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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. 

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.

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.

Could Medicaid Payback Rules Come to an End?

Amid recent reports from such prominent news outlets as The New York Times and Associated Press about the negative impact of Medicaid estate recovery on families, the idea of ending this practice altogether has resurfaced.

What Is Medicaid?

Medicaid is a public assistance program that seeks to provide health insurance coverage for Americans with limited means. To be eligible for Medicaid in most states, you must meet strict income and asset guidelines. Generally, Medicaid rules will require that you have no more than $2,000 to your name.

Many older Americans who eventually need long-term care services come to rely on Medicaid to cover these costs. (Note that Medicare, a different government program, does not pay for long-term care.)

As of late 2023, the median monthly cost of a semi-private room in a nursing home in the U.S. was close to $9,000. The vast majority of people cannot afford to pay these prices out of pocket over the long term. So, they often opt to spend down what assets they do have until they can qualify for the Medicaid program.

What Is Medicaid Estate Recovery?

Federal law requires that states attempt to recover the funds they had paid out for a Medicaid recipient’s medical care during their lifetime. This might include any costs that have accrued for nursing facility services, prescription drugs, or other medical or long-term care. The Medicaid Estate Recovery Program specifically affects Medicaid long-term care recipients who had reached age 55 or older.

With certain exceptions, it’s mandatory for a state to seek these repayments from the person’s estate after they have passed away. States that fail to pursue this course of action may be at risk of losing the Medicaid funding they receive from the federal government.

Can Medicaid Take Your Home?

In most states, only property that is part of your probate estate is subject to Medicaid estate recovery. So, for instance, if you have named someone to benefit from your life insurance policy, those funds will pass outside probate in most places. However, your house may be your sole asset, and you may not have taken precautions to protect it from estate recovery. In this case, the state Medicaid agency could place a lien on it to recover its costs.

The financial consequences of the Medicaid Estate Recovery Program can be devastating for grieving families. As states seek to recover money they have spent on Medicaid beneficiaries who received long-term care benefits, families with lower incomes tend to be the ones in the crosshairs. In some cases, the survivors of the deceased may lose their family home or face bankruptcy.

The Stop Unfair Medicaid Recoveries Act

In March 2024, U.S. Rep. Jan Schakowsky (D-IL) reintroduced legislation, the Stop Unfair Medicaid Recoveries Act, proposing to end Medicaid estate recovery altogether. The bill would prevent states from placing liens on the homes of Medicaid recipients while helping to improve access to long-term care services.

According to the recent story in the Times, one nonpartisan agency cited that, for fiscal year 2019, most states recouped less than 1 percent of what they had spent on Medicaid long-term care benefits.

“This current system ... is ineffective and unjust, and it must end,” Schakowsky said in a news release about the Act. “Let’s give our seniors and their families dignity and peace of mind.”

Numerous advocacy groups had previously expressed their support for ending Medicaid estate recovery. However, the bill may not be particularly likely to move forward immediately.

Plan for the Unforeseen With Your Elder Law Attorney

Avoiding Medicaid estate recovery is possible, but it does take careful and deliberate planning.

Facing the possibility that you could one day need Medicaid long-term care coverage is important. After all, statistics show that seven in 10 older Americans are likely to require some form of long-term care in their later years.

Keep in mind that the rules regarding Medicaid benefits, which are specific to your state, can be complex. Be sure to work with your elder law attorney, who can help you navigate your potential options. They can assist you in planning for your future and guide you in making the best possible decisions. This might include strategizing about when and how to apply for Medicaid or looking for ways to protect your assets.

Getting Help When Providing Care at Home for Aging Parents

As they grow older, your parents may prefer to continue living in their home rather than moving to a long-term care facility. They are not alone in this; more than three-quarters of adults over the age of 50 say they would prefer to age in place. If your parent can safely live at home on their own with your support, you may wish to seek some form of outside help. Fortunately, you have a number of options to explore.

Home Care Services for Seniors

Public as well as private agencies offer a variety of home care services for older adults. These may include the following:

• Home health care, either part-time or 24 hours a day
• Personal care and homemaking services, such as shopping, cooking, and cleaning
• Services delivered to the home, such as meal programs, transportation, and home repair
• Money management
• Respite care service programs that provide unpaid family caretakers with a periodic break

Other Community and In-Home Support Options

The Program for All-Inclusive Care of the Elderly (PACE) is another initiative locally available to qualifying individuals. PACE provides services through adult health centers in different communities, with additional in-home support available.

More than 2,000 adult day care centers nationwide also offer such services as physical therapy and social support.

Medicare and Medicaid Home Health Care

Home care can cost far less than nursing home care. A growing number of states are therefore striving to provide services to older adults who wish to remain in their homes. Medicare and Medicaid are two programs that provide some coverage of the medical portion of home health care.

Coverage can often prove inadequate, however. Medicare will cover home health care services if you qualify. Meanwhile, Medicaid home care services vary widely from state to state.

If you have an older loved one who wants to age in place, you may need to combine Medicare or Medicaid with other resources.

Of the thousands of private home care agencies operating nationwide, about half are Medicare or Medicaid certified agencies. If Medicare or Medicaid cover the services these agencies provide, these programs will reimburse for these services. Such certification also means that the agency has met certain minimum federal standards regarding patient care and finances.

Private accrediting organizations can also certify home care agencies. The two major accrediting groups for home care agencies are the Community Health Accreditation Partner and the National Association for Home Care & Hospice.

Non-medical services are available to help older people remain independent as well. The Older Americans Act funds more than 10,000 senior centers and gives grants to states and Area Agencies on Aging to provide services for aging adults. Such services include Meals-on-Wheels, transportation, respite care, housekeeping and personal care, money management, and shopping. Services are usually free, but you may face waiting lists or staffing shortages, depending on where you live.

To find an Area Agency on Aging program near you, visit the Eldercare Locator or call 1-800-677-1116. In many cases, these agencies may offer case management and coordination services as well.

Support Though a Geriatric Care Manager

The profession of private geriatric care managers has evolved to help coordinate services for seniors. Geriatric care managers usually have a background in social work, nursing, or psychology. They offer expertise in helping older people and their families arrange for various kinds of long-term health care. They also help evaluate an older person’s needs, review available options, and monitor the older person’s care.

To find a geriatric care manager in your area, visit the website of Aging Life Care Association.

Additional Resources

As you navigate the options for home health care, reach out to your attorney. They can assist in long-term care planning, navigating Medicare and Medicaid, and finding ways to help cover the costs.

For further information on home care options, be sure to check out the following resources:

Websites

• AARP: Needs Assessment Checklists
• Family Caregiver Alliance: Hiring In-Home Help
• Caring Connections: Caring for Someone

Medicaid Spend Down: Pay for More Than Just Medical Bills

Since the 1960s, Medicaid has provided health care coverage for low-income people across the United States. For millions of seniors, Medicaid offers financial assistance, helping them to cover the cost of long-term care services. Today, this joint federal-state program also benefits other qualifying populations with limited income, including children and people with disabilities.

Qualifying for Medicaid

You may not foresee yourself applying for Medicaid in the future. Yet in reality, research shows that roughly one in seven seniors are likely to require long-term care at some point later in life. Long-term care can be extremely costly; this is why many people have come to rely on the Medicaid benefits that cover these costs.

Given these sobering statistics, consider gaining a better understanding of Medicaid and shaping your plans sooner rather than later. To qualify for Medicaid, you may need to carry out certain actions at least five years prior to when you apply. That's because most state Medicaid agencies will look back at the five years leading up to when you submit your application for the program.

If you happened to make certain purchases or gifts during this so-called “lookback” period, you could end up facing a penalty. Unfortunately, these penalties could mean you have to wait months, or even years, before you become eligible for Medicaid.

Medicaid is for people living on limited incomes. So, among the main criteria to qualify for Medicaid is that you have limited income and assets. Generally, you must have no more than $2,000 in your name to be eligible for this public benefits program. (Note that this limit can vary according to state, however.)

If you have more than that, you may find yourself having to “spend down” your extra assets to meet the $2,000 limit. Only after you have fulfilled this (and other) requirements would Medicaid begin paying for basic long-term care expenses.

The upside, however, is that not all your assets count against you in the eyes of Medicaid. For example, your primary home is typically exempt. You also can own one car without worrying about exceeding Medicaid’s asset limits. And, depending on your state, you may be able to spend your excess money on certain items that help make your life more comfortable.

Medicaid Spend Down

As mentioned above, each state dictates what the income and asset limits are for Medicaid applicants. These figures also tend to shift a bit every year. 

Take note that not every state allows for a Medicaid spend down. These so-called “income cap” states follow different rules.

Also, take care that items you do decide to buy as part of your spend down are specifically for the Medicaid applicant.

So, What Can You Pay For?

All that said, Medicaid applicants can generally spend down their excess income in several ways. Paying off credit card debt or medical bills is one possibility. Prepaying for your funeral services is often a legitimate spend down option, too. Admittedly, these sorts of payments might not bring you much enjoyment, but they still may be able to count toward your spend down amount.

In many cases, you can spend down your surplus assets on medical services, equipment, or health insurance premiums.

Perhaps you have come to rely on a wheelchair or cane or could benefit from hearing aids. You may want to have an eye doctor check your vision. If your prescription eyeglasses are out of date, you may be able to purchase a new pair. These are all medical expenses that could potentially be part of your spend down efforts.

At the same time, your excess income can go toward much more than unpaid medical debt or other bills. Purchases that help improve your quality of life tend to be permissible. Here are five tangible types of items you may be surprised to find you can legally purchase as part of your Medicaid spend down:

• A new vehicle – You may need a reliable car or a wheelchair accessible vehicle to get to medical appointments. Keep in mind that some states place a limit on the value of your one vehicle. For example, you might not want to plan on purchasing an RV camper for road trips if you are seeking Medicaid assistance.
• Electronics – In some states, upgrades to your smartphone, laptop, television set, or another communications device may be a possibility.
• New clothes – It might be an ideal time for you to stock up on new socks, pajamas, or other clothing necessities.
• Books or subscriptions – Sources of entertainment can boost your quality of life, too. You may prefer books or magazines, or subscriptions to streaming services like Netflix.
• Towels and bedding – Check with a professional to see whether you can refresh your bedding or towel supply as part of your spend down. If moving to a long-term care facility, ask whether they provide these types of items for you.
• Furniture – You may be moving to a facility that allows you to bring along certain preapproved furnishings. For example, you might benefit from a recliner chair with a power lift in your new space.
• Home improvement – Even if you'll receive long-term care at home, you might be able to spend your excess income on modifying your residence. Maybe you need to invest in fixing your plumbing, paving your driveway, or installing a wheelchair ramp.

Consult with your attorney to understand what is and is not permissible. (A bonus is that you may in fact be able to include legal fees as part of your spend down process.)

Why It’s Key to Work With Your Elder Law Attorney

The rules regarding Medicaid get complicated quickly. Be sure to talk to your elder law attorney about Medicaid planning. Discuss your needs with them and ask what your options might be for spending down your assets. They can identify strategies to help preserve your hard-earned savings while avoiding potential Medicaid penalties.

Whatever you do choose to purchase, keep all your receipts and detailed documentation in case any questions come up. You don’t want to break the rules by accident and end up facing a Medicaid penalty period.

Pay Monthly for Medicare Part D Prescriptions Come 2025

What Is Medicare Part D?

Adults who are age 65 and older can enroll in Medicare, a federal health insurance program. If you have signed up for Medicare Part A, Part B, or both, you can also sign up for Part D.

Available through private insurers, Medicare Part D remains optional and covers certain categories of prescription medications. When choosing a Part D plan, review the specific drugs that each plan covers. You may already rely on a particular prescription medication or medications. Take the time to determine whether it appears on the list of drugs covered by any plans you are considering.

To get a better understanding of the wealth of options available for Medicare coverage, be sure to visit the Medicare website.

What Is the Medicare Prescription Payment Plan?

In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced that a new Medicare Prescription Payment Plan will start in 2025. Under this plan, all Medicare prescription drug plans, including Medicare Advantage plans, will now offer enrollees the option to spread out their prescription drug out-of-pocket costs over 12 months.

How Will It Work?

You may have high prescription costs; about one-third of seniors today in fact have trouble affording their medications. Meanwhile, about one in five say they have chosen to skip dosages from time to time to make their high-cost prescriptions last longer.

If you normally pay at the pharmacy at the time you pick up your prescription, you will have another option under the new plan. Come 2025, you can opt to be billed for and pay these costs (capped at a certain amount) over time through your insurer. This is meant to make prescription drugs more accessible and manageable for those who need them most. It will not, however, change the prescription costs.

Starting in 2025, Part D enrollees may opt into the program by contacting their Part D sponsor and completing the Medicare Prescription Payment Plan election process. This is true regardless of whether you have a traditional or Medicare Advantage plan.

What Happens Next?

After enrolling in the plan, your sponsor will notify any pharmacy that fills a prescription of your status, and you will not pay anything at the register. Instead, you will be billed the cost in monthly installments by your plan sponsor.

If you do not pay the billed amount, your participation in the program may be terminated. However, you cannot be terminated from the Part D plan for failing to pay for your prescriptions. In addition, CMS guidance states the sponsor must do the following:

• issue notices for missed payments,
• give a grace period of at least two months for failure to pay the billed amount, and
• create a reinstatement process to allow those enrolled to get back into the program if they can show good cause for failing to make payments.

The Plan May Not Be Right For You

If affording your medication is a hardship and spreading out payments over 12 months would not provide enough reprieve, a more appropriate option may be one of the four Medicare Savings Programs or the Medicare Part D Low Income Subsidy known as Extra Help. Not everyone is eligible for these programs, however, and you must apply for these options.

While the Medicare Prescription Payment Plan may be good news for many, it may not be right for everyone, such as those with low out-of-pocket prescription costs. It is expected that feedback from the public and other interested parties will add some further changes to the proposed Medicare Prescription Payment Plan to help as many people as possible.

Additional Resources

To learn more about Medicare, including your payment options, be sure to consult with your elder law attorney.

What Are the Different Types of Adult Day Care?

Adult day care, also known as adult day services, includes programs that assist seniors in completing activities of daily living, such as bathing, going to the bathroom, and getting dressed. Adult day services also help older adults remain social as they age, an important part of maintaining a healthy lifestyle.

If you are the caregiver of an older adult, you may consider using an adult day care to increase their quality of life. Here, learn more about services that can enhance their physical, mental, and social health. You’ll also find information on potential payment options and whether these services are a good fit for your loved one.

Types of Adult Day Care Services

There are three categories of adult day care services:

1. social adult day care,
    
2. adult day health care, and
    
3. specialized adult day care.

You may choose one type or another based on your needs or the needs of your older family member. Fortunately, many facilities provide each service under one roof. Continue reading for more details about each type of adult day care service.

Social Adult Day Care

Social adult day care includes non-medical supervision and care for patients. Social adult day care focuses on patients’ mental and physical health by increasing social interaction and providing nutritious meals.

Adult Day Health Care

Adult day health care provides physical, occupational, and speech therapy services. These programs usually have trained nurses on staff. Patients can look forward to receiving good meals and participating in social activities.

Specialized Adult Day Care

Specialized adult day care services tailor their care to patients with Alzheimer’s or other types of dementia. Caregivers adapt the available social and health services to patients’ abilities.

How Much Does Adult Day Care Cost?

The cost of adult day care services depends on the state. According to the Genworth Cost of Care Survey, the following is a state-by-state monthly cost of care breakdown:

• Alabama = $758
• Alaska = $1,562
• Arizona = $2,102
• Arkansas = 1,733
• California = $1,842
• Colorado = $1,950
• Connecticut = $1,842
• Delaware = $1,661
• Florida = $1,517
• Georgia = $1,300
• Hawaii = $1,625
• Idaho = $2,167
• Illinois = $1,885
• Indiana = $1,733
• Iowa = $1,353
• Kansas = $1,788
• Kentucky = $1,690
• Louisiana = $1,788
• Maine = $2,600
• Maryland = $1,928
• Massachusetts = 1,587
• Michigan = $1,733
• Minnesota = $2,167
• Mississippi = $1,408
• Missouri = 1,907
• Montana = $2,600
• Nebraska = $,1842
• Nevada = $1,788
• New Hampshire = $1,842
• New Jersey = $1,950
• New Mexico = $1,993
• New York = $1,907
• North Carolina = $1,197
• North Dakota = $3,383
• Ohio = $1,733
• Oklahoma = $1,495
• Oregon = $2,654
• Pennsylvania = $1,625
• Rhode Island = $1,798
• South Carolina = $1,408
• South Dakota = $2,600
• Tennessee = $1,733
• Texas = $769
• Utah = $1,939
• Vermont = $3,224
• Virginia = $1,690
• Washington = $2,600
• West Virginia = $1,083
• Wisconsin = $1,723
• Wyoming = $1,733

The numbers above can seem staggering, especially since it is a monthly expense. Fortunately, there are many ways to offset the cost of adult day care, including Medicaid, veterans programs, and private payment options.

Does Medicaid Cover the Cost of Adult Day Care?

The criteria to qualify for Medicaid programs that cover adult day services vary by state. Medicaid Waiver Programs sets the standards who is eligible for senior day care. Examples of what the Medicaid Waiver Programs consider when apportioning payment for day services include the applicant’s income, financial resources, and functional ability.

Am I Eligible for Medicaid Adult Day Care Coverage?

Medicaid Waiver Programs are partially based on the applicant’s financial status (income and the value of their countable assets). The financial criteria vary from state to state.

Income requirements for Medicaid are set by the state. Factors that your state’s Medicaid Waiver Programs may consider include your and your spouse’s combined incomes and your countable assets.

Do Veterans Affairs Programs Cover Adult Day Care Services?

If you are a retired service member, you may qualify for veterans benefits that cover adult day care. If you qualify for community care and meet the clinical criteria for an available service, your adult day service costs are likely covered.

Tips for Choosing Your Adult Day Care Provider

Choosing an adult day service is an important task. The facility will be caring for your family member, and you are making a large financial commitment. Consider the following before making your final choice:

• The services the facility offers
• The mental and physical functional ability of your loved one
• Staff-to-patient ratio
• Staff training
• Whether they dispense medication

This is not an exhaustive list. If you are considering enrolling in an adult day service, find expert help online.

2024 Standard Protections for Spouses of Medicaid Applicants

Each fall, the Centers for Medicare & Medicaid Services (CMS) renews the federal guidelines that seek to protect individuals whose spouses are applying for or receiving Medicaid long-term care benefits.

These protections, known as the Spousal Impoverishment Standards, help to support the financial well-being of seniors who continue residing at home while their spouse on Medicaid lives in a long-term care facility, such as a nursing home.

Qualifying for Medicaid Long-Term Care Benefits

Long-term care is prohibitively expensive for many, so a large share of adults aged 65 and older rely on Medicaid to help cover the costs.

To qualify for Medicaid long-term care benefits, however, one must generally have very limited resources. In most states, the asset limit is set at $2,000. (Certain assets, such as personal belongings and the applicant’s primary residence, do not count toward this limit.) The applicant’s income typically goes to the nursing home as well, with some exceptions.

So, what happens if a person who qualifies for Medicaid long-term care is married? How can their healthy spouse afford to remain on their own at home? This is where the Spousal Impoverishment guidelines help.

2024 Spousal Impoverishment Figures

Note that most of the latest figures, outlined below, are effective January 1, 2024.

Community Spouse Resource Allowance (CSRA)

A spouse who continues living at home while their partner receives long-term care coverage through Medicaid can keep up to $154,140 in assets starting in 2024.

The healthy spouse, or so-called “community spouse” then has a minimum amount of assets to live on without rendering their Medicaid spouse ineligible for benefits. This special protection is known as the Community Spouse Resource Allowance (CSRA). The maximum CSRA generally rises each year; in 2023, it was $148,630.

Meanwhile, according to federal law, no state can set the minimum CSRA below $30,828 as of 2024.

Monthly Maintenance Needs Allowance (MMNA)

In addition to CSRA, the federal government offers another level of protection for the community spouse: the Monthly Maintenance Needs Allowance (MMNA).

The MMNA ensures that the healthy spouse who continues to live in the couple’s home maintains a certain amount of monthly income while their partner receives their Medicaid long-term care coverage. (Learn more about the ins and outs of MMNA.)

In 2024, the maximum MMNA will be $3,853.50 (up from $3,715.50 in 2023). Again, this is the most in monthly income that the community spouse can keep while their spouse lives in a long-term care institution. If the healthy spouse does not make enough income to live on, this allowance comes from the income of the spouse on Medicaid.

Note that the minimum MMNA for 2024 can vary depending on your state. Alaska and Hawaii typically have slightly higher minimums. The federal government updates the minimum MMNA each July.

A Note on Income Cap States

Certain states have in place a Medicaid income cap. If you reside in one of these income cap states, you will not qualify for Medicaid if your income equals more than $2,829 (in 2024) – unless you have a certain type of trust in place. This trust, known to many as a Miller Trust, must hold any income you receive that is above that cap.

As of 2023, the 23 income cap states were Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Iowa, Kentucky, Louisiana, Mississippi, Nevada, New Mexico, New Jersey, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, and Wyoming.

Home Equity Limits

As mentioned above, Medicaid does not consider the primary home of an applicant as a countable asset, unless the applicant’s equity interest in their home is above a certain amount.

Your home equity equals your home’s value minus the sum of any loans you owe on the home. In 2024, the home equity limit is set to $713,000. (Some states choose to raise this limit to $1,071,000.)

Work With Your Elder Law Attorney

Planning for Medicaid and navigating the Medicaid application process can be daunting. For expert assistance, consult your attorney today.

Access the 2024 Spousal Impoverishment Rules via the Medicaid website.

PACE Program Helps Seniors Remain at Home

Most seniors want to stay at home as long as they can instead of moving into a nursing home. The little-known Program for All-Inclusive Care of the Elderly (PACE) provides care and services to some nursing home-eligible seniors and disabled individuals, enabling them to remain in their home far longer than they might otherwise be able to do.

Program History

PACE’s inception dates to the 1970s when the federal and state governments were developing community-based services for some of their most in-need constituents. As part of this effort, states explored fee-based services for the elderly and disability communities. PACE was among the programs developed during this time.

Today’s PACE model comprises managed care services serving a population of very frail community-dwelling elderly or disabled individuals. These people are usually dually eligible for Medicare and Medicaid and also qualify for nursing home placement.

Participants receive core services not in nursing homes, but in their home or an adult day health center.

What Is PACE?

PACE provides pre-paid, comprehensive health care designed to enhance quality of life and autonomy for frail older adults, enabling them to live in their homes as long as possible while preserving their existing family structure.

To be eligible, participants must:

• be at least 55 years old
• qualify for Medicare or Medicaid (or both)
• live safely in a PACE service area
• meet their state’s criteria to qualify as a nursing home care candidate

Participants must meet any additional program-specific conditions imposed by their local PACE program.

If a senior joins PACE, the program becomes the sole provider of Medicaid and Medicare services. The enrollee must agree to forgo their usual sources of care and receive all their services through PACE. For example, participants may not also enroll in any other Medicare Advantage, Medicare prescription drug, or Medicaid prepayment plan, or optional benefit. This includes a 1915c Home and Community Based Services waiver or the Medicare hospice benefit.

PACE provides a team of doctors, nurses, social workers, personal care attendants, and dietitians to assist each senior. Participants can also receive therapeutic, ancillary, and social support services.

All care is centralized in an adult health center and supplemented by in-home and referral services. Other covered services include adult day care, dentistry, and prescription drugs.

Enrollees get Medicare Part D-covered drugs and all other necessary medications through the program. They don’t need to join a separate Medicare Part D prescription drug plan; doing so disenrolls them from PACE.

In addition, PACE provides transportation to the health center or to doctor’s appointments at other locations. It also provides meals and social activities along with other non-medical care.

For example, PACE in New York City will fix an air conditioner during a heat wave. It can also provide food during a snowstorm. The focus is on preventative care and avoiding hospitalization.

Once a person enrolls in PACE, it becomes their sole source of services. Participants can, however, leave the program at any time.

Enrollees must recertify annually, which varies across states. A state may waive recertification requirements if it determines there is no reasonable expectation of improvement in a person’s condition because of the severity of their condition or functional impairment.

Program Costs

PACE is paid for by Medicare and Medicaid benefits and private pay in some instances. Whether enrollees pay a premium depends on their financial situation. If a senior meets Medicaid’s income and resource limits, they’ll generally have a small payment, or their entire premium will be covered.

At enrollment, PACE verifies whether an individual is dually eligible for Medicare and Medicaid and whether they have Medicare Part A and/or Part B. Unless a person is dually eligible, and to the extent they would normally be required to pay, they will need to continue to pay their Medicare Part A, Part B, and/or Part D premiums. PACE then determines the amounts payable by the person, which likely won’t change over the course of their program participation.

PACE’s Success

Research shows that PACE reduces hospitalizations, emergency room visits, and nursing home stays. Some states have documented that participants receive better preventive care, with higher rates of community residence and caregiver satisfaction.

Currently, 155 PACE centers operate in 32 states. These numbers will likely increase as federal incentives for the program improve. Congress and the Centers for Medicare & Medicaid services are also exploring ways to improve PACE.

Find a program near you today.