Elder
Law Update
North Carolina Edition
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This Month's Favorite Links
Check Them Out!
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BenefitsCheckUp
A Great Site - Make Sure You
Haven't Missed Anything!
FairMedicare.Org
Lots of Interesting Medicare "Stuff"
- Good Part D Podcast
Come across an interesting link? Share it with
me.
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PLEASE VISIT MASON LAW
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I WANT TO KNOW
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If you have an idea or comment that will help me
make this a better newsletter
please
send it to me. Just
click! |
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Dear Stacey,
Happy New Year! It looks like a busy one . . . so
stay tuned.
We have a lot in this issue, so I won't take up much
space here. Check out this month's favorite links to
the left. Ann and Bobby (wife and son) will both
tell you I am an inveterate "surfer" and can't
resist
 dredging
up interesting things floating in cyberspace. I
stumbled upon
Benefits Check Up some time ago, and the site
continues to improve. Well worth a visit. I recently
came upon
FairMedicare.org, a Medicare reform (or some
might say "anti-reform") organization. There are
some interesting things there, as well as a decent
Part D podcast.
This month I continue with my primer on Medicaid. We
are in the middle of discussing what sorts of assets
count (or do not count) for nursing home Medicaid
purposes under the new DRA rules. Next month I'll
move on to trusts.
Dr. Shevlin is back with a
"hey-I-hadn't-thought-about-that" article, Warren
"Social Security Guy" Coble continues with his
series on Social Security Disability, and Savannah
lawyer-turned-banker Rose deVries brings us up to
speed on credit scoring (a little understood topic).
Recall last month Dr. Hodges wrote an article on the
importance of vaccinations. Geriatric Care Manager
Barbara Dunn (who has never crossed paths with Dr.
Hodges) sent in an interesting response (actually
more of an "add-on") to Dr. Hodges' article.
Which reminds me . . . if you have any comments or
something to add please
let me know. I can't offer 15 minutes of fame,
but I might be able to get you a second or two!
Have a great new year.
Bob Mason
Certified Elder Law Attorney
Certified by the
National Elder Law Foundation,
recognized by the American Bar Association as the
certifying entity for specialization in Elder Law. |
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MEDICAID BASICS
AFTER DEFICIT REDUCTION ACT: Part II
Bob Mason
This is part of a
multipart series that will delve into the whacky
world of Medicaid nursing home benefits after the
Deficit Reduction Act. I don't know how many
installments we will have . . . enough to get the
job done.
This second
installment examines the treatment of non-real
estate assets under Medicaid.
THE ASSET RULES
(Continued)
A Reminder From The
Last Installment
The basic rule of nursing home Medicaid eligibility
is that an applicant, whether single or married, may
have no more than $2,000 in "countable" assets in
his or her name. If the applicant is married, the
spouse is called the Community Spouse, and there are
rules
 concerning
how many countable assets the Community Spouse may
keep. Those rules will be discussed in a later
installment. "Countable" assets generally include
all belongings except for (1) personal possessions,
such as clothing, furniture, and jewelry, (2) one
motor vehicle, (3) the applicant's principal
residence, and (4) assets that are considered
inaccessible for one reason or another. The asset
rules are quite complex.
Keep in mind, the rules discussed in this part
relate to qualifying for Medicaid and have nothing
to do with transferring those assets or whether
those assets might be subject to estate recovery
upon the death of the applicant. Those rules will be
discussed in a later installment.
Personal Property:
Household and Personal Effects
Household furnishings, clothing, jewelry and other
personal effects used by an applicant and spouse as
such are non-countable. For example, clothing and
furniture regularly used by an applicant or spouse
will not count; clothing and furniture in a storage
area (perhaps from a discontinued business) will
count.
Personal Property:
Automobiles
One automobile used to transport the applicant or a
spouse is noncountable. The DMA manual instructs the
caseworker to assume that is the case unless there
is evidence to the contrary. If the applicant and a
spouse own more than one automobile, then the most
valuable auto does not count, but other autos will
be countable.
Insurance
For purposes of Medicaid, two types of insurance are
relevant: One type has no cash value or buildup
(commonly called term insurance), the other type
does have some sort
of cash value or buildup (and comes under a variety
of headings such as "whole" or "universal" or
"variable" . . . the cash value is what is important
for Medicaid purposes). Examine all life insurance
policies. Do not count term insurance. If the total
face value of any sort of "cash buildup" insurance
exceeds $10,000, the cash value of those policies
are countable.
Example: Maude owns two whole life policies, and a
term life insurance policy. One whole life policy
has a face value of $7,000 and a cash value of $500;
the other has a face value of $4,000 and a cash
value of $2,500. The whole life policies exceed
$10,000, so the total cash value of $3,000 is
countable. The term insurance does not count.
Instead say Maude owns a $7,000 face value policy
with a cash value of $6,000 and a $2,500 policy with
a cash value of $2,000. Because the face values
total less than $10,000, the $8,000 total cash
values will not count.
Retirement
Plans/IRAs
Retirement plans and IRAs that are at all accessible
are countable. The fact that accessing them may
cause unpleasant tax consequences or surrender
charges is irrelevant. On the other hand, an IRA
that is paying a fixed, irrevocable annuity stream
may not count as an asset.
Burial Contracts
Irrevocable burial contracts are not countable.
Revocable contracts are countable. Note carefully,
if an applicant does not have an irrevocable burial
contract, $1,500 in otherwise countable resources
may be earmarked for burial purposes and thus avoid
classification as available resources.
Annuities
DRA made a number of very important changes in this
area. If an annuity purchased on or after November
1, 2007, is either revocable or assignable it is a
countable resource.
 If
the annuity is not a countable resource (because it
is irrevocable and nonassignable), then the annuity
must be analyzed to determine whether a transfer
penalty will apply.
Transfer penalties will be discussed in much greater
detail in a later issue. For purposes of this brief
discussion, however, an annuity purchased (or a
preexisting annuity that has any changes made) on or
after November 1, 2007, will not be subject to a
transfer of assets sanction if the State is named as
remainder beneficiary to the extent of Medicaid
benefits paid (the State may take second place
behind a spouse and a minor child) and the annuity
is expected to pay out in level payments over the
actuarial life expectancy of the annuitant.
Next Issue . . .
Trusts! What counts, what doesn't.
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STAYING CONNECTED
Patricia Shevlin, M.D.
Have you ever participated in an exercise where you
wore a blindfold or earplugs to simulate the
experience of a person with a disability? The
exercise makes one aware of the challenges some
people live with every day.
The reality of life for some of our senior citizens,
however, is a little different. Instead
 of
living with one major disability, they live with a
collection of smaller ones. To experience what they
go through, you'd have to imagine yourself with, for
example, poor eyesight, decreased hearing and
decreased mobility. You could see well enough to get
around in your home, but not well enough to read or
watch television. You could hear loud noises but
couldn't hear a friend's voice on the telephone. You
could walk inside your home but not well enough to
get into your church from the parking lot.
In general, the seniors that I see in my office tend
to minimize the deficits they have (not that I
expect I will do anything differently in the same
situation). They tend to see the deficits as a
normal consequence of aging and that they have to
live with their deficits. The problem with this
approach is that they develop sensory deprivation
over time. A large body of research suggests that
the more stimulated the brain is, the better the
brain maintains its abilities. The collection of
deficits that many seniors develop will slowly
detach them from their world. The statements I
frequently hear, "I can get by with the glasses I
have" leaves a person more vulnerable than they
realize.
Assuming the senior needs, and is willing to use,
glasses or hearing aids, the next hurdle is
financial. Neither is covered under traditional
Medicare. Books with large print and a large
magnifying glass have helped a number of people stay
more in touch. Cell phones with speakers or a
cordless phone with a speaker can allow a hearing
impaired senior to use both ears to hear a friend on
the telephone. A cane or a walker can help steady a
person enough to allow them to get out of the house.
The decreased likelihood of dementia or depression
is well worth the cost. We need to encourage the
seniors that we know to consider the benefits of
staying connected, no matter what they need to use
to do it.
Patricia Shevlin, M.D., is a principal in Asheboro
Family Physicians, Asheboro, North Carolina.
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EVEN MORE ON SOCIAL SECURITY DISABILITY BENEFITS
-Warren
Coble
Last month we discussed onset date and waiting
period. Continuing in that line, let's look at
retroactive benefits, using our closing example from
last month:
An individual is diagnosed on March 15, 2007 with a
severe illness but continues to work fulltime
earning over $1,500.00 per month (SGA level) until
July 10, 2007. The onset date would be July 10,
2007. The five month waiting period would then be
August, September, October, November, and December.
Entitlement would occur in January, 2008, and the
first payment would be due in February, 2008.
For discussion, let's suppose that the individual,
hoping to get better and go back to work, waited
until July 2008 to file the application, and Social
Security approves the application in November 2008.
The waiting period is still August through December
of 2007. Entitlement will still be effective
January 2008, and retroactive benefits will be paid
from January 2008 to the date of processing by SSA,
November 2008.
As I wrote earlier, in Supplemental Security Income
(SSI) cases there is no "waiting period", but
eligibility begins the month after application. For
example, a protective filing application is filed
November 3, 2007, and is later approved by the
Disability Service in April 2008. Benefits under
SSI will start with December 2007, and retroactive
benefits would be paid from December 2007 to April
2008.
Individuals potentially eligible for SSI (low income
and assets), should never delay filing an
application, as they will lose money if they delay.
Based on the waiting period requirements,
individuals eligible for regular Title II Social
Security disability can have up to 17 months from
the onset date to file an application with no
potential loss in benefits. However, the earlier an
individual starts the application process, the
sooner a decision will be made on the application,
and the sooner benefits can begin, if approved.
Any individual who believes they cannot return to
work due to an ongoing disability should file
immediately. There is nothing to be gained by
waiting.
Confused? Send me an email and we'll sort it out!
Social Security expert Warren Coble welcomes your
questions regarding Medicare, Social Security and
Senior Life in general! Email Warren by clicking
HERE. |
WHAT IS YOUR CREDIT SCORE?
-Rose deVries,
Darby Bank & Trust Co.
In today's society, people have become
increasingly dependent on credit. As such,
having a good credit history is an important
part of maintaining a happy, healthy and
financially fit life. Your credit score and
underlying history follow you forever and will
play a huge role in major financial
circumstances throughout your life. It will
ultimately be used as a future indicator of your
credit worthiness, as it reveals pertinent
information about your past and present payment
patterns.
When applying for credit during major purchases,
albeit mortgages or car loans, lenders
 are
interested in knowing how "risky" you are. A
credit bureau score, often called "FICO score,"
is the most common one used by lenders to
determine the level of risk involved with
loaning you money. In fact, Fair Isaac Corp.
says that this score is used by 90 percent of
the 100 largest banks. This FICO score affects
both the loan amount and terms that a lender
will offer at any given time.
These scores provide a guide to future risk
based solely on credit report data. Many lenders
use the score as such - a guideline to help make
credit decisions. A credit score, while
critical, is not the only deciding factor for
lenders. Each has his own strategy and level of
risk that he or she is willing to assume based
on a given credit product.
FICO scores are calculated from five categories:
payment history, amounts owed, length of credit
history, new credit and types of credit used.
All categories are taken into consideration when
determining your score. Your score will not
include demographic or employment information.
Generally speaking, credit scores range from 300
to 850. The higher the score, lower the risk you
are to lenders. The majority of the U.S.
population - 27 percent - averages a credit
score of 750 to 799.
Overall, credit scores not only benefit the
lender but also the credit applicant. Often
times scores enable you to receive loans more
quickly, allow decisions to be made fairly
because they are based on actual data, and allow
"mistakes" to fade as both good and bad
credit-related information is taken into
account. In fact, lenders who use FICO credit
scores are able to identify individuals likely
to perform well in the future - even though
their credit report shows past problems.
If you don't feel your current score is "up to
par," rest assured there are recommended
guidelines and tips to help improve your credit:
· Pay your bills on time
· Keep balances low on credit cards
· Don't open a number of new credit cards
just to increase available credit
· Have credit cards, but manage them
responsibly
As we move into 2008, new FICO scoring will
begin to meticulously evaluate the information
in consumer's credit files, separating the "good
risks" from "bad risks." With this updated
system in place, low risk consumers will begin
to get better deals from lenders while high risk
applicants may find it tougher to get credit.
Whether it's receiving credit for a new car loan
or mortgage, we encourage all to start managing
their accounts responsibly. Taking into account
your credit score is something that will ensure
a happy, healthy and financially fit 2008!
Rose
de Vries, JD, is Vice President of Private
Banking Services for Darby Bank & Trust Co.
(offices in Vidalia, Lyons, Pooler and Savannah,
Georgia). Rose is based in Darby's main Savannah
office. You may email comments and questions to
Rose by clicking
HERE
or by giving her a call at 912-944-2612.
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LETTERS
In
our last issue of Elder Law Update Dr. Beth Hodges
wrote an interesting piece on vaccinations. Barbara
Dunn, a past contributor and a geriatric care
manager in Savannah (who does not know Dr. Hodges)
wrote us with these added observations. Because
both Dr. Hodges and Dr. Shevlin (our regular medical
contributors) areextremely meticulous practitioners,
we knew that neither would feel at all defensive
about Ms. Dunn's general comments (in fact, they may
well share many of her sentiments).
Dr. Hodges,
I enjoy your columns--please keep writing.
Thanks for your very informative piece on elder
vaccinations. As Paul Harvey says, "and the rest of
the story" is that elders may not be immunized
because no one, not even the weasel, is watching the
hen house these days. Were the solution as simple as
getting every elder to an annual primary care visit
with Dr. Hodges, I wouldn't be too busy in practice
right now! Alas, caregivers, local and distant,
don't know or don't understand that elder health
care delivery is extremely complex.
The fact is, vaccinations often fall prey to the
same convolutions of our medical-industrial complex
as do other health care slip-ups. When we solve
hospital-acquired decubiti we'll also be able to
easily immunize all elders in a timely fashion.
As an RN-geriatric care manager, vaccination status
is always part of my initial assessment. Too date,
few elders (or their caregivers if there are any)
have any inkling about vaccinations. That's when my
work begins.
Identifying (accurately) a client's vaccination
status via medical office records is quite an
undertaking for most medical offices. Once I work
past all the HIPAA resistance, I find that the
office chart (most still rely on paper) may not
address vaccinations at all or the chart is just
plain inaccurate. Mostly, however, the office chart
is so vast, that finding the status is much too
trying for most providers and the question is
quickly turned over to the staff to solve. I
persevere until, numerous phone calls later, I get
my info.
Other common obstacles to a seemingly simple process
include elders (that's most of them) who attend
medical visits alone (without eye glasses or hearing
aids!), long-distance caregivers who can't possibly
track an elder's health care needs, and use of
multiple providers. As you know, once four, five, or
six specialists (who don't talk with one another)
are involved the responsibility for primary care
becomes murky.
I'm much too busy to do the research, but do you
suppose that elder vaccinations are highly
predictive of well-managed care?
I always enjoy your writings--keep up the good work.
Barbara J Dunn, RN, MSN
ElderCare Management of Coastal Georgia, LLC
Thanks, Barbara . . . we welcome all reader
comments!
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The Usual Disclaimer: This newsletter is for
general information only. Please do not rely on
anything you read in this email as definitive legal
advice applicable to you. All situations are
different, including yours. Nothing you read in this
newsletter is a suitable substitute for professional
advice you may receive from your attorney, your
accountant, or your tax advisor.
All contents copyrighted 2007 by Mason Law, PC.
Contents may be republished with written permission
of Mason Law, PC (which permission will usually be
given!). |
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