Posts Tagged ‘Georgia’

Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

For many people, Medicaid may be the only financing option for nursing home level of care. Medicare has limited benefits. Most people do not own long term care insurance. And for most, private paying $6,000 a month is not an option.

Qualifying for Medicaid is another matter. It can be difficult . . . or it can be easy. Here is the easy answer along with some free legal advice. Fix up the house, buy a new car and simply spend the rest down on the spouse’s nursing home care. When everything has been spent down, go apply for Medicaid.

Is that the smartest approach? No. But the advice was “free”! Also, the nursing home and the Medicaid people in Atlanta will love you.

The better way just may be a bit more difficult. While every case is different, many strategies can save a tremendous amount of money, not to mention aggravation and worry.

The answers do not come easily. As the United States Supreme Court observed in the Schweiker v. Gray Panthers case, the “Byzantine construction” of the Social Security Act (of which Medicaid is a part) makes the rules and regulations “almost unintelligible to the uninitiated”.

You’ll need a guide with the knowledge and experienced to shepherd you through the process.

In addition to a thorough understanding of the nuances of the Medicaid rules, many of the successful strategies require an advanced understanding of trust law, taxation, real property law and the interconnections among Medicaid and other programs (VA benefits, for example).

Is it necessary to hire an attorney to complete a Medicaid application? No, not if the “easy” answer mentioned above will suffice.

Will people advise that it is not necessary to hire an attorney? You bet! Occasionally it is someone with a local Department of Family and Children’s Service office. More often it is a nursing home.

The problem with that sort of advice is both parties have a vested interest in keeping someone on “private pay” as long as possible. It is not in their interest to move someone to Medicaid.

Further, many, if not most, nursing home business office staff who offer to complete (sometimes they’ll insist on completing) a Medicaid application do not have more than a basic understanding of the complex rules and advantageous strategies available.

Also, neither has the knowledge, skills and ability, much less a law license, required to draft trusts, devise appropriate estate plans and stand by to advocate for you (in court if necessary) should the need arise.

Finally, if a lawyer is “the way to go” keep in mind that lawyers, like doctors, are not all the same. A great attorney in one area of the law may not have any idea of what to do with Medicaid rules that are “unintelligible to the uninitiated”. Ask for references, ask how many similar cases have been handled, ask for credentials and certifications and satisfy yourself they know what they’re talking about and are ready to get on your side.

Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

“Will the nursing home take my home?” is the question elder law attorneys constantly field.

The answer: “Maybe, maybe not, but probably not right away.”

What these people are worried about is something called “estate recovery”. In Georgia it is taking on some life and promises litigation. The current Big Question is whether the state can recover on a Medicaid lien on a life estate or other “nonprobate” property.

Estate recovery is a procedure Congress ordered in which Medicaid attempts to recover all or a portion of the benefits paid with respect to an individual from that individual’s assets upon his or her death.

Congress Offered Some Choices

Congress allowed states the option of recovering against probate assets only or against all assets. Probate assets are those assets that pass through a person’s estate and under the terms of a will (if there is one). Nonprobate assets are assets that pass pursuant to terms independent of an estate (for example, life insurance policies that name beneficiaries other than estate, joint tenancy with rights of survivorship bank accounts, or life estates in real property).

What The General Assembly Chose

The General Assembly enacted a statute to allow the Department of Community Health (DCH) to “make claim against the estate of a Medicaid recipient”.

Most elder law attorneys believe the General Assembly opted to confine estate recovery to the probate estate. First, from the clear words of the statute, it chose not to expand the definition of “estate” beyond the traditional probate estate. The way one “makes a claim against an estate” is before a probate court, and a probate court will only have jurisdiction against a probate estate.

Second, the General Assembly did nothing to address the technical manner in which non-probate assets could become part of a probate estate. For example, to make what is left of a life estate after the life estate holder has died a probate asset would require a number of amendments to ancient Georgia real property law. Under Georgia law, once a life estate holder has died, the property is free of the deceased life estate holder’s creditor claims. It is gone.

What DCH Chose

DCH elected to use the harsher method and to attempt estate recovery against all assets – ignoring (many believe) the wishes of the General Assembly.

However, Congress gave the states a choice. The General Assembly spoke. The law is well settled in Georgia that administrative agencies (like DCH) must remain within the boundaries set by their master (the General Assembly).

The law also provides exceptions to estate recovery when hardship can be proven. For example, if the deceased is survived by a spouse or a minor or disabled child.

Advance planning is wise if nursing home financing is of any concern. Avoiding or mitigating the effects of estate recovery makes advance planning particularly critical.

Finally, you should always seek assistance from qualified counsel if facing estate recovery. Estate recovery is tricky business. Make sure your attorney understands it or associates someone who does.

Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

[Note:  The Georgia annuity rules described below are very similar to the North Carolina annuity rules - see discussion of annuities at Basic North Carolina Medicaid Nursing Home Rules]

The Georgia Department of Community Health recently changed Medicaid annuity rules to allow the use of some (not all!) annuities by someone entering a nursing home.

The Basic Concept

First, understand the basic concept of an annuity. Someone pays money to a company. The company promises to pay the money back either in a lump sum in the future, or over time in regular installments. The payments could begin immediately (an “immediate annuity”) or start in the future (a “deferred annuity”).

The payments from the company will include a return of what was paid, plus some interest. Meanwhile, the company is taking the money and (it hopes) making more with it than it will have to pay back to the buyer.

There are many and complex reasons that such an arrangement might make sense with respect to a realistic portion of one’s nest egg (remember the old adage “don’t put all your eggs in one basket”).

The New Rules

If an annuity fits the new requirements, it will not count as an asset for Medicaid purposes (although the income will count). To be “noncountable” the annuity must be nonassignable, irrevocable, and have a steady stream of payments that will not extend beyond the life expectancy of the annuitant (the person receiving the payments).

Further, the annuity must name the State of Georgia as the remainder beneficiary to the extent the state has paid out Medicaid benefits. A spouse and a disabled child may take first place ahead of the state.

So?

Many seniors have a modest nest egg meant to sustain retirement. The problem is the egg may be too big for Medicaid. Most people entering their senior years understandably panic when a spouse goes into a nursing home to the tune of $5,500 or so a month.

A “new” annuity can take “excess” cash (which was an excess asset for Medicaid purposes) and put it into an annuity (the shorter time frame the better) to immediately begin paying the stay-at-home spouse income.

Voila! The excess asset (cash) is converted into income that is not counted for Medicaid purposes (the state would count the income of the spouse in the nursing home only).

On The Other Hand . . .

Any person who thinks he or she (or his or her spouse) might end up in a nursing home within several years and have a tough time paying for it better be very careful before buying an annuity.

Buy an annuity that is not designed correctly and Mom and Dad could have an expensive mess. If the annuity has substantial surrender charges the unfortunate buyer has a choice: Hang on to the annuity and never qualify for Medicaid or dump the annuity and take a bath.

Buy an annuity that is designed correctly and it could be part of a well-conceived plan.

There are plenty of great financial advisors out there who either know these rules or at least understand that this is an issue and will seek additional help.