As many of you know I’ve been an Elder Care Lawyer for many years, even before most people had heard about Elder Law. After experiencing first-hand the frustrations families feel when facing age-related issues for themselves or a loved one, I made it my mission to start a law firm that could make their lives easier.
I could have chosen a name like the “Toman Law Firm”, or “Toman Law Offices”, or “Dennis Toman, Attorney at Law.” That certainly is what most firms do, and it’s the goal of many lawyers to “have their name on the letterhead.”
But I didn’t give my law firm my name. As the founding attorney, I wanted to make sure that the focus of my firm is always on our clients…and not on the lawyers. Our firm is built on what we do and who we serve, and that is most important to me.
As the first lawyer in North Carolina to specialize in both Elder Law and Estate Planning, I am proud that The Elderlaw Firm continues its mission to be a trustworthy guide along the Elder Care journey. Too often families don’t know where to turn for help. By making what we do front and center in our name, my hope is that more families will have an easier time finding the support and service they need from a firm that is knowledgeable, responsive and caring when dealing with the legal issues of aging. And when they call us, we’ll be here.
That’s why I named this firm, The Elderlaw Firm. It describes what we do and who we help. We are “Your Elder Care and Estate Law Firm.”
One last thing about our name: you might chuckle when I tell you that sometimes a person will call and ask, “May I speak with Mr. Elder?” Some folks are actually surprised when they hear that Mr. Elder doesn’t work here and never has!
Dennis J. Toman, JD, CELA
This information is provided for general informational purposes only. It is not specific legal advice and creates no attorney-client relationship.
In past issues of ElderLaw Today we have been explaining the Medicaid changes under the new Deficit Reduction Act of 2005. We also explained we were waiting for the State to begin enforcing these new rules.
On November 1, 2007, North Carolina issued the DMA Change Notice relating to long-term care elgibility changes. The changes addressed in the memorandum are the following:
- “The beginning date for periods of ineligibility (penalty periods for transfers for less than fair market value) is changed.
- Partial month penalties will be determined when the amount of a transfer is less than the average private pay rate or there is a remainder after dividing the transfer amount by the private pay rate.
- The look-back period for all transfers is changed to 60 months.
- Individuals with home equity that exceeds $500,000 are ineligible for long-term care services.”
The Memorandum goes on to state that these changes are in effect for all transfers made on or after November 1, 2007.
Here is an example of what this means:
Using the new rules, if a Medicaid applicant (or his spouse) transferred $52,000 to his daughter on January 15, 2008 and then applied for Medicaid in February 2009 with less than $2,000 of remaining assets…then the claimant would be eligible for assistance beginning in February except for the transfer. Since February 2009 is the first month of eligibility, the penalty would begin that month because the transfer occurred after November 1, 2007.
What does this mean?
Let’s assume that the claimant transferred the $52,000 as in the above example. The $52,000 transfer would cause a penalty of 10.4 months. That is determined by taking the amount of the transfer ($52,000 in this example) and dividing it by the average cost of a nursing home ($5,000 per month according to the State of North Carolina). In other words, the penalty is now 10.4 months.
The major change in this case, however, is that under the new law the penalty period will not start until the assets have otherwise been spent down. Under the old law the penalty started (for transfers prior to November 1, 2007) in the month the gift was made. No longer. Now the transfer penalty will not start until the Medicaid applicant is already spent down below $2,000 as required by North Carolina law and is in a nursing home and applies for Medicaid. Only then will the penalty start to toll.
Obviously the intent of this new legislation is to require the gifted or transferred funds to be used for the cost of care of the person who made the gift. The effect of the law is to make gifting more difficult.
To make matters worse, the State can no longer “round-down” partial periods of ineligibility. Under the prior law the State would disregard a transfer penalty if the penalty was determined to affect less than a full month. That is no longer permitted under the new law.
Under the new rules, a partial month penalty will be converted to days. Based on the current average cost, each $161.00 will equal a one (1) day sanction. In the example above, 10.4 months would be converted to 10 months and 12 days. Similarly, a gift of $500.00 would incur a 3 day penalty.
There are very important implications to this for all Medicaid applicants. In essence, any gift or transfer (e.g. gifts to children, charities, church tithing, any gifting whatsoever) is now subject to the new transfer rules. If someone makes a gift after November 1, 2007 the penalty period does not begin tolling until the individual is otherwise spent down and in a nursing facility (or receiving CAP services), and applies for Medicaid.
A further implication concerns “simple” applications.
“Simple” Medicaid applications could be filed under the old rules knowing that any small or inadvertent gifting would probably not make the applicant ineligible for Medicaid. There are now very few if any “simple” Medicaid applications. Every application must be scrutinized by someone who knows the new rules!
This law does not mean that there are no ways to protect assets or to do asset transfers. However, now more than ever you will need the expert advice of an elder law attorney to help you through these situations. In the coming months we will continue to provide additional advice and information on the law.
Important Note: If a married person enters a nursing home and needs Medicaid, despite the gifting restrictions, in that case the institutionalized spouse usually can qualify for Medicaid quickly by using the right Medicaid strategy. Future issues of Elderlaw Today will discuss this, or call our office at 336-378-1122 or 877-909-1122 for additional information.
Have you ever filed a Medicaid application? Or have you worried about the need to file one? An inadequate Medicaid application can lead to delay and lack of payment to the nursing home. These problems lead to denials of applications and appeals.
Filing a Medicaid application can be daunting. Think of an income tax return, where you have to not only provide income, but also asset information, family information, health forms, detailed banking records for past years and do this while a loved one is facing a care crisis. Daunting may be an understatement.
Knowing the ins and outs of Medicaid applications can mean the difference between spending hundreds of thousands of dollars unnecessarily, or preventing a nursing home resident from being discharged for nonpayment. Our office regularly files Medicaid applications in many counties across North Carolina, and we know that families are simply unprepared for what awaits them at the Medicaid office.
Sometimes our clients have already tried to file a Medicaid application and failed. They know firsthand the difficulty in gathering and organizing the needed information, and the frustration of waiting in line to meet with the Medicaid office. After we tell them that we can handle the Medicaid application for them, there is a tremendous sigh of relief and the tension lifts from their shoulders. They smile. They are thrilled to hear that they don’t have to deal directly with a government office. They were worried about filing the wrong information, or saying the wrong thing, or not knowing whether what the caseworker says is correct or not…but not anymore.
On top of that, the Medicaid laws are complex and ever-changing. We’ve seen more errors made by the Medicaid office than we can count. While we were able to catch these mistakes, we wonder about the thousands of people who file applications without expert help… they never know the mistake was made so of course they can’t correct it!
Should families get professional assistance to file Medicaid Applications?
- Families who get advice from well meaning friends, neighbors and even social workers who generally do not understand the potential complexities and ticking bombs involved with these applications.
- You need to know the actions you should take the month before filing a Special Assistance application for a married couple (Medicaid for Assisted Living).
- Medicaid attorneys can advise on issues such as the right time to file (yes, even the right day in the month depending on whether we are dealing with Medicaid or Special Assistance), what information you need to gather in advance to avoid a denial and valuing land and investments.
- Some people seek information from the Medicaid office, and only hear part of the story. You shouldn’t have to be an expert in Medicaid, but you need to know how to find one.
Some REAL Examples!
- A wife has gone to the Medicaid office to apply for her husband in the nursing home, and she was told that they needed to spend half of their money and come back to apply later. Don’t let this happen to you! The Medicaid office will tell you to spend half of your money, while we will show married couples how to preserve nearly all of their assets.
- A family that had tried to apply for Medicaid but was denied was worried that their parent would be forced to leave the nursing home for nonpayment. Not only were we able to get Medicaid approved, we were able to get the facility’s back bills paid in full by working out a contract with the Medicaid office.
- When families have real estate in addition to the home place, they are often told that they have to sell that real estate in order to qualify for Medicaid. That is not the case, but the families believed what they were told by the social worker. By taking the right steps, at the right time and in the right order, we were able to get Medicaid almost immediately…without selling any real estate.
- The Medicaid office has made mistakes in calculating the required monthly payment to the nursing home, which would have cost the family money month-after-month until we had it corrected.
- A family that made transfers before the rule changes in November 2007, assumed that they could not apply for Medicaid because they were under a penalty period. They were afraid to go to the Medicaid office for fear they might be turned away, or be accused of doing something wrong. We reviewed the situation, determined that the transfers were not a problem, and started the Medicaid application right away. Getting the right advice saved that family tens of thousand of dollars.
- We frequently hear from families that they “couldn’t have gotten through this without us,” that they had “no idea that anyone could help them this way.” We truly enjoy helping!
- We have been contacted by nursing homes, who asked whether we could help, and then put their resident in touch with us, so that we could ensure that the resident could qualify for Medicaid and continue to get needed care without fear of being forced to leave for nonpayment.
When it comes to filing a Medicaid application, there is no substitute for knowing the law and how the system works. Our office regularly assists families with their Medicaid applications. We can ensure that the application is handled professionally and promptly. Professional assistance will give families peace of mind, and ensure that the nursing home facility is paid in a prompt and orderly manner.