Fong Law Group

Can We Take Out a Reverse Mortgage to Pay for Care While We Wait for Medicaid Approval?

I have received a question from a reader lately. My mom is 93 years old and living at home with 24-hour care. We applied for Medicaid and have spent down her funds. We are awaiting financial approval and an opening at the nursing home to place her. Can we take out a reverse mortage on the house to keep paying for her care at home until she can be admitted? And can we be reimbursed for repairs we need to make to the house to qualify for the mortgage?

Answer: Yes, and yes. You can take out a reverse mortage, and you can get reimbursed from the mortgage for money you advance for repairs to the house. However, be very careful to document every dollar that you spend. The best approach is to lend the money to your mother and have her sign a promissory note memorializing the loan and then have her pay for the repairs herself. Otherwise, the Medicaid agency might view your payments as a gift to your mother and her reimbursement of you to be a disqualifying transfer.

Finally, with respect to the remaining reverse mortgage funds available to be drawn on when your mother moves to the nursing home, confirm with your state Medicaid agency that they don’t view these as available to your mother. They shouldn’t, but with 51 separate Medicaid programs out there, it’s best to confirm that they don’t. 

How Gifts Can Affect Medicaid Eligibility

We’ve all heard that it’s better to give than to receive, but if you think you might someday want to apply for Medicaid long-term care benefits, you need to be careful because giving away money or property can interfere with your eligibility. 

Under federal Medicaid law, if you transfer certain assets within five years before applying for Medicaid, you will be ineligible for a period of time (called a transfer penalty), depending on how much money you transferred. Even small transfers can affect eligibility. While federal law allows individuals to gift up to $15,000 a year (in 2019) without having to pay a gift tax, Medicaid law still treats that gift as a transfer.

Any transfer that you make, however innocent, will come under scrutiny. For example, Medicaid does not have an exception for gifts to charities. If you give money to a charity, it could affect your Medicaid eligibility down the road. Similarly, gifts for holidays, weddings, birthdays, and graduations can all cause a transfer penalty. If you buy something for a friend or relative, this could also result in a transfer penalty.

Spending a lot of cash all at once or over time could prompt the state to request documentation showing how the money was spent. If you don't have documentation showing that you received fair market value in return for a transferred asset, you could be subject to a transfer penalty.

While most transfers are penalized, certain transfers are exempt from this penalty. Even after entering a nursing home, you may transfer any asset to the following individuals without having to wait out a period of Medicaid ineligibility:

• your spouse
• your child who is blind or permanently disabled
• a trust for the sole benefit of anyone under age 65 who is permanently disabled

In addition, you may transfer your home to the following individuals (as well as to those listed above):

• your child who is under age 21
• your child who has lived in your home for at least two years prior to your moving to a nursing home and who provided you with care that allowed you to stay at home during that time
• a sibling who already has an equity interest in the house and who lived there for at least a year before you moved to a nursing home

Before giving away assets or property, check with your attorney to ensure that it won't affect your Medicaid eligibility.

How to Fight a Nursing Home Discharge 如何抵抗養老院強制住客出院 (中英對照)

Once a resident is settled in a nursing home, being told to leave can be very traumatic. Nursing homes are required to follow certain procedures before discharging a resident, but family members often accept the discharge without questioning it. Residents can fight back and challenge an unlawful discharge. 

According to federal law, a nursing home can discharge a resident only for the following reasons:

• The resident's health has improved
• The resident's needs cannot be met by the facility
• The health and safety of other residents is endangered
• The resident has not paid after receiving notice
• The facility stops operating

Unfortunately, sometimes nursing homes want to get rid of a resident for another reason--perhaps the resident is difficult, the resident's family is difficult, or the resident is a Medicaid recipient. In such cases, the nursing home may not follow the proper procedure or it may attempt to "dump" the resident by transferring the resident to a hospital and then refusing to let the him or her back in.

If the nursing home transfers a resident to a hospital, state law may require that the nursing home hold the resident's bed for a certain number of days (usually about a week). Before transferring a resident, the facility must inform the resident about its bed-hold policy. If the resident pays privately, he or she may have to pay to hold the bed, but if the resident receives Medicaid, Medicaid will pay for the bed hold. In addition, if the resident is a Medicaid recipient the nursing home has to readmit the resident to the first available bed if the bed-hold period has passed.

In addition, a nursing home cannot discharge a resident without proper notice and planning. In general, the nursing home must provide written notice 30 days before discharge, though shorter notice is allowed in emergency situations. Even if a patient is sent to a hospital, the nursing home may still have to do proper discharge planning if it plans on not readmitting the resident. A discharge plan must ensure the resident has a safe place to go, preferably near family, and outline the care the resident will receive after discharge.

If the nursing home refuses to readmit a patient or insists on discharging a resident, residents can appeal or file a complaint with the state long-term care ombudsman. The resident should appeal as soon as possible after receiving a discharge notice or after being refused readmittance to the nursing home. You can also require the resident's doctor to sign off on the discharge. Contact your elder law attorney to find out the best steps to take. 

老人在養老院定居下來後，當被告知要離開可能會造成很大的打擊。養老院在迫令住宿者離開之前必須遵循某些程序，但家人經常接受開除而不會質疑。住宿者可以反駁並挑戰非法開除。

根據聯邦法律，養老院只能出於以下原因開除住宿者：

• 住宿者的健康狀況有所改善
• 設施無法滿足住宿者的需求
• 其他住宿者的健康和安全受到威脅
• 住宿者在收到通知後未付款
• 設施停止運作

不幸的是，有時養老院想要擺脫住宿者是另有原因的。也許是住宿者很難應付或是住宿者的家人很難應付，或住宿者有醫療補助。在這種情況下，療養院可能不遵循正確的程序，或者可能試圖把住宿者轉到醫院然後拒絕讓他們回來。

如果養老院將住宿者轉移到醫院，州法律可能要求養老院為住宿者保留床位一定日子（通常約一周）。在轉移住宿者之前，養老院必須告知住宿者其床位保留政策。如果住宿者自付，他可能需要支付保留床位的費用，但如果住宿者有醫療補助，醫療補助將支付住宿費。此外，如果住宿者有醫療補助，而床位保留期已過，養老院必須重新安排首個可用床位給住宿者。

此外，如果沒有恰當的通知和計劃，養老院不能開除住宿者。一般而言，養老院必須在出院前的30天發出書面通知，但在緊急情況下允許更短的通知。即使病人被送往醫院，如果養老院計劃不重新接納住宿者，也仍需要做好適當的出院計劃。出院計劃必須確保住宿者有一個安全的地方，最好是靠近他的家人，並概述住宿者出院後會得到的照顧。

如果養老院拒絕重新接納住宿者或堅持讓住宿者出院，住宿者可以向州的長期護理監察專員提出申訴。住宿者應在收到出院通知後或被拒絕入住養老院後儘快提出上訴。您還可以要求得到住院醫生簽字才出院。聯繫您的老人法律師，了解最佳步驟。

Don’t Wait to Purchase This Type of Insurance

“With so many types of health insurance available, it is hard to decide which types of supplemental insurance you need.”

Insurance is a tool that is necessary to protect yourself and your loved ones. Long-term care insurance and life insurance are often offered by employers as part of your benefits package. However, as discussed in the article “What Is Critical Illness Insurance” from the balance, this additional insurance could make a big difference in your family’s financial well-being. Before making any decisions, it’s important to understand the role of critical insurance.

Critical illness insurance, which is also known as critical care insurance, is a type of insurance policy that pays insurance policyowners with a lump sum payment, after they are diagnosed with a specific type of illness that is listed on their insurance policy. This insurance may also be structured to make serial payments, based on the policyowner’s ongoing medical treatments or condition.

Some critical coverages are very limited and only cover a handful of illnesses, while others can provide coverage for as many as thirty different conditions.

Like any kind of insurance policy, it’s important to read the fine print. There will likely be conditions attached to getting a cash payout. Do the research before signing up.

Some critical illness policies cover the portion of the cost of any diagnostic or screening tests for a condition. If you have regular colonoscopies, for instance, and you own a cancer policy, it is possible that the unreimbursed portion of your procedure could be covered by the critical illness policy. A good policy could work for you during your entire healthy life, as well as during a critical illness.

Some of the critical illness policies provide an option to combine critical illnesses coverage with additional life insurance, accident or disability insurance. If you want to maximize coverage and avoid having to manage a few different insurance policies, this may work for you. Again, read the fine print. You don’t want to put all your insurance eggs in one basket, only to find that the conditions are counter-productive to your coverage goals.

Critical illness insurance usually comes with a list of illnesses that are included in the policy. Each one will have very specific criteria that will define whether you qualify for a benefit payment. There are cases where people may think they have coverage because of a diagnosis, only to learn that they have not met the specific criteria.

Deciding whether you need critical illness insurance, in addition to your employee benefits, is a personal decision. If you are paying several hundred dollars a month for many years and never become ill, then you may not consider the money well spent. However, if you receive a diagnosis of a critical illness and you receive a large payout, you’ll be glad to have the coverage.

Another option is to put the same amount of money into a health savings account. However, there’s no way to be sure that the account will grow enough to cover the expense of a major, life-changing illness.

Reference: the balance (March 11, 2019) “What Is Critical Illness Insurance”

Still Working but Coping with Early Stages of Dementia

“Sharing a dementia diagnosis is a challenge facing thousands of Americans.”

There are many factors to consider when you’re still active in the workforce but have received a diagnosis of dementia. How has your job performance been affected? Have you been able to devise a system for maintaining your performance levels, or are you not able to safely proceed with the tasks of your job?

For a neurosurgeon, early stages of dementia would probably require an immediate end to their career. However, someone in a less demanding occupation, might be able to figure out a way to continue working. The situation is never easy, explains Next Avenue in the article “Dementia Diagnosis: When Do You Go Public?”

In one case, a man who was diagnosed at age 58 with minor cognitive impairment had found workarounds but knew that he was heading into dementia. He shared his information with his employer, colleagues and professional acquaintances, as well as his large family, which includes a nearly 90-year old father. Not everyone can have these conversations, and few are ever prepared for them.

According to the Alzheimer’s Foundation, 200,000 Americans have the early onset variation of Alzheimer’s, meaning they are 65 or under when they start having symptoms. Another 5.7 million Americans who are 65 or older live with Alzheimer’s.

The director of palliative care and medical ethics care at New York University, Dr. Hamilton, has delivered the bad news to hundreds of patients. She says that most of them are not surprised with the diagnosis. They are scared and worried, but rarely surprised. She believes that the rewards outweigh the risks, when it comes to sharing this news, and that families live with less uncertainty when everyone knows what has happened. This knowledge allows the family to move forward with practical planning.

The first step is to get legal and financial matters in order. That means an estate plan, including a health care directive and a Power of Attorney for financial matters and a health care proxy to make decisions, when the person no longer can do so themselves.

It’s a scary conversation to have with employers. It may be that the federal civil rights law, the Americans with Disabilities Act (ADA) prohibits discrimination and requires employers to make “reasonable accommodations” for employees with disabilities. However, this isn’t always what happens.

Dr. Sujatha Hamilton says that many people today need to work past age 65, and disclosing their illness is helpful, if their employer can have their duties modified or their schedules restructured. They are more likely to be terminated or forced into retirement, if their employer does not know why things are going wrong, when their performance starts to suffer.

As part of planning for a next stage of life after a dementia diagnosis, care directives and estate plans may need to be revised. Your estate planning attorney will be able to help make the changes to the estate plan and what plans need to be made for long-term care, as the disease progresses.

Reference: Next Avenue (Feb. 4, 2019) “Dementia Diagnosis: When Do You Go Public?”

He’s 60. She’s 48. What Does Their Retirement Plan Look Like?

“The Pew Research Center looked at the age gap in couples. For the most part, people marry someone close in age. However, one stereotype proved to be true: Men who are remarrying tend to wed younger women.”

When couples are about the same age, working the retirement numbers is complicated enough.  However, what about when there’s a big age gap. In fact, an article from The Washington Post asks “How will a couple’s retirement look when there’s a big age gap?” Apparently, a big age gap can lead to some special challenges.

Not only are men who have recently remarried more likely to have a spouse who is younger, said one researcher, in many cases they are marrying women who are much younger. Twenty percent of newly married men wed women who are at least 10 years younger than themselves and another 18% marry women who are six to nine years younger.

By comparison, just 5% of men in their first marriage marry women who are 10 years younger.

For women, the likelihood of having a far younger spouse is very low.

That big age gap can be a big factor in decisions about when you retire, when spouses take Social Security and in planning how much money the couple needs to save and how to invest their savings.  Since women tend to outlive men, it’s especially important for retirement savings to last longer, when the wife is much younger than her husband.

When to retire is one of the big questions. Long-term care considerations, health insurance and other health costs become more significant, when there’s a younger spouse.

Couples with big age gaps need to have a plan that accommodates the partner with the longest life expectancy. Therefore, a 70-year-old husband and a 56-year-old wife need to plan for their portfolio to last over the wife’s longer life span. That could be 30 years, especially if she has good health and a family history of longevity.

If the older partner had a higher income level over his working career, delaying Social Security filing past full retirement age to age 70 could be extremely important. It will enlarge the higher-earning spouse’s benefit and it will also enhance the lifetime benefits for the surviving spouse.

If there is a big age gap between you and your partner, you’ll need to have a lot of discussions about the issues that retirement and retirement planning brings.

Couples should sit down with an estate planning attorney and discuss the challenges they may face because of a large age difference. The attorney will be able to provide guidance, including exploring the use of many kinds of trusts or other estate planning tools that will protect the younger spouse.

Reference: The Washington Post (Oct. 22, 2018) “How will a couple’s retirement look when there’s a big age gap?”

How Will You Pay for Nursing Care? 你將如何支付護理費？ (中英對照)

“While the U.S. inflation rate was 2.1% for the first half of the year, the cost of a one-room assisted living facility grew by 6.67% from 2017 to 2018, Genworth Financial says.”

In other words, you’re going to need a much heftier retirement fund or a better plan, to prepare for the possibility of needing long term care. A recent article from CNBC, “This retirement expense has hit $100,000 annually–and it’s continuing to rise,” reports that a larger number of older adults will need specialized care. Another problem is a shortage of skilled workers. Care expenses will rise with wage demands. Your best bet: start planning now for how you’d like to receive—and pay for—your care.

Overall, the rising cost of care has outpaced inflation. The CPI (Consumer Price Index) for all urban consumers was 2.1% for the first half of 2018. The annual median cost of a room at an assisted living facility grew faster, and even the cost of a shared room in a nursing care facility increased—by 4.11%.

Here’s a look at the most expensive places to seek care:

Aging in Alaska is the most expensive state, if you need to be in a nursing home. The annual median cost for a private room: $330,873, according to the Genworth study. An alternative might be assisted living facilities. However, they offer less medical care or assistance. There’s also the option of having a home health care aide come to visit.

Home health care services cost the most in Hawaii, where patients pay an annual cost of $68,640 for just 44 hours a week of care at home. The growing demand for support services, is likely to push the cost of care even higher.

People planning to retire in five years or so, can prepare by working with a knowledgeable advisor. The first question is, where do you want to receive care? The next one is to plan for the worst-case situation, where you or a spouse need the care that only a skilled facility can provide.

The solution, if you can get coverage, may be a long-term care insurance policy, or a life insurance policy with a long-term care feature. The cost may be high but the costs you might incur without that coverage will be way higher.

Another solution is Medicaid (Medi-Cal in California).  In most states, Medicaid is the only government program that can nursing care.  However, Medicaid is not open to everybody.  You must pass a means-test in order to qualify for Medcaid.  Medicaid involves a series of complex rules and it is not easy to tell right away whether a person qualifies for Medicaid.  If you want to know whether you qualify for Medicaid, you should contact an attorney specializing in this area. 

Part of your planning should also include selecting trusted people, family or friends, who can be named to take over your financial matters (power of attorney) or medical care (health care power of attorney), should you become incapacitated, by illness or injury.

Your estate planning attorney will be able to help you prepare these documents, along with a comprehensive estate plan that protects you and your family while you are living and after you have passed.

Reference: CNBC (Oct. 20, 2018) “This retirement expense has hit $100,000 annually–and it’s continuing to rise”

Genworth Financial表示，“雖然上半年美國通脹率為2.1％，但室內輔助生活設施的成本從2017年到2018年增長了6.67%。”

換句話說，你需要一個更強大的退休基金或更好的計劃，為需要長期護理的可能做準備。 CNBC最近發表的一篇文章稱，“This retirement expense has hit $100,000 annually–and it’s continuing to rise”  大多數老人需要專門護理。另一個問題是技術工人短缺。護理費將隨工資需求而增加。您最好的選擇是現在就開始計劃您希望如何接收並支付您的護理費。

總體而言，護理成本的上升超過了通貨膨脹。 2018年上半年所有城市消費者的CPI（消費者價格指數）為2.1%。可是輔助生活設施的房間年度中位數成本增長更快，甚至護理設施中共用房間的成本也增加了 4.11%。

以下是護理費最昂貴的地方：

如果你需要住在養老院，阿拉斯加是養老最昂貴的州。根據Genworth的研究，私人房間的年度中位數成本為330,873美元。另一種可能是輔助生活設施。但是，他們提供的醫療保健或援助較少。還有另一個選擇是請家庭醫療助手前來探望。

在夏威夷，家庭醫療保健服務的成本最高，患者每週僅44小時就需支付一年68,640美元的費用。對於支援服務的需求不斷增加，這可使護理成本更高。

計劃在五年之內左右退休的人可以通過與專業人士合作來做好準備。第一個問題是，您想在哪裡接受護理？下一個為最壞的情況打算，您或配偶需要入住護老院才可護理。

如果保險些，解決方案可能是長期護理保險政策，或具有長期護理功能的人壽保險。成本可能會很高，但如果沒有覆蓋所有範圍，可能會產生更高的成本。

另一種解決方法是醫療補助（加州白卡）。 在大多數州，醫療補助是唯一可以提供護理的政府計劃。 但是，醫療補助計劃並不對所有人開放。 您必須通過一連串的經濟審查才能獲得醫療補助資格。 醫療補助涉及一系列複雜的規則，並且不能立即便判斷一個人是否有資格獲得。 如果您想知道自己是否有資格獲得白卡，您應該聯繫專門從事該領域的律師。

您的計劃還應包括選擇可信賴的人，家人或朋友為您在生病或受傷而無法處理財務或醫療時去幫你處理有關事務。

您的資產規劃律師將能夠幫您準備這些文件，一個全面的資產計劃能在你在生及去世後去保護您和您的家人。

參考: CNBC (Oct. 20, 2018) “This retirement expense has hit $100,000 annually–and it’s continuing to rise”

 

Financing Assisted Living by Saving, Planning and Insurance

“In March 2018, the U.S. Census Bureau reported that by 2030, all baby boomers will be over the age of 65, leading to a unique situation in demographics: 20% of U.S. residents will be at retirement age.”

Part of the increase in the number of people who live long enough to be of retirement age, is because life expectancies have increased. The average U.S. life expectancy has increased from 68 years in 1950 to 79 years in 2013, according to the Population Reference Bureau cited in an article from U.S. News & World Report titled “How Should I Finance Assisted Living?”

The combination of increasing life expectancies and improvements to healthcare, means that more people are living longer after they stop working. This has led to a financial crisis for many Americans: how can they pay for the increased cost of healthcare and assistance needed, as they enjoy these additional years, and in some cases, decades.

It’s like a math problem. If you retire at age 65 and need to enter an assisted living facility 10 years later, how much money will you need to pay for the health care you’ll need by the time you reach 84? It’s impossible to calculate, because there are so many unknown factors.

Those factors are exactly what Americans need to consider, because most facilities primarily rely on private payments and Medicare does not cover the cost of assisted living facilities. It only pays for rehabilitation in a nursing home for the first hundred days. After that, the only assistance available is Medicaid.

Medicaid coverage is supposed to kick in, only when a person has spent down all of their assets and is basically destitute.

One survey by a major financial company reports that the median monthly cost for an assisted living community is $3,750 or $45,000 a year. Long-term care by a home health aide can top $4,000 monthly or nearly $50,000 a year.

These kinds of numbers demonstrate the need to save and plan well for retirement and for the possibility of needing to pay for assisted living. However, boomers are not at all positioned well for either retirement or assisted living. By the time people start thinking about retirement, they are usually in their 50s or 60s.

No matter when you start, starting is better than not doing anything. When you meet with your estate planning attorney, discuss how your estate is structured, in terms of paying for long-term care. Does it make sense for you to purchase an insurance policy to protect your assets and should it be owned by you or by a trust? What kind of trust?

Your estate planning attorney also is likely to have a network of professionals who help families navigate this complex world of care facilities. Understanding this system and the individual’s needs, can go a long way in making a difficult and expensive process much easier.

Reference: U.S. News & World Report (Oct. 10, 2018) “How Should I Finance Assisted Living?”