Fong Law Group

How to Get Into a Nursing Home as a Medicaid Recipient

While Medicaid helps pay for nursing home care, being admitted to a nursing home as a Medicaid recipient is not always easy. There are several ways to navigate the process, depending on your situation. 

With the median cost of a nursing home room being more than $250 a day, most families need help paying for long-term care. Medicaid is the primary method of covering the costs for nursing home care in the United States, but in order to qualify for Medicaid, an applicant must have limited income and assets. 

Generally, nursing homes will only accept patients who can pay for their care, while Medicaid will not pay for nursing home care unless an applicant is already living in a nursing home. This creates a predicament: How to get a loved one into a nursing home in order to receive Medicaid? The following are some of the methods you can use to find a nursing home that will accept your loved one:

• Private Pay. The easiest way to get into a nursing home is to be able to pay for care while the resident’s assets are spent down in order to qualify for Medicaid. Residents who can pay privately for a few months can file a Medicaid application once they are in the nursing home and start receiving benefits when the resident’s funds are below their state’s threshold for “countable assets.” Make sure the nursing home accepts Medicaid patients — and get the timing right so that the resident doesn’t run out of funds before the Medicaid application is approved. 

If the resident lacks the funds to pay for his or her own care, the resident’s family could pay. However, this is risky. The family will not be reimbursed if the resident eventually qualifies for Medicaid. It may be possible for the family to lend the money to the nursing home under a written agreement stating that the funds will be returned when the resident qualifies for Medicaid. 

• Medicare. Medicare provides nursing home coverage for up to 100 days of “skilled nursing care” per illness. The patient must enter the nursing home no more than 30 days after a hospital stay that had lasted for at least three days (not counting the day of discharge). The care provided in the nursing home also must be for the same condition that caused the hospitalization (or a condition medically related to it). In addition, the patient must receive a "skilled" level of care in the nursing facility that cannot be provided at home or on an outpatient basis. And finally, Medicare covers care only for people who are likely to recover from their conditions. If a loved one meets these conditions, it is possible for them to enter a nursing home and immediately apply for Medicaid while Medicare pays in the meantime. 
   
• Medicaid Pending. There are some nursing homes that will accept a resident who has applied for Medicaid and is awaiting a response. Unfortunately, there are only a few nursing homes that accept Medicaid pending residents without some type of payment guarantee in the event the application is denied. The nursing homes that accept Medicaid pending residents tend to be those with lower ratings for nursing home quality.  

When moving into a nursing home, be careful about signing a nursing home admission agreement. Nursing homes may try to get families to agree to pay their loved one’s bills if a Medicaid application is denied. Read any agreement thoroughly and have it reviewed by your attorney. 

Navigating the Medicaid process is complicated. If possible, consult with an attorney before entering a nursing home and applying for Medicaid.

Which States Have Been Hardest Hit by the Nursing Home Staffing Crisis?

The COVID-19 pandemic has caused nursing home staffing shortages across the United States, even forcing facilities to close, but some states have been hit harder than others. A new analysis looks at which states are confronting the worst staffing problems. 

Overwhelmed by the stress of long hours, low pay and exposure to the COVID-19 virus, nursing home workers have been quitting in record numbers. According to the Service Employees International Union, more than 420,000 workers -- nearly 10 percent of the workforce -- left the long-term care industry between the start of the pandemic and January 2022. The labor hemorrhage has turned what was already a chronic staffing problem into a full-blown crisis as understaffed facilities struggle to care for patients, accommodate family visitation, and admit new patients waiting in hospitals to be discharged.

The online platform Seniorly, which helps families find senior living facilities, recently analyzed staffing data in all 50 states and identified which ones have been hardest hit. Overall, one-quarter of nursing homes in the United States had staff shortages as of the end of February 2022, but Minnesota was reporting the most, with 41 percent of facilities experiencing a scarcity of workers. Washington and Maine also had large numbers of facilities with insufficient staff (close to 38 percent in both states). 

According to Seniorly, the biggest shortages are among nursing workers (registered nurses, licensed practical nurses, and vocational nurses) and aides (certified nursing assistants, nurse aides, medication aides, and medication technicians). These are the employees who provide the most direct care to nursing home residents. Although fewer facilities (an average of 3.5 percent) are experiencing shortages of higher paid workers, such as physicians, physician’s assistants, and advanced nurse practitioners, the number of facilities with a dearth of even these types of workers has jumped almost a percentage point since 2020.   

While most states are enduring huge staffing problems, a few states are actually trending in the right direction. Arkansas, Connecticut, and Texas have fewer facilities reporting staffing shortages than in 2020. And California has the lowest percentage of facilities with staffing issues (about 2 percent). 

To read the full analysis and see how your state is doing, click here.  

Requiring Adult Children to Pay for Aging Parents' Care

Did you know you could be responsible for your parents' unpaid bills? More than half of all states currently have laws making adult children financially responsible for their parents, including their long-term care costs. However, these laws are rarely enforced.

Filial responsibility laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their parents who cannot afford to take care of themselves. States may allow a civil court action to obtain financial support or cost recovery, impose criminal penalties on children who do not support their parents, or allow both civil and criminal actions. 

Generally, most states with such laws do not require children to provide care if they lack the ability to pay. States also vary on what factors they consider when determining whether an adult child is able to pay. Children may not be required to support their parents if the parents abandoned them or did not support them.

With regard to long-term care, most low-income parents qualify for Medicaid, making it unnecessary for a nursing home to pursue the resident's children for payment. When the Deficit Reduction Act of 2005 made it more difficult to qualify for Medicaid, experts predicted a wave of lawsuits by nursing homes under state filial responsibility statutes, but that has not happened. However, in 2012 a court in Pennsylvania ruled that a son was responsible for his mother’s $93,000 nursing home bill under the state’s filial responsibility law. 

While in most instances adult children are not held responsible for their parents’ long-term care bills under these laws, they may have to pay a nursing home in other circumstances. In some cases, children have been held liable if their parent transferred assets to them, making the parent ineligible for Medicaid. Additionally, there are cases in which children who signed an agreement affirming that they would assist their parent in paying for a nursing home have been sued for breach of contract by the nursing home. After a parent dies, Medicaid estate recovery allows the state to recoup Medicaid benefits from the parent’s estate, reducing the amount the children can inherit. 

If your parent needs long-term care, be sure to consult with your attorney to make certain you are not creating a situation in which you might be liable for your parent’s care. 

What to Do If Your Medicaid Application Is Denied

If you apply for long-term care assistance through Medicaid and your application is denied, the situation may seem hopeless. The good news is that you can appeal the decision. 

Medicaid is a program for low-income individuals, so it has strict income and asset eligibility requirements. Qualifying for Medicaid requires navigating the complicated application process, which has many potential stumbling blocks. However, a Medicaid denial does not mean you will not eventually qualify for benefits. 

The Medicaid agency may deny a Medicaid application for a number of reasons, including the following: 

• Missing documentation. You need to show proof that you are eligible for benefits, which usually means providing Social Security statements, bank records, property deeds, retirement accounts, and insurance records, among other things. 
• Excess assets. In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in "countable" assets (in most states). 
• Transferred assets. If you transferred assets for less than market value within five years before applying for benefits, you may be subject to a penalty period before you become eligible for benefits. 

The Medicaid agency is required to issue the denial notice with 45 days of the application (or 90 days if you filed for benefits on the basis of a disability). When you get a denial notice, read it carefully. The notice will explain why the application was denied and specify how to file an appeal. 

Before filing a formal appeal, you can try informally asking the agency to reverse the decision. If you made a mistake on the application, this is the easiest and quickest way to proceed. If the caseworker made a mistake, it may be more complicated and require escalation to a supervisor or a formal appeal. 

Appealing a Decision
The denial notice will tell how long you have to file an appeal—the deadline may be as short as 30 days or as long as 90 days after the denial notice. It is important to file the appeal before the deadline. Whether the denial notice requires it or not, you should submit your request for an appeal in writing, so that there is a record of it.

Once your appeal is submitted, the Medicaid agency will set a hearing date. Applicants must attend the hearing or their cases will be dismissed. You have a right to have witnesses testify at the hearing and to question the Medicaid agency’s witnesses. It is a good idea to have an attorney to help you through the appeal process. An attorney can make sure you have all the correct documentation and information to present at the hearing. 

If you win the appeal, your benefits will be retroactive to the date of your eligibility—usually the date of your application. If you lose the appeal, the notice will explain how to appeal the decision. The next step in the appeal process usually involves submitting written arguments. If the next appeal is unsuccessful, then you will have to appeal to court. It is crucial to have the assistance of an attorney for this. 

Reapplying for Benefits
If your application was denied correctly due to excess assets or income, there are steps you can take to spend down your assets or put your income in a trust. Contact an attorney to find out what actions you can take to qualify for benefits. Once you do this, you can then reapply for benefits. Note that when you reapply for benefits, your eligibility date will change to the date of the new application. 

Should You Prepare a Medicaid Application Yourself?

Navigating the Medicaid application process can be complicated, especially if you are applying for long-term care benefits. Hiring an attorney to help you through the process can be extremely helpful. 

Whether you should prepare and file a Medicaid application by yourself or should hire help depends on answers to the following questions:

• How old is the applicant?
• How complicated is the applicant's financial situation?
• Is the individual applying for community or nursing home benefits?
• How much time do you have available?
• How organized are you?

Medicaid is the health care program for individuals who do not have another form of insurance or whose insurance does not cover what they need, such as long-term care. Many people rely on Medicaid for assistance in paying for care at home or in nursing homes.

For people under age 65 and not in need of long-term care, eligibility is based largely on income and the application process is not very complicated. Most people can apply on their own without assistance.  

Matters get a bit more complicated for applicants age 65 and above and especially for those of any age who need nursing home or other long-term care coverage. In these cases, availing yourself of the services of an attorney is practically essential.

Medicaid applicants over age 65 are limited to $2,000 in countable assets (in most states). It's possible to transfer assets over this amount in order to become eligible, but seniors need to be careful in doing so because they may need the funds in the future and if they move to a nursing home, the transfer could make them ineligible for benefits for five years. Professional advice is also crucial because there is a confusing array of different Medicaid programs that may be of assistance in providing home care, each with its own rules.

All of that said, the application process itself is not as complicated for community benefits (care that takes place outside of an institutional setting, such as in the beneficiary’s home). In short, those over 65 may need to consult with an elder law attorney for planning purposes, but they or their families may be able to prepare and submit the Medicaid application themselves.

But submitting an application for nursing home benefits without an attorney's help is not a good idea. This is because Medicaid officials subject such applications to enhanced scrutiny, requiring up to five years of financial records and documentation of every fact. Any unexplained expense may be treated as a disqualifying transfer of assets, and many planning steps -- such as trusts, transfers to family members, and family care agreements -- are viewed as suspect unless properly explained. Finally, the process generally takes several months as Medicaid keeps asking questions and demanding further documentation for the answers provided.

Many elder law attorneys offer assistance with Medicaid applications as part of their services. This has several advantages, including expert advice on how best to qualify for benefits as early as possible, experience in dealing with the more difficult eligibility questions that often arise, and a high level of service through a long, grueling process. The one drawback of using an attorney rather than a lay service is that the fee is typically substantially higher. However, given the high cost of nursing homes, if the law firm's assistance can accelerate eligibility by even one month that will generally cover the fee. In addition, the payments to the attorney are generally with funds that would otherwise be paid to the nursing home -- in other words, the funds will have to be spent in any event, whether for nursing home or for legal fees.

Home Health Aide Costs See the Sharpest Increase in Annual Long-Term Care Survey

Long-term care costs climbed again in 2021, with rates for home health aides and homemakers seeing the sharpest rises, according to Genworth’s annual Cost of Care Survey. The coronavirus pandemic continues to contribute to cost increases. 

In the past year, Genworth reports that the national median annual cost of home health aides shot up 12.50 percent to $61,776, and the median annual rate for the services of a homemaker also jumped 10.64 percent to $59,488. Home health aides provide hands-on personal care, but not medical care. Homemaker services help with household tasks like cooking or cleaning that cannot be handled alone.

Price increases for nursing home care were more moderate, with the median cost of a private nursing home room rising 2.41 percent to $108,405 and the median cost of a semi-private room in a nursing home now $94,900, up 1.96 percent from 2020. Meanwhile, assisted living facility rates grew 4.65 percent for a median cost of $54,00 per year. After falling in 2020, adult day care costs rose 5.41 percent from $74 to $78 a day.

Even though costs fell sharply there, 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 $378,140, down 13.38 percent since 2020. Missouri was the most affordable state, with a median annual cost of a private room of $71,175.

The 2021 survey, conducted by CareScout for the 18th straight year, was based on responses from 14,698 nursing homes, assisted living facilities, adult day health facilities, and home care providers. 

As the survey indicates, long-term care is growing ever more expensive. Contact your 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 2021 Cost of Care Survey, including costs for your state, click here.

Biden Proposes Major Nursing Home Reforms, Most Extensive "In Decades"

The Biden administration has announced far-reaching nursing home reforms, targeting staffing and accountability at facilities with deficient care. Advocates are calling the proposals, which include the first-ever federal minimum staffing levels, the most significant reforms in decades. 

Nursing homes have been plagued by chronic understaffing and high turnover rates for years, a problem only exacerbated by the COVID-19 pandemic. Studies have revealed that nursing home staffing levels are often inadequate and inaccurately reported and recent research found that increasing staffing by just 20 minutes a day led to fewer COVID cases and deaths. Meanwhile, there is evidence that most nursing homes have inadequate infection control measures in place. 

Currently there are no minimum staffing levels for nurse's aides, who provide most of the day-to-day care. Instead, nursing homes are required "to provide sufficient staff and services to attain or maintain the highest possible level of physical, mental, and psychosocial well-being of each resident."

Recognizing these issues, President Biden announced new measures aimed at improving the safety and quality of care in nursing homes. The Biden administration’s proposals include taking the following actions: 

• The Centers for Medicare and Medicaid Services (CMS), which regulates nursing homes, will study the level and type of staffing needed to ensure safe and quality care and propose minimum staffing levels within a year. 
• CMS will explore ways to phase out multi-occupancy rooms and promote single-occupancy rooms. 
• The administration will call on Congress to provide $500 million for health and safety inspections, a 25 percent increase. 
• CMS will increase enforcement actions against poor-performing facilities. After reversing a Trump era change that imposed a one-time fine for nursing home deficiencies, CMS will explore making per-day penalties the default penalty. 
• In an effort to increase transparency of nursing home ownership, CMS will create a database to track nursing home owners and operators across states. In addition, the government will investigate the role private equity firms play in buying and selling nursing homes. 

The Consumer Voice,  an advocacy group for long-term care issues, calls the proposals the “most significant reforms in nursing homes in decades.” Terry Fulmer,  president of the nonprofit John A. Hartford Foundation, which works to improve long-term care, calls the plan “a major step forward for quality and safety in our nation’s nursing homes.” 

CMS had previously announced that it will add data on staff turnover rates and weekend staffing levels to its Care Compare website, giving consumers another tool when choosing a nursing home. 

To read the announcement from the administration, click here.

For more information about the reforms from Kaiser Health News, click here.

Medicaid’s "Snapshot" Date and Its Crucial Impact on a Couple’s Financial Picture

When a married couple applies for Medicaid, the Medicaid agency must analyze the couple’s income and assets as of a particular date to determine eligibility. The date that the agency chooses for this analysis is called the “snapshot” date and it can have a major impact on a couple’s financial future. 

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in "countable" assets (the figure may be somewhat higher in some states). Medicaid law also provides special protections for the spouses of Medicaid applicants to make sure they  have the minimum support needed to continue living in the community while their husband or wife is receiving long-term care benefits. 

In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $137,400 (in 2022). This is the community spouse resource allowance (CSRA), 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 $27,480 (in 2022). Some states are more generous to the community spouse. In these states, the community spouse may keep up to $137,400 (in 2022), regardless of whether or not this represents half the couple's assets. 

Medicaid agencies must pick a date to use to analyze the applicant’s assets. The date that the agency chooses can affect how much money the applicant must spend down before qualifying for benefits and how much a spouse is able to keep. It is called the "snapshot" date because Medicaid is taking a picture of the applicant’s assets as of this date.

The snapshot date is usually the date of "institutionalization," the day on which the Medicaid applicant enters either a hospital or a long-term care facility in which he or she then stays for at least 30 consecutive days. States use as the snapshot date either the first day of the month the applicant entered the facility or the actual date of entry. If the applicant enters a hospital or nursing home, stays for 30 days, goes home, and then reenters a hospital or nursing home, the snapshot date is the date the applicant entered the hospital or nursing home for the first stay. 

Not all Medicaid long-term care applicants are in an institution. If the applicant is applying for Medicaid home care through a waiver program, the snapshot date is usually either the date of the application or the date the applicant is determined to need a nursing home level of care.  

On the snapshot date, the Medicaid agency counts up all of an applicant’s and his or her spouse’s assets, excluding the couple’s house. Then depending on the state’s CSRA, the agency determines how much the community spouse can keep. If any assets above $2,000 remain, then that money must be spent down before the applicant will qualify for benefits. 

Example: If a couple has $100,000 in countable assets on the snapshot date and the state allows the spouse to keep half the couple’s assets up to the maximum CSRA, the Medicaid applicant 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. If the state allows the spouse to keep the entire amount of the maximum CSRA, then the community spouse could keep the entire amount and the applicant would not be required to spend down assets. 

Proper planning can help a couple determine when the best time to apply for benefits based on the snapshot date and maximize the assets the couple can keep. Consult with your attorney for advice. 

What Documents Are Required for a Medicaid Application?

Medicaid applicants must prove that they have limited income and assets in order to be eligible for long-term care services. Before beginning the application process, it is helpful to understand what information you will be required to provide to prove your eligibility. 

Medicaid is a state-run program, so the rules can vary from state to state, but in general applicants are not eligible for Medicaid benefits if the applicant's income exceeds $2,523 a month (for 2022). Applicants can also have no more than $2,000 in assets in most states.  

States require Medicaid applicants to provide the necessary information to prove that they are eligible for benefits. The burden of proof is on the Medicaid applicant—not on the state. In addition to needing to provide identifying information such as a birth certificate and proof of citizenship, following are some of the documents that you may have to provide to the Medicaid agency when you apply for benefits:

• Proof of income. A copy of any pay stubs, Social Security statements, and/or pension checks; income tax returns for the past five years; and verification of any other sources of income, for example, rental income or dividends. 
• Bank records. Copies of bank statements for the past five years. 
• Property. A copy of the deed to any property owned within the past five years and a copy of the most recent property tax bill. 
• Retirement accounts. Statements for the past five years of retirement accounts. 
• Insurance. Copies of any insurance policies, including health insurance, life insurance, and/or long-term care insurance.
• Car registration. Registration information for any cars owned by you. 
• Burial arrangements. Copies of any prepaid funeral contracts or deeds to burial plots.

The state may use an electronic database to verify some of the information. Intentionally giving false information is a serious offense. 

The state looks back five years to determine whether you transferred assets for less than market value within five years of applying for Medicaid. Applicants who gave away assets may be subject to a period of ineligibility. 

Not all assets will be counted against you for the purposes of Medicaid eligibility. Personal possessions, one vehicle, your principal residence, and prepaid funeral plans are “noncountable” assets. However, the state will likely still request information about these assets. 

After you begin receiving benefits, you are not done. Medicaid reviews your income and assets every year to ensure that you are still eligible. This could involve electronic verification or submitting more documentation. 

The Medicaid application process is complicated, and submitting an application without an attorney's help, particularly if you are applying for nursing home benefits, is not a good idea.  The process generally takes several months as Medicaid keeps asking questions and demanding further documentation for the answers provided. Before applying, contact your attorney. 

Things to Remember at Tax Time

Tax day, which is Tuesday, April 19 in 2022, is approaching and it is time to begin crossing T's and dotting I's in preparation for paying taxes. As tax time draws near, you want to make sure you file all the proper forms and take all deductions you're entitled to.

Following are some things to keep in mind as you prepare your tax form.

• Gifts. Did you give away any money this year? The gift tax can be very confusing. If you gave away more than $15,000 in 2021, you will have to file a Form 709, the gift tax return. This does not necessarily mean you will owe taxes on the money, however. 
• Medical Expenses. Many types of medical expenses are tax deductible, from hospital stays to hearing aids. To claim the deduction, your medical expenses have to be more than 7.5 percent of your adjusted gross income. This includes all out-of-pocket costs for prescriptions (including deductibles and co-pays) and Medicare Part B and Part C and Part D premiums. (Medicare Part B premiums are usually deducted out of your Social Security benefits, so be sure to check your 1099 for the amount.) You can only deduct medical expenses you paid during the year, regardless of when the services were provided, and medical expenses are not deductible if they are reimbursable by insurance.  
• Parental Deduction. If you are caring for your mother or father, you may be able to claim your parent as a dependent on your income taxes. This would allow you to claim the $500 tax credit for any non-child depedents. 
• Long-Term Care Insurance Premiums. Premiums for "qualified" long-term care policies are treated as an unreimbursed medical expense. Long-term care insurance premiums are deductible for the taxpayer, his or her spouse and other dependents. 
• Social Security Benefits. Although Social Security benefits are generally not taxable, people with substantial income in addition to their Social Security may pay taxes on their benefits. If you file a federal tax return as an individual and your "combined income," including one half of your Social Security benefits and nontaxable interest income is between $25,000 and $34,000, 50 percent of your Social Security benefits will be considered taxable. If your combined income is above $34,000, 85 percent of your Social Security benefits is subject to income tax. 
• Home Sale Exclusion. Married couples can exclude from income up to $500,000 in profit on the sale of a home ($250,000 for single individuals). If a surviving spouse sells the home, he or she can still claim the exclusion as long as the house was sold no more than two years after the spouse's death. 
• Elderly or Disabled Tax Credit. Some low-income elderly or disabled individuals are entitled to a special tax credit. To be eligible, you must meet income limits. For more information, click here.
• Earned Income Tax Credit. Previously primarily available to people with young children, for 2021 working seniors without dependents may qualify for this important credit.  For more, click here.  
• Tax Refunds. Getting a federal tax refund should not affect your Medicaid or Social Security benefits. For a year after recieving a tax refund from the federal government, the refund will not be considered income or resources for SSI or Medicaid purposes. You can also transfer the refund within a year without incurring a penalty. 

The IRS's Tax Counseling for the Elderly (TCE) Program offers free tax help to taxpayers who are 60 and older. For more information, click here. The IRS also publishes a Tax Guide For Seniors.