If a person is going to be in a nursing home (nh) or needs long term care help for half a year or more, maybe the rest of their lifetime, many will eventually apply for assistance. This is because of the long term care costs involved–on average close to $8100 per month in Michigan.
Medicare typically only covers such costs the first 20 days in full, the next 80 days afterwards with a co-pay, and typically bows out, or stops coverage, after day 100. (If the care level is hospice in nature, Medicare may jump back in with payments for the hospice service costs–but not the room and board portion of hospice.)
Medicare, which most folks 65 or older get, is not really “means tested.” This means that Medicare doesn’t really care about our assets or incomes and doesn’t typically care what our financial situation might be in a coverage analysis.
If it appears that the person is going to need a nursing home for months and months and months, or even years, they might apply for help with such bills via Medicaid, which doesn’t have a 100 day coverage limit. But Medicaid IS ‘means tested” and so a review of exempt versus non exempt assets is made, and sometimes, to qualify, one has to do some planning or spending down of non-exempt assets, or both.
Below are the “numbers” for 2018. Feel free to make an appointment with us if you need to look into Medicaid planning, or need help paying for long term care or preserving the nest egg of the spouse who doesn’t need long term care care.
Equity value of homestead (exempt) $572,000.00
Individual Resource Allowance (yearly) 2,000.00 (0r $3,000 if both spouses in nh)
Monthly Personal Needs Allowance 60.00
Minimum Protected Amount Community Spouse 24,720.00
Maximum ” ” ” ” 123,600.00
Burial Fund/Space Allowance (2 different things) 1,500.00 or more, depending on many factors
Pre-paid Funeral Contracts 12,540 (2017 number subject to adjustments)
Vehicle (one vehicle only) exempt (generally no value limit)
Minimum Monthly Allowance for Community Spouse 2,030.00
Maximum ” ” ” ” ” 3,090.00
There are more figures and numbers that can crop up when a medicaid application is being made–keep in mind DHHS essentially puts the assets into two piles–those assets which are exempt (and don’t count “against” an application, thus also amounts one can readily “protect) and assets which are not exempt. Non exempt assets would likely be used up, spent, on care BEFORE Medicaid could help. But this can really put those left behind at a disadvantage. Sometimes, with prudent planning or review, a couple or individual could shift these numbers a bit, to help preserve important savings or protections for the community spouse. Elder law attorneys help review these issues with the applicant/family. Naturally each situation differs and so what might be prudent or possible for one family, might not work, or may not be needed, for others. But a review is always smart.
DHHS also looks at the income of a Medicaid applicant. Typically, virtually all of the applicant’s income is used to help pay for the nursing home, with Medicaid helping pick up the balance, or shortfall. Thus, if a single person had monthly social security of 1300 dollars, and an 800 dollar pension from one spot and a 125 dollar pension from another spot they would turn over all but 60 dollars a month to the nursing home (this would be their patient pay amount under Medicaid rules), in this instance the single person would pay 2165 dollars every month towards their care–and Medicaid would help with the rest of the monthly bill.
When the nursing home patient (or prospective patient) has a spouse who can stay at home though, the patient pay amount might be adjusted so the community spouse–the one still home–can avoid what the law would call spousal impoverishment. The federal government and states who come together to provide Medicaid, realize that a spouse left behind might suffer if they can’t keep a bare bones budget going.
So in the example above, the nursing home spouse had 2225 of monthly income. What if their (community) spouse had income of 900 a month social security and one pension of 420 a month (as an example) for a total income of 1320 a month? Under the rules, at minimum, the community spouse could keep 2030 from their joint incomes. This means that the nursing home spouse would be able to give the community spouse at least 710 per month (to bring the community spouse up to 2030 in monthly income) and this also means that the “patient pay” amount in our example would change–and would drop to 1455 per month.
Anyway, this stuff can get confusing but as a basic numbers example for 2018, I wanted to get this posted. Most of the numbers above changed with the beginning of 2018, a few of the numbers change in the summer, so check with the Michigan Department of Health and Human Services or call an elder law attorney and make an appointment if you need to explore this more.
As reported in the New York Times the other day, there are some steps one can take if you are single or essentially so, and the quasi- automatic default system of relative care won’t be available. This is good reading. Remember too, a stop with an attorney, a consultation, and perhaps preparation of documents such as a power of attorney or medical power of attorney, or long-term care planning strategies, is smart. https://www.nytimes.com/2018/03/23/business/elder-orphans-care.html
I presented early in January to a chapter of the State Retirees Association of Michigan–Lansing Chapter. (The materials I handed out can be found elsewhere on our site–like here: lhttp://SERAPresentationltcfinal )
One of the folks in attendance faced an issue that crops up more often than you might think. The issue? Who will help me when I need it. We were not talking about nursing home help or help in a hospital.
Rather we were talking “agents.” Those people who might help during a period when we are alive but not really able to help ourselves much.
Most attorneys suggest creation of a durable power of attorney to help with financial issues, contracts, bill paying, banking and property management. When your durable power of attorney document is drawn up, you are the principal. The person you entrust to help out is your agent.
A medical power of attorney is also advisable. In Michigan we have a particular name for these medical power of attorney documents–we also refer to them as a patient advocate form. So you name, effectively, a medical agent/patient advocate and possibly a successor as well.
Most naturally we urge selection of, and people tend to choose, those who know them, and in whom they can put a good deal of trust. That’s smart. Often this is family–but even then, if we are frank, we know some family members are better at such jobs, honors or duties, than others.
Back to the SERA member. She was very close to 90 years old, and had outlived most of those to whom she’d turn, and one other relative was darn close to her age and in worse physical health.
Sometimes other people come to us, and while they still have children only in their 30’s or 40’s, those children may have problems of their own–finding themselves in a messy divorce, or almost broke and near bankrupt, etc. Those folks also have a difficult time thinking of someone to name as an agent.
And more often than in the past, more clients come to us who have long been single, with no spouse nor children.
How do you find an agent under such circumstances? There is no one simple answer, but three routes come to mind:
a) explore your extended family tree—Is there a niece or even great niece or nephew who could help? Have you talked to them, and if so, do they share your values, are they up to the task?
b) go deeper into your friendship network, even make new friends (this isn’t a Dale Carnegie class, but you might be surprised what reaching out might do)—Do you belong to Rotary or a bowling club or hunting group? Would you ever be able to invite someone to discuss such an idea to dinner at your house? I am hearing more of intentional arrangements as well–a sort of adopted friend/family thing–where other single folks, maybe your age or younger, say in effect “Hey, I’ll help you out, if that time should ever come–and if you’re in a position to help me out, should the time come, you can do the same for me.” This often involves selecting a few people, of course, who talk the idea through.
c) consider professional assistance–In Michigan, a patient advocate cannot be paid for their services–talking with a doctor, considering alternative treatments, and so on. If they run into out-of-pocket costs, that can be reimbursed. So patient advocacy is something for which even a professional would make little or nothing. But if you have an agent under a durable power of attorney act on your behalf, and IF you have it in the document, an agent could charge a reasonable fee for doing the running around, making contracts, paying bills, and such other work as an agent might do. And if you have a trust and name a trustee (perhaps a bank, or an attorney or an accountant) they too can charge a reasonable fee to take care of your affairs.
This is not a “one size fits all” decision. Still, it is worth thinking about and worth discussing, before the need hits.
A recent article going a bit deeper, and perhaps with a slightly different direction, popped up in the ABA Bifocal Journal and can be found here: https://www.americanbar.org/groups/law_aging/publications/bifocal/vol–39/issue-3–february-2018-/agingsolo.html
And as always, if you need to chew on this, or related ideas, we are here to help.
From Left to Right: Brad, Tyler, Richard, Helen, Jadranko
At the law firm of Bradley Vauter & Associates, P.C. we also call ourselves “the place for good counsel.” We want to be the place you turn to in order to get information or advice or help when you need it–and we want folks to think about seeing us sooner rather than later. An hour of our time in advance of a major transaction, BEFORE you sign on the dotted line or BEFORE a deadline looms in something important, can often actually save you money or costly trouble in the long run. It’s always smart to think through the possible IMPACT of an action, or contract or response BEFORE you get locked in, we believe. Let us be your counselors and advisers soon–we still have office hours between now and the New Year. And God willing, we will be around in 2018 to help you in our many practice areas. Call us at 517 853-8015 to set up an appointment soon. In the meantime, from all of us–Merry Christmas, Happy Holidays, and Happy New Year to you and yours!
When we help clients with “estate planning’ we also discuss planning for events while they are still living. Many of us have ideas about what to do with our legacy or estate, once we are dead. We might have family or friends or charities in mind–people or organizations who would take after our death because of provisions in our will or trust, or even because we have simply named the person or organization as a beneficiary after our death on an account at a bank or credit union or IRA.
But what would happen if we became quite disabled before we died? Is there a way we can sort of “take control” even though we are disabled? Some advocates say yes, if you work hard at it. But even more folks say, the time to “take control” is before you lose control–in other words, line up your choices and make some decisions AND PUT THEM IN WRITING, before you ever become severely disabled.
Have you thought about naming someone/something who could help with your financial and business affairs (sometimes this might even include a financial institution if your holdings are large or sophisticated) while you are living?
How about your medical affairs? Who have you picked to speak for you, should you be so disabled that doctors don’t think you understand what is going on, and medical treatment decisions (starting or switching or stopping treatments, for instance) are needed? In Michigan parents DO NOT automatically get to speak for their young adult children such as the 19-year-old still in college or trade school, nor–a surprise to many–is a spouse legally allowed to decide for a spouse without documents in place or a court order.
The law in Michigan, through Michigan’s statutes, gives a preference for these issues to next-of-kin BUT that preference arises when we haven’t made the decision in advance, and put it in writing. Without a bit of planning and work court involvement might be needed–a hassle and expense in a time of crisis or mourning that you can usually avoid by getting documents set up ahead of time.
For the times when we might be alive but not able to handle our own affairs, the usual documents needed are a durable power of attorney (the business and financial affairs of life) and a medical power of attorney/designation of patient advocate (medical decision making when we are alive but incompetent). Sometimes a trust can help as well–in the financial/business arena.
When we are dead, the most common document to come in handy is a will (or a trust, or both) and one can also have a personal property distribution list, and a funeral representative named if you so desire.
As a recent article in the New York Times indicates, we should not always assume that “next-of-kin” are the natural choice after all–estrangement among family members is not uncommon. And even among families who have been keenly supportive of one another, not all our relatives are equally able to step into our shoes while we are living, nor be smart choices to wrap up our affairs once we die.
Our firm takes the time to talk through some of these issues with you for better planning and to help create documents that will be helpful and not merely perfunctory. We have created a sort of estate and life planning questionnaire that we can send to folks before they meet with us, so that our meetings then are productive and informative, and in order that we can eventually create a tailored estate plan at a still reasonable cost. Give us a call soon if you’d like to create or update your life and estate planning.
As to the New York Times article, you can find it here: https://mobile.nytimes.com/…/debunking-myths-about-estrange…