Fong Law Group

Staying Safe in Winter Weather: Tips for Older Adults

Winter can be an enjoyable time of the year, with holidays, time with family, and winter scenery. But it can bring challenges, especially for older adults. Keeping a home warm enough can be expensive, staying warm while outside is more difficult, and driving, and even walking can be more dangerous. Here are some ways older adults can stay safe and warm during the winter months.

Preventing Falls

Snow and ice can make outdoor areas dangerously slippery. Falls are a significant risk for older adults and can result in serious injuries. Here are some ways to reduce the risk of falling:

• Wear Proper Footwear: Wear shoes or boots with good traction and nonslip soles to provide more stability on icy or wet surfaces. Choose waterproof footwear to keep feet dry and warm.
• Use Assistive Devices: Canes and walkers can help with balance. For added safety in slippery conditions, attach an ice tip to the end of the cane or walker supports.
• Walk Carefully: When walking outdoors, take small, slow steps, and try to keep your center of gravity directly over your feet. Avoid rushing or carrying too many items that could throw off your balance.
• Keep Walkways Clear: If possible, enlist help from family or neighbors to keep your sidewalks, driveway, and porch free of snow and ice. Use ice melt or sand for added traction.
• Install Handrails: Handrails on steps and pathways can provide added support, especially in icy conditions.

Driving Safely

Winter roads can be hazardous due to snow, ice, and reduced visibility. Older adults should take extra precautions when driving during winter weather. Here are some tips for driving safely during the winter:

• Check the Weather: Avoid driving in severe winter storms. Check the forecast before planning trips and postpone any non-essential travel if conditions are poor.
• Prepare Your Car: Get your vehicle winter-ready; keep tires in good condition, top off antifreeze, and have a full gas tank. Consider keeping emergency supplies in the car, such as blankets, a flashlight, extra gloves, and nonperishable snacks.
• Drive Slowly: Reduce speed on icy or snowy roads and increase the distance between your car and the vehicle in front of you. Use headlights to improve visibility.
• Avoid Distractions: Stay focused on the road. Keep your hands on the wheel, eyes on the road, and avoid phone use or other distractions.
• Consider Alternatives: If winter driving feels too risky, consider alternative options. Ask a family member for help, take public transportation, or use a rideshare service.

Heating a Home Safely

Heating a home during winter is essential, but it’s important to avoid potential hazards, such as carbon monoxide poisoning or accidental fires. Here are some tips to keep your home warm and safe:

• Use Space Heaters with Caution: If you’re using space heaters, keep them at least three feet away from flammable objects, such as curtains or bedding, and always turn them off when leaving the room or going to sleep.
• Install Carbon Monoxide Detectors: Heating systems, especially those that burn gas, oil, or coal, can produce carbon monoxide. Install detectors in key areas of your home and test them regularly.
• Avoid Using Stoves or Ovens for Heat: Using a stove or oven as a heat source is dangerous and increases the risk of carbon monoxide poisoning.
• Check the Heating System: Have a professional inspect and service your heating system before winter. Ensuring it’s working efficiently can reduce the risk of breakdowns or safety issues.
• Layer Up: Wear warm clothing indoors, such as sweaters, thermal layers, and warm socks. This allows you to keep the thermostat lower, saving on heating costs.

Getting Appropriate Vaccinations

Winter is peak season for illnesses, such as influenza and pneumonia, which can be more severe for older adults. Keeping up with vaccinations can help protect you from seasonal illnesses.

• Flu Vaccine: The flu virus circulates more widely during winter. An annual flu shot is recommended for everyone, especially older adults, as it can reduce the severity and risk of complications from the flu.
• COVID-19 Vaccine: Staying current with COVID-19 vaccinations, including any recommended boosters, can provide additional protection during winter months when respiratory illnesses are more prevalent.
• Pneumonia Vaccine: Pneumonia can be life-threatening for older adults. Talk to your health care provider about getting a pneumonia vaccine, especially if you have chronic conditions that may increase your risk.
• RSV Vaccine: Respiratory Syncytial Virus (RSV) can cause severe respiratory infections. Discuss the newly available RSV vaccine with your health care provider.

Planning for a Safe Winter

By taking precautions, you can stay safe and comfortable throughout the winter season. Remember to keep emergency contacts on hand and communicate regularly with family and friends so they can assist if you need help. Stay warm, stay safe, and make the most of the winter months!

The holiday season offers the chance to spend time with family and discuss long-term care options and estate planning. Though these topics may seem uncomfortable at first, the sooner they are addressed, the sooner a thoughtful plan can be put in place. Working with an experienced elder law attorney can help make the process easier. They can discuss options that will best meet your unique needs.

Medicaid Applicants: Protecting Your Healthy Spouse in 2025

For millions of seniors nationwide, Medicaid provides a safety net for people who find themselves requiring long-term care. Most Americans aged 65 and older – roughly 70 percent – will need these kinds of services in their later years, according to research. Meanwhile, the cost of long-term care has been rising with every passing year. In 2023, the national median cost for a semi-private room in a nursing home reached nearly $9,000 a month.

Medicaid Coverage

Run jointly by the federal and state governments, Medicaid – which sometimes goes by other names, depending on your state – provides health insurance to low-income populations. If you need to seek Medicaid coverage for long-term care, you may be aware that you must meet strict income and resources limits to qualify. In most states, you cannot have more than $2,000 in “countable” assets to your name to receive these benefits.

So, what happens if you are married? Does your healthy spouse have no choice but to live in poverty? Fortunately, no – states permit the healthy spouses of Medicaid applicants to retain a certain amount in resources to protect them from becoming impoverished.

Community Spouse Resource Allowance for 2025

Each year, the Centers for Medicare & Medicaid Services (CMS) issues updated Community Spouse Resource Allowance (CSRA) figures. These CMS guidelines outline how much of the couple’s assets the healthy spouse can keep while their Medicaid spouse gets the long-term care support they need. Generally, the CSRA increases each year.

Starting January 1, 2025, a spouse who lives at home while their partner receives Medicaid long-term care benefits can retain up to $157,920 in assets (an increase from $154,140 in 2024). Some states apply a maximum CSRA as well as a minimum CSRA. Under federal law, the minimum CSRA in 2025 will be $31,584. State Medicaid programs can then set their own limits within these federal guidelines.

Monthly Maintenance Needs Allowance for 2025

If you receive long-term care benefits through Medicaid while your healthy spouse continues residing at home, you may feel better knowing that your partner can also keep a minimum amount of income each month. The federal government calls this their monthly maintenance needs allowance (MMNA). In 2025, the maximum MMNA will be $3,948 (an increase from $3,853.50 in 2024).

Work With an Elder Law Attorney

The rules for Medicaid can quickly become complex and often vary widely by state. To ensure that you are pursuing the best coverage options for your situation, speak with a qualified elder law attorney in your area.

Medicare Open Enrollment - and New Benefits - Are on the Way

Medicare open enrollment is on the horizon. Now is the time to start thinking about any changes you may want to make to your Medicare coverage. Thanks to the Inflation Reduction Act, some significant changes have come along for Medicare, and more will take effect in the near future.

Medicare Open Enrollment

Medicare open enrollment happens once each year. In 2024, the open enrollment period is between October 15 and December 7. Any changes to your Medicare plans will take effect on January 1, 2025. During the open enrollment period, you can:

• Join or drop a Medicare Advantage Plan, switch between Medicare Advantage Plans, or add or drop Medicare prescription coverage.
• Switch from Original Medicare to a Medicare Advantage Plan or vice versa.
• Join or drop a Medicare prescription drug plan, or switch to a different drug plan if you are enrolled in Original Medicare.

If you are already in a Medicare Advantage Plan, you will also have an open enrollment period between January 1 and March 31 of 2025, during which you can:

• switch to another Medicare Advantage Plan (with or without drug coverage);
• drop your Medicare Advantage Plan and return to Original Medicare; or
• join a separate Medicare drug plan.

Learn more about Medicare enrollment periods and how to join the various plans.

Lower Drug Prices for Medicare Members

One of the most significant changes Medicare beneficiaries will see in the coming years is the lowering of prescription drug prices. Under the Inflation Reduction Act (IRA), the federal government was granted the authority to negotiate the prices of certain high-cost medications covered under Medicare. This historic move is designed to reduce out-of-pocket expenses for beneficiaries and lower costs for the Medicare system.

In 2026, the first round of negotiated prices will take effect, affecting the cost of 10 widely used prescription drugs. These drugs were chosen because of their high cost, they are each available only from single sources, and there are no generic or biosimilar competitors.

The following chart outlines the initial 10 drugs that will be affected by the lower negotiated prices. The prices in the chart are rounded and represent estimates of the Wholesale Acquisition Costs (WACs) based on a 30-day supply in calendar year 2022.

The manufacturers of the drugs are participating in the Negotiation Program voluntarily. The below information is subject to change. Learn more on the Centers for Medicare & Medicaid Services (CMS) website.

Negotiated Prices for 10 Medicare Drugs (going into effect in 2026)

Drug Name	Commonly Treated Condition	List Price for 30-Day Supply in 2023	Discount of Negotiated Price From 2023 List Price	Agreed-to Negotiated Price for 30-Day Supply for 2026
Januvia	Diabetes	$527	79%	$113
Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, NovoLog PenFill	Diabetes	$495	76%	$119
Farxiga	Diabetes, Heart failure, Chronic kidney disease	$556	68%	$178.50
Enbrel	Rheumatoid arthritis, Psoriasis, Psoriatic arthritis	$7,106	67%	$2,355
Jardiance	Diabetes, Heart Failure, Chronic kidney disease	$573	66%	$197
Stelara	Psoriasis, Psoriatic arthritis, Crohn’s disease, Ulcerative colitis	$13,836	66%	$4,695
Xarelto	Prevention and treatment of blood clots, Reduction of risk for patients with coronary or peripheral artery disease	$517	62%	$197
Eliquis	Prevention and treatment of blood clots	$521	56%	$231
Entresto	Heart failure	$628	53%	$295
Imbruvia	Blood cancers	$14,934	38%	$9,319

If you take any of these 10 drugs, you will want to monitor developments closely. Keep in mind the lower prices will not take effect until 2026. Planning ahead can help you anticipate future savings and make informed decisions during the 2025 open enrollment period.

In addition to the 10 drugs listed above, the CMS will pick 15 more drugs by February 1, 2025, that are covered under Medicare Part D to negotiate lower prices for starting in 2027. For 2028, CMS will negotiate lower prices for 15 more drugs that are covered by Medicare Part B and Part D. Up to 20 more Part B and Part D drugs will be chosen for lower negotiated prices each year after 2028.

Americans Are Still Paying More for Medications

Even with these discounts, Americans are still paying more for brand-name prescription medications than people in most other countries. According to The Commonwealth Fund, Americans’ per capita spending on pharmaceuticals is nearly three times the average of citizens of other Organisation for Economic Co-operation and Development (OECD) nations.

A 2022 study published by JAMA found that about a fifth of U.S. adults over the age of 65 were trying to reduce their prescription drug costs by skipping or delaying filling their prescriptions, reducing or skipping doses, or using another person’s medication. Some survey respondents said they had to forgo basic needs or start accruing debt so they could afford their medications. Such desperate measures can have serious consequences for people with chronic health conditions.

More Changes Coming to Medicare

The IRA offers additional changes that will help Medicare beneficiaries on other fronts as well.

• Medicare beneficiaries will have a yearly cap on how much they will have to spend on out-of-pocket prescription drugs covered by Medicare. The cap for 2025 is to be set at $2,000.
• Insulin costs are capped at $35 per month per covered prescription for those who are enrolled in Medicare Part D. This cap may not apply to all insulin products. Check with your care provider to determine whether this applies to you.
• Recommended vaccines will be available at no cost to people who have Medicare prescription drug coverage.
• The Medicare Part D low-income subsidy program (LIS), also known as Extra Help, has been expanded to 150 percent of the federal poverty level (FPL). If your annual income is 150 percent of the FPL, then you may qualify for the Extra Help program.
• Companies that raise the prices of certain drugs faster than the rate of inflation must pay a rebate to Medicare.

Learn More About Medicare and Late-Life Planning

As is typical of health insurance and health care, Medicare and its related plans have nuances. Speak with a health care professional or your elder law attorney. They can discuss your specific situation and potential options with you.

New Rental Assistance Rule May Open Benefits to More Seniors

The Social Security Administration (SSA) has published a final rule simplifying and expanding its rental subsidy program for Supplemental Security Income (SSI).

Effective September 30, 2024, the new rule is likely to allow more people to qualify for SSI. In addition, some current SSI recipients may see an increase in their monthly benefit amount as a result. The rule change is part of a broader agency effort to streamline certain aspects of the SSI program.

SSI applicants and recipients may want to talk to their elder law lawyer about the new rule if they have questions about how it affects them.

How Do You Qualify for SSI?

SSI is a federal public benefits program that provides a modest monthly benefit to qualifying recipients. It serves older adults across the United States who meet strict income and resource limits. People with disabilities who have limited income and resources also may qualify. In most states, to be eligible for SSI, an individual must have less than $2,000 to their name.

SSI Rental Assistance Explained

Income affects more than whether an individual is eligible for SSI benefits. It also has an impact on the SSI recipient’s benefit amount.

The SSA’s definition of income includes not only “earned” income from a job and “unearned” income such as gifted cash, but also what SSA calls “items received in-kind,” including shelter given to an individual or that someone else pays for.

A rental subsidy can result in a lower SSI payment for current recipients. It may also disqualify someone from receiving SSI because their income is too high.

However, SSI is now changing how it calculates the rental subsidy amount. The new rule will expand an exception that previously only applied in seven states but starting in September 2024 will apply nationwide.

How Rental Subsidy Is Calculated – The Current Rule

If an individual pays a monthly required rent charge that equals or exceeds the current market rental value (CMRV) in their area, a “business arrangement” exists under SSA rules. This means that the SSA does not see the SSI applicant or recipient as receiving rental assistance.

SSA regulations consider a person to be receiving a rental subsidy — a type of unearned income — if they are paying a monthly rent amount for a property that is less than the CMRV where they live. This commonly occurs when somebody is living with a family member who charges them less for rent than what they would pay on the open market.

For example, consider an SSI recipient who lives with their sibling, paying a monthly rental rate of $400. If the CMRV in their area is $800, the amount of rental assistance would be $400.

However, the SSA imposes a regulatory cap, called a Presumed Maximum Value (PMV), on the rental subsidy amount that can be assessed; that amount is $334.33 for 2024. The SSA also has an unearned income exclusion of $20 per month.

Using the example above, imagine a landlord accepting $400 per month instead of the CMRV of $800. The amount that the SSA would count as rental assistance would be $314.33 ($334.33 PMV minus the $20 general income exclusion amount).

Assuming a maximum monthly SSI payment of $943 in 2024, and assuming there is no other countable income, the recipient’s benefit amount would be reduced to $628.67 ($943 minus $314.44).

Exception

Following court cases that challenged the SSA’s rental subsidy rule, exceptions were provided in seven states — Texas, Connecticut, New York, Vermont, Illinois, Indiana, and Wisconsin.

In these states, a “business arrangement” still exists. However, the rental subsidy does not count as income if the monthly rental rate equals or exceeds the PMV, instead of the CMRV.

Apply this exception to the example above: An SSI recipient in Connecticut pays $400 per month instead of the CMRV of $800 per month. They would not have their rental subsidy count as income because the $400 payment is more than the $334.44 PMV for 2024.

The SSA notes that in the seven excepted states, application of the rental subsidy exception generally results in a higher SSI payment amount.

New Rule Applies SSI Rental Subsidy Exception Nationwide

The SSA announced in April 2024 that the new rule would make the state-specific rental subsidy exception national policy for SSI applicants and recipients.

According to the SSA, the policy change will increase the benefit amount for some recipients and allow more people to qualify for SSI payments. However, it will not affect how much SSA pays per month (a maximum of $943 in 2024).

Even with this exception, though, some applicants could see their monthly benefit amount reduced; others may not qualify. The actual formula that the SSA uses is complicated and includes the number of household members, as well as other sources of income.

The rental subsidy rule change is the latest SSA effort to remove barriers to accessing SSI payments. Also in the fall of 2024, the agency will no longer use food an applicant or recipient receives from friends, family, and community support networks as part of its “in-kind support and maintenance” calculations. And in April, SSA published a rule changing how it factors support from other public assistance programs, such as SNAP, when determining beneficiary payments.

More than 7 million individuals received federal SSI benefits in January 2023, with payments averaging $654 per month. During calendar year 2022, 172,000 individuals applied for SSI benefits based on age, while 1.23 million applied based on blindness or disability. Approximately 522,000 applicants received SSI benefits in 2022, a decrease of 1 percent compared to 2021.

Understanding Social Security Benefits Can Be Difficult. An Attorney Can Help.

While the new SSI rule may be advantageous for many low-income, older Americans, terms like “PMV,” “CMRV,” and “in-kind” support are not necessarily intuitive. They may add to the confusion around an already long and challenging SSI benefits process.

To make sure the value of your rental subsidy is accurately determined, and that you receive the SSI benefits you’re entitled to, get in touch with your elder law attorney.

Feds Simplify and Clarify Various Medicaid Rules for States

Thanks to a new rule recently finalized by the federal government, obtaining and renewing health care coverage under the Medicaid program is set to become easier for millions of Americans.

What Is Medicaid?

Medicaid provides people living on limited income with access to health care services. Enrollees must meet strict financial guidelines to qualify. In most states, you must have $2,000 or less in assets to your name to be eligible for Medicaid.

As a joint federal-state program, Medicaid allows states to set their own eligibility criteria and service coverage guidelines, so programs – as well as the criteria to qualify for them – tend to vary across states.

Policy Changes

In April 2024, the Centers for Medicare and Medicaid Services (CMS) officially published the second part of its new two-part rule.

The new rule seeks to standardize some of the application and renewal processes that Medicaid enrollees will follow, regardless of the state in which they live. As part of an effort to make documentation policies more consistent across states, it also updates language about electronic recordkeeping for state agencies, which has not seen revisions since the late 1980s.

Several of the new changes are of specific interest to Medicaid enrollees aged 65 and older and those who are living with a disability.

Among its provisions are the following points related to Medicaid:

• Enrollees who are aged 65 and older or living with a disability will no longer have to appear in person for their renewal interviews.
• Medicaid recipients seeking to renew their coverage will have 30 days to return any necessary documentation to their state Medicaid agency.
• Medicaid recipients will not have to go through the renewal process more than once every 12 months (with certain exceptions).
• First-time Medicaid applicants will have at least 15 calendar days to provide any additional information requested to complete their application. The state will have, at most, 45 calendar days to determine an applicant’s eligibility.
• State Medicaid agencies must take steps to update contact information for an enrollee who may have moved before they pursue termination of that person’s coverage.
• The CMS is also extending the re-enrollment timeline for people who lost their Medicaid coverage during the unwinding period following the end of the COVID-19 public health emergency. The deadline to re-enroll is shifting from July 31, 2024, to November 30, 2024.

Other updates include streamlining the amount of information applicants need to submit and requiring state agencies to accept renewals via snail mail and phone as well as online or in person. These changes will begin to take effect in June 2024. Estimates suggest that the new rule will result in boosting Medicaid enrollment by 1.33 million people by the year 2028.

“Our North Star is ensuring that everyone who is eligible for coverage can enroll and keep that coverage,” CMS Administrator Chiquita Brooks-LaSure said in a news release. “Our work must start and end by breaking down barriers that prevent eligible people from connecting to coverage.”

For more information about this historic rule, access the fact sheet from CMS.

Connect With an Elder Law Attorney

Understanding the ins and outs of Medicaid can be overwhelming. For guidance on applying or qualifying for Medicaid in your state, be sure to work with your elder law attorney. 

Proposed Medicare Bill to Help Seniors With Medical Costs

In the ever-evolving landscape of health care, one critical challenge has been ensuring that Medicare recipients receive the coverage they need without undue financial burdens. A new legislative effort aims to address a particularly perplexing issue: the distinction between hospital observation status and inpatient status, and its effects on Medicare coverage.

Understanding Observation Status

Observation status is a classification hospitals use to determine the billing for Medicare patients. When a patient is under observation, the hospital technically considers them outpatients. (This is the case even though the patient may stay overnight or for several days in a hospital bed and receive similar care to that of an inpatient.) An inpatient is someone who has been formally admitted to the hospital.

Characteristics of Observation Status

• Temporary and Evaluative: Observation status is generally intended for patients who need short-term monitoring or further testing to determine if they should be admitted as an inpatient or if they can be discharged.
• Billing Implications: Since observation status is classified as outpatient care, patients may face higher out-of-pocket costs compared to inpatient stays, especially if they need to transition to a skilled nursing facility for further care.
• Clinical and Financial Effects: Observation status can affect clinical decisions and financial burdens for patients, as it often leads to confusion and unexpected expenses due to its distinction from inpatient care.

Challenges With Observation Status

The main challenge with observation status lies in its effect on Medicare coverage. Under current Medicare rules, time spent under observation does not count toward the three-day inpatient stay requirement for skilled nursing facility (SNF) coverage. This can lead to significant out-of-pocket costs for patients who need skilled nursing care after leaving the hospital but who did not meet the inpatient criteria.

“When seniors require hospitalization, their focus should be on their health and getting well, not on how they were admitted,” Sen. Susan Collins (R-ME), a co-sponsor of the bill, said in a news release. “Yet currently, many older Americans face severe financial consequences due to the distinction between an observation stay and inpatient admittance.”

Medicare’s Three-Day Stay Rule

Medicare’s three-day stay rule is a policy that requires a patient to have a minimum of a three-day inpatient hospital stay to qualify for Medicare Part A coverage of SNF care. This rule has significant implications for patients and their access to necessary post-acute care services.

Details of the Three-Day Stay Rule

• Inpatient Requirement: To be eligible for coverage of SNF care under Medicare Part A, you must have been an inpatient for at least three consecutive days.
• Exclusion of Observation Days: Days spent under observation status, even if in the hospital, do not count toward this three-day requirement. This can potentially disqualify patients from SNF coverage despite having spent time in the hospital.
• Financial Consequences: Patients who do not meet the three-day inpatient requirement may face substantial costs for SNF care. This can be financially burdensome and limit access to necessary rehabilitative services.

The Effect on Patients

The three-day stay rule can create a significant barrier for patients who require SNF care after a hospital stay. Many patients who have been under observation status might not meet the inpatient criteria. As a result, they may fail to qualify for Medicare coverage of subsequent skilled nursing care. This often leads to out-of-pocket expenses that can be challenging for many, particularly older adults on fixed incomes.

The Improving Access to Medicare Coverage Act

The Improving Access to Medicare Coverage Act is a bipartisan legislative proposal introduced to amend a critical shortcoming in Medicare coverage related to hospital stays. The primary goal of the bill is to ensure that time spent under observation status in a hospital counts toward the necessary days for Medicare coverage of subsequent SNF care.

Key Provisions

• Observation Status Inclusion: The Act proposes that observation status counts toward the three-day hospital stay requirement for Medicare coverage of SNF care.

• Patient Protection: By addressing the observation status issue, the Act aims to protect patients from unexpected high costs associated with not meeting the inpatient requirement for Medicare Part A coverage of SNF care.

• Improved Coverage and Access: The Act seeks to ensure that Medicare recipients have better access to necessary post-acute care services without the financial strain caused by the current policy limitations.

The introduction of this Act highlights the need for a more equitable system that recognizes the reality of hospital care, where observation status can often involve the same level of care and duration as inpatient status.

How the Act Addresses the Issues

The Improving Access to Medicare Coverage Act aims to rectify the disparities caused by the current policy by including observation status in the calculation of the three-day hospital stay. This change is intended to:

• Enhance Equity: By counting observation days toward the three-day requirement, the bill would provide a more equitable system that acknowledges the reality of patient care needs.

• Reduce Financial Burden: The Act would alleviate the unexpected costs associated with the current exclusion of observation status, making post-acute care more affordable for Medicare beneficiaries.
• Improve Access to Care: Ensuring that more patients qualify for Medicare-covered SNF care would improve access to necessary rehabilitative services, promoting better health outcomes and quality of life for older adults.

“This bipartisan bill would deem time spent in observation status as inpatient care for the purpose of the Medicare three-day prior hospital stay requirement for skilled nursing care, which will help insulate older Americans from undue out-of-pocket costs and ensure that they get the care that they need,” said Sen. Collins.

The Improving Access to Medicare Coverage Act represents a significant step toward addressing the complexities and inequities of Medicare coverage related to hospital stays. By including observation status in the calculation of the three-day inpatient requirement, the Act seeks to ensure that patients receive the care they need without facing unnecessary financial burdens. This legislative effort underscores the importance of continually assessing and updating health care policies to meet the needs of the population and to provide fair, comprehensive access to essential health services.

Learn More About Medicare

You can learn more about Medicare benefits and your rights by contacting your elder law attorney today. They can discuss your specific situation and your options with you.

Promissory Notes and Medicaid Planning

Medicaid planning is often a complex process aimed at preserving a person’s assets while qualifying for Medicaid benefits. Finding a way to pay for long-term care costs without depleting all your hard-earned assets is a key part of Medicaid planning.

One strategy for protecting assets and qualifying for Medicaid that has gained attention in recent years is the use of promissory notes. This article will provide an explanation of promissory notes in the context of Medicaid planning, including their purpose, legality, implications, and considerations. Note that not all states allow promissory notes. Consult with an experienced elder law attorney before using one.

What Are Promissory Notes?

A promissory note is a legally binding document that outlines the terms of a loan agreement between two parties: the lender (creditor) and the borrower (debtor). It includes details such as the loan amount, interest rate, repayment schedule, and any other relevant terms and conditions. Promissory notes are commonly used in various financial transactions, including loans between individuals, businesses, and financial institutions.

Promissory Notes in Medicaid Planning

Medicaid is a public assistance program that assists individuals with limited income and resources in obtaining health insurance. It also serves as the primary way for millions of seniors in the United States to pay for long-term care services.

To qualify for Medicaid in most states, you must have no more than $2,000 in so-called “countable” assets to your name. Typically, five years before you apply, you may “spend down” your excess assets to bring them under this $2,000 threshold. Transferring assets within this five-year window of applying for Medicaid can otherwise result in a penalty period during which you may not be able to receive benefits.

Of course, not everyone plans this far ahead, as many people do not expect they will need long-term care. A Medicaid applicant may use a promissory note to transfer assets to other individuals, such as their children, while still complying with Medicaid eligibility requirements. By transferring assets through a promissory note, they can effectively reduce their countable assets, thereby helping them meet Medicaid's asset limit criteria.

How Do Promissory Notes Work in Medicaid Planning?

A person seeking Medicaid benefits might opt to transfer some of their assets to a family member, typically a child, in exchange for a promissory note. Assets can also be transferred to a trust. The beneficiaries of a person’s trust are often their children.

When the assets are transferred, a legally binding promissory note is created. The promissory note lays out the terms of the loan, including the principal amount, interest rate, repayment schedule, and other relevant information.

The borrower agrees to repay the loan according to the terms outlined in the promissory note, usually through regular installment payments over a specified period.

By transferring assets by way of a loan and creating a promissory note for the loan, the person seeking Medicaid benefits effectively reduces their countable assets, potentially qualifying them for Medicaid coverage.

Legal Considerations

Though promissory notes can be a valuable tool in Medicaid planning, it's important to ensure compliance with state and federal laws and regulations. As mentioned, Medicaid has strict rules regarding asset transfers and eligibility. Improper use of promissory notes could result in penalties or loss of benefits.

Key legal considerations include the following:

• Fair Market Value: The terms of the promissory note, including the loan amount and interest rate, should reflect fair market value to avoid scrutiny from Medicaid authorities.
• Payments: Payments on the loan must be made in equal amounts during the term of the loan with no deferral of payments and no balloon payments. (A balloon payment is a large payment made at the end of a loan’s term, after making much smaller payments along the way.)
• Term of the Loan: The term (length of time) of the loan must not last longer than the anticipated life of the lender.
• Debt Cancellation: The debt cannot be cancelled upon the lender’s death.
• Arm’s Length Transaction: The transaction should be conducted as an “arm’s length” transaction, meaning it should be carried out as if the parties were unrelated and dealing with each other at arm’s length.
• Look-Back Period: As stated above, Medicaid has a look-back period during which asset transfers are subject to scrutiny. In most states, the look-back period is five years. Any transfers made within this period may affect Medicaid eligibility, so it’s essential to plan accordingly.
• State-Specific Regulations: Medicaid rules vary from state to state, so it's crucial to consult with an experienced attorney familiar with Medicaid regulations in your state to ensure compliance.

Benefits of Using Promissory Notes in Medicaid Planning

Promissory notes offer several potential benefits in Medicaid planning, including the following:

• Asset Preservation: By transferring assets through a promissory note, individuals can preserve their wealth while still qualifying for Medicaid benefits to cover long-term care expenses.
• Control: The lender retains control over the repayment schedule and can customize the terms of the promissory note to suit their needs.
• Family Involvement: Promissory notes provide an opportunity for family members to participate in Medicaid planning and contribute to the financial well-being of their loved ones.

Risks of Using Promissory Notes in Medicaid Planning

When considering the benefits of using promissory notes in Medicaid planning you should also consider the risks, which could include the following:

• Regulatory Scrutiny: Improperly structured promissory notes may attract scrutiny from Medicaid authorities, potentially resulting in penalties or disqualification from benefits.
• Complexity: Medicaid planning involving promissory notes can be complex and requires careful consideration of legal and financial implications.
• Tax Implications: Transferring assets through promissory notes may have tax implications for the lender and the borrower, so it’s essential to seek professional tax advice.

Will a Promissory Note Work for Your Medicaid Planning?

Promissory notes can be a valuable tool in your Medicaid planning process. They could allow you to transfer assets while maintaining Medicaid eligibility. However, it’s crucial to navigate this strategy carefully, ensuring compliance with applicable laws and regulations.

Contact your elder law attorney today to talk further about gaining acceptance into the Medicaid program. They can help you determine whether including a promissory note in your planning will work for your situation. Elder law attorneys also can walk you through other benefits that may be available to you and help you understand how you can qualify for coverage.

HUD Housing Programs That Support Aging in Place

Ninety-three percent of adults 55 and older want to remain in their homes as they age, according to U.S. News & World Report. “Aging in place” involves growing old comfortably and safely in one’s dwelling.

As adults age, they may want to remain in their homes and communities for several reasons. For one, remaining in one’s own residence preserves independence.

When older adults remain in their home, they can continue local activities they enjoy and maintain their routines. They may be better able to maintain their quality of life.

Staying in the same community fosters social support. It makes it easier to sustain relationships with friends, neighbors, and community members. Seniors who need long-term care services also may be able to receive at-home care.

Several barriers can prevent seniors from aging in place. Rising housing costs, home maintenance, and lack of accessibility can prompt older adults and their families to consider senior living options, such as assisted living.

The cost of housing can be a particular burden for retirees on fixed incomes. More than half of older adult renters are cost-burdened. This means that they spend more than 30 percent of their income on housing, per the Joint Center for Housing Studies of Harvard University.

The Department of Housing and Urban Development (HUD) administers programs that can help older adults age in place. HUD programs supporting seniors include the Section 202 Supportive Housing for the Elderly Program and the Section 8 Housing Choice Voucher Program. Note that moving residences to participate in one of these programs may be necessary. However, these programs can help older adults remain in communities rather than entering assisted living or long-term care facilities.

Section 202 Supportive Housing for the Elderly Program

The Section 202 Supportive Housing for the Elderly Program incentivizes the creation of housing for low-income older adults. The program funds eligible private and nonprofit sponsors to create senior housing.

Section 202 housing provides support services essential to aging in place, such as cleaning, cooking, and transportation. This type of housing is available to households with at least one adult 62 years old or older. The individual or family must meet the program’s income requirements. The household income must be less than 50 percent of the Area Median Income (AMI) for the property’s location.

Residents of Section 202 properties typically pay 30 percent of their adjusted household income for rent. The federal government covers the remaining costs.

To find Section 202 properties, consider reaching out to a HUD-approved housing counselor for guidance. Note that, as HUD does not handle leasing, prospective renters must contact a property manager or owner directly.

Section 8 Housing Choice Voucher Program

Through the Section 8 Housing Choice Voucher Program, low-income renters who are older can select privately owned housing of their choice that meets program requirements. This gives older renters greater flexibility in choosing housing that meets their needs. For example, they may be able to look specifically for accessible housing.

Public Housing Agencies (PHAs) administer this program under HUD. Participating households receive a voucher. The program pays a housing subsidy directly to the landlord for the participating family or individual.

To be eligible for Section 8 housing, families and single people must meet certain requirements. Generally, their income can be at most 50 percent to 80 percent of the median income for their region.

Apply for the Section 8 Voucher Program by contacting your local PHA. HUD offers an agency directory. While waiting lists for Section 8 Housing can be long, some PHAs prioritize older applicants. HUD permits PHAs to prioritize certain applicants, which can include older adults.

Speak to Your Elder Law Attorney

Both Section 202 and Section 8 programs offer housing for low-income people. However, Section 202 specifically serves households with older adults. Section 8 housing is available to low-income households, including but not limited to families with older members.

Section 202 participants are more limited in their housing choices. They must reside in specific approved properties. Meanwhile, Section 8 participants have greater housing choice.

You may wish to remain in your home for as long as you can do it safely. As you consider housing options for aging in the community, your elder law attorney can help. They can assist you in identifying relevant housing programs and applying for Section 202 or Section 8 housing. 

Understanding Medicaid: What Does Medicaid Cover?

In the complex and frequently changing landscape of health care in the United States, Medicaid stands out as a vital program. Since 1965, it has provided essential coverage to millions of low-income individuals and families. Alongside Medicare, Medicaid serves as a lifeline for those who may otherwise struggle to afford health care services.

Though Medicaid exists to help those who need it, navigating the specifics of what it covers and does not cover can be daunting. This article highlights the basics of Medicaid coverage, shedding light on its benefits and limitations.

The Basics of Medicaid

Medicaid offers health care coverage to individuals and families with limited income and relatively few assets. The program provides a wide range of medical services, including doctor visits, hospital stays, prescription drugs, and preventive care. Medicaid is a joint federal and state program, so each state has the flexibility to administer the program differently within broad federal guidelines.

The eligibility criteria for Medicaid benefits can therefore vary from state to state. Generally, they relate to factors such as income, household size, disability status, and age. Some groups, such as children and pregnant women, may qualify based solely on income. Others, such as seniors and people with disabilities, may need to meet additional criteria.

Services covered by Medicaid also vary from state to state. Each state is required by federal law to provide Medicaid’s mandatory benefits. However, you cannot necessarily assume your state will cover the specific medical care you need.

The following benefits are provided as a guideline. Partner with a professional with expertise in your state’s Medicaid rules to ensure you get the most suitable coverage.

What Medicaid May Cover in Your State

Doctor Visits and Preventive Care

Medicaid should cover visits to primary care physicians, specialists, and other health care providers for preventive services. This may include vaccinations, screenings, and wellness exams.

Hospital Services

Medicaid coverage for inpatient and outpatient hospital care may include emergency room visits, surgeries, and medically necessary treatments.

Transportation to Medical Care

Medicaid generally covers the costs of emergency and non-emergency transportation to and from medical appointments and services that are covered by Medicaid.

Prescription Drugs

Medicaid provides coverage for a wide range of prescription medications deemed medically necessary by health care providers. However, coverage may vary depending on your state's specific guidelines.

Laboratory and Diagnostic Services

Medicaid may cover laboratory tests, diagnostic imaging, and other medical tests necessary for diagnosis and treatment.

Maternity and Newborn Care

Pregnant women enrolled in Medicaid receive comprehensive prenatal, delivery, and postpartum care, as well as coverage for newborn care.

Mental Health and Substance Abuse Services

Mental health services may be eligible for Medicaid coverage. These may include counseling, therapy, and psychiatric care, as well as treatment for substance abuse disorders.

Long-Term Care

Medicaid provides coverage for long-term care services. This includes care in nursing facilities and home health services for eligible individuals who require assistance with daily activities. Individuals may qualify for these services because of age, disability, or chronic illness.

Dental and Vision Care

Coverage for dental and vision services varies by state. Medicaid often includes preventive and basic dental care for children and limited coverage for adults. Vision care may include exams and eyeglasses for children.

What Does Medicaid Not Cover?

Cosmetic Procedures

Medicaid typically does not cover elective cosmetic procedures or treatments that are considered purely cosmetic in nature and not medically necessary.

Experimental or Investigational Treatments

Medicaid does not cover experimental or investigational treatments that have not been proven effective or approved by regulatory agencies.

Certain Types of Care

Though Medicaid covers a wide range of services, there are limitations on certain types of care, such as infertility treatments, elective abortions, and some types of alternative medicine. For example, the federal government lists family planning as a mandatory service benefit, but states interpret this differently.

Non-Emergency Medical Transportation

Though some states offer limited transportation assistance for medical appointments, Medicaid may not cover non-emergency transportation to health care facilities.

Out-of-Network Providers

Medicaid typically requires beneficiaries to receive care from providers within the program's network. Out-of-network care may not be covered except in emergency situations or with prior authorization.

Certain Prescription Drugs

Though Medicaid covers a broad range of prescription medications, coverage may be limited for certain drugs, particularly brand-name medications.

Routine Foot Care

Medicaid often does not cover routine foot care unless it is medically necessary. For example, treatments such as nail trimming, callus removal, or orthopedic shoes may be covered only for Medicaid beneficiaries with a specific condition, such as diabetes.

Seek Expert Advice on Medicaid

Medicaid plays a crucial role in ensuring access to health care for millions of vulnerable individuals and families nationwide. By covering a wide range of essential medical services, Medicaid helps improve the health of eligible beneficiaries. It also alleviates financial burdens for people with low income who may otherwise struggle to afford care.

Though Medicaid covers many services, exclusions and limitations could result in unexpected costs or denials of coverage. Be sure you understand the scope and limitations of Medicaid coverage in your state so you can make informed decisions about your health care needs and costs.

Contact your elder law attorney today to talk further about Medicaid. They can walk you through the benefits that may be available to you and help you understand how you can qualify for coverage.

States With the Highest and Lowest Assisted Living Costs

Today, 58 million adults in the United States are 65 and older. Seniors make up more than 17 percent of the American population. The U.S. Census Bureau expects this number to reach 83.7 million by 2050.

Meanwhile, one in every seven older adults will at some point need to rely on long-term care services in their later years. As a result, the growing number of aging Americans is creating an increased need for assisted living options.

What Is Assisted Living?

Assisted living is one type of long-term housing and care option for seniors. These facilities offer residential housing for older adults who need assistance with activities of daily living (ADLs). ADLs include such everyday tasks as bathing, dressing, preparing one’s meals, housekeeping, and managing one’s medication. Unlike nursing homes, assisted living facilities do not provide around-the-clock medical care to their residents.

The National Center for Assisted Living reports that there are currently more than 30,600 assisted living facilities and 1.2 million licensed beds in the U.S. According to the National Investment Center for Seniors Housing and Care, the senior housing occupancy rate rose for the ninth consecutive quarter, just surpassing 84 percent in late 2023. (The pre-pandemic rate, as of the first quarter of 2020, was 87 percent.) With this rising occupancy rate, the demand for assisted living is outpacing the number of beds available.

Seniors seeking information on assisted living options may find recent data from the Seniorly Resource Center particularly useful. The Center’s newly issued 2024 report sheds light on the costs of assisted living – from the most to the least expensive – across the U.S.

The Cost of Assisted Living

Across the country, assisted living costs an average of $4,401 monthly, increasing by 8 percent from 2021 to 2023.

During this timeframe, average assisted living costs grew in 30 states, remained about the same in six states, and fell in 15 states.

• Wyoming saw the most considerable increase. There, assisted living costs leapt by 53 percent between 2021 and 2023, from an average of $3,845 per month to $5,894 per month.
• In both New Hampshire and West Virginia, average fees rose by 46 percent. With average monthly costs rising from $5,644 to $8,248 in New Hampshire, it stands as the single most expensive state for assisted living. In West Virginia, assisted living prices went from $3,327 to $4,846 per month.
• Fees decreased by 15 percent in three states between 2021 and 2023. In Indiana, average monthly costs reduced from $4,328 to $3,695. Iowa fees lowered from $4,013 to $3,420. Washington State’s monthly assisted living fees went from $4,995 to $4,176 on average.

The Most Expensive, and Most Affordable, States for Assisted Living

While the prices of assisted living options can vary even within states, the findings identified the states with the highest and lowest fees on average.

As mentioned above, New Hampshire has the highest average monthly cost of assisted living at $8,248. Meanwhile, Louisiana has the lowest average monthly rate of $2,946.

The 10 most expensive states for assisted living, with monthly costs averaging above $5,000, are mainly located in New England and the Mid-Atlantic, reflecting the number of higher-end options available in these regions.

In-Home Care

Many seniors and their families may weigh assisted living against in-home care. Similar to assisted living, in-home care varies in affordability across states. An in-home aide costs an average of $5,462 per month in the United States.

• Minnesota is the most expensive state for home health aides, costing an average of $7,333 per month. Compared with in-home care, assisted living is in fact more affordable there, with an average cost of $3,472 per month.
• In West Virginia, home health costs an average of $3,793 per month, while assisted living costs an average of $4,846.

Weighing the pros and cons of assisted living versus in-home care remains essential. One 2022 study suggested that many seniors relying on in-home care were missing out on necessary assistance compared with those living in a residential facility setting.

Paying for Assisted Living

In addition to the rising costs of assisted living in many places, the Seniorly report points out that inflation has exceeded the Federal Reserve’s 2 percent target since March 2021. In addition, The New York Times also reports that senior living costs have risen faster than inflation.

Given the high costs of assisted living and in-home care, paying for care can be challenging for many families. Medicare does not cover assisted living room and board. Medicaid generally does not cover these costs, either; however, numerous states offer Medicaid assisted living waivers that can help. Unfortunately, waiting lists for such waivers may be lengthy.

According to Seniorly’s report, the typical American must save for about 17 years to be able to afford a single year of assisted living costs. To calculate this, it used the Census Bureau’s 2022 median annual household income and assumed 4.1 percent savings. Based on these estimates, it would take nearly 27 years of savings to pay for a year of assisted living in New Hampshire or about 12 years to afford a year of assisted living in Maryland.

Navigating Senior Care: Speak With Your Elder Law Attorney

Your elder law attorney can help you or your loved one organize strategies for affording long-term care. Contact them today to create a long-term care plan that will work for you.