Fong Law Group

The Trump Administration Allows States to Choose Medicaid Block Grants

The Trump administration has unveiled a plan to allow states the option to cap Medicaid spending using block grants. While this change does not directly affect nursing home residents on Medicaid and is billed as a way to improve state flexibility in running Medicaid programs, it could result in significant service cuts. 

Medicaid is a joint federal-state program that functions as an open-ended entitlement program, meaning it does not include any pre-set funding limits. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state's Medicaid costs. The state picks up the rest of the tab.

Announced on January 30, 2020, the Centers for Medicare and Medicaid Services (CMS) plan, dubbed "Healthy Adult Opportunity," would allow states to apply for block grant funding instead of receiving unlimited matching funds. States that choose to enter such an arrangement would receive a pre-set amount of money in exchange for increased flexibility in how they administer their programs. 

The new funding option applies mainly to healthy adults under 65 who are covered under Medicaid expansion. People needing long-term care and individuals who are 65 and over would not be included in a potential state block-grant project along with children and individuals with disabilities. States also cannot block grant services that are required under the Medicaid statute, such as emergency and hospital services. 

While long-term care beneficiaries may not be directly affected by this new funding structure, there could be an increase in costs to other Medicaid beneficiaries. States that choose block grant funding can increase prescription drug costs or change which prescription drugs are covered. Medicaid traditionally covers all federal-approved drugs, but the new plan allows states to cover just one drug per class. States can also increase co-pays or cut non-emergency services. If enrollment in Medicaid dramatically increases due to a health crisis or a recession, states that received a pre-set amount of funding may not have enough money to cover everyone, resulting in additional cuts to services. 

Opponents of the block grant concept contend it is illegal because only Congress can make such program changes, and litigation against the proposal is almost certain. In addition, it is unlikely that a state could get a waiver before 2021, when there may be a new federal administration.

For more information about the new plan, click here and here.

Medicaid Protections for the Healthy Spouse

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.

The so-called "spousal protections" work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of "institutionalization," the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the "snapshot" date because Medicaid is taking a picture of the couple's assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $128,640 (in 2020). Called the "community spouse resource allowance," this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $25,728 (in 2020).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple's assets have been reduced to a combined figure of $52,000 -- $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $128,640 (in 2020), regardless of whether or not this represents half the couple's assets. For example, if the couple had $100,000 in countable assets on the "snapshot" date, the community spouse could keep the entire amount, instead of being limited to half.

The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple's income is in the name of the institutionalized spouse and the community spouse's income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $2,113.75 to a high of $3,216 a month (in 2020). If the community spouse's own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse's income.

Example: Joe Smith and his wife Sally Brown have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith's name and $700 is in Ms. Brown's name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Ms. Brown's MMMNA is $2,200 (based on her housing costs). Since Ms. Brown's own income is only $700 a month, the Medicaid agency allocates $1,500 of Mr. Smith's income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $140 a month ($1,700 - $1,500 - $60 = $140).

In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support.

Contact your attorney to find out what you can do to make sure your spouse has enough income to live on. 

Feds Release 2020 Guidelines Used to Protect the Spouses of Medicaid Applicants

The Centers for Medicare & Medicaid Services (CMS) has released the 2020 federal guidelines for how much money the spouses of institutionalized Medicaid recipients may keep, as well as related Medicaid figures.

In 2020, the spouse of a Medicaid recipient living in a nursing home (called the "community spouse") may keep as much as $128,640 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Known as the community spouse resource allowance or CSRA, this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2020 will be $25,728.

Meanwhile, the maximum monthly maintenance needs allowance (MMMNA) for 2020 will be $3,216. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse's income. The minimum monthly maintenance needs allowance for the lower 48 states remains $2,113.75 ($2,641.25 for Alaska and $2,432.50 for Hawaii) until July 1, 2020.

In determining how much income a particular community spouse is allowed to retain, states must abide by this upper and lower range. Bear in mind that these figures apply only if the community spouse needs to take income from the institutionalized spouse. According to Medicaid law, the community spouse may keep all her own income, even if it exceeds the maximum monthly maintenance needs allowance.

The new spousal impoverishment numbers (except for the minimum monthly maintenance needs allowance) take effect on January 1, 2020.

Home Equity Limits:

In 2020, a Medicaid applicant’s principal residence will not be counted as an asset by Medicaid if the applicant's equity interest in the home is less than $595,000, with the states having the option of raising this limit to $893,000.

Home Care Costs Rise Sharply in Annual Long-Term Care Cost Survey

When it comes to long-term care costs, the charges for home care are now rising faster than those for nursing home care, according to Genworth's 2019 Cost of Care survey. In the past year, the median annual cost for home health aides rose 4.55 percent to $52,624, while the median cost of a private nursing home room rose only 1.82 percent to $102,200.

Genworth reports that the median cost of a semi-private room in a nursing home is $90,155, up 0.96 percent from 2018, and the median cost of assisted living facilities rose 1.28 percent, to $4,051 a month. But home care services had sharper increases. The national median annual rate for the services of a home health aide rose from $22 to $23 an hour, and the cost of adult day care, which provides support services in a protective setting during part of the day, rose from $72 to $75 a day, up 4.17 percent annually.

Alaska continues to be the costliest state for nursing home care by far, with the median annual cost of a private nursing home room totaling $362,628. Oklahoma again was found to be the most affordable state, with a median annual cost of a private room of $67,525.

The 2019 survey, conducted by CareScout for the sixteenth straight year, was based on responses from more than 15,178 nursing homes, assisted living facilities, adult day health facilities and home care providers.  Survey respondents were contacted by phone during May and June 2019.

As the survey indicates, long-term care is growing ever more expensive. Contact your elder law attorney to learn how you can protect some or all of your family's assets from being swallowed up by these rising costs.

For more on Genworth’s 2019 Cost of Care Survey, including costs for your state, click here.

Home Care Costs Rise Sharply in Annual Long-Term Care Cost Survey

When it comes to long-term care costs, the charges for home care are now rising faster than those for nursing home care, according to Genworth’s 2019 Cost of Care survey. In the past year, the median annual cost for home health aides rose 4.55 percent to $52,624, while the median cost of a private nursing home room rose only 1.82 percent to $102,200.

Genworth reports that the median cost of a semi-private room in a nursing home is $90,155, up 0.96 percent from 2018, and the median cost of assisted living facilities rose 1.28 percent, to $4,051 a month. But home care services had sharper increases. The national median annual rate for the services of a home health aide rose from $22 to $23 an hour, and the cost of adult day care, which provides support services in a protective setting during part of the day, rose from $72 to $75 a day, up 4.17 percent annually.

Alaska continues to be the costliest state for nursing home care by far, with the median annual cost of a private nursing home room totaling $362,628. Oklahoma again was found to be the most affordable state, with a median annual cost of a private room of $67,525.

The 2019 survey, conducted by CareScout for the sixteenth straight year, was based on responses from more than 15,178 nursing homes, assisted living facilities, adult day health facilities and home care providers.  Survey respondents were contacted by phone during May and June 2019.

As the survey indicates, long-term care is growing ever more expensive. Contact your elder law attorney to learn how you can protect some or all of your family's assets from being swallowed up by these rising costs.

For more on Genworth’s 2019 Cost of Care Survey, including costs for your state, click here.

Medicaid's Power to Recoup Benefits Paid: Estate Recovery and Liens

Federal law requires the state to attempt to recover the long-term care benefits from a Medicaid recipient's estate after the recipient's death. If steps aren't taken to protect the Medicaid recipient's house, it may need to be sold to settle the claim. 

For Medicaid recipients age 55 or older, states must seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States also have the option of recovering all Medicaid benefits from individuals over age 55, including costs for any medical care, not just long-term care benefits.

There are a few exceptions. The state cannot recover from the estate of a Medicaid recipient who has a surviving spouse until after the spouse passes away. After the spouse dies, the state may file a claim against the spouse's estate to recover money spent for the Medicaid recipient's care. The state also cannot recover from the estate if the Medicaid recipient had a child who is under age 21 or a child who is blind or disabled.

While states must attempt to recover funds from the Medicaid recipient's probate estate, meaning property that is held in the beneficiary's name only, they have the option of seeking recovery against property in which the recipient had an interest but which passes outside of probate (this is called "expanded" estate recovery). This includes jointly held assets, assets in a living trust, or life estates. Given the rules for Medicaid eligibility, the only probate property of substantial value that a Medicaid recipient is likely to own at death is his or her home. However, states that have not opted to broaden their estate recovery to include non-probate assets may not make a claim against the Medicaid recipient's home if it is not in his or her probate estate.

In addition to the right to recover from the estate of the Medicaid beneficiary, state Medicaid agencies may place a lien on real estate owned by a Medicaid beneficiary during his or her life unless certain dependent relatives are living in the property. The state cannot impose a lien if a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there.

Once a lien is placed on the property, if the property is sold while the Medicaid beneficiary is living, not only will the beneficiary cease to be eligible for Medicaid due to the cash from the sale, but the beneficiary would have to satisfy the lien by paying back the state for its coverage of care to date. In some states, the lien may be removed upon the beneficiary's death. In other states, the state can collect on the lien after the Medicaid recipient dies. Check with your attorney to see how your local agency handles this.

There are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if the Medicaid recipient and his or her spouse owned the home as tenants by the entireties or if the house is in the spouse's name and the Medicaid recipient relinquished his or her interest. If the house is in an irrevocable trust, the state cannot recover from it.

In addition, some children or relatives may be able to protect a nursing home resident's house if they qualify for an undue hardship waiver. For example, if a Medicaid recipient's daughter took care of him before he entered the nursing home and she has no other permanent residence, she may be able to avoid a claim against his house after he dies. Consult with your attorney to find out if the undue hardship waiver may be applicable.

What to Look for When Buying an Annuity

An annuity can be a useful tool for long-term care planning, but annuities are also complex financial products that are hard to understand. If purchasing an annuity, you need to consider your options carefully. 

An annuity is a contract with an insurance company under which the consumer pays the company a certain amount of money and the company sends the consumer a monthly check for the rest of his or her life, or for a certain term. Annuities come in many flavors. They can be deferred (begin paying out at a later date) or immediate (begin paying out right away). They can pay a fixed amount each month or pay out a variable amount based on how the money is invested. While a fixed immediate annuity can be a good Medicaid planning option for a married couple, other annuity products can be quite complex and confusing and are not right for everyone. 

If you have decided an annuity is the right choice for your long-term care or retirement plan, you need to shop around to find the right product. The following are some purchasing tips:

• Check the terms. Be sure to read the annuity contract carefully. Annuities often have surrender charges that penalize you for withdrawing your money too early. You need to understand for how long you won’t be able to access your money and when payouts begin. There may also be other fees associated with the annuity as well as optional riders. Understanding the fees will allow you to shop around to find the best product. 
• Choose your salesperson. Insurance companies often pay generous commissions to the brokers who sell their particular annuities, payments that many of the brokers don't disclose. They also generally don't disclose whether they are paid more or less by one insurance company than another or whether the annuity being sold is the best option for the consumer. Ask your broker questions to determine how they are paid. You may want to seek a second opinion to make sure your salesperson isn't steering you into a product that isn't right for you. 

Select a sound insurance company. Annuity payments are often supposed to last a lifetime, so you want an insurance company that will stick around. Make certain that the insurer is rated in the top two categories by one of the services that rates insurance companies, such as A.M. Best, Moody’s, Standard & Poor’s or Weiss.

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。