Final
Personal Care Home Regulations Published
Written
By: Attorney
Jeffrey
A. Marshall
,
CELA*
The
Department of Public Welfare’s (DPW’s) final regulations governing
Personal Care Homes and Assisted Living Facilities have been published.
Personal Care Homes have been regulated by DPW for many years.
But the new regulations are far more detailed and protective of
residents. Included in the
new regulations are provisions regarding unannounced Departmental
inspections, fire safety protections, reportable incidents and
conditions, resident-home contracts, quality management, refunds,
resident rights, complaint procedures, administrator qualifications,
administrator and staff training, approval of training courses and
instructors, emergency preparedness, emergency medical plan, smoking
safety, medications, medication administration training, safe management
techniques, preadmission screening tool, initial and annual assessment,
support plan, notification of termination, and secured dementia care and
enforcement.
According
to DPW there were 1,689 licensed personal care homes in the state
in October 2004 with a resident capacity of 75,958. Of this total, 1,293
homes (77%) were operated for profit and 396 homes (23%) were operated
as nonprofit. 317 of the homes were serving 8 or fewer residents (19%),
with 1,372 homes serving 9 or more residents (81%). Of the 53,240
residents in personal care homes at that time, a total of 10,425
residents (19.6%) received Supplemental Security Income (SSI) benefits
that were accepted as full payment towards the resident’s monthly
care.
A
copy of the new regulations are posted on the Marshall & Associates
website at the following link: http://www.paelderlaw.com/images/pchregs2005.pdf
.
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Mark
Your Calendars:
9th
Annual Professional Update Planned for
May
12th in
Williamsport
&
May 13th in
Wilkes-Barre
The
9th Annual Elder Law Update has been slated for Thursday, May
12th at the Radisson Hotel in
Williamsport
and Friday, May 13th
at the Woodlands in
Wilkes-Barre
from
8:00AM-12:15PM
.
This
will be your opportunity to get the latest information on changes that
are of critical importance to seniors and to those of us who provide
services to them. In
addition to Jeff Marshall’s annual update, attendees will hear from
Patricia Brady, Director of the Bureau of Long Term Care Programs at the
Pennsylvania Department of Public Welfare.
Ms. Brady will discuss the use of Medicaid funds to expand the
delivery of long term care in home and community settings, and important
new state initiatives such as Community Choice.
John
Krasja from AFC First Financial Corporation will discuss the growing use
of reverse mortgages to pay for the living and long term care expenses
of senior homeowners. He
will speak about myths associated with reverse mortgages and consumer
safeguards and discuss how this financial tool can benefit seniors.
Attendees
at this year’s Update will also hear from Attorney Kathy Hendrickson,
President of The Family Trust and Attorney Kemp Scales of Scales Elder
Law about the use of Special Needs Trusts. These trusts allow disabled
individuals to qualify for Medicaid while retaining access to funds for
their non-Medicaid covered needs. Recently Governor Rendell has proposed
major changes in the treatment of these trusts, especially (d)(4)(C)
“pooled” trusts and (d)(4)(A) “payback” trusts.
The
Update is FREE and intended for professionals in the elder care and
elder services network such as individuals working in nursing homes,
hospitals, assisted living and personal care facilities, area agencies
on aging, and county assistance offices.
It will also be of great interest to social workers, insurance
and financial planners, accountants, lawyers, and trust officers who
work with seniors.
The
Northcentral Pennsylvania Estate Planners Council has applied and is
pending approval for 3 continuing education credits for attorneys
and accountants for
the
Williamsport
program.
Application
for credit has also been submitted and is pending approval for Personal
Care Home Administrators.
The
Williamsport
session’s breakfast is being
sponsored by Citizens & Northern Trust & Financial Management
Group.
If
you have questions or would like to register, call 1-800-401-4552 or
e-mail Marshall & Associates Director of Education, Melissa Bottorf
at mbottorf@paelderlaw.com.
Spousal
Income Allowance Set to Increase
Written
By: Attorney
Jeffrey A. Marshall
, CELA*
If
a married nursing home resident receives Medicaid benefits, his or her
community spouse is entitled to retain a certain minimum level of income
called the Minimum Monthly Maintenance Needs Allowance (MMMNA).
If the community spouse’s own income is insufficient to provide
this income allowance, income can be diverted from the institutionalized
spouse.
The
MMMNA must be at least 150% of the federal poverty level for a family of
two plus an excess shelter allowance. The minimum MMMNA is set by
federal law and is adjusted no later than July 1st of each
year to keep up with inflation.
As
of
July 1, 2005
, the minimum MMMNA will be increased from $1,562 to $1,604 per month.
The actual MMMNA can be higher depending upon the monthly shelter
related expenses incurred by the community spouse.
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Governor
Proposes Legislation Implementing Medicaid Cuts –
Part
2:
Written By: Attorney
Jeffrey A. Marshall
, CELA*
This
is Part 2 in a series of articles that summarize some of the changes
proposed by Governor Rendell to the rules governing qualification for
Medicaid-financed long-term care services for seniors. A copy of the
entire legislative proposal is available on the Elder Law Firm of
Marshall & Associates website at http://www.paelderlaw.com/images/medicaid.pdf.
This issue of the Elder Care Law Alert discusses
the proposed change in the methodology by which an individual with a
spouse in a nursing home can obtain their federally required minimum
income allowance. While
exceedingly complex, this issue is of critical importance for married
seniors with low incomes.
The following discussion is very technical and many
readers of the Elder Care Law Alert may wish to skip the details which
are set out below. The
bottom line is as follows: In
order to save money for the Medicaid program, the Legislature is being
asked to change existing rules so that married couples will have to
spend more of their assets when one of them needs nursing home care.
If this law is enacted, the income and financial resources of
many low-income widows and widowers will be reduced.
Married couples will be burdened with additional complex
financial requirements at a time when their lives are already in crisis
due to age and illness.
The proposal is at Section 441.6 of the
legislation.
Section 441.6: Income for the Community Spouse
Background
Until the spousal protection laws took effect in
1989, the rules governing Medical Assistance for institutionalized
individuals did not offer much protection for their community spouses.
The needs of the non-institutionalized spouse were not
considered. As a result, especially in cases where the institutionalized
spouse received the majority of a couple's income, the spouse in the
community could be left with income below the poverty level.
Beginning in 1989, the spousal impoverishment rules
required states to allow the non-institutionalized "community
spouse" to retain minimum income and asset allowances.
These spousal impoverishment rules apply where one spouse is
institutionalized and the other spouse lives “in the community.”
(These rules do not apply to applicants for benefits under the
Medicaid Home Waiver program.)
The spousal impoverishment laws allow a nursing
facility resident to allocate some monthly income to the community
spouse, if needed, to maintain the community spouse's income at a
minimum level. This minimum income level is called the community spouse
minimum monthly maintenance needs allowance (MMMNA).
States are given some flexibility in establishing
the MMMNA. It must be no lower than 150% of the federal poverty level
for a family of two plus an excess shelter allowance, but it cannot
exceed an annually adjusted cap. States
can choose to set the standard MMMNA at any figure between the required
minimum and the cap.
Pennsylvania
has chosen to set the spousal income allowance at the minimum.
Claiming the Income Allowance under Current Law
If the income of the community spouse is below the
MMMNA, the amount of the shortfall is called the "community spouse
monthly income allowance" (CSMIA). This shortfall amount may be
"deducted" from the income of the institutionalized spouse and
paid to the community spouse as additional support.
However, before having to take income from the
spouse in the nursing home, a community spouse is currently permitted to
first keep extra resources to invest to meet the CSMIA shortfall.
This is called the “resource-first” approach.
Pennsylvania
has allowed the use of the resource-first approach since the settlement
of a class action suit, Hurly v. Houston.
The resource-first rule applies only where there is a low-income
community spouse - whose income is below the mandated minimum allowance.
With the resource-first approach, the community
spouse is allowed to retain and invest additional resources sufficient
to bring his or her income up to the mandated minimum. This method is
advantageous to the community spouse since it allows her to keep
additional financial resources. Upon
the death of the institutionalized spouse, the community spouse will be
able to rely on those additional resources that will continue to provide
her with needed income. It
is virtually always to the advantage of the community spouse to use the
resource-first approach.
The Income Allowance Under the Legislative
Proposal
Section 441.6 is intended to reduce the amount of
resources that can be retained by a low income community spouse.
It reduces the amount of protected resources in several ways: (1) it
bases the resource allowance on the community spouse’s anticipated
future income shortfall (after the death of the institutionalized
spouse) rather than the actual current income shortfall; and, (2) it
specifies that a community spouse who chooses to use the resource first
approach cannot actually keep the extra resources but must purchase an
immediate annuity.
An immediate annuity is usually a contract issued
by an insurance company. The purchaser pays a lump sum to the
insurance company. In return, the insurance company agrees to make
set payments to the purchaser over a period of time. The payments
include the return of the lump sum paid by the purchaser plus a
specified rate of earnings.
Under the Governor’s proposal, the community
spouse would be allowed to keep only enough additional resources to
purchase an immediate annuity which meets the requirements of Section
441.6. The immediate annuity would have to make equal monthly
payments to the community spouse. DPW would have to be named as
contingent beneficiary of the annuity in the event of the death of the
community spouse so that any remaining payments could be used to
reimburse the government.
Annuity payments are composed of two elements: (1)
return of principal (what you paid in) and (2) earnings. One reason
Section 441.6 will save money for the Medicaid program is that the state
will treat the entire annuity payment (both the interest earned and the
return of principal) as “income” of the community spouse for
purposes of the MMMNA. In effect, the new rules will force community
spouses to convert their additional protected resources into
income. Treating return of principal on an annuity as income reduces the
actual resources that can be preserved by the community spouse.
Section 441.6 also requires that the annuity be
“actuarially sound.” “Actuarial soundness” means that all
payments to the community spouse must be made over a period of time that
can be shorter than, but no longer than, the community spouse’s
anticipated life expectancy as shown in actuarial tables. This means
that the community spouse would likely not be permitted to purchase an
annuity that would continue for the rest of her life (a “life”
annuity). (With a life annuity, the payments would end if the
community spouse dies, meaning the government would get no payments as
contingent beneficiary). Instead the community spouse would have to
purchase a term annuity with a term no longer than the anticipated life
expectancy of the community spouse.
Of course, many people outlive their actuarial life
expectancies. If the community spouse outlives her actuarial life
expectancy, her annuity payments will some day cease. At that
point, the community spouses’ “income” will fall below the MMMNA
that existed when the annuity was purchased.
For long-lived low income community spouses (who
will be people most in need of financial resources) the new rules will
mean that their impoverishment won’t be avoided, it will only be
postponed.
Here is a rough example of how this change will
work.
Mr. and Mrs. Jones are in their 80s and have
$90,000 in investments and the following fixed monthly income:
$ 600
Mrs. Jones Social Security
$ 1,200
Mr. Jones Social Security income
$ 800
Mr. Jones pension (single life)
======
$ 2,600 a month total joint income
Mr. Jones has a stroke and enters a nursing home.
Assume that Mrs. Jones has a MMMNA of $1,600 a
month and that is what she actually spends each month to live. Her
income ($600) is below her MMMNA. She is entitled to additional
income of $1,000 per month.
Under
current regulations, Mr. Jones would immediately qualify for
Medicaid. Virtually all of Mr. Jones $2,000 in monthly income
would go to pay for his care, but Mrs. Jones would get to keep the
couple’s entire $90,000 in investments. She can invest that $90,000
however she thinks best. If Mr. Jones dies, Mrs. Jones will have monthly
income of $1,200 (due to an increase in her Social Security) plus the
$90,000 in investments to live on for the rest of her life.
Under the
proposed legislation, Mr. Jones would not qualify for Medicaid right
away. Mrs. Jones could keep only one-half ($45,000) of the
couple’s investments. Mr. Jones can keep $2,400. Mrs.
Jones will have to purchase an immediate annuity for approximately
$23,000. (In determining the amount of the annuity, Mrs. Jones
income shortfall will be treated as being only $400 rather than $1,000.
During her husband’s lifetime, she will receive $600 a month from his
income). The remaining $19,600 of excess resources will have to be spent
down before Mr. Jones will qualify for Medicaid.
If Mr. Jones dies, Mrs. Jones will eventually
receive all of the annuity payments. At that point in time $400 of
her monthly “income” (the annuity payments) will be gone. All of the
$23,000 that was invested in the annuity will be gone.
Instead of $90,000, Mrs. Jones will end up with
less than $50,000 in investments to supplement her fixed income for the
rest of her life. Mrs. Jones is in much worse financial shape than
she would be if the current rules were retained. She has a lower
income and smaller savings to fall back on. After the annuity payments
run out, she will have to live the remainder of her life with income
less than what is specified in the federal spousal impoverishment laws.
Conclusion
DPW is to be commended for pursuing this proposed
policy change through the legislative route rather than through
regulations. The state legislature should have the opportunity to
decide whether to institute this policy that will eventually reduce the
income of some community spouse’s below the established poverty level
as a means of reducing Medicaid spending.
Pennsylvania
already gives the community spouse only the minimum required income and
resource allowances. The change in the rules will deprive low
income community spouses of even more of their already limited financial
resources. Most of the “savings” generated will pass to the
federal government.
In addition, the Legislature will have to decide
whether Section 441.6 is just too complex and whether
Pennsylvania
should force community spouses to actually purchase annuities which may
be poor investment choices for them. Is it good policy to make the
already nearly unintelligible rules governing the finances of community
spouses even more difficult to understand? Is Section 441.6 much
too complicated and restrictive to be justified by its relatively small
potential savings to the Medicaid program? Is Section 441.6 too
much of an attempt to kill a gnat with a sledge-hammer? Our state
representatives will have the opportunity to answer these questions.
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Marshall
& Associates’ Staff Present at Nursing Home Administrator’s
Conference
Attorney Jeffrey
Marshall & Planning Specialist Lisa Barner will be presenters at the
Central Pennsylvania Education Resources, Inc. (CPERI) Long Term Care
Conference on Tuesday, May 17th at the Ramada Inn in
State College
. For
the past two years, staff from Marshall & Associates have been
presenters at each of their bi-annual conferences.
This three-day
conference attracts over 100 nursing home administrators and related
professionals from across the state.
This year, Marshall & Associates’ session is entitled
“Legal Issues in Nursing Facilities:
What Administrators Need to Know.”
Attorney Marshall and
Ms. Barner will discuss changes occurring in Medicare, Medicaid and
other legislative and regulatory issues. In addition, as part of the
Marshall & Associates session, John L. Krasja, Jr. of AFC First
Financial Corporation will discuss the use of reverse mortgages to
finance long term care.
For more information
about the event, or to register, please visit CPERI’s website at www.cperi.com
In
the Community…
The
professional staff of Marshall and Associates will be presenting to the
following groups and organizations over the next couple of weeks.
Many of these events are open to the public.
If you would like more information or would like to schedule
someone to speak at your group, please contact Melissa at 321-9008 or at
mbottorf@paelderlaw.com
-Attorney Kevin Grebas will be making a
presentation about Paying
for Long Term Care on May 18th
at the Maria Joseph Manor
in
Danville
.
-Attorney Matthew Parker will be talking about Mistakes
Retirees Make to the
Amity Club on May 25th at
12:00 PM
. The presentation will be
held at the Villa Restaurant in
Williamsport
.
-Attorney Tammy Weber and Planning Specialist
Suzanne Starr will be at the
Catawissa
Senior
Center
on June 2nd.
They will speak about Ways
to Pay for Long Term Care at
10:30 AM
.
-The Ladies
Auxiliary at the Presbyterian Home at
Williamsport
will meet on June 7th
at
1:30 PM
. Attorney Parker will
speak about Essential
Estate Planning.
Back
issues of The
Elder Care Law Alerts
are available on our website.
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*Attorneys
Marshall and Parker are certified
as Elder Law Attorneys by the National Elder Law Foundation under
authorization from the Pennsylvania Supreme Court.
