Ask the Expert- Isn't Medicaid for Poor People?
Published: Fri, 07/19/13
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Ask the Expert- Your Elder Law Questions Answered by Evan H. Farr, CELA |
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Ask the Expert- Isn't Medicaid for Poor People?
 Q. I was taking my daily exercise walk the other day when I ran into a neighbor who said that his wife with dementia recently qualified for Medicaid and will be entering a nursing home next month. I live in a somewhat affluent neighborhood in Burke where houses go for half a million dollars. This couple worked most of their lives at decent jobs, raised three college-educated children, and have two nice cars. There is no way they can be poor enough to qualify for Medicaid. Can you explain? And if they do qualify for a government program meant for poor people, how is it ethical? A. Medicaid was designed for the poor during Lyndon Johnson's War on Poverty and still serves as a program for millions of low-income Americans. But it also benefits many middle to upper class seniors, primarily by covering the catastrophic costs of nursing-homes so families like your neighbors don't have to deplete the assets it took a lifetime for them to earn. Nursing homes in Northern Virginia cost $12-$15,000 a month. Many people assume that Medicare will cover long-term care, but at most it covers 100 days of rehabilitation, and does not cover help with activities of daily life, like eating and bathing, that the aged can need for years. With baby boomers and their parents living longer than ever, few families can count on their own money to go the distance. Stagnant incomes, declining savings, and rising debts make the costs of long-term care an increasing threat to the security of current and future middle-class families. Did you know that only a small percentage of people are covered by private long-term care insurance? As we age, medical care will only get more expensive, and for many of us, the cost of long-term care will outstrip our families already stressed financial resources. This is why, for many seniors over the age of 65, Medicaid is the main way we finance long-term care in this country. Medicaid is the primary payer for more than a million nursing home residents (Source: Forbes/AARP). And these aren't the indigent --many of them are the result of middle-income people who have already run through their own money paying for their nursing home costs, and then become eligible for Medicaid. Why wait for that to happen? Life Care Planning and Medicaid Asset Protection is the process of protecting assets from having to be spent down in connection with entry into a nursing home, while also helping ensure that you or your loved one get the best possible care and maintain the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home. Life Care Planning and Medicaid Asset Protection can be started any time after a person enters the "long-term care continuum," meaning that a person is starting to need assistance with Activities of Daily Living (eating, dressing, bathing, toileting, transferring, and walking) or Instrumental Activities of Daily Living (such as cooking, cleaning, caring for pets, paying bills and managing finances). Congress accepts the realities of Medicaid Planning through rules that protect spouses of nursing home residents, allow Medicaid Asset Protection via the purchase of qualified Long-Term Care Insurance policies, allow the exemption of certain types of assets, and permit individuals to qualify even after transferring assets to a spouse or to a disabled family members or to a caregiver child. To plan ahead and accelerate qualification for Medicaid is no different than planning to maximize your income tax deductions to minimize your income taxes. It is no different than taking advantage of tax-free municipal bonds. It is no different than planning your estate to avoid estate taxes. To qualify for Medicaid, applicants must have minimal assets--no more than $2,000 in cash and cash equivalents such as bonds and IRAs. For married couples, the spouse staying at home may have assets worth an additional $115,920, the annually adjusted Social Security cap for 2013. Does this mean that if you need Medicaid assistance, you'll have to spend nearly all of your assets to qualify? No -- there are dozens of Medicaid asset protection strategies that can be employed with the help of a Certified Elder Law Attorney, such as Evan H. Farr. Money that is protected through proper planning can be used to:
To discuss strategies specific to your situation, please call 703-691-1888 to make an appointment for a no-cost consultation at The Fairfax Medicaid Protection Law Firm of Evan H. Farr, P.C.   Dear Ernie and Jannette, I am worried about my mother. She is 85 and is still driving. She has arthritis and diabetes, hearing loss, visual impairment and is experiencing the beginning stages of dementia. Last time I drove with her, I was scared for my life. Now, every time she gets behind the wheel, I am scared for hers. Yet, she refuses to give up driving because she doesn't want to lose her independence. How do you recommend we talk to her about handing over the car keys and finding other alternatives for transportation? Thanks! May Ihavda-Keyes -----
Dear May, Many older adults are capable of driving safely, even into their 80s. But people age differently. Several factors, including hearing loss, dementia, visual impairment and others, place seniors at much greater risk for road accidents and affect their driving ability. It is often difficult to talk to an elderly family member about giving up their car keys -- especially if the older person doesn't agree that continuing to drive will be risky. Often, families are making the tough choice between safety and independence on their own. There is new evidence, though, that doctors could have more of an influence on one of the toughest decisions facing an aging population. A study that was recently cited in an Associated Press article found that when doctors warn patients that the older folks may be medically unfit to be on the road, there is a drop in serious crash injuries among those drivers. The American Medical Association recommends that doctors administer a few simple tests in advising older drivers. Among them:
Here at The Fairfax Elder Law Firm of Evan H. Farr, P.C., we urge families to sit down with their loved ones who are affected by poor eyesight, chronic disease, and medications that might impair driving and talk about your concern for their safety on the road. Elderly drivers and family members should also take heed of the laws in your state regarding vision tests, restricting of mail renewals, and road tests. For more information about Aging Drivers and the Law, see the article on the Fairfax Elder Law Firm of Evan H. Farr, P.C. website. For tips on talking with an unsafe driver (with dementia or Alzheimer's), click here. If you have an elderly family member who insists on driving longer than appropriate, you should strongly encourage that family member to come in for a consultation with one of our attorneys about the Living Trust Plus(TM) Asset Protection Trust. This Trust is the only type of trust that protects assets from the expenses of probate PLUS lawsuits (for example, from causing a car accident), PLUS long-term care. About Ernie and Jannette: African dwarf frogs Ernie and Jannette have lived at The Farr Law Firm for about two years, and they belong to Evan and Jeannie Farr. They reside on Jeannie's desk, and love socializing with Big Red the Betta fish and greeting all of the clients that come to the firm. |
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