Medicaid

On today’s blog we would like to break down the basics of Medicaid. Often, we get calls from families who aren’t able to pay for the average of $8,500 a month for nursing home care for their loved one. If they do not happen to have Long Term Care Insurance already, we need to determine their eligibility for Medicaid and other alternative means.

But what is Medicaid?

Medicaid is a benefits program that is primarily funded by the federal government and administered by each state. Rules tend to vary from state to state. The primary benefit of Medicaid is that unlike Medicare (which only pays for skilled nursing) the Medicaid program will pay for long term care in a nursing home once a person has qualified. Medicare does not pay for treatment of all diseases or conditions. For example, a long term stay in a nursing home may be caused by Alzheimer’s or Parkinson’s disease and even though the patient receives medical care, the treatment will not be paid for by Medicare. In that case, one will have to pay privately (e.g. using long term care insurance or other funds) or they’ll have to qualify for Medicaid.

To qualify for Medicaid, applicants must pass some fairly strict tests on the amount of assets they can keep. To understand how Medicaid works, we first need to review what are known as exempt and non-exempt (or countable) assets. Exempt assets are those which Medicaid will not consider (at least for the time being). In general the following are primary exempt assets:

•         Home, (equity up to $800,000). The home must be the principle place of residence. The nursing home resident may be required to show some “intent to return home” even if this never actually takes place.
•         Personal belongings and household goods.
•         One car or truck.
•         Income producing real estate.
•         Burial spaces and certain related items for applicant and spouse.
•         Up to $1,500 designated as a burial fund for applicant and spouse.
•         Irrevocable prepaid funeral contract,
•         Value of life insurance if face value is $1,500 or less. If it does exceed $1,500 in the total face amount, then the cash value is countable.

All other assets are generally non-exempt and countable. Basically all money and property, and any item that can be valued and turned into cash, is a countable asset unless it is listed above as exempt. This includes:

•         Cash, savings, and checking accounts, credit union share and draft accounts.
•         Certificates of deposit.
•         US savings bonds.
•         Individual Retirement Accounts (IRAs), Keogh plans (401K, 403B).
•         Nursing home accounts.
•         Prepaid funeral contracts that can be cancelled.
•         Trusts (depending on the terms of the trust).
•         Real estate (other than primary residence).
•         More than one car.
•         Boats or recreational vehicles.
•         Stocks, bonds, or mutual funds.
•         Land contracts or mortgages held on real estate sold.

Why seek advice for Medicaid?

As life expectancies and long term care costs continue to rise, the challenge quickly becomes how to pay for these services. Many people cannot afford to pay $8,500 per month or more for the cost of a nursing home. And those who can pay find their life savings to be wiped out in a matter of months, rather than years. Fortunately, the Medicaid Program is there to help. In fact, within our lifetime, Medicaid has become the long term care insurance of the Middle class. But the eligibility to receive Medicaid benefits requires that you pass certain tests on the amount of income that you have. The reason for Medicaid planning is simple. First, you need to provide enough assets for the security of your loved ones. Second, the rules are extremely complicated and confusing. The result is that without proper planning and advice, many people spend more than they should and their family security is jeopardized.

Many of our clients have expressed peace of mind knowing they have taken the necessary steps to protect their assets and not to leave their loved ones with the burden of responsibility. If you are in need of suitable facilities and don’t know where to begin, inquire about our senior placement services. For Medicaid application assistance, Medicaid planning advice, or to learn more about us, click here or feel free to call our office today at (201) 342-3300. 

Senior Placement

When a loved one needs nursing home care, it can be an emotionally and mentally straining experience. It may be difficult to accept that someone we look up to may need assistance with everyday tasks to the point where they need to enter a nursing home or an assisted living facility. Furthermore, with so many nursing homes and assisted living facilities the process of finding a suitable place for your elder loved one. Each one with different—it raises the question, which one is best?

As a senior placement providers and elder care advisors, we are in regular contact with our network of nursing homes and assisted living facilities. Thanks to this network and constant communication, we know which places accept Medicaid and which places are private pay only. Additionally, we also keep in mind the specific programs and extra services they have.

Consider this case study: Ralph and Alice.

Ralph and Alice were high school sweethearts who lived in Saddle River, NJ, their entire adult lives. Two weeks ago, Ralph and Alice celebrated their 51^st anniversary. Yesterday, Alice, who has Alzheimer’s wandered away from home. Hours later she was found sitting on a street curb, talking incoherently. She was taken to a hospital and treated for dehydration. Ralph comes to see you after their family doctor tells him he needs to place Alice in a nursing home. He tells you they both grew up during the Depression and have always tried to save something every month. Their assets, totaling $100,000, not including their house, are as follows:

Savings Account……………………….$15,000

CDs…………………………………………..$45,000

Money Market Account……………$37,000

Checking Account……………………..$3,000

Residence (no mortgage) .………..$650,000

Ralph gets Social Security and Pension Checks totaling$1,500 each month. Alice’s check is $450. His eyes fill with tears, as he says, “At 8,500 to the nursing home every month, our life savings will be gone in less than three years!” What’s more he’s concerned he won’t be able to all their Social Security checks. There’s good news for Ralph and Alice. It’s possible he will get to keep his home and most of their assets… and still have the state Medicaid program pay Alice’s nursing home costs. While the process may take a little while, the end result will be worth it. To apply for Medicaid, he will have to go through New Jersey Family Care. If he does things strictly according to what FSD tells him, he will only be able to keep about ½ his assets (or about 50,000) plus he will keep is income. But the end results can be better than the traditional spend down, which everyone talks about. Ralph might be able to turn the spend down amount of roughly $50,000 into an income stream that will increase his income and meet the Medicaid spend down virtually right away. In other words, if handled properly Alice may be eligible for Medicaid from the first month that she goes into the nursing home. That’s why it’s important to have an Elder Care and Special Needs Advisor to guide you through the system and the Medicaid Process to find the strategies that will be most beneficial in your situation. So, he will have to get advice from someone who knows how to navigate the system. But with proper advice he may be able to keep what he and Alice have worked so hard for. This is possible because the law does not intend to impoverish one spouse while the other needs care in a nursing home. This is certainly an example of where knowledge of the rules and how to apply them can be used to resolve Ralph and Alice’s dilemma. Of course, proper Medicaid planning differs according to the relevant facts and circumstances of each situation as well as state law. 

To learn more about Federal National Funding click here or to have your questions regarding senior placement answered personally by one of our associates, please call out office at 201-342-3300. One of our associates will be happy to speak to you. 

High Nursing Home Costs

Since 2011 there has been a steady rise in the cost of nursing home care of nearly 19%. Many experts agree this trend isn’t going to change due to the increased demand of nursing care and the rising cost of medical care. In fact, the current national average is $8,500 a month. The average American family simply cannot cover this tremendous cost

Call today to learn how to cut down nursing home costs

However, there is applying for Medicaid as an option. Medicaid is a federal and state funded program that has helped the middle and working class pay for nursing home and assisted living costs. Many families have found that applying for Medicaid takes a huge load off their shoulders—they can now send their loved one to any number of Medicaid certified nursing homes or assisted living facilites without worrying about the costs.

As great of a solution this is, it does not come easily. Applying for Medicaid alone can be confusing as the language is a little tricky and errors can lead to disqualification.

Still, there is another solution. At Federal National Funding we have been helping families cut down on nursing home costs by assisting them with Medicaid applications and planning. We help simplify the process for you by handling the paperwork.  Plus, if your loved one happens to be a veteran, we know of other government programs that can assist with nursing home costs and assisted living.

Our initial consultation is free, so if you’d like to learn more please call us today at 201-342-3300. A representative will be happy to speak to you. 

To learn more about us at Federal National Funding, feel free to visit our website here.