MEDICARE AND MEDICAID: WHO PAYS FOR LONG-TERM

CARE

Sponsor: Elder Law Section CLE Credit: 1.0

Thursday, June 14, 2018 2:35 - 3:35 p.m.

Bluegrass Ballroom II Lexington Convention Center

Lexington, Kentucky

A NOTE CONCERNING THE PROGRAM MATERIALS

The materials included in this Kentucky Bar Association Continuing Legal Education handbook are intended to provide current and accurate information about the subject matter covered. No representation or warranty is made concerning the application of the legal or other principles discussed by the instructors to any specific fact situation, nor is any prediction made concerning how any particular judge or jury will interpret or apply such principles. The proper interpretation or application of the principles discussed is a matter for the considered judgment of the individual legal practitioner. The faculty and staff of this Kentucky Bar Association CLE program disclaim liability therefore. Attorneys using these materials, or information otherwise conveyed during the program, in dealing with a specific legal matter have a duty to research original and current sources of authority.

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TABLE OF CONTENTS The Presenter .................................................................................................................. i Medicare and Medicaid: Who Pays for Long-term Care ................................................. 1

The Current Costs of Health Care ........................................................................ 1 Who Pays? .......................................................................................................... 3 Medicare .............................................................................................................. 3 History of Medicare .............................................................................................. 3 Overall Success of Medicare ............................................................................... 4 The "Parts" of the Program .................................................................................. 4 Financing ............................................................................................................. 5 Eligibility .............................................................................................................. 5 Enrollment ........................................................................................................... 5 Part A Benefits ..................................................................................................... 7 Benefits Covered under Both Parts A & B ............................................................ 8 Part B Benefits ..................................................................................................... 8 Part C or Medicare Advantage ............................................................................. 9 Part D Benefits .................................................................................................... 9 Coordination of Coverage .................................................................................. 10 Medicaid Health Benefits ................................................................................... 11 Medicaid Eligibility ............................................................................................. 11 Long-term Care Medicaid .................................................................................. 11 What Is a Resource Assessment ....................................................................... 13 Medicaid Benefits – Transfers ........................................................................... 15 Medicaid Planning ............................................................................................. 16

THE PRESENTER

Misty C. Vantrease Kentucky Elder Law PLLC

920 Dupont Road Suite 200 Louisville, Kentucky 40207-4695

MISTY C. VANTREASE is the managing partner of Kentucky Elder Law PLLC in Louisville where she focuses her practice in the area of elder law. Ms. Vantrease received her B.A. from Murray State University and her J.D. from the Louis D. Brandeis School of Law at the University of Louisville. She also received a L.L.M. from Stetson University. Ms. Vantrease is a member of the Louisville and Kentucky Bar Associations, ElderCounsel and the National Association of Elder Law Attorneys.

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MEDICARE AND MEDICAID: WHO PAYS FOR LONG-TERM CARE Misty Clark Vantrease

I. THE CURRENT COSTS OF HEALTH CARE

A. As We Age, There Are a Variety of Health Expenses that Must Be Paid:

1. Doctor's visits (primary care or specialists); 2. Hospitalizations; 3. Prescriptions; 4. Durable medical equipment; 5. Long-term care; 6. Dental and vision.

B. The Numbers

1. In 2010, the U.S. spent 2.6 trillion dollars or $8,402 per person on health care and 18 percent of the U.S. economy was devoted to health care. This spending was 90 percent higher than in many other industrialized nations.

2. Health care costs per capita have grown an average 2.4

percentage points faster than the GDP since 1970. 3. Half of health care spending is used to treat just 5 percent of the

population. 4. Prescription drug expenditures grew 114 percent from 2000 to

2010. Health Care Costs, A Primer, Key Information on Health Care Costs and Their Impact; Kaiser Foundation May 2012.

5. Per capita spending is highest on those sixty-five and older with

an average of $9,744 per person. 6. Average out-of-pocket expenses have increased 73 percent from

1996 and 2009. 7. For those age sixty-five and older, the increase has been 46

percent. The greatest increases have been for those through 125 percent of the poverty line – 85 percent.

8. Health expenses accounted for 14 percent of Medicare household

budgets in 2012, three times that of non-Medicare households.

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9. The older the Medicare recipient, the greater their percentage of spending.

10. Health Insurance Premiums (Part B, Medigap coverage, Part D)

account for the largest portion of the money spent on health expenses. Health Care on a Budget: The Financial Burden of Health Spending by Medicare Households, Kaiser Foundation, Jan. 9, 2014.

C. Long-Term Care

1. Nationally:

a. Average hourly rate for Home health – $20/hour. b. Assisted Living Facility Costs – $3,628/month

($43,536/year). c. Nursing Home Care – $225/day $82,125/year (semi-

private) or $253/day $92,345/year (private) Cost of Care Survey 2016; Genworth.

2. In Kentucky:

a. Average Home Health costs – $19/hour or $43,907/year. b. Average Assisted Living costs – $3,350/month

($40,200/year). c. Average Nursing Home costs – $208/day $75,920/year

(semi-private) or $239/day $87,235/year (private) Cost of Care Survey 2016.

3. Overall.

a. Greater spending for women. b. Greater spending for those with cognitive impairment

(Alzheimer’s for example). c. Studies vary on average length of stay in a nursing home

with numbers ranging from a little under one year to just under three.

d. Over 70 percent of those sixty-five and over will need

some form of long-term care, lasting an average of three years, with some type at home and some in a formal facility. http://www.cbsnews.com/news/long-term-care-what-are-the-real-risks/

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II. WHO PAYS?

A. Private Health Insurance (Anthem, Humana, etc.) B. Government as Provider C. VA Health System, Military Retiree Health Care, Prisons, Indian Health

Services D. Government as Insurer E. Medicare (Elderly and Disabled – not indigent) – administered by

Department of Health and Human Services / Centers for Medicare and Medicaid Services

F. Medicaid (Blind, Elderly, Disabled – indigent) – Administered by

DHHS/CMS and State Medicaid Agencies G. Private Long-term Care Insurance (Transamerica, Genworth, etc.) H. The Individual I. Family Caregivers through Time, Loss of Work, and Health

III. MEDICARE

A. Researching Medicare B. www.cms.gov C. Statute – 42 U.S.C. §1395 et. seq. D. Regulations – 42 CFR, Parts 400-429 E. Case Law F. Administrative Guidance Documents G. CMS Program Manuals and Transmittals

Coverage Determinations Database IV. HISTORY OF MEDICARE

A. Passed in 1965 B. Part of the Great Society C. Medicare and Medicaid were Established at the Same Time through the

Same Legislation

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D. Not a New Idea

1. Roosevelt talked about it. 2. Harry Truman on 11/19/1945 in a special message to Congress

outlined comprehensive, prepaid medical insurance plan for all people – dubbed "National Health Insurance."

E. Between 1945 and 1965, lawmakers narrowed the potential recipients to

Social Security beneficiaries. F. 1965 – President Johnson signed HR 6675 (The Social Security Act of

1965) to provide health insurance for the elderly and the poor. G. 7/30/1965 – In a ceremony, President Johnson signs Medicare and

Medicaid Bill (Title XVII and Title XIX Social Security Act in Independence, MO and the first recipient of a Medicare card was Harry Truman).

H. 1972 Amendments expanded Medicare to provide coverage to Disabled

Persons receiving cash benefits for twenty-four months under Social Security Disability program and persons suffering from end-stage renal disease and skilled nursing facility (SNF) residents needing skilled therapy.

V. OVERALL SUCCESS OF MEDICARE

A. Before Medicare, of those over sixty-five, less than 50 percent had insurance and 35 percent lived in poverty.

B. After Medicare

1. Access to care increased by one-third. 2. Poverty among older and disabled Americans decreased by two-

thirds. 3. Today, more than 54 million Americans are enrolled in Medicare. 4. Federal spending is almost $600 billion (14 percent of Federal

budget). VI. THE "PARTS" OF THE PROGRAM

A. Part A – Hospital Insurance covers inpatient hospital services, skilled nursing care, hospice care, and some home health services.

B. Part B – Supplementary Medical Insurance covers physician services,

outpatient services, and some home health and preventive services.

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C. Part C – Medicare Advantage is a private pay option for beneficiaries that covers all Parts A and B services, except hospice. If you enroll in C, you must also enroll in B.

D. Part D – Covers outpatient drug benefits.

VII. FINANCING

A. Part A – Funded by a dedicated payroll tax of 2.9 percent of earnings, shared equally between employers and workers. "HI Fund"

B. Part B – Funded through beneficiary premiums (set at 25 percent of

estimated program costs for the aged) and general revenues (the remaining amount, approximately 75 percent), "SMI Trust Fund."

C. Part C – Funded through the Hospital Insurance (HI) fund and Part B

fund. Thus, you must also enroll in Part B. D. Part D – Funded through SMI Trust Fund, beneficiary premiums, general

revenues, and state transfer payments. VIII. ELIGIBILITY

A. Age sixty-five or older with sufficient FICA (Federal Insurance Contributions Act) participation.

B. Requires forty quarters of sufficient income and contributions to Social

Security or Railroad Retirement. C. Even if you have not paid in enough quarters, you can pay a premium to

participate in the program. For example, the premium in 2013 was $441. D. Persons under sixty-five who receive cash disability payments from Social

Security for at least twenty-four months (five month waiting period for cash payments plus twenty-four months is effectively twenty-nine months from the date of disability). Those with ALS do not have waiting period requirement.

E. Any age with end-stage renal disease.

IX. ENROLLMENT

A. Parts A and B – Seven month period beginning three months before the month you turn sixty-five, includes the month you turn sixty-five, and extends three months after you turn sixty-five. If you wait until the last four months of this initial enrollment period, you will have a delay in coverage. Part A is most often premium-free.

B. Part B has a premium that will be deducted from your Social Security

payments (if sufficient to cover). The standard amount is $134, but the majority of SS recipients will pay an average of $109 (approximate). If

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person over sixty-five is higher income, the standard amount increases and is capped at $428.60 for persons with income of $214,000 (single) or $428,000 (married, filing jointly).

C. If you don't enroll during the initial enrollment period, you can enroll during

a Special Enrollment Period. If you're covered under a group health plan based on current employment, you have a Special Enrollment Period to sign up for Part A and/or Part B at any time as long as you or your spouse (or family member if you're disabled) is working, and you're covered by a group health plan through the employer or union based on that work. This is called "creditable coverage." Please note that retiree coverage is typically NOT "creditable coverage." Ask your administrator for a letter verifying that it does qualify to avoid penalties.

D. Part C – Enrollment is at the same time as enrollments for Parts A and B. E. Each year there is an open enrollment period in which Medicare

beneficiaries may join or leave original Medicare or Medicare Advantage plans. It is typically in the fall and the dates are published annually.

F. Medicare beneficiaries shop for plans through insurance company

representatives or independent brokers. G. If you don't sign up for Part A (if you have to buy it) and/or Part B when

you're first eligible, and you don't qualify for a Special Enrollment Period, you may have to wait until the Medicare General Enrollment Period (from January – March 31) to enroll and coverage will start July 1 of that year. In most cases, you'll have to pay a late enrollment penalty for as long as you have Part B if you sign up during the General Enrollment Period. If you did not have creditable coverage and did not sign up during your initial or any applicable special enrollment period, the penalty will be imposed.

H. The late enrollment penalty takes the standard premium amount and

increases it by 10 percent for each full twelve-month period that you could have had Part B, but didn't. For example, if you were first eligible for Part B in July 2013, but didn't enroll until January 2016, you'd have a 20 percent late enrollment penalty. The standard premium amount would be increased by 20 percent for as long as you have Part B.

I. Part D – If you decide not to get Medicare drug coverage when you're first

eligible (initial enrollment period), you'll likely pay a late enrollment penalty unless you have other creditable prescription drug coverage (enroll in special enrollment period)

J. To get Medicare drug coverage, you must join a plan run by an insurance

company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.

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X. PART A BENEFITS

A. Inpatient Hospital Services

1. Coverage is linked to a "spell of illness"; begins on the day a patient enters a hospital and ends when he or she has not been in a hospital of skilled nursing facility for sixty days.

2. Days 1-60: Beneficiary pays a deductible of $1,340 (2018). 3. Days 61-90: Beneficiary pays a daily coinsurance charge of $335

(2018). 4. Days 91-150: Beneficiary may draw on one or more of sixty

lifetime reserve days. Daily coinsurance charge of $670/day. 5. Days 151+: Beneficiary pays all costs.

B. Skilled Nursing Facility (SNF) Services

1. Must have an inpatient hospital stay of three days, transfer to SNF must be within thirty days of discharge and there must be a rehabilitative discharge. 100 days per "spell of illness."

a. Days 1-20: Beneficiary pays $0. b. Days 21-100: Beneficiary has a daily coinsurance charge

of $167.50.

2. Observation v. Admission Issues for SNF Benefit.

a. Prior to October 2013, people were being held up to two weeks or even more under observation status. August 2013, new rule (two midnight rule) released by CMS with October effective date. 78 Federal Register 50496-01 (Aug.19, 2013, eff. Oct. 1, 2013).

b. Since October 2013, most people in the hospital will not be

"admitted" until they have been in the hospital two midnights. They will be on observation status until then.

c. This means most people will have to be in the hospital for

at least five midnights before they will be entitled to Medicare rehab benefits.

d. Some conditions and illnesses are pre-approved for

automatic admission.

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3. Jimmo v. Sebelius, No. 5:2011cv00017 – Document 56 (D. Vt. 2011).

a. Prior to 2011, a beneficiary was only awarded Medicare

coverage for as many SNF days as they were "improving" with a maximum of 100 days.

b. Jimmo case was filed in 2011 and settled later that year.

Government agreed that "improvement" standard was not required, only that skilled nursing care was necessary to maintain the patient's condition.

c. Training and Medicare manual rewrites have been slow

and it is not uncommon to still see discharges for lack of improvement. Families should always, always appeal.

C. Hospice Care

1. Provides palliative care and management of a terminal illness. 2. Medicare beneficiary must have life expectancy of six months or

less. 3. Consists of two ninety-day periods, followed by an unlimited

number of sixty-day periods. 4. Attending physician and hospice physician must certify to start;

subsequent certifications can be done by hospice physician alone. 5. Payment rate depends on location where services are rendered

(more for inpatient). XI. BENEFITS COVERED UNDER BOTH PARTS A & B

Home Health Services

1. Part A covers up to 100 visits following a stay in a hospital or SNF. All other home health is covered under Part B.

2. Services for those with End Stage Renal Disease are covered

under Parts A and B. XII. PART B BENEFITS

A. Physicians' Services, Outpatient Hospital Services, Durable Medical Equipment and Other Medical Services

1. Medicare pays 80 percent with 20 percent paid by the beneficiary

(or Medi-gap policy). 2. All services or doctor's visits must be "reasonable and necessary."

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3. For preventive care services there is no coinsurance. Outpatient and mental health services are being phased out (this could be subject to change through new legislation).

"No payment may be made … for any expenses incurred for items or services, which… are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." Social Security Act Section 1862(a), codified at 42 U.S.C. §1395y(a)(1).

B. Therapy Services

1. Covers medically necessary outpatient physician and occupational therapy and speech therapy.

2. Annual limit on how much can be paid in a calendar year.

C. Clinical Lab and Other Diagnostic Tests (no co-pay) D. Durable Medical Equipment

80/20 split on payment between government and patient

E. Hospital Outpatient Services (outpatient surgery) F. Emergency and non-emergency ambulance services if other modes of

transportation could endanger the Medicare beneficiary's health. 80/20 split.

XIII. PART C OR MEDICARE ADVANTAGE

A. Private health plans are paid a per-person amount to provide all Medicare covered benefits (except Hospice) to those that enroll in their plan.

B. As of 2015, 31 percent of Medicare beneficiaries were enrolled in

Medicare Advantage plans. C. Must cover all that Medicare covers and can offer more benefits. Be

warned, however, that their claim approval process is often more difficult or you are limited to certain providers (HMO).

D. In our practical experience, those with Part C get less SNF rehab time

than those with traditional Medicare. XIV. PART D BENEFITS

A. Deductible of no more than $405 in 2018. B. Co-payment of co-insurance depends on your plan up to out-of-pocket

costs of $3,750 (2018).

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C. Between $3,750 and $5,000 in out-of-pocket where catastrophic coverage kicks in, there is coverage gap called the "doughnut hole." The ACA has been slowly closing this gap in coverage.

D. While in the gap in 2017, Medicare beneficiaries will pay no more than 40

percent of costs of name-brand drugs and 51 percent of generic. E. The gap will eventually close in 2020 with beneficiaries being responsible

for no more than 25 percent of prescription costs. F. Private insurance coverage. G. 93 percent of Medicare beneficiaries have some form of additional

coverage. XV. COORDINATION OF COVERAGE

A. https://www.medicare.gov/Pubs/pdf/02179.pdf B. Primary Payor v. Secondary Payor

Most common situations.

a. If covered by Medicare and Medicaid, Medicare is primary and Medicaid is secondary.

b. If covered by Medicare, sixty-five or older, and covered by

private group health insurance because beneficiary or spouse is still working and employer has more than twenty employees, group health plan is first, then Medicare. If less than twenty employees, payors are reversed.

c. Coordination of coverage. d. If covered by Medicare, sixty-five or over, and are covered

by a group health plan through your former employer after retirement, Medicare pays first, then retiree coverage.

e. If covered by Medicare because of disability and are

covered by a group health plan through former employer or because spouse is working AND employer has more than 100 employees, group health plan is primary payor and Medicare is secondary. If less than 100 employees, it is reversed.

f. Other situations discussed in Publication 02179.

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XVI. MEDICAID HEALTH BENEFITS

A. Federal/State Partnership B. States Choose to Participate and Run Individual Programs per State

Medicaid Plan, Administered through the State's Medicaid Agency C. Federal Financial Participation/Federal Matching Plan Administered

through CMS/DHHS; Amount Varies by State's Per Capita Income D. IT IS MEDICAL INSURANCE, NOT MONEY OR CASH PAYMENTS E. CASH PAYMENTS ARE SSI AND ARE FOR THOSE WHO ARE

DISABLED BUT DID NOT WORK ENOUGH QUARTERS FOR SSDI (Developmentally disabled child)

XVII. MEDICAID ELIGIBILITY

A. Means Tested Social Welfare Program B. Through ACA, those within 138 percent of the federal poverty level or an

additional 20 million people were eligible for Medicaid insurance coverage.

XVIII. LONG-TERM CARE MEDICAID

A. Costs of Care – Private Pay B. What We See in the Louisville Metro Area

1. Home Care – $20/hour. 2. Assisted living – $3,000-4,500/month. 3. Personal Care (includes unskilled Memory care) – $5,000-

$6,000/month. 4. Nursing Home care – $8,500- $10,000/month.

C. Medicaid Benefits Eligibility

1. To qualify for Medicaid, a Resident needs to meet the following criteria:

a. Have been in an institution for thirty days or longer

(hospital or skilled care facility). b. Be in a nursing home (not assisted living). c. Be in a Medicaid bed.

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d. Need skilled or intermediate nursing care. e. Meet Medicaid's financial criteria.

2. Medicaid benefits income limits.

a. Technically, if the institutionalized person's income is over $2,205/month, he is not eligible for Medicaid. (2018 Federal SSI rate of $750 x 3 = $2,250).

b. Practically, income above $2,250 is placed in a Qualified

Income Trust and he is then eligible. Bottom line – if income is less than the cost of the nursing home, he is income eligible.

c. The income of the spouse of an institutionalized person is

not limited.

In situations where the spouse's gross income is below the Community Spouse Income Allowance (CSIA), currently $2,030/mo, some of the institutionalized person's income may be transferred to the CS to bring the spouse's income up to $2,030.

3. Medicaid benefits – resource limits.

a. Medicaid speak: an asset is called a Resource. b. Resources are those assets that an individual or a couple

own and can apply, either directly or by sale or conversion, to meet basic needs of food, clothing and shelter. This includes anything owned by their revocable trust.

c. Translation – everything you own or have a legal right to

assert a claim upon. d. A disclaimed inheritance is a resource because of the right

to assert a claim. Therefore, try to avoid leaving an inheritance to a nursing home resident. Leave the asset to his or her heirs instead.

e. A single person (never married, widowed, divorced, or

married when both are in the Nursing Home) is resource-eligible when his or her countable resources are less than $2,000.

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f. A Community Spouse1 may keep half (50 percent) of countable resources up to a maximum of $123,600 (2018 figures). This is called the Community Spouse Resource Allowance (CSRA).

g. A Community Spouse may keep all countable resources if

the total is less than $24,720 (2018 figure).

4. Medicaid benefits – excluded resources.

a. Homestead property and all contiguous property; however, for singles, the home will lose its excluded status after six months of institutionalization. Under the new rules, there is no six-month exemption if the home is valued over $572,000. (2018).

b. One vehicle, regardless of value, if it can be used to obtain

medical treatment. For a single person, you will need a letter from the family physician stating that the nursing home resident is capable of being transported in this vehicle.2

c. Household personal effects. d. Qualified Plans such as pensions, 401Ks, IRAs, Roth IRAs

and Keogh plans (HR-10) are exempt (in KY; in IN, community spouses are exempt but nursing home residents are not).

e. Property that is essential for support for the individual or

spouse and that is used in a trade or business. Rental property is not considered a trade or business.

f. Life insurance, up to $1,500, if designated as a burial

reserve. g. Irrevocable funeral contract for reasonable amount.

XIX. WHAT IS A RESOURCE ASSESSMENT?

A. The Resource Assessment is an evaluation of the combined countable resources of the Institutionalized Spouse (IS) and Community Spouse (CS) completed at the beginning of the continuous period of institutionalization. The combined countable resources are compared to

1 A Community Spouse is a spouse of an institutionalized person who resides in the community (as opposed to also being institutionalized). Can be in assisted living. 2 Resident forfeits right to non-emergency transport.

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the current Medicaid resource allowance to determine when the IS will meet resource eligibility for Medicaid.

EXAMPLE #1 COMMUNITY SPOUSE RESOURCE ALLOWANCE Home $90,000 Excluded One Car $15,000 Excluded Savings $95,000 $95,000 H,W,JT,RLT Cabin $30,000 $30,000 PVA value IRAs $75,000 Excluded Ins. CV $17,000 $17,000 TOTAL $142,000 Countable $142,000 / 2 = $71,000 Community Spouse keeps $71,000 (CS) Institutional Spouse keeps $2,000 (IS) Spend Down $69,000 ******************************************************** Medicaid eligibility is reached when combined assets of H & W are less than $73,000 ($71,000 for W and $2,000 for H). The result of the resource assessment will be a CSRA and a spend-down dollar determination. Don't leave the Medicaid office without this piece of paper or you may find the office saying (one year and $60,000 later) "we have no record of your ever being here. Sorry." Been There – Seen That.

EXAMPLE #2 COMMUNITY SPOUSE RESOURCE ALLOWANCE Home $90,000 Excluded One Car $15,000 Excluded Savings $205,000 $205,000 H,W,JT,RLT Cabin $30,000 $30,000 PVA value IRAs $75,000 Excluded Ins. CV $17,000 $17,000 TOTAL $252,000 Countable $252,000 / 2 = $126,000 (which is above the limit of $123,600) Community Spouse keeps $123,600 Institutional Spouse keeps $2,000 Spend Down $126,400 $252,000 - $123,600 - $2,000 = $126,400 ******************************************************** Medicaid eligibility is reached when combined assets of H & W are less than $125,600 ($123,600 for W and $2,000 for H).

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XX. MEDICAID BENEFITS - TRANSFERS

Disqualifying Transfer – "transfer for less than fair market value" within five years of applying for Medicaid.

1. For 2018, the Transferred Resource Factor is $6,067/month, or

$199.46/day. The state uses the daily figure. Example – A $100,000 gift creates a period of ineligibility of 501

days (16.7 months). 2. Rebuttable presumption that the transfer was for the purpose of

obtaining Medicaid.

3. The penalty period does not start until the Medicaid applicant is "otherwise eligible" if not for having made the gift.

4. Therefore, an applicant must actually apply for Medicaid and be

totally eligible in every other way before the clock starts running on the penalty period.

5. Get the Medicaid denial in writing and make sure it shows the

starting and ending dates for the period of ineligibility (penalty period).

6. Other than transfers between spouses, the disabled child

exception, and the caregiver child exception, there are NO Medicaid gift exclusions. They all count.

7. The $14,000 exclusion for federal gift tax reporting purposes does

not apply to state Medicaid eligibility. 8. Disabled Adult Child – The home and financial assets may be

transferred to a disabled child without a transfer of resources penalty (§2070 – Vol. IVA). Definition of "disabled" is Social Security definition.

Important to determine whether child is receiving SSI

(needs based) or SSDI (ability based).

9. Caregiver Child – can receive the home only.

a. A caregiver child is a child who resided in the parent's home for the two years immediately preceding the nursing home admission and provided care such that without such care, a nursing home admission would have been necessary at least two years earlier.

b. Child should still be in the house at time of application.

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c. Going to assisted living before the nursing home will sever ability to make caregiver child transfer.

10. Sibling Exception – A home may be transferred to a sibling who

has an equity interest in the home and who lived with the institutionalized individual one year prior to institutionalization. Any amount of equity is sufficient.

Make sure deed showing an equity interest is recorded.

XXI. MEDICAID PLANNING

A. Use specially drafted Irrevocable Trusts (IDGTS) to do pre-planning. No rights to principal under any circumstances can be retained.

B. Gifting, but watch out for tax issues. Trusts are almost always preferable. C. Crisis planning typically involves a combination of gifts and Medicaid-

compliant annuities or promissory notes.

D. Key Medicaid Websites – One

1. 42 U.S.C. §1396 Enabling Federal Law.

a. http://www.law.cornell.edu/uscode/uscode42/usc_ sec_42_00001396---p000-.html.

b. (use the Next button to look at sections r & r-5).

2. 907 KAR Kentucky Administrative Regulations.

http://www.lrc.ky.gov/kar/TITLE907.HTM.

3. Kentucky Vol IVA - KY Medicaid Operations Manual.

http://manuals.chfs.ky.gov/dcbs_manuals/DFS/voliva/ volivatoc.doc.

4. DRA (2005) Deficit Reduction Act of 2005.

a. http://thomas.loc.gov/cgi-bin/query/z?c109:S.1932: b. Go to # 5 EAS.

E. Key Medicaid Websites – Two

1. CMS (Center for Medicare & Medicaid Services – Go to Publication 45).

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a. https://www.cms.gov/Regulations-and-Guidance/guidance/Manuals/Paper-Based-Manuals-Items/CMS021927.html.

b. State Medicaid Manual.

2. Social Security Program Operations Manual (POMS) Medicaid Section.

https://secure.ssa.gov/apps10/poms.nsf/chapterlist!

openview&restricttocategory=05

3. Kentucky Medicaid website.

http://chfs.ky.gov/dms/Regs.htm

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