MEDICAID, MEDICARE, VA AND SOCIAL SECURITY DISABILITY BENEFITS

MEDICAID, MEDICARE, VA

AND SOCIAL SECURITY DISABILITY BENEFITS

By: Craig Riffel, Attorney and CPA

             

            As the population ages, the public is having more and more questions about Medicaid, Medicare, veterans and Social Security disability benefits.  They are confused about eligibility, qualifications, limitations, coverage, etc.  The problem is compounded by the fact there is very little easy-to-read or easy-to-understand information readily available to the public.  As a result, incorrect information about these benefits has been and continues to be disseminated by individuals, attorneys, accountants, financial advisors, social workers and many more.  These myths spread like diseases and continue to infect and corrupt the decisions individuals make regarding these benefits.

            

In order to make good decisions, individuals need good information.  Basing decisions on incorrect information or myths can have disastrous consequences.  To help inform the public and assist individuals, their advisors and other professionals about these benefits, Senior Resources & Benefits, L.L.C. (“SRB”) was created.  SRB’s sole mission is to educate and provide useful information about these benefits.  SRB publishes its information in many written forms as well on its website at www.SRBLLC.com.

             

SRB’s educational materials and authorities dispense with many myths surrounding benefits.  For example, in the Medicaid area, SRB explains on its website how Medicaid planning is completely legal and how a person: (1) does not have to do Medicaid planning either three or five years in advance, (2) with a typical trust will not qualified for Medicaid, (3) can have a substantial amount of assets (i.e. net worth from $50,000 to $3 million) and still qualify for Medicaid benefits, (4) can live at home and receive Medicaid, and (5) can reside in a private room at a nursing facility and still receive Medicaid, etc.

             

Medicare is a federal insurance program administered by the federal government to help pay medical expenses for persons over age 65 and some disabled persons under age 65.  Medicaid is codified in Title XIX of the Social Security Act.  Medicaid is a federal insurance program administered by the states designed to assist persons with long-term care expenses such as nursing home costs, in-home care costs, medical expenses and prescription medications.

            Medicare and Medicaid differ significantly.  Medicare is entirely a federal program funded by the federal government while Medicaid is a joint federal-state program funded by federal and state money.  Medicare is administered by the federal government and Medicaid is administered by the states.  While Medicare is available to anyone 65 years of age and older or disabled and who has paid into Social Security, Medicaid is available to those individuals meeting very specific eligibility criteria. 

Medicare primarily pays for medical expenses and preventative care.  It only pays up to 100 days of skilled nursing care received while the individual is receiving rehabilitation services.  If the person is receiving only custodial care and not any rehabilitation services, Medicare does not pay for any skilled nursing care even if the person has all 100 days remaining.  Additionally, the 100-day limit is reduced by the number of days the individual is in a hospital. 

Medicaid pays for skilled nursing care in both a nursing facility and at-home regardless if the person is receiving rehabilitation services and without any limit.  There is a new program in Oklahoma in which Medicaid will be paying for some care in assisted living facilities.  Medicaid also pays for unreimbursed medical and prescription medication expenses.

            The Veterans Administration offers a variety of benefits to veterans, their surviving spouses and dependents.  One of the most popular is the Aid and Attendance pension.  Basically, a veteran, surviving spouse and dependent would be entitled to the pension if:  (1) the veteran did not receive a dishonorable discharge, (2) the veteran served at least 90 days of consecutive active duty, and (3) at least 1 day of the veteran’s active duty service was during a time of war.  The specific dates of war are defined on SRB’s website at www.SRBLLC.com.  If the preceding three criteria are met, the amount of pension will vary from $1,056 to $1,949 per month depending upon the particular applicant and the applicant’s income.  There are very few asset limitations with the Aid and Attendance benefit and no transfer of asset restrictions.

            An individual may also qualify for Social Security disability benefits.  To be disabled:  (1) the person must not be able to perform the work in which he or she was previously engaged, (2) not be able to adjust to perform other work, and (3) the disability must be expected to last for at least 1 year or result in death.  Additionally, a person must have accumulated 40 credits in most cases.  Of these credits, 20 credits must be earned within the 10 years prior to the application.  A credit is equal to one quarter of work resulting in a total of 4 credits being available each year.  Younger workers can qualify with lower credit requirements based upon their ages. 

           

For more information about Medicaid, Medicare, Veteran’s benefits, Social Security disability, estate planning or asset protection planning, visit Senior Resources and Benefits, LLC (“SRB”) at www.srbllc.com or at one of our offices through-out the state.  Our Corporate office is located at 3517 West Owen K. Garriott Road Suite Three Enid, Oklahoma 73703,  our Tulsa office at 4608 S. Garnett Suite 505 Tulsa, Oklahoma 74146 or our Oklahoma City office @ 1000 West Wilshire Suite 310, Oklahoma City, OK 73110 or you may call Jeremy Nichols, Crystal Pritchett, or Steve Money @ 1-800-407-9302 or benefits@srbllc.com .  All legal services for SRB provided by the law firm of Mitchel, Gaston, Riffel & Riffel, P.L.L.C. with website at www.westoklaw.com and the Law Office of Steve Money. 

Craig Riffel is an attorney and certified public accountant with law firm of Mitchel, Gaston, Riffel & Riffel, PLLC with offices in Enid, Woodward, Fairview and Ponca City, Oklahoma.  He is also a member of the National Academy of Elder Law Attorneys and has taught Medicare and Medicaid to other attorneys and CPAs through seminars sponsored by the Oklahoma Bar Association, chapters of the Oklahoma Society of Certified Public Accountants, and national continuing professional education companies.  A significant portion of Mr. Riffel’s practice consists of Medicaid (nursing home) planning, estate planning and asset protection planning. 

3517 W. Owen K. Garriott Road • Suite One • Enid, OK  73703 Voice: (580) 234-8447 • Fax: (580) 234-5547 E-Mail: craig@westoklaw.com • Website: www.westoklaw.com

MEDICAID CRISIS PLANNING VS. MEDICAID PREPLANNING

MEDICAID CRISIS PLANNING VS. MEDICAID PREPLANNING

By: Craig Riffel, Attorney and CPA

            In the past, Medicaid planning was predominantly crisis related planning.  Crisis planning, or 911 planning as we commonly refer to it, involves planning to qualify an individual for Medicaid benefits immediately.  In other words, the applicant is either in a nursing facility or preparing to enter a nursing facility in the immediate future and wanting to qualify for Medicaid benefits.  Crisis planning can also involve an applicant who is remaining at home and either receiving in-home health care services or needing to receive those services immediately.

            In the typical Medicaid crisis case, the applicant is in poor health and usually does not participate in the planning process.  The planning is conducted on his or her behalf by the applicant’s spouse, power of attorney, or children.  By definition, the applicant is unable to attend meetings or participate in the planning due to his or her incapacity.  The applicant is either in a nursing facility, hospital or unable to leave the home.   The applicant can obtain Medicaid qualification immediately.  Contrary to popular belief, the applicant does not have to wait 3 years, 5 years or any length of time to qualify for benefits.  See my February 2005 Medicaid article titled, “The Most Misunderstood Rule in Medicaid” located on my Firm’s website at www.westoklaw.com.            

            Over the past several years, there has been a significant growth in the number of applicants desiring to do their Medicaid planning much earlier.  We refer to this type of planning as Medicaid preplanning.  In a Medicaid preplanning case, the applicant is usually in fair to good health and does not anticipate needing care in the immediate future.  The national statistics tell us 1 out of every 2 people needs care.  The applicant simply wants to get the planning completed and assets positioned so that if the applicant is in the 50% needing care, the applicant and the applicant’s family will be protected.  They will not have to go through the Medicaid crisis planning.

            In most Medicaid preplanning cases, the potential applicant is in good health and able to participate in the planning process.  The individual is able to attend most, if not all meetings, provide some, if not all, of the needed information and make decisions regarding the planning.  The potential applicant does not know if and when the Medicaid will be needed.  Sometimes the Medicaid preplanning individuals can either be married couples or single individuals.  The potential applicant is considered to have a preplanning case even if the individual is receiving assistance from a child or loved one in handling financial affairs or other matters but is still in good health.

            Although an applicant can wait until the last minute to qualify for Medicaid benefits, there are two distinct advantages of Medicaid preplanning over Medicaid crisis planning.  First, preplanning is lest costly than crisis planning.  In most cases, preplanning costs approximately a third to two-thirds of the cost of crisis planning.  Second, preplanning is done at a time and in a manner which does not create as much stress and anxiety for the applicant and the applicant’s family.  When Medicaid planning is left to the last possible moment as with crisis planning, the applicant and applicant’s family are dealing with a variety of issues (i.e. applicant’s health, applicant’s care, cost of care, etc.).  Qualifying for Medicaid at this time adds one more issue to an already stressful situation.

            These advantages are directly due to the fact a Medicaid preplanning applicant does not need benefits immediately.  Instead, the applicant positions himself or herself for Medicaid well before the benefits are needed.  This allows the preplanning applicant to take advantage of the one element a crisis planning applicant does not have which is time. 

            Since benefits will not be needed until sometime in the future, we do not file a Medicaid application as part of the preplanning.  We file the Medicaid preplanning application when the applicant needs benefits which is some point in the future.  Applicants often question what additional work will need to be performed at the time of filing the Medicaid application.  At the time of completing the preplanning, it is impossible to know exactly what will be needed because we do not know for certain if and when we will be filing a Medicaid application.  As a general rule, the longer a preplanning applicant can wait between the preplanning and filing of the Medicaid application, the less work which must be performed.  In some instances, no additional work will be needed other than just filing the application.  This is true even if the application must be filed within the 5-year look back rule discussed at the beginning of this article.

            In many instances, individuals have already completed their estate planning prior to learning about Medicaid preplanning or consulting with a Medicaid professional.  Individuals may have a will or trust already in place and believe this these documents protect them.  The reality is they do not provide any protection from long-term care costs.  Wills and trusts address the issue of what is to happen to assets when a person dies.  In other words, they dispose of property, appoint personal representatives or trustees, avoid probate in some instances, save or eliminate estate taxes and provide for an orderly administration of the applicant’s estate.  They do not address the issue of long-term care either at home or in a nursing facility.  Individuals who have done their estate planning and nothing further are not protected from these exorbitant costs.

            Although these individuals have already done their estate planning, they can still incorporate long-term care or Medicaid planning into their existing estate plans.  Doing so is like adding a room to an existing house.  When a person adds a room to an existing house, they do not tear down the house and start over.  They simple construct the new addition, add the new room to the existing home and make the two work together.  The same is true for adding Medicaid planning to an existing estate plan.  The individual does not redo his or her entire estate planning but simply adds the Medicaid planning to their existing estate plan.