OHIO ELDER LAW BLAWG

Kaiser Family Foundation Study Finds Sharp Jump in Medicaid Enrollment

The Kaiser Family Foundation found enrollment in Mediciad topped 48 million last year as the national recession continued and jobs and employer-provided health-care coverage were harder to find.

THe study showed more than 3.6 million Americans enrolled in Medicaid as compared to the previous year, or a jump of about 8.1 percent. The rolls grew in all 50 states and the District of Columbia between December 2008 and December 2009.

With the economy showing some signs of improvement or stability, states are predicting enrollment will continue to grow but at a smaller pace. State Medicaid officials, according to the survey, are projecting a 6 percent increase in medicaid caseloads this year.

The Columbus Dispatch reported that "Ohio officials are more optimistic, forecasting that the state's rolls will climb about 3.5 percent, much lower than the 9 percent enrollment increase in the state program last year."

With unemployment claims slowing, Ohio predicts medicaid applications will similarly slow. "As people find work and the layoffs slow, people are collecting paychecks and don't need (assistance)," he said to the Dispatch.

Ohio's Medicaid program insures approximately two million people.  Nationwide, yearly cost of the program increased 8.8% last year, with state officials projecting costs increasing about 7.4 percent in 2010, Kaiser found.

Although Ohio didn't implement Gov. Ted Strickland's planned expansion of its Children's Health Insurance Program to middle-class children, our state did avoid cuts in eligibility and services by making use of about $1 billion in federal stimulus money.

 

Trusts are Good and Trusts are Bad

Like anything in life, there is a good and a bad side.

Last week when the market went down 1000 points, that seemed like bad news. However, some lucky soul out there was probably buying Accenture for 1 cent a share, and it bounced back up to its pre-crash status of some $40.  So, it was bad, yes, but it also was good, wasn't it?

When planning for nursing home eligibility under Medicaid, trusts can be...well, good or bad.

Trusts can be great tools for controlling assets after your death, estate tax savings, privacy, and wealth preservation.  However, when a revocable living trust (a trust that you can terminate or change at will) holds assets and you apply for Medicaid, certain strange things can happen. 

Things that normally are NOT counted for medicaid purposes suddenly ARE counted.  For instance, if you put your house in a trust, Medicaid will count it as an asset whether you are living in it or not.  However, if it is OUT of a trust, and you or a spouse are living in the house, Medicaid will NOT count the house as an asset. 

Is this bad, or is this good?  Well, it all depends. 

With a married couple, usually we want a great deal of countable assets when you first go into a facility, but very few assets after that.  Why?  Because generally a spouse who goes to a nursing home has to somehow use 1/2 of the assets he and his wife have collectively on the first date he went into institutional care. 

So, if you and your spouse have $100,000 in cash, and you own a house worth $100,000 that is titled in your joint names, the house is not counted, and you will have $100,000 in countable resources and you will have to spend $50,000 (half of the $100,000 you have) before the spouse in the nursing home can get Medicaid to pay. 

But what if you have the house in a trust before you go into a nursing home?

Now you have $200,000 alltogether: $100,000 in cash, and $100,000 in a house.  The house is counted as an asset because it is in the trust!  So Medicaid says, you have $200,000 and you need to get rid of $100,000 before you are eligible for Medicaid! That becomes easy. If we remove the house from the trust and put it in your name, viola!  You have $100,000 in cash, and Medicaid can no longer count the house as an asset because its now in your name.

On the other hand, some people apply for Medicaid with the house in trust, and don't realize that it will be counted, and may end up getting their Medicaid application denied.

So, that's kinda bad.

So there you are, trusts are good and trusts are bad. Either way, it pays to have someone experienced review the situation if you or a loved one is either going into a nursing home, or has been diagnosed with a condition that may cause a stay in a long term care facility.

-Todd

A Roundup of Key Elder Law Numbers for 2010

Below are figures for 2010 that are frequently used that may be of interest to my clients.

Medicaid Spousal Impoverishment Figures for 2010 Unchanged From 2009

The minimum community spouse resource allowance (CSRA) remains $21,912, as does the maximum CSRA, $109,560. The maximum monthly maintenance needs allowance remains $2,739. The minimum monthly maintenance needs allowance remains $1,821.25 until July 1, 2010.

For the CMS document announcing the unchanged 2010 figures, click here.

Income cap: Because the SSI federal benefit rate was unchanged, the income cap for 2010 applicable in "income cap" states should remain $2,022 a month.

Annual Gift Tax Exclusion Stays at $13,000

The annual gift tax exclusion remains at $13,000.

Long-Term Care Premium Deductibility Limits for 2010

The Internal Revenue Service has announced the 2010 limitations on the deductibility of long-term care insurance premiums from taxes. Any premium amounts above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year	Maximum deduction
40 or less	$330
More than 40 but not more than 50	$620
More than 50 but not more than 60	$1,230
More than 60 but not more than 70	$3,290
More than 70	$4,110

Benefits from per diem or indemnity policies, which pay a predetermined amount each day, are not included in income except amounts that exceed the beneficiary's total qualified long-term care expenses or $290 per day (for 2010), whichever is greater.

For details from the American Association for Long-Term Care Insurance, click here.

Medicare Premiums, Deductibles and Copayments for 2010

• Basic Part B premium: $110.50/month (was $96.40) (But most beneficiaries will not pay this increase due to a "hold-harmless" provision in the Medicare law prohibiting Part B premiums from rising more than that year's cost of living increase in Social Security benefits. For more, click here.)

• Part B deductible: $155 (was $135)

• Part A deductible: $1,100 (was $1,068)

• Co-payment for hospital stay days 61-90: $275/day (was $267)

• Co-payment for hospital stay days 91 and beyond: $550/day (was $534)

• Skilled nursing facility co-payment, days 21-100: $137.50/day (was $133.50)

Premiums for higher-income beneficiaries:

• Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 in 2010 will pay a monthly premium of $154.70.
• Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 in 2010 will pay a monthly premium of $221.
• Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 in 2010 will pay a monthly premium of $287.30.
• Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more in 2010 will pay a monthly premium of $353.60.

Rates differ for beneficiaries who are married but file a separate tax return from their spouse:

• Those with incomes between $85,000 and $128,000 will pay a monthly premium of $287.30.

• Those with incomes greater than $128,000 will pay a monthly premium of $353.60.

For more information, click here.

Social Security Benefit Changes for 2010

Monthly Social Security and Supplemental Security Income (SSI) benefits will not automatically increase in 2010 as there was no increase in the Consumer Price Index (CPI-W) from the third quarter of 2008 through the third quarter of 2009. For other important 2010 Social Security information, click here.

Medicaid Study: Expansion will save billions in Health Care Costs

A West Virginia study showed that expanding Medicaid eligibility along with requiring individuals and businesses to carry health insurance could save that State's taxpayers more than $2 billion a year in health care costs, according to a study released Dec. 7.

The study predates the current health care debate, but its release is timely in that the US Senate is considering legislation to drastically overhaul the nation's health care system, including provisions relating to expansion of Medicaid and Medicare.

    Story

Who is our biggest healthcare insurer?

While the healthcare debate drags on, I was thinking about this question.   We know there are some huge health care insurance companies out there: Humana, Wellpoint, Aetna, and others.  

But who provides coverage services to the greatest number of people?

Answer: The US government is already our largest health insurer.  Over 110 million people are currently covered by Medicare, Medicaid, Veterans, and other benefits provided by the government.  

Medicare, interestingly enough, is a federal program, but farms out a good deal of its paperwork to private insurance companies for processing of claims.  And the overhead is pretty low, extremely low compared to private health insurers.

So, with fully one third of our healthcare coverage being provided by the federal government already, why are there such vehement objections to a public option? 

No Increases for Community Spouses - Cost of Living Index Stays Down

The Centers for Medicare and Medicaid Services (CMA) has announced that there will be no increase in the community spouse resource allowances (CSRA) and the maximum monthly maintenance needs allowance for 2010.  

In a memo issued by CMA, the lack of any increase is due to the Consumer Price Index staying the same, rather than growing as it traditionally does.

If you have any questions, please call our office.

Annuities and Medicaid: Recent Decision Renews Old Technique

Back in the 1990's when a married client would come it to see me about medicaid when their spouse was in the nursing home, one of the first techniques we would look at is whether we could convert a portion of the couple's assets to an income stream for the spouse living at home by using an annuity.

This technique would immediately create Medicaid eligibility, and would often be something that would create a much greater income for the community spouse.

The technique was sometimes not appropriate when the community spouse had little income, or in some other circumstances, but in the right situation it was a very successful planning technique.

The State of Ohio developed regulations that quashed this technique, but after the deficit reduction act of 2005, the annuity laws were changed on the federal level, and Ohio went back to the drawing board to try to come into compliance with the federal law, and still prevent people from buying annuities to qualify for Medicaid.

Ohio tried in regulation to prevent the transfer of assets from one spouse to the other in order to purchase an annuity by calling it an improper transfer of resources and by indicating any such purchase of an annuity would be invalid if not permitted by a hearing decision.

The Court of Appeals in Ohio (10th district, which is in Franklin County, Ohio) held in a recent case that the transfer of funds to the community spouse to purchase an annuity is not an improper transfer, and that the regulation requiring a hearing decision does not apply.  This may re-open an avenue of Medicaid Planning that had been closed or limited for several years.

The purchase of an annuity to qualify for Medicaid is still an area fraught with risks if not properly done.  If you are thinking about trying to qualify for Medicaid by use of an annuity, please contact our office so we can guide you through the process.

Average Cost of a Nursing Home Increased

June 11, 2009 - - Beginning July 1, 2009, the Ohio Department of Job and Family Services has set the average monthly cost of a nursing home from the current $5,247.00 level to $6,023.00.

The new value will be used in determining the penalty for transfers of assets that have no consideration (gifts).  For each $6,023 transferred or gifted, a medicaid applicant is not eligible for nursing home or certain waiver services for a month.

The Deficit Reduction act of 2005 permits Medicaid to penalize persons who transfer assets in the last five years prior to applying for Medicaid.  The penalties can last for a fraction of a month.

If you have any questions about the average cost of a nursing home in the State of Ohio, please feel free to contact the Elder Law Office of Todd W. Bartimole at 216-464-9999.

New Spousal Impoverishment Amounts Released

The Centers for Medicare & Medicaid Services has released the community spouse resource allowances (CSRA) and the maximum monthly maintenance needs allowance (MMMNA) for 2009. The new minimum CSRA is $21,912 and the new maximum is $109,560. The new maximum monthly maintenance needs allowance is $2,739. The minimum monthly maintenance needs allowance remains $1,750 until July 1, 2009.

The new figures are effective January 1, 2009, and reflect an increase in the Consumer Price Index (CPI) of 4.9 percent from September 2007 to September 2008.

Medicaid pay for a Sex Change Operation? New York Judge says No

A federal district court in New York recently found Medicaid is not obligated to pay for transsexual surgery as treatment for a beneficiary's Gender Identity Disorder. Casillas v. Daines (U.S. Dist. Ct., S.D.N.Y., No. 07-Civ-4082, August 5, 2008).

The plaintif, Terri Casillas wasa 48 year-old Medicaid beneficiary.  He had been diagnosed with Gender Identity Disorder (GID) in 1978. He began hormone therapy to become more feminine. Medicaid covered the costs of Casillas's therapy until 2004, at which point Medicaid coverage ended. Casillas continued to pay privately for therapy until 2006.

In January 2007, Casillas's doctor recommended a combination of hormones, orchrectomy and vaginoplasty as medically necessary treatment for Casillas's condition. However, New York law prohibited Medicaid reimbursement for all gender reassignment procedures. Casillas filed a civil rights action against New York, alleging that the state had violated her right to treatment under the Medicaid Act and the Equal Protection clause of the Constitution. The state argued that federal law gives the states wide leeway to choose whether to cover certain medical procedures and services and that New York had a rational basis for not covering gender reassignment procedures.

The Federal District Court for the Southern District of New York granted the motion for judgment on the pleadings. The court found that a carve-out provision in the federal statute allowed states to "place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures" gives New York the authority to limit treatment for GID. The court also found that the equal protection claim of the plaintiff failed because the state had a rational basis for limiting treatment, namely the danger and complications of gender altering surgery and life long estrogen treatments.