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Medicare vs. Medicaid: Understanding the Benefits and Differences

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How are you going to pay for home health care when you or your spouse find yourselves in a situation where one of you might be draining all the assets because of a catastrophic health care incident? Or where someone’s in a situation where they don’t want to come out of their home?

Benefits of Home Care

Being cared for in the home is certainly less dramatic. It also allows you to keep your dignity, staying in the home you’ve worked hard for your entire life. That’s what we’re about: trying to help people preserve their hard earned money and property – and keep their dignity in the process.

There are direct health benefits of staying at home. Less confusion, because it’s in an environment that you’re familiar with. Less infections, because there’s only one or two people in the home. Statistics demonstrate that people recuperate at home better than they do in an institutional setting.

Even just the peace of mind. All of us, if we have a choice, would rather be at home. Most of the time you don’t find people saying, “Please take me out of my home and put me in an institution somewhere.”

There are financial benefits as well. But health care in general costs money. Unless you have really planned for this with long term care insurance – which is not the norm – then you can quickly exhaust your other liquid assets paying for health care, especially as you age.

That’s where Medicare and Medicaid come in, whether separately or working in combination.

The Difference Between Medicare and Medicaid

How do those differ?

They are totally separate programs, Medicare and Medicaid: when they apply, how long Medicare lasts, and when it runs out and Medicaid can come in and take over.

Medicare is basically a health benefit for people who are typically over 65 years of age. If you’re younger than 65 and you have a disability that lasts longer than 2 years, you can qualify for Medicare prior to age 65. Also, with end-stage renal disease, you can get Medicare benefits very quickly and very early on.

Medicaid is really a program designed for the indigent, for those who don’t have the financial means to care for themselves. Carved out of that is a health care program, and typically they fall under Medicaid waivers.

How Medicaid Can Help You

In North Carolina, we have two Medicaid waiver programs for personal care services. That’s going to be assistance in your activities for daily living – bathing, dressing, ambulating, eating, mobility, transferring, and things of that nature.

One is called Personal Care Services or PCS, which you need a doctor’s order for. Typically, in that service, you can get up to 80 hours of services per month, which works out to be about 18 hours a week. Just this year, North Carolina legislator passed a law that allows an additional 40 hours for those with dementia, for a total of 120.

The second program is the CAPDA program. With your activities in daily living, you’re typically going to get  upwards of about 36 hours a week, which is more than PCS.

With both of those programs, you’ll have to qualify for Medicaid, whether you’ve already gone through the process or still need to apply. The PCS program can take a couple of months to get on. A couple of years ago, each county was capped out of the number of slots that they had for the CAPDA program.

Then, we have one other Medicaid waiver program, which is private duty nursing and is for RNs and LPNs to take care of people in the home who have catastrophic needs. They need either a tracheostomy and/or a ventilator – pretty high-tech nursing needs.

How Medicare Can Help You

The Medicare side of it is really a totally different program. If you’ve had a qualifying hospital stay, you’ve got to be getting better. But the real advantage to a Medicare program – when you have home health – is that you’re going to get up to a 60 day spell of illness.

It’s called an “intermittent spell of illness”, and that’s going to be paid 100% under your Part A Medicare. You might get nursing services, a physical therapist or occupational therapist, speech language pathologist, or a home health aid that comes and assists with bathing. And that’s going to last for 60 days.

Now, there are times when they can be recertified for an additional 60 days, but it usually caps out at that 60-day period.

When You Need Both

There are programs where Medicare and Medicaid can overlap at the same time. Then there are people that have finished their Medicare service and still need additional services after that. That could be through Medicaid, private pay, or long term care insurance.

And obviously there aren’t the stringent qualification requirements for Medicare like there are for Medicaid. One of the beauties of the Medicare benefit for home health is that it’s paid at 100%. For those individuals who qualify for that, it’s a great program for them.

The Importance of Planning Ahead

One of the most heartbreaking calls that I get is from the people that fall in that gap. They’re over-resourced for Medicaid, and they’re under-resourced to pay for it privately. Perhaps their income level doesn’t allow them to roll over and let Medicaid pay for it. It’s a hard place.

That’s why it’s important to plan ahead and make sure you’re prepared, whether it’s an emergency situation or simply old age.

Medicare vs Medicaid

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Joe Seidel, Division Director for Bayada Home Health Care explains the differences in using Medicare versus Medicaid to pay for in-home healthcare.

In-Home Care – What Services Are Provided – with Joe Seidel from Bayada Home Health Care

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Joe Seidel, Division Director for Bayada a home Health Care talks about what many services are provided with home healthcare. Great discussion about the future of healthcare and the technology involved.

Who pays For Home Healthcare

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Joe Seidel, Division Director of Bayada Home Health Care, explains the many different ways to pay for home healthcare.

Crystal Springs – Retirement Community & Town Homes

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Don Peeler shows off his no-step, custom built retirement community, Crystal Springs.

Special Needs Trusts: The Current Law and Pending Legislation

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Introduction

Individuals with special needs often face “quality of life” challenges compared to those without special needs.  Many times individuals with special needs require added expenses to meet those needs.  The added financial burden often leads individuals with special needs to depend on public benefits to help them meet those costs.   Unfortunately, public benefits often fail to meet all of the needs of a disabled individual.  However, the supplemental needs of those individuals (meaning needs not covered by public benefits) can be met by using funds held in a Special Needs Trust (SNT).

 

Understanding Special Needs Trusts

A Special Needs Trust is a trust that is established for an individual with special needs who is or may become dependent on public benefits.  The trust is specifically identified to meet certain supplemental needs and to enhance the quality of life for the beneficiary, the special needs person.  Most importantly, the SNT is created so as to not disqualify the beneficiary for the public benefits being received.  The trust, then, is a pool of money available for the benefit of the beneficiary in order to provide him or her with goods or services that public benefits do not provide.  For example, SNT funds may be used for in-home care services that would otherwise not be affordable to the beneficiary.  Should a person with special needs receive these funds outright and outside a properly created SNT, the individual may become ineligible for the public benefits and reinstatement of the benefits can be a difficult process.

There are two types of SNTs:  A third-party SNT and a first-party SNT.  A third-party SNT is one in which a loved one has assets that he or she would like to use to benefit the individual with special needs.  Whereas, a self-settled SNT is one in which the assets belongs to the individual with special needs. 

A self-settled SNT is often used in the case of a litigation settlement.  One example involves an individual who was in a car accident and sued the “at fault” driver successfully.  By the time the lawsuit settlement was reached, the individual had been declared disabled.  Instead of the settlement funds being given outright to the person who is now disabled, the funds could be placed into a self-settled SNT for the benefit of that individual.  This allows the person with the disability to continue to receive benefits and have the settlement money available to him or her for supplemental purposes, increasing his or her quality of life.

Self-settled SNTs have been recognized by federal law since 1993 under 42 USC §1396p(d)(4)(A).   A self-settled SNT contains a mandatory payback provision, meaning that upon the death of the beneficiary, the State will be paid back from the remaining trust assets up to the amount of public benefits expended on behalf of the beneficiary during his or her lifetime. 

Within a self-settled trust an individual trustee or corporate trustee is appointed to manage the funds in the trust.   Choosing the correct trustee is an important decision as the trustee will be responsible for managing and investing trust assets, and is responsible for following the guidelines regarding proper distributions from the trust.  Failing to do so could result in a loss of benefits for the trust beneficiary. 

 

Problem with the Current Law

The law, as currently written, states that a first-party trust may only be established by the individual’s parent, grandparent or a court of competent jurisdiction.  It appears that the option for a competent individual to establish his or her own trust under 42 USC § 1396p (d)(4)(A) was a simple mistake by the writers of the law.  However, this minor mistake causes major financial losses to disabled individuals.  It requires those disabled individuals who have no parent or grandparent alive to establish the trust, to expend money on an attorney and court costs in order to ask for a court order establishing the trust.  The money to accomplish this is often such an impediment for these individuals, that they do not pursue it and end up either kicked off the public benefits or forgoing the supplemental monies they would otherwise have access to.

 

Pending Legislation

Currently there are two identical bills sitting in the House of Representatives and in the Senate which would create the option for competent individual who is disabled to establish his or her own trust under 42 USC § 1396p(d)(4)(A).  In May 2013, H.R. 2123 was introduced in the House and the next day it was referred to the House subcommittee on Health, where is currently sits.  A few months later in November 2013, S. 1672 was introduced in the Senate, was read twice and referred to the Committee on Finance.  The title of the identical bills is the “Special Needs Trust Fairness Act of 2013” and is described as “a bill to amend title XIX of the Social Security Act to empower individuals with disabilities to establish their own supplemental needs trusts.” 

As advocates for individuals with special needs, it is important that we support this bill so that our clients have more choices for themselves with regards to establishing special needs trusts.  If you feel so inclined, please contact your Congressional representative and ask for the passage of these bills.  Encouragement from us of the importance of this bill to our clients is imperative to get the bill recognized and enacted.  Otherwise, it may get lost in the shuffle and our clients’ needs may not be adequately addressed.

 

Conclusion

A Special Needs Planning attorney is an essential advocate when preparing SNTs for individuals with special needs.  The attorney will be able to identify the type of SNT that would be helpful in the particular situation and will know how to properly construct it so as to prevent the person with special needs from being kicked off his or her benefits.  There are many roadblocks that can arise in the planning process and it is imperative that you have an attorney familiar with the many federal and state laws and regulations concerning public benefits and SNTs.

If you have a client with special needs who would benefit from the establishment of an SNT, please contact us.  We are committed to and passionate about assisting those with special needs and look forward to helping in any way we can.

Reverse Mortgage Seminar

in Articles by Greg McIntyre 1 Comment

Chris Munson – Yadkin Bank Reverse Mortgage Expert educates us on the ins and outs of reverse mortgages.

Retirement Income Planning and Protection – 07-31-2014 – LeGrand Center

in Articles by Greg McIntyre 1 Comment

Great seminar! Thanks to all who came. I so enjoy doing these and educating the public on tools to help them save their hard earned money and property. Thanks again for a great night!

Helping Families Deal With the Financial and Emotional Costs of Dementia

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As Elder Law attorneys we are specially situated to help find solutions to many of the problems this condition brings with it.  While we can’t stop dementia, we can help protect those in its clutches while the medical world continues to seek prevention, treatment and reversal of the condition.

 

Losing Brain FunctionDementia Defined

The Alzheimer’s Association defines dementia as, “a general term for a decline in mental ability severe enough to interfere with daily life. Memory loss is an example. Alzheimer’s is the most common type of dementia.”

Dementia is not actually a specified disease.  It describes, instead, a general decline in memory or other thinking skills and is identified through a variety of symptoms.  Alzheimer’s disease accounts for 60 to 80 percent of dementia cases.  In order to be characterized as dementia, at least two of the following mental functions must be significantly impaired:  visual perception; reasoning and judgment; memory; communication and language; or ability to focus and pay attention.  Dementia is not a normal part of aging as the terms “senility” or “senile dementia” infer.  If a loved one is having trouble with any two or more of these mental functions, it’s a good idea to get it checked by a doctor.  Dementia is progressive and typically takes over the mental functions over time.  In this way, it provides the individual and the family with time to plan for its disastrous affects.[1]

 

Cost to the Individual

The cost to the individual with dementia is difficult to quantify.  Because dementia is a progressive condition and one where aging is the greatest risk factor, it is logical that at the beginning and younger stages of dementia, the cost to the individual is minimal.  As dementia progresses, so does the need for assistance with daily activities.  This assistance often comes in the form of meal preparation, help with grooming and hygiene, transportation assistance, as well as help with many other daily activities.  Dementia patients can become so mentally challenged that they may place themselves in dangerous situations, such as roaming neighborhoods and getting lost.  While the individual affected by dementia may need only a few hours of help per week at the beginning of symptoms showing, soon they may need around the clock supervision, not only for assistance with daily activities, but to protect them from themselves.  The individual’s costs will include medical expenses as well as paying a caretaker.

Caretaking for one with dementia varies depending on the quantity of care required.  An in-home caretaker may charge up to $21 per hour or higher.  Adult day care can run as high as $18,200 per year or more.  When an individual can no longer live alone but is not quite ready for a nursing home, Assisted Living facilities are available but may cost as much as $42,600 per year or more.  When around the clock care is needed, a nursing home can cost an individual up to $90,520 per year, or higher.  To view costs in other states and national average costs of long term care, see the MetLife Survey of Long Term Care Costs, https://www.metlife.com/mmi/research/2012-market-survey-long-term-care-costs.html#keyfindings.

 

Cost to the FamilyFamily

Where the individual with dementia is fortunate enough to have family nearby, the family will often step up to assist the ill loved one with their daily activities.  Again, the process can be gradual and before the helpful family member realizes it, they may find themselves missing work and, finally, quitting their job altogether in order to give proper care to the dementia patient.  Obviously, the cost to the family includes the loss of income from this family member’s job.

The less recognizable cost to the family, however, is the emotional strain that is placed on the family member caretaker.  In order to save the family money, many family members will work nearly twenty-four hours, seven days per week.  The ramifications are physical, mental and emotional health problems to the caretaker.  The medical costs and possible future psychological costs to the caretaker, then, must be considered.

It is important that family members take a step back from the situation and assess this cost.  Providing a caretaker with time off every day, week and year is a must to ensure the caretaker’s health.  The caretaker must have appropriate support in order to keep caring for the loved one.

 

Cost to the Nation

As a nation we have begun to recognize the devastation that dementia has caused and will continue to cause.  Organizations such as the Alzheimer’s Association have been effective in lobbying for monies to be put towards the research of dementia treatment, prevention and reversal.  The cost of dementia to our nation has been a great motivator for politicians to fund such research.

A study conducted by RAND Corporation in 2013, estimated the national cost of dementia to be between $159 billion to $215 billion (including an estimate for the monetary value of informal care provided).[2]  The majority of the costs associated with dementia are for institutional and home-based long-term care and not medical services.

Medicare and Medicaid pay for some of this cost, which amounts to a taxpayer burden.  According to the Alzheimer’s Association March 2013 Fact Sheet, in 2013 it is estimated that Medicare and Medicaid paid approximately $142 billion in caring for those with Alzheimer’s or other type of dementia.[3]

It is clearly in the best interest of the nation’s economy to continue research on prevention, treatment and reversal of dementia.

 

Conclusion

The costs of dementia can be devastating to the affected individual, their family and the nation.  While scientists continue to search for solutions to the debilitating condition, the families affected with it must face its challenges.  It is recommended that those families seek emotional support by way of a therapist or support group.  In addition, seeking out an Elder Law attorney can benefit the affected individual and family members in several ways.  Elder law attorneys can guide families to important resources available for the financial and other challenges they will face.  Elder law attorneys can also ensure that the family’s assets are being used in the most efficient manner considering other available resources and the family’s individual goals.

Getting an Elder Law attorney involved in planning for the challenges ahead is one of the MOST important steps a family facing the impact of dementia will take.  If you or someone you know is affected by dementia, we can help and we welcome the opportunity to do so.

 

[1] http://www.alz.org/what-is-dementia.asp

National Healthcare Decision Day

in Articles by Greg McIntyre 1 Comment

We will be at the Dover Foundation YMCA to assist the public with their healthcare directives on National Healthcare Decisions Day, Wednesday, April 16, 2014.

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