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Understanding Your 2020 Long-Term Care Benefits

“When I sit down with a client, I look at the big picture. I consider the individual, their family situation, medical and emotional needs (short-term and long-term), possible government benefits available (Medicaid, Veterans benefits), tax implications, and then I assist in determining the best plan for their circumstances.” – Genny Bernstein

Elder Law is a complex and highly specialized area of practice that requires a comprehensive understanding of both State and Federal Laws in addition to the ability to tailor legal strategies to each client’s unique needs. Senior Counsel Genny Bernstein, a Board Certified Specialist in Elder Law and VA Accredited Attorney, has answered some of our client’s most commonly asked questions and shared current long-term care benefits.

 

How is long-term care paid for?

As clients age, the need for assistance with everyday activities is a commonplace. While many seniors would like to stay in their home, it is not always a viable option. Often, additional support in an assisted living or skilled nursing facility is required. Notwithstanding where the care is occurring, the costs can be expensive.

There are generally three ways to pay for these costs:

  1. Pay out of pocket. This reduces and can even exhaust an estate, thereby creating the concerns of outliving one’s money. 
  2. Through long-term insurance, if affordable and if one is insurable. 
  3. Through government benefits, if eligible, through programs such as Medicaid and/or Veteran Benefits. 

Who Qualifies for Long-term Care Medicaid in a Nursing Home?

Medicaid for long-term care is not only very expensive but can also be very confusing. For an applicant to qualify, there are several requirements that s/he along with their spouse, if any, must meet. These include a citizenship requirement, a medical component along with an income and asset eligibility determination. This is a “means-tested” program.

This chart below is a Medicaid Quick Reference Guide for the Long Term Care for determining eligibility.
Florida Long-Term Care (January 2020) Income and Asset Limits

 

Applicant:  
Individual Income Limit (Income Cap) $2,349
Individual Countable Asset Limit $2,000
Monthly Personal Allowance $130
   
Spouse of Applicant (community spouse):  
Spouse Countable Resource Allowance/Asset Limit $128,640
Minimum Monthly Maintenance Income Allowance $2,114
Maximum Monthly Maintenance Income Allowance $3,217
   
Penalty Divisor $9,485
Home Equity Interest Limit $595,000

*Figures above are subject to change.

Notwithstanding the above figures, there are exempt assets that are not countable in determining asset amounts. These include but are not limited to one car at any value, personal effects and furnishings, a burial account with a cash value up to $2500.00, and prepaid burial plans/plots and irrevocable funeral plans. 

Additionally, if an applicant’s income is too high, don’t assume that you are not eligible. In these situations, the creation of a Qualified Income Trust (QIT) can be used to hold the excess income thereby meeting income qualifications. It is an extra step but it can eliminate ineligibility issues due to overage of monthly income.

Medicaid planning, whether in crisis or if done proactively in pre-planning, involves a comprehensive plan to protect assets within the parameters of the laws, in order to avoid a client, their spouse, and possibly their family from financial impoverishment.  It is imperative to speak with an attorney/specialist to customize the proper plan for each family’s unique situation.

Do all veterans qualify for VA Pension with Aid and Attendance?

The Veteran Administration made some significant changes to the rule and regulations governing Veteran Benefits as of October 18, 2018. These changes affect mostly “means-tested” programs and have a limited impact on other programs such as compensation. Notwithstanding these changes, the VA offers a variety of benefits to Veterans and their loved ones, from health care to financial assistance.
Pension with Aid and Attendance is a benefit for non-service connected Veterans, meaning Veterans that do not have a service-related injury. This program is “Needs-Based.” There is often a misconception that every Veteran is entitled to such benefits. The question then becomes: Does a Veteran qualify for Pension with Aid and Attendance and what are the requirements?

The criteria contain a service component in addition to medical needs, assets limitations, and income evaluations. A Veteran must meet all of the criteria to obtain benefits. In addition, a spouse and certain dependents of a Veteran may also be entitled to benefits; the criteria must also be met.

To qualify, the Veteran must have served on active duty for a period of ninety (90) consecutive days with at least one day being during a wartime period. The wartime periods are outlined by the Veteran Administration and include World War II, the Korean Conflict, the Vietnam Era, and the Persian Gulf War, to name a few. The Veteran must have been discharged under conditions other than dishonorable. In addition, a Veteran must be either 65 years or older or permanently and completely disabled.

Since this type of VA program is for those with limited financial means, there is a net worth determination. The VA now calculates net worth as the value of your assets combined with yearly income. The net worth limit for a single or married veteran is $129,094 effective as of December 1, 2019. However, there are still excluded assets that are exempt from this calculation.

Lastly, eligibility depends on Gross Countable Income. The Gross countable income can be reduced using a formula utilizing unreimbursed medical expenses (that is out of pocket medical expenses) to determine the amount of the benefit. The higher the unreimbursed medical expenses, the greater the likelihood of receiving benefits. If the unreimbursed medical expenses exceed the gross income amount, the applicant will receive the full benefit. If the unreimbursed medical expenses do not exceed the gross income amount, the applicant may be entitled to a lesser benefit.

Veteran Benefits

Monthly VA Pension with Aid and Attendance Reference Guide:
  Improved Pension Maximum Aid Attendance Maximum
Veteran $1,146 $1,912
Veteran with 1 Dependent $ 1,500 $ 2,266
Widow of a Veteran $768 $1,228
Widow with 1 Dependent $ 1,006 $ 1,465
Veteran Permanently Housebound $ 1,400 n/a
Same as above with 1 Dependent $ 1,755 n/a
Widow Permanently Housebound $ 939 n/a

*Effective date 12-1-2019. Figures above are subject to change

One of the significant rule changes is the creation of a look back period for uncompensated transfers of assets made after October 18, 2018, for all applications submitted for VA Pension with aid and attendance. In other words, any gifts or transfers of assets for less than fair market value may create an ineligibility period. The VA will be using a lookback period of 36 months or 3 years. The ineligibility period will be determined by combining the total value of the gifts or uncompensated transfers prior to the application and dividing it by the divisor of $2,266 (the benefit amount for a veteran with a dependent for pension with aid and attendance as shown above) thereby creating the time period for ineligibility when an applicant would otherwise be eligible.

Another rule change to be aware of is the maximum penalty period time-frame. Although the lookback period is three (3) years of uncompensated transfers prior to the application beginning on or after October 18, 2018, the penalty period can be up to five (5) years.

Although the VA rules can be complicated to understand, the changes made create some uniformity in the application process but still create confusion.

If eligible, these benefits can make a world of difference in the care that an eligible Veteran or spouse can receive on a monthly basis.

How Do I Avoid Medicaid & VA Conflicts?

When the time arises that clients and their families begin dealing with the aging process and the medical needs that can accompany them, finding solutions becomes the priority. But beware, what one program allows may be completely different than another. This is often the case when planning for Medicaid and Veteran Benefits. There is some overlap with criteria, but some planning strategies can lead to problems with eligibility between the two long-term planning programs. Hiring a specialist to assist can negate ending up in the Medicaid/VA conflict.

Only a VA accredited Attorney or Agent can assist with these types of applications. As an accredited attorney, Genny Bernstein assists clients with these matters.

Click here for more information about Genny's background and practice.

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