I mainly use this forum to update you on important legal topics in the field of Elder Law and Estate Planning, including recent changes and developments in the law, and I don’t typically talk about my personal life in this blog.  However, since it’s the 4th of July and we’re all spending time with our friends and families, I’ve decided to talk a bit about what I’ve been doing in my family life that’s had me so busy this summer. 

The Independence Day holiday commemorates the adoption of the Declaration of Independence on July 4, 1776 and celebrates the birthday of the United States of America.  It’s a day of picnics and parades, a night of concerts and fireworks, and a celebration of American patriotism.  Much of my non-lawyer life is likewise spent in celebration of  American patriotism — as an adult volunteer with the Boy Scouts of America here in the BSA National Capital Area Council. 

Centennial Camporee Arena Show

First, there was the Centennial Camporee at Goshen Scout Reservation over the Memorial Day holiday, where our Council celebrated the 100th Anniversary of Scouting in America.  This was the largest event in the history of the BSA National Capital Area Council — with approximately 8,000 Scouts, Scout families, and Scout leaders in attendance!  As Chair of our Council’s Shooting Sports Committee and a member of the Centennial Camporee Steering Committee, I spent eighteen months (and hundreds of hours) helping to plan and prepare for this once-in-a-lifetime event.   Most of this preparation time was spent recruiting, scheduling and coordinating more than 65 range safety volunteers to run the dozen different target ranges (BBs, archery, rifle, shotgun, etc.) that were part of the fun and excitement for the three days of the Centennial Camporee.  Here is some of the media coverage of this historic event: TV Report from Roanoke Channel 7   /  NCAC Post-Event Press Release.

Evan Receiving Silver Beaver Award

In June, at the NCAC Annual Business Meeting and Silver Beaver Award Ceremony, I was deeply honored to be one of the fifteen recipients of the Silver Beaver Award for outstanding service to youth in the National Capital Area Council.

Just yesterday, I returned with my family from Camp Marriott (part of Goshen Scout Reservation), where I spent a week with my son’s Troop at Boy Scout summer camp, where I also helped to train new adult leaders from around our Council.

Hopefully, now that all of this is complete, I’ll have more time to devote to legal updates and developments.

On the other hand, later this summer I’ll be spending a week and a half working at Fort AP Hill as a member of the archery staff at the BSA National Scout Jamboree . . . .

A recent Washington Post article concludes that many nursing homes have been “up-coding” billing for care of residents for years, meaning that some nursing homes sometimes bill a resident more than they should be billed by using a special billing category intended to be used only for the five percent of nursing home patients who need highly specialized care and rehabilition. 

The article quotes Marie-Therese Connolly, who headed the Justice Department’s Elder Justice and Nursing Home Initiative from 1999 to 2007, as stating that “[u]pcoding, billing for services not rendered, and billing for worthless services have been significant problems for years, costing taxpayers many millions, if not billions, of dollars.”

In the Washington area, two nursing homes owned by HCR ManorCare put their residents in the most expensive billing category at nearly five times the national average, according to the Washington Post analysis.  The ManorCare nursing home in Silver Spring, MD put 45 percent of its residents into that category, and the ManorCare facility in Wheaton, MD put 43 percent of its residents into that category.  According to the article, a spokesman for ManorCare denied any improper billing or upcoding, stating that residents are coded into billing categories based on their medical and rehabilitative needs.

According to the Post article, this billing program is specifically targeted in President Obama’s health-care legislation passed last week by Congress, changing two rules that experts said have been exploited by nursing homes to inflate bills.  For a review of how the new health-care legislation affects seniors, see my article Health Reform: Changes in Store for the Elderly. ]]> http://blog.virginiaelderlaw.com/2010/04/survey-shows-some-nursing-homes-may-bill-for-services-not-provided/feed/ 0 http://blog.virginiaelderlaw.com/2010/04/health-reform-changes-in-store-for-the-elderly/ http://blog.virginiaelderlaw.com/2010/04/health-reform-changes-in-store-for-the-elderly/#comments Thu, 08 Apr 2010 19:44:00 +0000 Evan Farr http://blog.virginiaelderlaw.com/?p=511 After a year of legislative wrangling and premature forecasts of death, historic legislation overhauling the nation’s health insurance system passed the Congress and has been signed into law by President Obama.  Among some of the highlights, this legislation contains:  

• The nation’s first publicly funded national long-term care insurance program, the Community Living Assistance Services and Supports (CLASS) Act;  
• A number of provisions aimed at ending Medicaid’s “institutional bias,” which forces elderly and disabled individuals in many states to move to nursing homes;
• Provisions that will help protect nursing home residents and other long-term care recipients from abuses, and give families of nursing home residents more information about the facilities their loved ones are living in or considering moving to. 

Community Living Assistance Services and Supports (CLASS) Act

The reasons for the CLASS Act, according to the U.S. Senate, are as follows:

• Long-term supports and services are not affordable or accessible for millions of Americans.
• An estimated 65 percent of those who are 65 today will spend some time at home in need of long-term care services, at an average cost of $18,000 per year.
• Five million people under age 65 living in the community have long-term care needs and over 70,000 workers with severe disabilities need daily assistance to maintain their jobs and their independence.
• One and a half million Americans are currently in nursing homes today. Roughly 9 million elderly Americans will need help with activities of daily living (ADLs) during the current year, and by 2030 that number will increase to 14 million.
• Many people who need long term services and supports rely on unpaid family and friends to provide that care, but ultimately are forced to impoverish themselves to qualify for Medicaid, which remains the primary payer for these services.

How the CLASS Act Works

• The CLASS Act will provide a lifetime cash benefit that offers people with disabilities some protection against the costs of paying for long term services and supports, and helps them remain in their homes and communities.
• CLASS is a voluntary, self-funded, insurance program with enrollment for people who are currently employed. Affordable premiums will be paid through payroll deductions if an individual’s employer decides to participate in the program. Participation by workers is entirely voluntary.
• Self-employed people or those whose employers do not offer the benefit will also be able to join the CLASS program through a government payment mechanism.
• Individuals qualify to receive benefits when they need help with certain activities of daily living, have paid premiums for five years, and have worked at least three of those five years.
• Once qualified, beneficiaries will receive a lifetime cash benefit based on the degree of impairment, which is expected to average roughly $75 per day.
• These benefits are intended to help maintain independence at home or in the community, and can be used to offset the costs of assistive living and nursing home care.

While helpful for some seniors, this benefit is fairly minimal for those of us living in the Northern Virgina area, as $75 per day won’t go very far.  In the Northern Virgina area, the average cost for home health ranges from around $18 – $22 per hour; for Assisted Living facilities from around $3,500 per month to $7,000 per month; and for Nursing Homes from around $6,000 per month to $10,000 per month.

Help for Medicare Recipients and Early Retirees

Of great interest to many seniors, the new health care law will eventually close the Medicare Part D coverage gap known as the “doughnut hole.” As most seniors know, the Medicare Part D prescription drug program covers medications up to $2,830 a year (in 2010), and then stops until the beneficiary’s out-of-pocket spending reaches $4,550 in the year, when coverage begins again. Many seniors fall into this “doughnut hole” around Labor Day, at which point they have to pay for the medications out of pocket through the end of the year.

The new law starts the process of closing the gap by providing a $250 rebate to Medicare beneficiaries who fall into the doughnut hole in 2010. Then, beginning in 2011 there will be a 50 percent discount on prescription drugs in the gap, and the gap will be closed completely by 2020, with beneficiaries covering only 25 percent of the cost of drugs up until they have spend so much on prescriptions that Medicare’s catastrophic coverage kicks in, at which point copayments drop to 5 percent.

Starting January 1, 2011, Medicare will provide free preventive care: no co-payments and no deductibles for preventive services such as glaucoma screening and diabetes self-management. Also, the legislation increases reimbursements to doctors who provide primary care, increasing access to these services for people with Medicare.

The law provides help for early retirees by creating a temporary re-insurance program that will help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55-64. Scheduled to run from June 21, 2010 through January 1, 2014, the reinsurance program will pay 80 percent of eligible claim expenses incurred between $15,000 and $90,000.

The law calls for an increased Medicare premium for those individuals earning more than $200,000 a year and married couples whose income exceeds $250,000. The law also applies the Medicare payroll tax to net investment income for couples earning more than $250,000 a year or individuals earning more than $200,000 a year.

Most of the cost savings in the law are in the Medicare program, which has made many seniors fearful that their benefits will be cut. The cost-saving measures do not affect the basic Medicare benefits to which all enrollees are entitled, but they may affect those enrolled in private Medicare Advantage plans. Medicare has been paying insurers who offer these plans more than it spends on average for Medicare beneficiaries. The original idea of Medicare Advantage was to save money by paying them less, the idea being that private insurers could be more efficient than the federal government. The opposite turned out to be the case.

Health care reform will pay the private insurers less, meaning that some will choose not to continue their plans and others will curtail extra benefits they offer enrollees, such as reimbursement for gym membership or free eyeglasses. But the cuts will be gradual, with the largest not beginning until 2015. The law also offers bonuses to efficiently run Advantage plans.

Another provision in the law will cut Medicare payment to nursing homes by about $15 billion over the next decade. Although Medicare does not pay for long-term care in nursing homes, Medicare does, in certain limited situations, pay for short-term rehabilitation in nursing homes, and Medicare’s payment to nursing homes for such short-term rehabilitation has been significantly higher what Medicaid pays to nursing homes.

Beware of Scammers

The new law has also created opportunities for scam artists, some of whom are peddling bogus policies through 1-800 numbers and by going door to door, claiming there’s a limited open-enrollment period to buy health insurance, warns secretary of Health and Human Services Kathleen Sebelius. For more on the fraud alert, click here.  

For the full text of the Reconciliation Act of 2010, click here. 

More links:

Health Reform Implementation Timeline

Health Insurance Reform: A Guide for Seniors

Consumers Guide to Health Reform

Democratic Policy Committee Summary & Analysis of the two enactments

The Patient Protection and Affordable Care Act, Section by Section Analysis

Summary of The Health Care and Education Reconciliation Act

When a person with disabilities submits an application for benefits, the SSA normally passes the application through a rigorous five-step process to ensure that the applicant truly needs assistance. The SSA first checks to see if the applicant is working, and then assesses whether the applicant is suffering from a “severe” medical condition. In the third step of the process, the SSA compares the beneficiary’s condition to a list of impairments that normally qualify a person for benefits without further assessment. When a person’s condition matches a condition on the list of impairments, the SSA presumes that the applicant has a disability and typically awards benefits without proceeding through the final two steps.

Unfortunately, most applicants typically have to wait for a long time before arriving at this third step in the evaluation process. Compassionate Allowances speed this process up by defining certain specific conditions that “obviously meet disability standards.” Prior to this month, the SSA included 50 medical conditions on the list of conditions that qualified for a Compassionate Allowance.  As of March 1, 2010, the SSA has now added an additional 38 conditions to the Compassionate Allowances list, greatly expanding the number of people who are eligible for the Compassionate Allowances program.

Although most of the conditions on the revised list are rare, of tremendous importance for the aging population is the fact that the SSA has now included Early-Onset Alzheimer’s Disease, Mixed Dementia, and Primary Progressive Aphasia among the new fast-track conditions, meaning that people who are diagnosed with any of these conditions can now receive disability benefits very quickly. In addition to a monthly disability payment, qualification for SSDI also allows earlier entry to Medicare health insurance benefits for those under age 65.  And for those under age 65 whose conditions are so severe that they must be placed in a nursing home, a disability determination from SSA also speeds up the Medicaid application process.

Please follow the links below to learn more about the Compassionate Allowance program:

Initial List of Compassionate Allowance Conditions

38 New Compassionate Allowance Conditions

Additional information about how compassionate allowances are processed

Statements from Family Members and Individuals with Early-Onset Alzheimer’s Disease

The federal Center for Medicare & Medicaid Services (CMS) has a part of its Web site – Nursing Home Compare — comparing nursing homes, which identifies facilities that have a history of poor performance. The Nursing Home Compare site labels nursing homes it calls Special Focus Facilities — those that have repeatedly violated state and federal health and safety rules and that rank in the worst 5 to 10 percent of all inspected facilities in a given state.  Using Nursing Home Compare, you can obtain detailed inspection information about each nursing facility that interests you, comparing various government-rated “quality measures” such as:

• Percent of Residents Who Have Moderate to Severe Pain;
• Percent of High-Risk Residents Who Have Pressure Sores;
• Percent of Residents Who Were Physically Restrained; and
• Percent of Residents Who Spend Most of Their Time in Bed or in a Chair.

The Nursing Home Compare Web site also rates the care and services that each facility provides to its residents, and allows you to view how each facility stacks up in staffing hours for each type of health care worker against the state and national averages.

U.S. News and World Report also recently started providing rankings of America’s nursing homes. The U.S. News rankings rely on Nursing Home Compare but provide some advanced search engine capability.   According to U.S. News,  their new feature –America’s Best Nursing Homes – addresses these and other issues.  Nursing homes are presented in tiers within each star category, based on their total stars in all three of the major areas. The topmost tier, for example, consists only of five-star homes that got 15 stars. The next tier down is five-star homes with 14 total stars, and so on. Within each tier, nursing homes are listed alphabetically. If you’re looking for a nursing home by location, and turn up too many, search terms can be combined in order to narrow the results.  For example, perhaps you want to search just for nursing homes that have a religious affiliation, or that accept Medicaid residents. Or you can launch a multipronged search, perhaps searching for non-profit four-star nursing homes that accept Medicaid and are located within 25 miles of a particular city. 

Placing your loved one in a nursing home that accepts Medicaid is vitally important if you plan to use the services of an Elder Law firm  (such as the Farr Law Firm) to help you with Medicaid Asset Protection.

Another free Web site that lets you compare nursing homes is MemberoftheFamily.net, which features easy-to-read, color-coded assessments of nursing homes nationwide.

Despite the ratings, in my experience nothing can substitute for visiting a nursing home in person. Virtually every nursing home will
have some deficiencies; after all, working with extremely disabled and impaired persons is very difficult. In my book, The Virginia Nursing Home Survival Guide (available as a free e-book on our Web site or in print edition at Amazon.com), I provide a Nursing Home Evaluation Tool to help consumers compare nursing homes during personal visits.

To find the best possible nursing home for your family’s situation, the first step is to determine what is most important for your family in looking for a facility. The resident’s needs and desires must be included in this evaluation. Consider variables such as location of the facility, whether a special care unit (such as for dementia) is available, and what types of payment sources are accepted. 

The second step is to identify the facilities in your area which meet the criteria you have established.

Step three is to tour those facilities you have identified in step two.  You don’t need to schedule your visits in advance. If you show up during regular business hours, you should be able to meet with an administrative staff member, who should be able to answer all your questions.  You will also want to tour a second time, in the evening or on the weekend, to see if there is a drastic difference in the atmosphere of the facility or the care being provided. It is important to tour at least two facilities so you can see the difference in the physical facility and the staff. 

While you are touring the facility, pay attention to your gut feelings.  Ask yourself:

• Do I feel welcome?
• How long did I have to wait to meet with someone?
• Did the admissions director ask about my family member’s wants and needs?
• Is the facility clean?
• Are there any strong odors?
• Is the staff friendly?
• Do they seem to genuinely care for the residents?
• Do the staff seem to get along with each other?

Listen and observe. You can learn a lot just by watching and paying attention. And ask questions. You want to be sure that the facility is giving proactive care, not just reacting to crisis.  Here are a few examples of the types of questions the staff should be able to answer:

• How do you ensure that call lights are answered promptly, regardless of your staffing?
• If my father is not able to move or turn himself, how do you ensure that he is turned and does not develop bedsores?
• How do you make sure that someone is assisted with the activities of daily living like dressing, toileting and transferring?
• Can residents bring in their own supplies?
• Can residents use any pharmacy they wish?
• How many direct care staff members do you have on each shift? Does this number exceed the minimal number that state regulations require, or do you just meet the minimum standard?
• What sources of payment do you accept?
• How long has the medical director been with your facility?
• What is your policy on family care planning conferences? Will you adjust your schedule to make sure that I can attend the meeting?

While touring each facility, use my Nursing Home Evaluation Tool to help you keep track of which facility you like best.  

Don’t Forget Expert Legal Help.

In addition to finding the facility you like best, don’t forget that you need expert legal assistance as part of the nursing home planning process. Without proper planning and legal advice from an experienced Elder Law firm such as the Farr Law Firm, many families needlessly squander their life savings on long-term care, and unnecessarily jeopardize their own care and well-being, as well as the security of their family.   The way to get the best care in any nursing home is to make sure that you choose a nursing home that accepts Medicaid and work with a Certified Elder Law attorney who specializes in Medicaid Asset Protection.  

What is the goal of this type of planning? The goals differ from person to person and family to family. Generally, for a married couple the most important goal is to ensure that the spouse remaining at home is able to live the remaining years of his or her life in utmost dignity, without having to suffer a drastic reduction in his or her standard of living. For a single or widowed client, the most important goal is typically to be able to enjoy the highest quality of life possible in the event of an extended nursing home stay. When there is an adult child or grandchild who is disabled, the primary goal is typically to protect assets to be used for the benefit of that disabled family member who is often also receiving Medicaid.  Money that is protected through proper planning can be used to provide a nursing home resident with an enhanced level of care and a better quality of life while in a nursing home and receiving Medicaid benefits.

For instance, protected assets can be used to hire a private nurse or a private health aide — someone to provide one-on-one care to the
resident — to help the resident get dressed, to help the resident get to the bathroom, to help the resident at mealtime, and to act as the
resident’s eyes, ears and advocate.  Money that is sheltered through proper planning can also be used to purchase things for the nursing home resident or disabled child that are not covered by Medicaid — such as special medical devices, upgraded wheel chairs, transportation services, trips to the beauty salon, etc.

Lastly, some parents do have a strong desire to leave a financial legacy for their children, particularly if there is a disabled child or
someone who needs special financial help.  

The Farr Law Firm specializes in Medicaid Asset Protection.  When your family member needs nursing home care, please remember that we are here to help you.

As a Certified Elder Law attorney, one of my primary goals is to help preserve the dignity and enhance the lives of my elderly clients.  For many of my clients, remaining in their homes as long as possible is one of their highest priorities.  I have been a long-time fan of reverse mortgages because they help my clients do exactly that — remain in their homes as long as possible.  

Why? Because in order to remain in your home as long as possible, you will most likely at some point need some home care.  “Home Care” can be health care and/or supportive care provided formally in your home by health care professionals (typically referred to as home health aides) or by paid or unpaid family members or friends (typically referred to as caregivers).  Often, the term “home care” is used to mean non-medical care, or custodial care, which may be provided by persons who are not nurses, doctors, or other licensed medical personnel.  The term “home health care” typically refers to care that is provided by a licensed health care professional — most often a Certified Nurse Assistant (CNA).  However, the terms are often used interchangeably, and for simplicity in this article I will use the term “home care” to refer to both types of care.

The goal of home care is typically to to allow you to remain at home and age in place, rather than being forced to move to an assisted living facility or nursing home.  Home Care providers render services in your own home. These services typically include a combination of health care services and life assistance services.

Health care services may include services such as wound care, administration of medication, physical therapy, speech therapy, and occupational therapy.  Life assistance services typically include help with daily tasks such as meal preparation, medication reminders, laundry, light housekeeping, errands, shopping, transportation, companionship, and help with the activities of daily living (ADLs), which typically refers to six activities (bathing, dressing, transferring, using the toilet, eating, and walking). 

Although some home care is provided by family members for free, most family caregivers need to be paid, and these payment arrangements should always be made pursuant to a written caregiver contract (prepared by an Elder Law Attorney) between the caregiver and the care recipient.  Because home care is quite expensive, having the proceeds from a reverse mortgage is often one of the  only ways that elders can afford to pay for appropriate home care. According to The 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, the 2009 national average hourly rate for home health aides increased by 5.0% from $20 in 2008 to $21 in 2009. The national average hourly rate for homemaker/companions increased by 5.6% from $18 in 2008 to $19 in 2009. 

Most of my clients, when they start out needing home care, will typically start with receiving 4 hours of care 3 days a week, which costs about $1,000 per month and is easily affordable for many people.  But over time, most of my clients progress to the point of needing upwards of 12 hours per day of home care, costing over $7,000 per month, and very few people can afford to pay for this type of care without eventually tapping into their home equity via a reverse mortgage.

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which completely protects your ability to remain in your home. So long as you pay your property taxes and homeowners insurance, and maintain your property, you can remain in your home forever. If the reverse mortgage lender fails, any unmet payment obligation to the borrower will be assumed by FHA. 

According to the Mortgage Professor’s article mentioned in my first paragraph, in 2009 about 130,000 HECMs were written, and feedback from borrowers has been mostly positive. In a 2006 survey of borrowers by AARP, 93% said that their reverse mortgage had a mostly positive effect on their lives.

For many of my clients, a reverse mortgage is the best way, and often the only way, for them to be able to afford to remain at home, despite the fact that reverse mortgages are expensive to obtain.  However, reverse mortgages are not for everyone, as there are other programs that may be able to help you remain in your home.  For instance, many of my clients are eligible for the Veterans Aid and Attendance benefit or for home-based Medicaid, or can be made eligible for these benefits through our process of Asset Protection. 

Whether you own your home outright or in a Revocable Living Trust or in my proprietary  Living Trust Plus^TM Asset Protection Trust, if you think a reverse mortgage might be the solution you need, please contact me for a free consultation so I can evaluate your specific situation and advise you as to whether a reverse mortgage is your best option for allowing you to live comfortably in your home.

Here’s an article written about Evan’s seminar and about the income-only trust: http://tinyurl.com/l3qc7q.

This is the 2nd national teleseminar that Evan Farr has done for NBI on this topic. Evan has also done a similar national teleseminar for ALI-ABA (American Law Institute – American Bar Association), in connection with two recent scholarly publications for the legal profession published by ALI-ABA, with Evan Farr as the lead author, entitled Planning and Defending Asset Protection Trusts and Trusts for Senior Citizens.

If you’d like to attend a similar seminar for consumers, we still have openings for our 2 lunch seminars this week — on Tuesday and Thursday at noon. To register, please click the link to the right or call 703-691-1888 and speak to Jeannie.

For more information about the Income Only Trust, and about Evan Farr’s Living Trust Plus™ Asset Protection Trust (which is Evan’s highly-developed and perfected Income Only Trust, used by dozens of attorneys across the country), please visit http://www.livingtrustplus.com.

Every day, our firm helps clients protect significant assets through the use of the Living Trust Plus™ Asset Protection Trust and still qualify for Medicaid. Our Firm specializes in Asset Protection and Estate Planning for clients concerned about the devastating expenses of long-term care. To begin the process, please call us today at 703-691-1888.

Life Estate Rule Made More Restrictive
Prior to August 2008, the Virginia Medicaid State Plan treated life estates in real property as exempt resources, meaning that the ownership of a life estate did not affect Medicaid eligibility. Effective August 28, 2008, the aforementioned change in Medicaid policy made life estates created after that date countable resources under most situations, though subject to the same exclusions that apply to other residential real estate (e.g. the home subject to the life estate would be exempt if the Medicaid Applicant, or a spouse or dependent child, was living in the home or the Medicaid Applicant was using “reasonable efforts” to sell the property interest, or during the first 6 months of institutionalization provided the Medicaid Applicant intended to return home).

The American Recovery and Reinvestment Act of 2009 (Recovery Act) that President Obama signed into law on February 17, 2009 provided increased federal funding for state Medicaid programs. To be eligible for the enhanced federal financing, states may not have eligibility standards, methods or procedures in place that are more restrictive than those effective on July 1, 2008. States that implemented more restrictive policies after July 1, 2008 had until July 1, 2009 to reverse these restrictions to receive the increased funding.

More Restrictive Life Estate Rule Rescinded
The August 28, 2008 change in Virginia Medicaid policy regarding life estates created a more restrictive eligibility standard than was in existence in Virginia on July 1, 2008. Therefore, in order for Virginia to qualify for the increased federal funding, the more restrictive life estate policy needed to be reversed. As of May 15, 2009, the more restrictive life estate policy was rescinded. Accordingly, we now have two diferrent Medicaid rules for life estates, depending on the date that the life estate was created:

* As a general rule, life estates created prior to August 28, 2008, or on or after February 24, 2009, are considered exempt assets.
* Life estates created on or after August 28, 2008, but before February 24, 2009, are treated in the same manner as other real property, subject to any applicable residential real property exclusions as mentioned above.

How Can Life Estates Now Be Used in Medicaid Asset Protection Planning?
Life estates have been used throughout Virginia history for many different purposes – Medicaid asset protection planning, estate planning, probate avoidance, and tax planning.

One asset protection strategy involves a parent purchasing a life estate in the home of a child. This strategy is specifically allowed by Medicaid under current law so long as the parent actually resides in the home for at least a year after the purchase of the life estate.

Another planning strategy involves the sale of real estate to a child, coupled with the retention of a life estate. This allows the parent to effectively sell the home for a discounted value, retain the lifetime right to live in the home, and avoid probate, while also preserving a step-up in basis for capital gains purposes on the death of the parent.

A third planning strategy involves the gift of real estate to a child, coupled with a retained life estate. Although this gift will trigger a period of Medicaid ineligibility if application for Medicaid is made within five years of the transfer, because the value of the remainder interest is lower than the full value of the entire piece of real estate, a gift of a remainder interest results in a shorter Medicaid penalty period than a transfer of the entire house.

A parent retaining a life estate in a home that is being sold or gifted to a child has several advantages:

1) The parent continues to qualify for any property tax exemptions such as senior citizens exemptions that were available prior to the transfer.
2) The parent retains the legal right to live in the property.
3) The parent retains the legal ability to obtain a reverse mortgage (with the agreement of the remainder beneficiary).
4) The child receives a stepped-up basis for capital gains tax purposes.

Life Estate transactions, and the financial and life expectency calculations that must be made in connection with these transactions, are extremely complicated and must be done pursuant to the applicable Medicaid regulations. It is essential that these types of transactions be done under the direct supervision of an experienced Elder Law firm such as the Farr Law Firm.

“In recent years evidence has been mounting to suggest that, at all levels in the delivery of healthcare, there is a prevailing bias – ageism – that is at odds with the best interests of older people. This prejudice against the old in American healthcare is evidenced by scores of recent clinical studies, surveys and medical commentaries, many of which are referenced here. In this report, we outline five key dimensions of the ageist bias in which U.S. healthcare fails older Americans:

- Healthcare professionals do not receive enough training in geriatrics to properly care for many older patients.
- Older patients are less likely than younger people to receive preventive care.
- Older patients are less likely to be tested or screened for diseases and other health problems.
- Proven medical interventions for older patients are often ignored, leading to inappropriate or incomplete treatment.
- Older people are consistently excluded from clinical trials, even though they are the largest users of approved drugs.”

A fictional story, often used in the training of geriatric physicians, goes this way:

“A 90 year old man meets with his doctor and complains about pain in his right knee. The doctor tells him, “Well Henry, what do you expect? You’re 90 years old.”

Henry replies, “But doctor my left knee is the same age as my right knee, there’s no pain and it feels just fine!”

Many in the health-care profession consider old age to be a disease itself. Any medical problems are inappropriately attributed to old age as if it were a medical condition. And since there is no cure for old age, appropriate tests and treatment are never performed. Thus, medical problems that may not be related to age and may just as frequently occur in younger people are often not treated.