend-down that allowed many people to meet the income requirements necessary to receive Medicaid support.

Here’s how it worked. Medicaid is available only to people below a certain level of income. Before the Affordable Care Act made health-insurance-Medicaid available to people based only on income, health-insurance-Medicaid used to be available only to people who had a particular, identified need AND whose income was low enough to qualify. For example, families with low income that qualified for the Aid to Families with Dependent Children also qualified for health-insurance-Medicaid.

One of the particular, identified needs that could qualify someone for health-insurance-Medicaid was a disability. People who were disabled (meaning that they cannot financial support themselves through work) who also had income below a certain level (which was adjusted for inflation from time to time,) qualified for health-insurance-Medicaid. So, some people who had disabilities could not qualify for health-insurance-Medicaid because their incomes were too high.

BUT, according to Ohio rules, a disabled person could spend money on his/her health care each month, and that amount would be deducted from his/her income. If, after the deduction of health care spending, the person’s remaining income was below the income limit enough to qualify for health-insurance-Medicaid, then the person would receive health insurance Medicaid for that month.

This was a monthly nightmare for the various county Departments of Job and Family Services, the agency that oversees financial eligibility for Medicaid. According to some estimates, 20,000 to 30,000 people had have their monthly spending monitored to see if they qualified for Medicaid for that month. Then, next month, it would start over again.

I MUST HERE GIVE CREDIT TO OHIO for taking care of its people. (You won’t hear that from me terribly often.) Most of these 20,000 to 30,000 people would have had no health insurance if Ohio had not allowed a monthly spend-down to qualify for health-insurance-Medicaid. With their disabilities, they would not have been able to get private health insurance because their disabilities would be “pre-existing condition” that health insurance companies would not have covered.

Then, after the Affordable Care Act was put into effect, all of the 20,000-30,000 could get health insurance. (Remember, pre-existing conditions could not be used as a reason to withhold insurance coverage.) So, Ohio ended its monthly spend-down program for disabled people with the expectation that all Ohioans (including people with disabilities) could get health insurance. Even if a good number of these 20,000 to 30,000 people qualified for Medicaid under the Affordable Care Act income test, Ohio will have a smaller share of the health care costs for those people. Under the ACA, the federal government picks up a larger share of the cost than it picked up for pre-ACA health-insurance-Medicaid. The state saves money.

That savings of state money for disabled people’s health-insurance-Medicaid is, in my view, the driving force behind all of the changes in Ohio’s Medicaid rules of August 1, 2016. It’s all about the money.

This is the end of the series on “Ohio Medicaid changes ‘Aged Blind Disabled’ Eligibility” for 2016, for now at least. (This series started April 28, 2016.) We finished just in time. The end of the year is here.

With Christmas and New Year’s Day around the corner, I do not expect to post another blog until January. Happy Holidays to all. Best wishes for 2017.

Peace on Earth! Good will to all Men and Women!

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Penalty Recovery through Annuities

Posted on December 15, 2016 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017. 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. Today’s installment will discuss the use of short-term annuities to recover from a long term care Medicaid penalty period that results from giving away assets.

Note: What I am calling “assets” Medicaid calls “resources.” In Medicaid’s terminology, “assets” includes both “resources” and “income.” Because most of the public thinks of “resources” as human resources or natural resources, and thinks of money in the bank as “assets,” I will use the term “assets” in this installment to refer to money in the bank and other similar things of value (like real estate, life insurance, etc.) that may be included in the applicant’s life savings.

Generally, when an applicant for Medicaid for long term care services gives away something of value (aka “assets,”) Medicaid will not pay for services for the amount of time that the given-away assets would have covered. This “penalty” is found within the “transfer of assets” rule in Medicaid’s regulations.

Despite the penalty, some Medicaid applicants wish to give away some of their assets. Usually, the applicants wish to give assets to their children. The giving of these assets to the applicant’s children often gives the applicants a great deal of emotional relief because it allows some of their money (the results of their working lives) to outlive them. Most parents want to leave something to their children and grandchildren. Finding a way to allow these applicants to give some of their assets is what most elder law attorneys try to do.

The trick is finding a way to cover the applicant’s long term care costs during the time that Medicaid will not (i.e., during the “penalty period” aka the “Restricted Medicaid Coverage Period.”) There used to be 4 different ways to cover such a penalty period. During 2016, Ohio Medicaid changed the rules on covering this penalty period. Today’s installment will discuss the use of short-term annuities to cover a penalty period in long term care Medicaid benefits.

Medicaid rules allow a person who gave away assets to use an annuity to cover his/her long term care costs during the associated penalty period. The annuities must meet a number of criteria:
– The annuity remainder beneficiary must be the state of Ohio. (Ohio may be named after the spouse or a dependent child.);
– The annuity must be Irrevocable and non-assignable;
– The annuity must be “actuarially sound” by paying out over a time period equal to or shorter than the annuitant’s life expectancy as determined by the Social Security Administration (usually found via a certain online calculator); and
– The annuity must pay out in equal monthly payments with no anticipated lump sum (except, potentially, to a remainder beneficiary.)
An annuity that meets these requirements is often called a Medicaid-Compliant Annuity.

Satisfying these requirements is relatively easy. They can all be set at the time of the purchase of the annuity. The trickiest part is determining the monthly payment and the number of monthly payments from the annuity. The annuity payments should be large enough to almost cover the monthly difference between the client’s monthly income and monthly costs. The number of months should be long enough to cover the penalty period.

Short term annuities are available (to my knowledge) from two sources, Krause Financial Services (MedicaidAnnuity.com) and Safe Harbor Annuity (SafeHarborAnnuity.com.) I have used Krause for such annuities. I became aware of Safe Harbor’s participation in this market in August 2016 and have not yet used Safe Harbor.

Until recently, Cuyahoga County’s Medicaid office had espoused the position that “actuarially sound” meant that the annuity must pay out for the ENTIRE life expectancy of the annuitant rather than for a period of time equal or less than the annuitant’s life expectancy. This position posited that any designed payout shorter than the life expectancy set forth in the Social Security tables referenced in the rule made the purchase of the annuity an improper transfer. (I do not know whether any other counties or individual caseworkers did so.) Two appeals of this position ruled against the county’s policy. Then, in November 2016, Cuyahoga County announced that it would accept annuities that were as long as or shorter than the person’s life expectancy.