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Strategies to Protect Your Money from Medicaid - AgingCare.com

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The following is extracted from AgingCare.com
Too few older adults know and understand their rights and options regarding health care, particularly long-term care, which, to quote the New York Court of Appeals, is "ruinously expensive."

A Caregiver Agreement is an excellent strategy in many cases where extra services are needed or desired that would not be covered by Medicaid, and are outside the scope of what a nursing facility or home care attendants would provide.

The caregiver can be a son, a daughter or other family member, a friend, a geriatric care manager or a home care agency. The services can be paid for in advance, and the payment will then reduce countable resources, helping the person in need of care gain Medicaid eligibility. A family member can render these services, providing income for that person (who may have given up a job or taken time off from work), and reducing conflict with other family members who are unable or unwilling to help out.

If the caregiver is to be paid in advance, the keys to creating an agreement that will be accepted by Medicaid are:

    The contract must specifically define the services provided and hours to be worked by the caregiver.
    The lump sum payment must be calculated using a reasonable life expectancy and legitimate market rates for the services.
    A daily log of actual services rendered and hours worked must be maintained, along with written invoices.
    Upon the death of the patient, any unearned amounts must be paid to Medicaid, up to the amount that Medicaid paid on behalf of the patient.

Spousal Transfers and Spousal Refusal

An important feature of the Medicaid laws is that transfers between spouses are permitted, are not subject to the "look back," and thus do not result in any penalty. In the case of a married couple, one of the basic strategies is to transfer any assets that are in the name of the spouse who needs care to the name of the well spouse (also called the "community spouse" where the spouse who needs care is in a nursing home).

New York and some other states permit something called "spousal refusal." In these scenarios, the well (or community) spouse will refuse to provide support for the spouse who needs care.As a result, the spouse who needs care will be immediately eligible for Medicaid, and will receive services.

Once Medicaid provides services, it has the right to seek contribution from the well spouse. In some cases, however, Medicaid does not pursue its rights, and in other cases it is willing to settle at a discount. At a minimum, the well spouse will receive a significant benefit because any reimbursement to Medicaid will be at Medicaid's discounted rates, rather than at the private pay rates that the providers would have charged.

Unfortunately, the majority of states are "spousal share" states that do not permit spousal refusal. In these states, the resources of both spouses are counted towards the Medicaid eligibility amount, and the above strategy is therefore ineffective.

Elder Law attorneys are able to work within the Medicaid laws to produce favorable outcomes for their clients. Bear in mind that every case has its unique facts, and these strategies might or might not be the top five for you, given your circumstances. In any case, it's hardly ever too late to develop an effective strategy to obtain benefits, and protect at least some of your assets or income at the same time.

David Cutner is a former family caregiver and co-founder of Lamson & Cutner, a boutique elder law firm in Manhattan, known for its successful strategic planning and insights into the issues of today's elder law maze.

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I have no connection with  David Cutner the following contact information is my thanks to him.

Lamson & Cutner, P.C.
9 East 40th Street
New York, New York 10016
Contact Information:
Phone: (888) 618-3701

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