Funeral Expenses and Medicaid – Part 2
Funeral Expenses and Medicaid (Part 2) This week’s post details the more common option when it comes to setting aside funds for a funeral before spending down towards Medicaid eligibility. Last week I explained that $1500 can be set aside for burial as long as it is specifically designated and not commingled with other funds. This can be dangerous if close attention is not paid to these requirements but the $1500 limit is also less than what most people spend on a funeral. A more appealing option is an irrevocable prepaid burial contract. This is an agreement in which the purchaser pays for a funeral in advance that the seller agrees to provide. The contract must be irrevocable - meaning it can’t be cancelled and the funds returned to the buyer. Medicaid permits a funeral to be paid in this way and there is no dollar limit, however, the purchaser must make the purchases at the time the contract is entered into. In other words, you can’t put a lump sum into the contract as part of a Medicaid spend down and decide later how to spend it. Because of the flexibility in spending for a funeral and the requirement to spend down to less than $2000
Funeral Expenses and Medicaid
Whenever I talk to a family whose loved one is close to spending down the required amount of assets to qualify for Medicaid, the topic of burial expenses comes up. Most people are aware that Medicaid permits setting aside funds to cover the burial but many are a bit fuzzy on the details so this week we’ll go over the basics. Medicaid permits an applicant to set aside up to $1500 for burial expenses for the applicant, the applicant’s spouse and immediate family members as long as the funds are specifically designated for burial and not commingled with other assets. In that case the funds do not count towards the $2000 asset limit. Immediate family members would include children of the applicant. The funds can be held in a revocable contract, revocable trust, as cash, or in a financial account, however, they must be clearly designated for burial and not combined with any other assets that are not designated for burial. Ownership of a burial space or an agreement to purchase a burial space is also an exempt asset and does not count towards the $1500 limit. This includes a plot, vault, mausoleum or urn. There is not limit on the cost of the burial space. Most of our
Out of Crisis Perhaps Change?
The global pandemic has caused havoc in everyone’s life. The immediate effects of the current crisis are obviously negative. Out of every crisis, however, there are often some positive changes. New York was the first region in the country to be hard hit by Covid. Hospitals were overwhelmed and as a result many people stayed away, choosing to fight the illness at home. Hospital at home services, which before Covid have been used on a limited basis to treat certain chronic conditions, have been utilized to treat Covid patients who otherwise would have needed to be admitted to a hospital. Medicare relaxed its requirements to permit coverage for this type of treatment. Once a doctor provides authorization, a home health care agency can come in to the patient's home to provide services under Medicare’s home health benefit. Telemedicine visits, intravenous lines and oxygen have also been provided and patients have monitored their own vitals through the use of pulse oximeters. A phlebotomist can come to the home to draw blood. For many patients this type of home treatment has worked well and they have recovered from the illness. Hospitals have avoided the crush of cases in their emergency rooms
End of Life Decisionmaking
In the 11 years that I have been writing this blog it has been a rare week that I have missed posting anything. For 25 years I have focused my practice on the field of elder law - helping to guide families through life’s transitions – as our tag line says. Aging and dying has for many Americans and their families become a long drawn out process. During these years we have helped our clients navigate that process. In the last several weeks I navigated that process on a personal level as my father, who has had several years of declining physical and mental health finally passed away last week. 15+ years ago both my grandmothers died a few years apart. I assisted my parents but more as an attorney would a client. I wasn’t the decision maker but there to provide advice. This time, with my dad, was different. I was the health care representative and the agent under power of attorney, consulting with my mother and sister, but responsible to make, communicate and carry out those decisions. In today’s post I want to share some of my observations. Obviously, doing what I do for a living, the legal documents were in place and detailed enough to allow me to speak with medical personnel and make
N.J. Court Gives Guidance on Hiring Aides – Part 3
In my 3rd and final post on a recent New Jersey Appellate Division case, I continue to discuss how Medicaid treats payments to aides when it comes time to file a Medicaid application. In order to keep the costs down, D.Z. hired aides for several years but did not go thru a home health care agency. As I have often advised clients and prospects, the way in which you hire and pay these aides can be problematic because of Medicaid’s 5 year look back period. The Appellate Division upheld the State’s decision to impose a substantial penalty because of the more than $200,000 in payments made to various aides that lacked sufficient documentation. As I wrote last week, the case can provide a roadmap of “dos” and “don’ts” for future Medicaid applicants. The Appellate court noted the lack of a written agreement memorializing the scope of the work or the rate of pay or whether the aides were licensed, although Medicaid regulations do not require written contracts or licensed aides. It’s just that without a document, it was more difficult for the State to answer these questions. The evidence just wasn’t there. D.Z.’s son tried unsuccessfully to obtain the aide’s testimony. This is not surprising. As we always tell families, it is easier to get cooperation
N.J. Court Gives Guidance on Hiring Aides – Part 2
In my post last week, I set out the facts of a recent Appellate Division case covering a situation I see frequently in my elder law practice – the payment of home health aides and how it affects Medicaid eligibility. The Medicaid applicant, D.Z. paid her aides almost exactly the way countless people I have spoken to over the years have paid their private aides. She and her son as her POA paid the aides by check payable to cash with no written agreement as to the services to be provided. The State assessed a penalty of 21 months on $210,000 of transfers for less than fair value, most of which went to pay the aides. As I was reading the case, I was very interested to see how the court would view the State’s arguments. How much deference would the State be given? The Administrative Law Judge issued a decision modifying the amount of the transfer penalty. The judge found that D.Z. had provided sufficient evidence to establish that she paid the aides and received equal fair market value in services so that no penalty should be imposed. The administrative law judge’s decision, however, while binding on the applicant is not binding on the State which has 45 days to accept, modify or reject it. The State rejected the judge’s conclusion