New Medicaid Qualification Amounts Announced for 2005

Written By: Jeffrey A. Marshall , Certified Elder Law Attorney

  The Centers for Medicare and Medicaid Services (CMS) has announced a number of new qualification and protected resource and income levels for Medicaid programs beginning January 1, 2005 . 

Community Spouse Allowances

In general, when your spouse is in a nursing home, he or she will not qualify for Medical Assistance (Medicaid) benefits until your combined savings are reduced to a certain level.  That permitted level of so-called "available resources" varies with each situation.  The general rule is that the community spouse can keep ½ of the amount of available resources that were owned by the couple on the date of admission to the nursing facility.  However, this protected "Community Spouse Resource Allowance" is subject to a ceiling and a floor.

In addition to being allowed to keep the resource allowance, the community spouse is also entitled to have a certain minimum level of income called the Minimum Monthly Maintenance Needs Allowance. The income allowance is also subject to a ceiling and a floor.  If the community spouse does not have the required level of income, the spouse may be allowed to keep additional resources or receive some of the institutional spouse's income. 

These community spouse resource and income allowances are adjusted annually.  Effective January 1, 2005, the new standards will be as follows:

ü Minimum Community Spouse Resource Allowance - $19,020.00.
ü Maximum Community Spouse Resource Allowance - $95,100.00.
ü Maximum Community Spouse Monthly Income Allowance - $2,377.50.

Note: The Minimum Monthly Income Allowance remains $1,561.25 - it will be adjusted on July 1, 2005 .

Federal Benefit Rate

CMS also announced the SSI Federal Benefit Rate Figures for 2005 as follows:

ü Individual - $579.00 per month

ü Couple - $869.00 per month

PDA 60+ Home Waiver Program

The Federal Benefit rate is used to determine qualification for many Medicaid public benefit programs including the Department of Aging Medicaid Home Waiver program. The income limit the Waiver program is equal to 300% of the SSI Federal Benefit rate. This means that effective January 1, 2005 the new income ceiling should be:

ü $1,737 per month - PDA 60+ Medicaid Waiver Program Income Limit

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

Qualifying for the Homestead & Farmstead Exclusions

Written By:  Attorney Matthew J. Parker

  Last month, the application for the Homestead and Farmstead Exclusions was mailed out to property owners within the Commonwealth of Pennsylvania .  The application was sent out to permit eligible property owners to qualify for the property tax relief set forth in the Pennsylvania Homeowner Tax Relief Act.  Property owners who qualify for an Exclusion may eventually see a reduction in their property taxes in the form of a reduced property assessment.  Any reductions in property taxes will be made up through increases in local income taxes and gaming revenues.  None of this proposed property tax relief will take effect until July 1, 2005 or as late as July 1, 2007 .

To qualify for an Exclusion, you must be the owner of a homestead or farmstead.  A homestead is principally defined as a dwelling, including the parcel of land on which the dwelling is located, and other improvements, which is primarily used as the domicile of the property owner.  It is the primary residence of the property owner that qualifies.  A secondary home, like a vacation home, would not qualify.

If an applicant has a life estate in the primary residence, the applicant should be treated as the owner during his or her lifetime and is legally responsible for all property taxes.  However, an applicant who has transferred title to his or her children without retaining any right to live in the property will be ineligible.

Farmsteads are also eligible for an Exclusion.  A farmstead is a farm with at least 10 contiguous acres, owned by the applicant, and serves as the applicant's domicile.   All buildings and structures on the farm must be primarily used in commercial agricultural production in one of the following ways; 1) to produce or store any farm product produced on the farm, 2) to house or confine any animal raised or maintained on the farm, 3) to store any agricultural supply to be used on the farm, or 4) to store any machinery or equipment used on the farm.

In the event that your primary residence has been deeded to your children and you have not retained any ownership rights in the property, seek legal advice as to how you may be granted sufficient ownership in the property to qualify for the Homestead or Farmstead Exclusion. 

A second notice regarding application for an Exclusion will be sent on December 31, 2004 to those who have not yet applied.  You have until March 1, 2005 to apply.   You will be notified within 30 days after filing the application as to whether you have been approved and have the right to appeal the denial of your application.

Attorney Parker can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

Pennsylvania Receives Cash & Counseling Grant

Written By: Attorney Jeffrey A. Marshall, CELA*          

  On October 7^th the Governor's Office of Health Care Reform announced that Pennsylvania has received a $250,000 "cash and counseling" grant from The Robert Wood Johnson Foundation and the Administration on Aging. Pennsylvania will use the grant to allow individuals who receive supportive services under the Medicaid waiver the option of directing and managing their own personal care services.

Traditionally, Pennsylvania has contracted directly with home care agencies to provide Medicaid-financed personal assistance services such as bathing, dressing, grooming, preparing meals, and housekeeping to qualified seniors and younger people with disabilities. However, the perception is that this agency-directed model limits consumers' choice and control of the services being provided.  Although the consumer may be able to choose among available agencies, their decision-making power may end at that point.  They may have little or no say or flexibility in how, when, and what services are provided. 

Under the cash and counseling model, consumers will be given flexible allowances they can use to design and direct their own services. The hope is that consumers will remain more independent and more satisfied with their services when they have more control and direction over those services.  Those providing the personal care services are likely to be far more responsive to the needs and preferences of the consumer when the consumer can hire, fire, and train the direct care worker.  "Providing more choice and control to people who are capable of managing these very personal daily activities makes a tremendous difference in improving their quality of life," said Kevin Mahoney, PhD, National Director of the Cash & Counseling program.

Under cash and counseling, an individual eligible for Medicaid-funded personal care services will first be assessed.  If approved for the program, the consumer will receive an individualized monthly budget they can use to choose from a menu of approved services such as hiring their own care-givers and purchasing items to help them live independently. There will be flexibility so that the consumer will be able to purchase more or less services depending on their particular needs that month. The participant's budget will be comparable to the value of services that he or she would have received from an agency. 

Counseling and bookkeeping services will be available to help participants consider their options and maintain tax and other paperwork. The program is entirely voluntary and consumers may choose to remain with traditional Medicaid-funded/ agency-provided services.

Cash and counseling is part of a national trend toward increasing personal responsibility and consumer involvement in their own health related services.  It is also intended to help facilitate the re-balancing of public funding for long term care towards home and community based care. The program should become available to participants in several home and community based waiver programs, including the PDA 60+ Waiver program. 

Pennsylvania will implement cash and counseling under its existing 1915(c) home and community based waiver authorization.  A new Medicaid waiver from the federal government to allow the use of Medicaid funds for the program should not be required.  However, Pennsylvania 's existing waiver may need to be modified to permit payment for services provided by individuals who have legal responsibility (such as guardians or agents under power of attorney) for the consumer. 

Implementation of cash and counseling will begin in 2005.  The program will first be tested in a few counties before becoming available state wide.  By the end of the three year grant period, the program should be a possible option for PDA 60+ Waiver eligible seniors in all Pennsylvania counties. 

The Office of Health Care Reform, in collaboration with the departments of Aging and the Public Welfare, will administer the program.  The national press release announcing the grant is available online at http://www.hcbs.org/files/51/2524/nationalrelease.doc.  

The website for the Governor's Office of Health Care Reform is  http://www.ohcr.state.pa.us/

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

Attorney General Files Lawsuit in Living Trust and Annuity Sales Scams

The following is drawn from a Press Release issued by Pennsylvania Attorney General Pappert on October 28, 2004.  For the entire press release, please go to the Attorney General's website at http://www.attorneygeneral.gov/press/release.cfm?p=E019E243-FA9B-5C86-C02C766CF63DE11D

  Attorney General Jerry Pappert has filed a civil lawsuit in Commonwealth Court accusing 16 defendants of engaging in an elaborate statewide living trust sales scheme, that deceived older Pennsylvanians into purchasing Revocable Living Trusts, long term annuities or charitable gift annuities that were costly, not in their best interest and/or unnecessary. The alleged victims documented approximate losses that range between $1,800 and $80,000.

Along with the complaint, Pappert filed a preliminary injunction in Commonwealth Court seeking to ban the defendants from engaging in the unlawful advertising, promotion or sale of estate planning products or services in Pennsylvania .

According to the lawsuit, the defendants encouraged consumers to meet with their "Estate Planning Advisors" or "Certified Senior Advisors" to explain "What Everyone Should Know About Estate Planning Techniques, Financial Planning Strategies" and "Estate Preservation." The promotional materials from the defendants' estate planning advisor companies led consumers to believe that they were receiving impartial estate planning advice.

The complaint claims that consumers who attended the presentations or allowed the defendants into their homes were advised to purchase a Revocable Living Trust. The trust was presented as an estate planning document that was in the consumers' best interest, regardless of their individual financial holdings. Many were sold living trust kits for approximately $1,800 whether they needed them or not. Consumers said they were unaware that the sales representatives were insurance agents who received sales commissions.

The alleged victims said they fully trusted the representatives and followed their advice because they were led to believe that they were lawyers or estate planners.

"In reality, the individuals advising consumers about estate planning products are not unbiased legal professionals but sales or insurance agents working on commissions," Pappert said. "These older citizens were given legal advice from non-attorneys who intentionally steered them toward purchasing living trusts as a way to find out the contents of their financial portfolios. After profiling the portfolios, the defendants deceptively convinced consumers to convert their stocks or other non-real estate investments into charitable gift annuities or long-term deferred annuities that paid the agents even higher commissions."

To encourage the sale of living trusts, the suit claims that the defendants used scare tactics and deceived consumers by falsely claiming that living trusts are superior to wills because:

- The probate process will result in significant delays and court costs.

- The probate process will greatly reduce the size of the decedent's estate because of attorney and executor fees.

- The probate process will require court intervention to supervise the administration of the estate.

- The probate process will expose private matters to the public.

- The probate process will expose the decedent's estate to litigation.

- Living Trusts will lessen or eliminate taxes.

Other alleged deceptions included claims that the defendants failed to disclose that:

- The rate of return would be less than promised on some annuity contracts.

- There were penalties for early withdrawal of annuity contracts.

- The sale of investment portfolios would result in losses due to capital gains taxes.

- Living Trusts may not be appropriate in all instances.

- Moving marital, residential real estate property into a living trust could have a possible negative impact on Medicaid eligibility. - Consumers had three days to cancel their transactions without paying a fee.

- They could not provide legal advice because they were not licensed attorneys.

"In my view, these actions are unconscionable. Consumers were lied to and deceived into purchasing long-term annuities based on what the defendants would make in commissions. The sales commission rate was higher if the pay-out period to consumers was longer. I am proceeding against these defendants with every appropriate remedy available under the law," said Pappert.

Pappert said several consumers told his office that they lost thousands of dollars in their life savings due to the failure to realize the promised returns, extra fees or costs, additional tax expenses and the inability to have access to their investments without paying huge penalties.

Pappert urged consumers who suspect that they were victimized in the alleged scheme to contact his office immediately by calling 1-800-441-2555 to obtain a complaint form. Consumers may also download a complaint form or electronically file a complaint by visiting www.attorneygeneral.gov.

Marshall, Parker & Associates' Now Offering FREE In-Office Workshops

  Marshall, Parker & Associates' is now offering free workshops for seniors, their families and professionals who want to know more about paying and planning for long term care.  The workshops are held in our Williamsport and Wilkes-Barre offices and last about an hour.  These informal discussions with our planning experts are a great opportunity to learn about the options available to pay for care. 

Reservations are suggested, but not required.  SIGN UP ONLINE or call 1-800-401-4552 for more information or to reserve your spot.

November is National Alzheimer's Awareness Month

  In 1983 former President Ronald Reagan declared November as National Alzheimer's Awareness month.  This year to commemorate, our local Alzheimer's Association has some great activities planned.  For more information, please call 822-9915 or e-mail  Regional Director, Estella Killian at estella.killian@alz.org.

Candlelight Vigils

Tuesday, November 16^th at 

Luzerne County Courthouse, Wilkes-Barre 5:30PM

Tuesday, November 16^th at 

Heritage Hill Adult Day Care, Hazleton 7:00PM

Wednesday, November 17^th at

Lackawanna County Courthouse Square , Scranton at 6:00PM

Wednesday, November 17^th at

Hazleton City Hall at 6:00 PM

Wednesday, November 17^th at

St. Luke's Lutheran Church, Williamsport at 7:00PM

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*Attorney Marshall is certified as an Elder Law Attorney by the National Elder Law Foundation under authorization from the Pennsylvania Supreme Court

 

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