Monday, January 28, 2008

The Double Tragedy of Ripping Elders Off

A significant portion of this article has been written and is crossposted from Jack Halpern's excellent work in My Elder Advocate

The Double Tragedy of Ripping Elders off is that they now don't qualified for goverment aid and the once proud , independent and wealthy elder is now dependent upon the generosity of strangers.

New Medicaid Laws Scrutinizes Seniors' Finances and make it more difficult for some seniors to gain access to subsidized long-term nursing-home care.

The reason for this is siblings who hide or steal their parents assets in order to make them look poor and quailified for Medicaid.

It means the government will look closer at seniors' financial dealings and deny benefits to anyone with more than $500,000 of equity in a home.

When he signed the Deficit Reduction Act in February, President Bush said it "tightens loopholes that allowed people to game the system by transferring assets to their children so they can qualify for Medicaid benefits."

Medicaid is a federal program that partners with states to provide health coverage and long-term-care assistance to 39 million people in low-income families and 12 million elderly and disabled people. The program pays nursing-home bills for patients with resources below certain income and asset levels.

"Essentially, what Congress is trying to do is to (discourage) people from trying to -- at least on paper -- make themselves look so poor that they qualify for Medicaid," said William Ruth, a Hilton Head Island lawyer specializing in estate planning.

It has been fairly common for seniors to pass off assets to heirs or in trusts to protect those assets and still qualify for Medicaid if they were close to going into a nursing home, Ruth said.

The average annual cost of nursing-home care in South Carolina was more than $46,000 in 2001, according to an AARP-sponsored study by GE Financial. State health-care administrators estimate that number to be closer to $60,000 today.

"It protects the program from people just dumping $1 million on relatives and the next day signing up for Medicaid," said Jeff Stensland, spokesman for the South Carolina Department of Health and Human Services, the agency that administers the state Medicaid program. "There are people that are exploiting the system and costing taxpayers millions of dollars each year. This closes those loopholes."

Previously, the law stated that the government would look back three years to see whether there were any asset transfers that would affect eligibility. It then would impose penalties based on a complex formula.

In the new law, the look-back period has been extended to five years, meaning all asset transfers made during that time are subject to penalty.

"Now, what's going to happen is, if anyone gives a gift in the last five years, and they're out of money, they're not going to be eligible for Medicaid because of that gift," said Nicole Harris, a lawyer specializing in estate planning and elder care.

"What could happen is, if a couple gives their son $40,000 in 2003, and four years later the wife is not in good shape, they've spent their money and now she's in a nursing home and the penalty period kicks in. All of the sudden, they're staring at a $40,000 bill that they're unable to pay," she said. "That five-year look-back is going to create huge problems."

Harris said the law change could cause the elderly to pass on assets to their children much earlier in life to avoid penalties.

Another significant change in the regulations is the inclusion of home equity of more than $500,000 in evaluating assets.

The new regulation provides that unless a spouse or a dependent child is living in the home, Medicaid will deny long-term custodial care in a nursing home to any applicant with more than $500,000 equity in their home.

Many say this change especially will be felt in coastal areas, where property values are higher. Opponents of the plan say the new law will cause some people to prolong enrolling in a nursing home to protect their property for as long as possible.

The new law allows states to increase the exempt home amount to $750,000. Many states will probably leave it at $500.000.

Reference My Elder Advocate Medicaid Law Scrutinizes Seniors' Finances

1 comment:

Kim said...

In Texas the Medicaid recover rules state that a person can have up to $300,000.00 in total assests.

The guardians and attorneys for my father-in-law had a Medicaid Expert come to court and testify that inorder to qualify for Medicaid the person could not have more then $2,000.00 in total assests. This expert was paid $2,000.00 from my father-in-laws estate. The guardians and attorneys then said "So that we can put the Manires on Medicaid we have to "spend down" their money."

DADs is now over the person of my father-in-law, and before they would take him as a client they said that he could not have "any assests and that the money the guardians get from the sale of his homestead would have to be spent as well."

The court appointed guardians and their attorneys are all splitting the money from the sale of the homestead, they have all already been paid a couple of hundred thousand dollars, and my father-in-law (mother-in-law passed last May) is left totally penniless.

The judge and the attorneys and guardians have now decided that DADs and Medicaid, can pay for and take care of my father-in-law.

The part that has been the latest abuse caused by these people and maybe the sorriest of all abuses caused by them is that my father-in-law has a burial plot, but these people have all seen to it that he now has no money to bury him with. They said in court that the "county can do it for $6,000.00or the family can see to it."

To me this sort of fraud (medicaid and DADs, saying that they can not take care of someone unless they are totally poor), and then the courts and it appointed guardians takeing all the moeny for themselves so that they can then put these elderly people on government assitance. What is it going to take to get this sort of thing looked at.
Kim Manire
Denton Texas