By Kate McGahan
(Remember laws can vary from State to State and from year to year! Be sure to
check with an informed attorney, geriatric care manager or Medicaid or other informed
human service representative to see how Medicaid rules apply to your individual situation.)
There are strict guidelines for Medicaid eligibility and the rules vary from state to
state. If your income, resources and expenses fall within the Medicaid guidelines,
you will be eligible for Medicaid assistance. A very important aspect of the Medicaid
process is the determination of your ongoing medical and health care expenses as
they relate to your income level. After all, the reason you are applying for Medicaid is
because your medical expenses outweigh your ability to pay for them.
You will need to verify the extent of your medical expenses as well as account for your
income and assets. If your income is too high, you may be eligible if your medical
bills, when subtracted from your income, bring you below the eligibility levels needed
to qualify. The process of subtracting your medical bills from your income to become
eligible for Medicaid is called a "spend down".
If you have excess resources, you must also "spend down" to qualify for Medicaid.
Usually assets include anything that can be converted to cash such as real estate,
automobiles, IRAs, stocks, bonds, and bank checking and savings accounts. If your
countable resources are over allowable limits, you can spend them down to the
required level and then become eligible for Medicaid. You can reduce your cash
resources by paying off the mortgage, buying a new car, making home improvements,
prepaying taxes and utilities, or paying family members to provide you with home care
and other services. This is a good time to prepay your burial expenses in the form of
an Irrevocable Trust Agreement. You might also cash in a savings account and pay
off the mortgage or to make a home improvement. Always keep a complete record of
disbursements; Medicaid may ask you to prove how you spent it.
If you need Medicaid assistance and you reside in your home or apartment, Medicaid
will set up a budget for you based on your income and medical expenses. There are
laws that protect you so that you should always be able to live within the budget that
is designed for you. If your income is greater than Medicaid allows you to have to
qualify, you can "spend down" your excess income on your medical care needs to
"buy in" to the Medicaid program.
If you require care in a nursing home or residential care facility, Medicaid will set up a
budget for you that will indicate the amount of your monthly income which will go
towards paying your cost of care at the facility. Medicaid makes allowances for you
to keep enough of your income to continue to pay your health insurance premiums
and provide you with a monthly personal allowance for special expenses such as
cable TV, hairdresser services and the newspaper. The remainder of your income is
paid to the facility towards the monthly bill. Medicaid is then billed for the rest of your
cost of care. Under certain circumstances, you may be able to keep your home as
well as a home maintenance allowance if your doctor believes that you will be able to
return home within 6 months. This means that Medicaid will allow you to continue to
pay your home maintenance costs during your stay at the facility.
Many people are afraid that they will lose their home in the Medicaid process. Your
home can be protected for you so long as you reside there or have the potential to
return there after a period of rehabilitation in a residential care facility. If your
spouse, minor, blind or disabled child is living in the home or if an adult child, sibling
or other relative was living with you for an extended period prior to application for
Medicaid and has established residency at that address, your home may also be
exempt from consideration.
Your spouse is the only person whose income and assets are deemed to be available
to you if you require long term care. For purposes of determining eligibility, your
combined assets are totaled and then divided equally between you and your spouse.
Part of the Medicare Catastrophic Coverage Act of 1989 brought about the "spousal
impoverishment rule" which protects the rights of your healthy spouse. The rule
requires that the income and assets of the "at home spouse/community spouse" must
be taken into account when determining the eligibility of the spouse applying for
Medicaid. Your spouse can keep his or her own income and usually some portion of
your income to go towards maintaining his or her standard of living. This amount is
determined upon the state's limits and your spouse's needs.
Your spouse who remains at home can keep the home, car, personal belongings, half
of the assets up to a set amount (usually around $75,000). Your spouse has appeal
rights if he or she believes that the resource allowance is so low it will cause a
hardship. Some states have a "Spousal Refusal" law which gives your spouse the
right to refuse to pay towards your cost of care.
If you have extensive health care needs, regardless of income, you may be eligible for
what is known as a Medicaid waiver. This is a concept where certain regulations
regarding income are waived to allow eligibility for Medicaid to take place to
specifically cover those health care needs. Because the application process is a
complicated one, it is a good idea to contact an attorney, geriatric care manager or
agency adviser to help you with the process. Be sure to seek the advice of a
professional familiar with Medicaid eligibility, the limitations of transfers and the right
to retain income and assets. If there is a charge associated with the services and you
have to spend down your resources to qualify, this is a smart way to do it. You may
save a lot more in the process.
They are called The Baby Boomers; The Sandwich Generation. They are the largest segment of our population and they were born between the years of 1946 and 1964. They have become the driving force of the marketplace and an issue of increasing magnitude for our society as a whole.
Greater longevity, lower mortality and diverse lifestyles are causing giant shifts in the demographics of our society. Some of us will spend as many years in retirement as we spent in our career. Some of us may spend as many years caring for our aging parents as we spent raising our children. Many of us will have the overwhelming task of caring for our children and our parents simultaneously.
Government has created new laws and has redefined the healthcare system in countless ways in an attempt to keep Social Security, Medicare, Medicaid and the taxpayers intact. Corporations now offer benefits such as Family Medical Leave and employee assistance programs which specifically address eldercare issues. Individually tailored work programs and pension plans offer increased flexibility to workers. More and more companies offer Long Term Care insurance as an employee benefit.
The year 2011 is the year the first born Baby Boomer will reach retirement age. Our government anticipates its approach, our employers are addressing the potential effects it will have on workers, and our communities are building the momentum to equip society with the programs that will help meet the needs of an aging population. Aging is inevitable. It is not something we like to think about, but loss or disability is certain to be an issue for each and every one of us. What have you done on a personal level to prepare for your aging and that of your family?
Creating and implementing a personal long term care plan is essential. It is not unlike creating and implementing a business plan. It has to do with identifying areas of need and weakness, creating a strategic action plan to meet those needs and deciding how to finance the whole operation. It is about hoping for the best and planning for the worst. People who see themselves as having an element of control always feel more secure and therefore are more resilient when changes take place. The primary purpose of the long term care plan is to ensure that an element of control always exists, no matter what happens. It is a planning tool as well as a communication tool.
There are six basic elderplanning areas that should be addressed in your long term care plan.
Medical: Preserving your health and wellness comes first and foremost. Be sure to have a trusted physician and a solid health insurance plan that meets your specific needs and preferences. Be accountable for learning and understanding the issues at hand so that you can take an active role in your own medical care.
Psychiatric: Have a plan for coping with the possibility of mental health issues such as clinical depression or substance abuse and addictions. Address competency and treatment issues and develop an awareness of support and treatment programs available to you. Take care of your ongoing emotional health as a preventive measure.
Physical: Be aware of options related to home safety, accessibility and residential and retirement living. Home safety is crucial to preserving ongoing independence. Accessibility experts can help to modify existing homes to accommodate disabilities. Creative residential options such as continuing care communities and special needs programs are regularly being developed to meet the needs of those who cannot or who choose not to stay home.
Legal & Financial: Legal and financial independence results from your ability to create a realistic plan related to your retirement goals and your preferences regarding medical treatment and long term care. This involves choreographing investments, your insurance portfolio, taxes, trusts, and your estate to work together to meet your projected retirement needs.
Social: This encompasses your hobbies, diversional pursuits and areas of passion and productivity. It is about connecting with others: family, friends, neighbors and community. It is about preserving individuality, complete with cultural and ethnic traditions. It is about learning and growing, no matter what age you happen to be.
Spiritual: This addresses the ongoing development of your understanding of what is important in life. This is the area where faith, hope and charity reside. It is where knowledge and forgiveness take place in the depths of your heart.
Involve a team of professionals to help you implement your long term care plan. This team should consist of a physician, an attorney, a financial planner and a geriatric care manager who can help you to pull the entire plan together. Your advisers will become an important part of the foundation that will help you to feel more secure and confident in facing the days and years ahead.
The absence of a national health policy seems to have created a black hole that has been filled with profit driven managed-care programs. While states such as California have been adapting to the managed-care concept for a number of years, New York is just beginning to feel the effects. Syracuse is a good example of community agencies working together to rise to the changes in demographics and in the industry.
The cost of running Medicare and Medicaid programs has been growing at nine percent per year. Experts say that, by the year 2030, Social Security, Medicare and Federal pensioner programs will exceed the federal government's revenues. The seemingly insurmountable task of trimming the budget seems to have come down to trimming the payments to the care providers. Massive state and federal cutbacks have severely affected hospital and health programs and the way they do business.
What does this mean to us? The managed care shift has had the tendency to refocus the healthcare industry toward business development and marketing efforts rather than customer service and patient care. The game has become "SURVIVAL". In the hierarchy of needs, physicians, hospitals, home care agencies, and other programs which rely on insurance to keep them alive have had to find a way to put food on their proverbial tables. This is a challenging task and makes it difficult to meet the more advanced qualitative needs of perfecting patient care.
Aggressive insurance procedures now affect providers on a multitude of levels. Insurance companies reward hospitals for treating patients with higher clinical needs. Medicare pays a certain rate for the treatment of a specific illness and the insurance companies follow suit. The more severe the illness, the higher the reimbursement. They also can refuse to pay for days a patient spends in the hospital on which a significant intervention did not take place. Subsequently, providers now find they need to perform surgery and diagnostic testing on weekends and after hours to promote reimbursement. This means paying additional staff for hard-to-fill time slots. It also includes paying additional staff to process the multitude of paperwork required for patient billing and reimbursement.
The "system" encourages the prompt discharge of less acute patients and begins a ripple effect that forces all parts of the healthcare delivery system to push a patient quickly toward the least restrictive, most cost-effective setting. This ripple effect causes nursing homes, rehab centers, home care agencies and others to need to be available off-hours and on weekends to do intake assessments, admissions, and crisis intervention. This new system presents an arena of discharge planning and case management considerations.
Because nursing home and rehab facilities are reimbursed for patients with higher needs, they also are eager to discharge residents who are more able to manage in a less-restrictive setting. People who one would have been permanent residents in nursing homes are now being encouraged to return home with services or to go to assisted living programs and special care facilities. The system has been forced to be creatively revised in the face of these new regulations. New residential and home care programs have arisen to compensate for the greater number of nursing home and hospital discharges. Some skilled facilities have developed subacute and short term rehabilitative services to capitalize on higher reimbursement levels. More and more independent living programs are offering a concierge of services.
Alzheimer's Disease is tragically one of the lowest reimbursable illnesses. It is one of the most common, of the longest duration, the most time consuming, and exhibits some of the most frequent repeated use of services in the system. The system does not financially reward providers for caring for people with such disorders.
How we cling to the status quo! Peter G. Peterson, in his book Gray Dawn, gives us a reality check: By 2015, most developed countries will have more elders as a share of their population than the state of Florida today. Caring successfully for older adults in the face of managed care will take a community-wide effort. The population is aging and managed care is here to stay.
Healthcare providers need to develop a positive attitude despite the lack of perfection in the system. This means making a shift from a sickness mentality to a wellness mentality; to prevention vs. cure. It's about having vision and defining a contributing role within a system that thrives on networking. It's about being proactive rather than being swept along with the tide of managed care; to begin to create and enhance programs, products and services and to become leaders in a system specialty.
Many US hospitals are forming partnerships with residential and rehab programs, home-care agencies, and primary care providers. Residential facilities are developing day programs and menus of services to expand their markets. Doctors are joining forces to meet the comprehensive needs of their patients.
There are many ways to partner - formally and informally- to meet the needs within the senior healthcare system. Formal alliances allow partners to share operating costs and collectively to meet the needs of the community. Clinical, financial, social, private, and public programs need to be available, accessible, and mutually beneficial to the older population. We need to learn how best to utilize one another to support the needs of those who need us.
Learn to see this as a challenge rather than as a problem. Exciting innovations are already occurring within the Central New York system. Follow the leaders of the community in developing unique programs to offset the negative consequences of managed care.
Loretto and St. Joseph's Hospital have partnered to meet specific needs which make programs like PACE/Independent Living Services- a program designed to prevent/reduce institutionalization and subsequent costs possible. Crouse Hospital and Community General Hospital together created The Alliance, which proposes to merge with VNA Systems to streamline the continuum of care for their patients. SUNY Health Science Center recently announced participation in WebMD - a full-service Web site for doctors and their patients --made possible by the combined efforts and funding or organizations such as DuPont, Microsoft, and CNN.
Competition is a driving force of the new system. Once we re-establish our equilibrium, we can allow competition to do what it does best: improve quality, reduce costs, and encourage providers to be creative in the marketing and delivery of their services. We must also work collectively to keep the continuum of care smooth and as user-friendly as possible.
The possibilities are endless. Growth doesn't just "happen" without people making a conscious change. If we don't promote change on our own, life will inevitably do it for us. It has pushed us to grow in challenging, sometimes frustrating and very exciting ways.
By Kate McGahan LMSW
We don’t like to think about aging and the potential issues of death, disability, dependence and cognitive loss. Because we don’t like to think about these things, we tend not to plan ahead for the inevitable.
Yes, the “system” has it’s own frailties. The “system”, however, is making dramatic strides to try to improve service delivery while at the same time, to reduce the tremendous costs of running federal and state programs such as Medicare and Medicaid.
The Managed Care system is changing health care delivery by attempting to reduce and eliminate unnecessary costs and treatments of medical health care. While far from perfect, this has in part caused a dramatic shift in the care and lengths of stay in hospitals, rehabilitation facilities, and nursing homes. Hospital stays have shortened, rehabilitation while nursing home facilities are now meeting more acute care needs of their residents. The newer residential concept of “Assisted Living” is now meeting the needs of many people who normally would have required nursing home care. Home care programs have been recharged to meet increasing needs of those who wish to remain at home.
Granted, there are many weaknesses in the system. Therefore, we need to be accountable for planning for our own future and the future of our aging families. Never underestimate the power of the “private pay dollar” when it comes to buying what you need and want in the health care system. That “dollar” buys your choice of caregivers, physicians, residential options and other preferred services.
How do you maximize the private pay dollar? By starting as early as you can to plan for your retirement. By saving and investing your money wisely. By maximizing your retirement income and pension plan. Have a solid health insurance plan that best supplements Medicare and a Long Term Care(LTC) Insurance plan that will fill the remaining “gap” of financing your long term care needs in the future.
Find out about medically-deductible expenses which can include the costs of nursing home care, home care, medications, home improvements due to a disability, insurance payments, copayments and a portion of your LTC insurance premium. You may qualify for a dependent-care credit if you are caring for a dependent parent at home and if you contribute to your parent’s medical expenses, those expenses may be deductible if you itemize.
Investigate the possibility of creative options such as a Reverse Mortgage or a HUD conversion loan which allow you to use the equity in your home to fund the costs of your long term care. Open a Medical Savings Account (implemented in 1996 on a demonstration basis) which allows you to invest your money and then reap your earnings tax free if applied to your personal health expenses. Look at your life insurance portfolio; you may want to borrow from your insurance to pay for your current needs.
Respectfully encourage your parents to plan for the future, if they haven’t already done so. Think about and implement Advance Directives such as a Living Will or Health Care Proxy. Establish a Power of Attorney and a legal and financial plan to attend to future needs.
Involve a team of objective, competent professionals to help you design a plan that is best-suited to your situation and personal goals. The ideal team will consist of an attorney, a financial adviser, an accountant, an insurance specialist and a geriatric care manager. The involvement of this team will help you in making sound decisions in the areas of financial, tax, estate planning and personal long term care planning.
Many Baby Boomers will find that they will spend more years caring for their aging parents than they did raising their children. Some will find themselves in the overwhelming situation of caring for both at the same time! Only 5-7% of our elderly population resides in nursing homes. The others are being cared for by families, home care agencies and informal caregivers. Many more are living active, independent lifestyles.
Gather your team of advisers, save and invest your money wisely and learn what choices are available to you. Communicate with your family and create a healthy lifestyle for yourself. When you have the support of those who love you and the advantage of good physical, emotional and financial health, you will find yourself surrounded with unlimited choices as you face the days ahead.
If you woke up this morning with more health than illness, you are more blessed than the million who will not survive this week.
If you have never experienced the danger of battle, the loneliness of imprisonment, the agony of torture, or the pangs of starvation, you are ahead of 500 million people in the world.
If you can attend a church meeting without fear of harassment, arrest, torture, or death, you are more blessed than three billion people in the world.
If you have food in the refrigerator, clothes on your back, a roof overhead and a place to sleep, you are richer than 75% of this world.
If you have money in the bank, in your wallet, and spare change in a dish someplace, you are among the top 8% of the worlds wealthy.
If your parents are still alive and still married, you are very rare, even in the United States.
If you hold up your head with a smile on your face and are truly thankful, you are blessed because the majority can, but most do not.
If you can hold someone’s hand, hug or even touch them on the shoulder, you are blessed because you can offer healing touch.
If you can read this message, you just received a double blessing and you are more blessed than over 2 billion people in the world who cannot read at all.
Be sure to count your blessings as Spring arrives!
As we count our blessings, we thank the friends of Elderplanning who offer their ongoing support, confidence and assistance in helping those who need us to find us! The strength of our service is in the strength of the vast network of professionals and agencies in our health care community. We appreciate your referrals and your help in meeting the ever-changing long term needs of our local seniors and their families.