Who Should ConsiderMedicaid Planning?

Determining Eligibility or Excess Spend Down

© 2013, LWP Who Should Consider Medicaid Planning? 1

Who Should Consider Medicaid Planning? 2

Summary of What We Covered Last Week

© 2013, LWP

Look Back Date/PeriodSpend DownTransfersPenalty Period

Who Should Consider Medicaid Planning? 3

This Week We Will Cover

© 2013, LWP

• Exemptions• Case Study• Miscellaneous Rules

The LWP™ Medicaid Planning Principles

© 2013, LWP Who Should Consider Medicaid Planning? 4

• Learn the rules (Federal/Local)• Determine if client is eligible or excess spend down

amount• If excess, identify the spend down method• Create and implement the Funding Plan

Qualification Exemptions

© 2013, LWP Who Should Consider Medicaid Planning? 5

• Home Exemption • Single

Only if “Intent to Return Home”• But, subject to estate recovery (at death) unless applicant returns home

prior to death, no lien can be placedsome states require to return home within a time frame (e.g., 6 months)

• Home with equity of $536,000 (2013) or less is exempt State has option to increase to $802,000 (2013) and/or based on CPI Excess equity is “Available Resource” (e.g., Reverse Mortgage)

• Married Home is exempt and no right to recovery from surviving spouse*

*Some states require home to be transferred to CS prior to Medicaid eligibility

Home Exemption

© 2013, LWP Who Should Consider Medicaid Planning? 6

• Single or Married Life Estate in a residence• Must reside in home 1 year after purchase (DRA ’05)

Spouse/Child Exception (Minor/Disabled) Child Caregiver Exception• Must reside in home for 2 years prior to parent’s admission to nursing

home Sibling Exception• Sibling must co-own home and reside there for 1 year prior

to IS’s admission to nursing home Homestead Exemption (state)

Other Exemptions

© 2013, LWP Who Should Consider Medicaid Planning? 7

• Automobile• Home Improvements• Personal Belongings• Prepaid Funeral• Assets to Produce Income to MMMNA• Life Insurance (up to $1,500 Face Value)

Who Should Consider Medicaid Planning? 8

Case Study

© 2013, LWP

Mr. & Mrs. Smith Determine Eligibility

From Law (common/statutes)From Local Medicaid Dept.

From Client.

Counseling ArtScience

Spot the Issue

Ask the

Questions

Applythe

Rules

When doesMr. Smith qualify?

Get the

Answers

Who Should Consider Medicaid Planning? 9© 2013, LWP

Who Should Consider Medicaid Planning? 10

• No Income Issue• Life Insurance exempt• Home exempt• Can be exempt• Stocks exempt• Snapshot date is

January 1, 2009• $120,000 x 3% +

$300.00/month • Savings are excess• Below MMMNA

• Care status covered?• How long will Medicare pay?• Length of anticipated stay?• Calculate income on savings

and add to MMMNA• 60 months transfer to or from

trust?• Has stay been continuous?• Medicare support?• Prior snapshot date?• Has the state adopted DRA?

Eligibility Issues Noted

© 2013, LWP

Who Should Consider Medicaid Planning? 11

• Concern about completing application because may not qualify

• What do estate planning documents look like?

• Is Mr. Smith competent?• Is Mrs. Smith competent?• Do they have Power of Attorney?• Who is client?• Who is decision maker?• Who is paying bill?• Any liabilities or debts?

• Citizen?• Do they have prepaid funerals?• Assets titled how?• Health insurance?• Other expenses beyond cost of

care?• SS gross or net?• Do the Smiths have long-term

care insurance?• Are either Veterans?• House Repairs?• Disabled/Minor Children?

Questions to Ask Client

© 2013, LWP

Miscellaneous Rules

© 2013, LWP Who Should Consider Medicaid Planning? 12

• “Solely for the Benefit of”• “Undue Hardship”• “Spousal Refusal”• “Estate Recovery”

Who Should Consider Medicaid Planning? 13

Summary of What We Covered

© 2013, LWP

ExemptionsCase StudyMiscellaneous Rules

Who Should Consider Medicaid Planning? 14

Next Week We Will Cover

© 2013, LWP

• Determining the Spend Down Method• Spend Down Methods• Case Study