Don’t File For Medicaid Too Soon!

Most people assume that they will age in place at home and never need long-term care, but statistics show that that is not the case.  Medicare may be available to pay for a limited period of care under limited circumstances, but if an individual does not have long-term care insurance, nursing home care can cost more than $12,000 per month in New Jersey.  And that is only the average monthly cost of care; many facilities charge a higher rate.  That translates to at least $144,000, which is an awful lot of money to pay out-of-pocket.  That is why many seniors who can no longer remain at home turn to Medicaid, which is a joint federal and state public benefits program, to help fund their care in a nursing home or an assisted living facility.

As part of the process of transitioning from hospital care to long-term care, you will probably be asked whether you have filed a Medicaid application. This is a routine part of the long-term care admissions process.  It is very important to avoid filing for Medicaid before it is needed, for at least two reasons. 

You cannot give away your assets and go directly on Medicaid.  Generally, any gifts made during the lookback period and not fully repaid, will be penalized. while there are a few exceptions, most uncompensated gifts made during the five year Medicaid lookback period will likely result in a Medicaid penalty period, which is the denial of payment through Medicaid for care in a nursing home or an assisted living facility for a period of time corresponding to the total of all the gifts made during the five year Medicaid lookback period.  However, Medicaid generally cannot take into account gifts made before the lookback period began. So if there is going to be gifting in large amounts, it is best for the gifts to be made before the beginning of the Medicaid lookback period. 

How do you know when the five year Medicaid lookback period is?  Actually, the term “five year” Medicaid lookback can be misleading.  Filing the first Medicaid application triggers the Medicaid lookback, which is a period of time running retroactively from the date of filing of the first Medicaid application.  For example, if Eric Early files a Medicaid application on June 1, 2021, and this is his first Medicaid application, then the lookback period will be from June 1, 2016 to June 1, 2021 (five years) and potentially continuing into the future. 

However, there are circumstances when the Medicaid lookback period can extend beyond five years.  In Eric’s case, if he withdraws his first Medicaid application and does not file another Medicaid application until January 1, 2022, the lookback period for his second Medicaid application will still run from June 1, 2016 through to June 1, 2021, but will continue thereafter until the date of filing of the second Medicaid application on January 1, 2022.  So if Eric (or his wife, if he is married) made large gifts in 2016, those gifts will be considered on his 2022 Medicaid application and will probably result in a gifting penalty which Eric could have avoided had he simply waited to file the Medicaid application.

If Eric is married, the first Medicaid application sets the “snapshot.” Medicaid looks at the assets of the husband, the wife and the assets in their joint names, totals the assets and that total is the snapshot.  The amount of the snapshot limits the amount the healthy spouse can keep.  You only get one Medicaid snapshot, so it is very important to get the highest snapshot possible.  Here is an example showing what can happen if you don’t do proper planning before filing a Medicaid application.  

For instance, if Jim was hospitalized in 2017, and the hospital social worker filed a Medicaid application for Jim thinking Jim might have to go into a nursing home, but it turns out that Jim was actually able to return to the home after all.  Jim’s Medicaid snapshot is permanently set in 2017.  His snapshot is set in stone and it is never going to change.  Suppose in 2017, Jim and his wife own a home and a joint checking account with $100,000 in 2017, the home is exempt, but the checking account is not. Jim’s snapshot is $100,000 based on the checking account balance. Jim can keep no more than $2,000 and his wife can keep $50,000 without additional planning or legal advocacy and representation. 

Suppose Jim never completed his Medicaid application in 2017 and his wife cares for him at home for another year and in 2018, re-files for Medicaid for Jim.  In 2018, she also sells the house which was jointly owned with Jim, for the sum of $150,000. If the deed to the house was left in Jim’s name, in 2018, Jim will be disqualified for Medicaid due to being over the $2,000 Medicaid resource limit, because he is entitled to half the house sale proceeds. Now Jim has to spend down an additional $75,000 that could have been saved, had the 2017 Medicaid application not been filed and had Jim and his wife consulted with an elder care attorney.  If you have questions about a Medicaid application, please feel free to contact me to discuss your unique situation.  

Questions? Let Jane know.

Do You Know How To Protect Yourself From Catfishing and Financial Abuse?

A version of this article ran in the April 2021 edition of The Elder Law Report, Including Special Needs Planning

Senior citizens and members of the disabled community have always been a major target for catfishing schemes, but since the pandemic hit last year it’s at an all-time high.  According to the Elder Justice Center, fraud increased to over $3.3 billion in 2020, well above the 2019 report. This blog post is intended to warn of catfishing schemes, which are no joke, especially when the most vulnerable members of our community could be victimized. That is why it is so important to remain on high-alert in the event you encounter financial and other forms of abuse. 

Internet friendly seniors need to be vigilant for cat fishers.  Catfishing involves schemes in which the perpetrator creates and holds out to the victim an offer which is too good to be true, to entice the victim into giving up personal information, money, or something of value for fraudulent purposes.  Catfishing comes in various degrees of sophistication and can involve the creation of a false identity which is held out to the public.  In one local catfishing scheme, the perpetrator held himself out as a lonely man working on an isolated oil rig looking for long distance love online.  The isolation of an oil rig is a convenient excuse for providing limited photos and for declining to meet in person or talk on the telephone. Communication tends to be via instant message or in online hang outs and chatrooms or via text messages.  Red flags for a catfishing scheme can include:  poor English, lack of communication by video, FaceTime, or any method which allows you to see who are talking with, a rapid paced romance, requests for you to use a particular type of software or program, requests for you to download a computer program (which may contain malware or ransomware), and requests for your social security number, Medicare number, bank account or credit card number or for you to purchase gift cards and to send them the gift card numbers.  Often the perpetrators of catfishing schemes are overseas. 

Another financial abuse scheme is unemployment fraud.  In these schemes, the perpetrator files an unemployment claim based on the victim’s work record and then opens up a new bank account into which the victim’s fraudulently claimed unemployment benefits are deposited.  Earmarks of unemployment fraud include receiving a letter from the unemployment office confirming the filing of a claim based on the victim’s work record.   Sometimes, the victim may be unaware of the scheme until he or she receives income tax forms in January of the following year, reporting unemployment income which the victim did not receive. File a complaint with the local police department and report the matter to your local unemployment office, which typically will have a fraud hotline.  

Then there are COVID-19 financial abuse schemes, which include: 

  • An offer for COVID-19 treatment, a vaccine or a booster shot from anyone other than a medical professional or a government health department
  • Being offered the chance to “jump the line” for the COVID-19 vaccine by paying a fee
  • Being offered quicker utility service restoration by paying a fee, particularly using a gift card, or a payment app such as Venmo, PayPal or Zelle 

Here are some general precautions you can take to minimize the risk of elder financial abuse:

  • Review your mail and bank statements regularly and contact your credit card company or the merchant regarding any unfamiliar transactions 
  • Do not let others access your money. Put your bank and financial statements away in a locked cabinet or drawer out of sight. Do not leave them in your car or in plain view in your house.  Refrain from carrying a lot of cash. 
  • Keep in regular contact with friends and family who can help you. 
  • Order a copy of your credit report and review it. 
  • Do not keep passwords or ATM or telephone passwords in writing in your wallet, purse, glove compartment or anywhere easily accessible in your home. 
  • Don’t ever give a power of attorney to someone you don’t know very well and trust.  Your power of attorney should be trustworthy, available, and respectful and should put your interests before their own. 

If you still have questions, there is a helpful senior financial safety risk assessment tool offered free to the public by the Center for Elder Law and Justice, a New York organization, in collaboration with the Pro Bono Net.  The online tool can be used to assess whether there are red flags for elder financial abuse and what you can do in response.  The tool is available online at https://elderjusticeny.org/.

Additional support and resources may be available through your local Adult Protective Services office, the county Office on Aging, local law enforcement and the county prosecutors offices. Resources at the state level include the Office of the Public Guardian, and the Office of the Ombudsman for the Institutionalized Elderly. 

Questions? Let Jane know. 

Elder & Disability Law Attorney Reunites Family After Early End to Involuntary Commitment Order

Flaster Greenberg elder and disability law attorney Jane Fearn-Zimmer recently assisted a New Jersey family with legal advice/advocacy and secured the early release of their loved one, after a series of unfortunate events culminated in an involuntary commitment order, apparently due to a medical misdiagnoses.

In this case, a family member expressed concern to the relative’s new physician, who did not know the patient well, and had spent minimal time with the patient. The patient was going through a very difficult marital separation and was understandably upset. The middle-aged patient had known no pre-existing diagnosis of chronic mental illness and had cared for other family members for many years while also maintaining employment.  

The family member was escorted to the hospital by the police from the medical office.  The patient was promptly made the subject of an involuntary commitment order and was transferred to a behavioral health facility.  Jane was retained by the family to help get the relative released. 

Getting in touch with a medical facility’s administrator can be challenging even before the pandemic, but since Jane knows the ins-and-outs of the behavioral health system, it was seamless for her to communicate quickly and efficiently with the right people. She was able to get the facility’s executive and its medical doctor to clear the patient for release prior to the scheduled involuntary commitment hearing date after she learned that the patient was not receiving appropriate care for a medical issue and group therapy sessions could not be held because the patients were confined to their rooms. Both patient and family were thrilled to be reunited.

“Jane helped me during my darkest time. She gave me hope as she acted in the most professional and attentive manner throughout the process of gaining our discovery.  She was very attentive to all my needs, answering my concerns as they came up daily,” said the client “This type of reassurance was a Godsend to me and enabled me to keep my composure knowing that I had a loyal, intelligent human on the outside representing my best interests and protecting my human rights. I feel forever indebted to her for her kindness and dedication to working so hard on my behalf, presenting a factual case, which enabled her to gain me an early emergency, after a lengthy and difficult stay. I am forever grateful for her.”

Questions? Let Jane know. 

Getting a Spousal Waiver for Medicaid Isn’t as Easy as You May Think in New Jersey 

This blog post is intended to help educate your family regarding the limited instances in which a spousal waiver may be available and help guide you through the tedious process of obtaining one in a suitable case. 

The Managed Long Term Services and Supports (MLTSS) Medicaid Program offers valuable benefits, which can provide for long term services and supports in the home, in an assisted living setting or in a nursing home.  However, federal Medicaid law and policy requires the states to evaluate all of the resources available to the Medicaid applicant during the five years immediately preceding the date of filing of the Medicaid application.  This requirement can make it very difficult to obtain a MLTSS approval, particularly if the Medicaid applicant has been separated from a spouse, has a obtained a divorce from bed and board, or has been divorced in the past five years.

Medicaid law and policy provides for Medicaid eligibility as a last resort, requiring the applicant to spend down any excess resources available over the $2,000 countable asset limit.  Under New Jersey common law, spouses can be held liable for necessary expenses (i.e., the cost of medical care) of their spouse and if their assets are in excess of the maximum community spouse reserve allowance (currently set at $130,380), even if the Medicaid applicant has less than $2,000, his or her Medicaid eligibility can be jeopardized by the funds in the name of the healthy spouse. 

Consequently, in determining eligibility for Medicaid, the County Welfare Office (CWO) will ask an applicant’s marital status, and will consider the applicant and his or her spouse legally married until the entry of a final judgment of divorce.  If the CWO determines that you are still married (which can happen even if you have been separated for years or have a divorce from bed and board), it will typically take a “what’s your’s is mine” approach in determining Medicaid eligibility.  This policy is typically enforced by requiring the Medicaid application to provide the spouse or former spouse’s social security number, if the Medicaid applicant has been married at any point during the five year Medicaid lookback period.  The social security number may be used to conduct an asset search, which will probably enable the CWO to identify and consider the current assets of the healthy current or former spouse.   This verification process places the Medicaid applicant in a Catch-22, because banking privacy laws block access to the healthy spouse’s statements, and the healthy spouse is unlikely to spend down assets under his or her sole control for the care of the sick former partner. 

What is spousal refusal? In some other states, especially New York, the strategy of “spousal refusal” is commonly used.  Under this strategy, the healthy spouse refuses to pay the nursing home bills of the spouse applying for Medicaid.  In response, the CWO in “spousal refusal” states evaluates Medicaid eligibility on the basis of the sick spouse’s own assets and income.  This result is referred to as a spousal waiver

New Jersey’s Strict Policy Regarding Spousal Waivers.  For years, the Garden State had a policy against awarding spousal waivers, in all but the most extreme cases, such was where spouses had lived separate and apart for many years.   As a result, spouse waivers were a rarity, making it best to obtain a final judgment of divorce and then wait more than five years to file a Medicaid application. 

How I was able to obtain spousal waiver for one of my recent clients:

In a nut shell, New Jersey was refusing to recognize federal law which provided for spousal refusal. Other states, including NY, do recognize spousal refusal. A little over a year prior to this case, another attorney’s application for a spousal waiver was denied by the New Jersey Department of Human Services, which prompted the case to be taken to the appellate division and the policy against spousal refusal/spousal waivers was overturned. Par for the course, New Jersey was very reluctant to grant the applications.

In my case, the spouses were still married.  The sick spouse was well-educated, extremely bright and conversant. However, their marriage was so difficult that the healthy spouse obtained a domestic violence restraining order against the other spouse, who nine years later became my client.  From that date forward, the two spouses lived separate and apart.  Eventually, one of the spouses needed long term care, and the spousal waiver was obtained largely on the basis of the restraining order.  It was critical to obtain all of that documentation.  Having the spousal waiver meant that the sick spouse was able to get the skilled nursing care needed, without the cooperation of the healthy spouse in the Medicaid application process.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

National Caregiver’s Day: A Look at Elder Care in the Age of COVID-19

It’s National Caregiver’s Day, and another year filled with countless and unimaginable changes has passed. This year especially, my heart goes out to caregivers and their loved ones everywhere! Even before the COVID-19 pandemic, caregiving was no bed of roses. But this year, caregivers are facing an onslaught of new challenges, not the least of which are combatting senior isolation and reduced access to face-to-face therapies and delayed medical examinations. 

How has the COVID-19 pandemic changed care options?  Adult medical day care centers are not providing in person care at their customary location but may deliver services via telehealth and in person visits in the home. This leaves care in the home and care in a long-term care facility as the remaining options for senior care.  

The long-term care industry has been hard hit by the pandemic. From a medical standpoint, until the pandemic subsides, full-time care in the home is probably the safest option. A good option for private care in the home would be hiring a home health aide through an agency.  Benefits of a full-time caregiver (whether hired or by a loved one) include stronger protection of the vulnerable senior, since the caregiver is not moving from home to home (or from home to a nursing home) caring for multiple patients in multiple settings. It can also give the family members or friends who are overseeing the care an opportunity to recharge, which is important to prevent burn out. The right caregiver can provide social companionship to the senior.  

Families considering this option will want to keep in mind that the cost of private, hired live in care will include the cost of groceries for the home health aide, as well as worker’s compensation insurance if the caregiver is providing only companion and housekeeping care. . In such cases, the homeowner’s carrier should be put on notice of the arrangement and the family should work with an accountant to ensure that an accountant or payroll company to ensure compliance with withholding and state insurance requirements. The home’s layout should include a private area with a door that closes for the caregiver, who will need to rest and recharge while the senior is sleeping.  An employment agreement with the caregiver can protect the homeowner and the employer’s rights and ensure that minimum wage and hour requirements are met. If the senior needs care from a certified home health aide, keep in mind that such care can only be provided through a licensed home health care agency with a nurse supervising the implementation of the doctor’s plan of care. Hiring a caregiver to provide such comprehensive care outside of an agency is illegal and potentially places the senior’s well-being at risk.  Agencies do screen their prospective employees, and may be able to identify unsuitable caregivers.  If the caregiver is willing to break state law, how amenable will the caregiver be to calling 9-1-1 if the senior needs emergency medical care of doing so means the caregiver is risking getting caught breaking the law?  The family may expect to save money with an unlicensed, under the table caregiver arrangement, but in addition to being illegal, the fallout from such arrangements tends to be extremely expensive and can take a terrible toll on the senior’s health.  

Another option is care in the home financed through the Veteran’s Special Improved pension/Aid and Attendance, which is a government benefits program for eligible United States military veterans or their surviving spouses to help defray the cost of care.  In cases where the senior qualifies for Medicaid, and is able to remain in the home, programs such as the Personal Preferences Program (PPP), “can provide a source of funding for the senior to choose and hire their preferred caregivers, which can include relatives and friends.” Under the PPP program, the senior chooses the services and schedule they desire. 

The remaining option is care in a long term facility. This may be the best option where the care recipient is a two person assist, has behavioral quirks, or requires a team of trained medical professionals to stabilize and maintain their condition.  In some situations, Medicare dollars can be used for limited periods of time as “key” money to admit the senior to the best facility possible, with the goal of later transitioning to payment for the best care through the   Medicaid program and the senior’s income. 

These are just a few important considerations. For help sorting through your options, consultation with an elder law attorney is recommended.  

For more information about elder care in the age of COVID-19, please feel free to reach out.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.