Possible Long Term Care Legislation on the Horizon?
Just the other day I had someone ask me about the possibility of the government extending the Medicaid lookback from 5 years to 10 years. Since the last change in 2005 when the lookback went from 3 to 5 years (which change became effective in February, 2006) I have heard this rumor reported to me numerous times but have never found anything to substantiate it and know of no bill in the works in Congress. There are, however, some other changes possible on the long term care financing front. Although still in what I would call infancy stages, Representative Frank Pallone of New Jersey among others has been working on legislation which would potentially expand government benefits to cover long term care. Some may remember that Representative Pallone was involved in the passage of the Community Living Assistance Services and Support (CLASS) Act. (See my posts 4/12/10 and 4/19/10.) The CLASS Act was designed to provide a modest amount of benefits to cover long term care. It was a voluntary program which was supposed to work like insurance. Participants paid a premium for a minimum of 5 years and then could be eligible
More Numbers of 2019
In my blog post last week, I disclosed some of the important numbers that change year to year with respect to the Medicaid and VA Aid and Attendance programs that we work to obtain for many of our clients. Here are the rest of the important numbers as well as 2019 Medicare and estate and gift tax numbers. In the case of a married couple where one spouse is applying for Medicaid, the healthy spouse is entitled to keep a certain level of assets, referred to as the Community Spouse Resource Allowance (CSRA). The maximum CSRA is $126,420 (if the couple has $252,840 in countable assets or more). The minimum CSRA is $25,284. As I explained in several posts in October, the VA has changed their rules regarding transfer of assets, borrowing from Medicaid. The VA now uses a net worth limit to qualify applicants that is tied to Medicaid’s CSRA so changes to the CSRA will likewise change the VA’s net worth number. The primary residence is an exempt asset for Medicaid purposes no matter the value if the non-Medicaid spouse is living in it. In the case of a single applicant
New Medicaid and VA Figures for 2019
The cost of living adjustment for 2019 for many of the government programs that affect our clients’ lives has been announced so here they are. For 2019, the Social Security Administration announced that Social Security recipients will receive an increase of 2.8%, which is greater than the 2.0% increase last year. Because Medicaid and the VA Aid and Attendance program adjustments are tied to the same percentage increase, this means that those benefits will also increase by the same 2.8%. The Medicaid income cap will go up to $2313 per month. This number is the limit on income per month needed to qualify for most Medicaid programs. For Medicaid recipients whose income exceeds this limit a Qualified Income Trust (commonly known as a Miller Trust) must be used to achieve and maintain eligibility. VA Aid and Attendance pension benefits will also increase by 2.8% in 2018. This means that a single veteran can receive a maximum of $1881 per month, a married veteran can receive as much as $2229 per month and the widowed spouse of a veteran tops out at $1208 per month in VA Aid and Attendance benefit.
Raising a Grandchild (Part 2)
In last week's post I focused on an increasingly common family arrangement in which -for several different reasons - grandparents who expected to retire and live a more leisurely lifestyle instead find themselves caring for their grandchildren. This often starts as a temporary solution but over time becomes a permanent one. Much has been written about the financial impact to seniors. Some are delaying retirement. Others are using savings meant for retirement to house, clothe, feed and education their grandchildren. This obviously will mean a change of lifestyle for many. But it will also impact the grandparents when their health starts to decline and they need long term care. Not much has been written about that. Money spent on raising another household won't be available when long term care is needed. As we know, 24/7 round the clock nursing home level care averages $13,000 to $14,000 per month - $150,000 a year or more. Government benefits to pay for care may become more of a necessity because the funds expected to pay for care may have already been spent and long term care insurance may not have been purchased. Both the
Raising a Grandchild (Part 1)
It is estimated that 2.7 million grandparents are raising their minor grandchildren in their homes. The reasons for this are varied. The birth parents may be unable to care for their children because of physical or mental illness, substance abuse, incarceration, homelessness, poverty, or unemployment. In many cases the grandparents didn’t expect to be raising their grandchildren or at least expected it to be on a temporary basis that over time came to be permanent. The balance of raising a young child while at the same time addressing the issues of aging and long term care presents unique issues that must be addressed to protect both grandparent and grandchild. The first issue is who will care for the grandchild if the grandparent should pass away or become unable to care for the grandchild if, for example, he or she requires nursing home care. As I stated above, the grandchild often moves in with the grandparent on a temporary basis. As time goes by the grandparent becomes the de facto parent, however, there is no legal designation as such. If the grandparent dies (or otherwise can no longer care for the grandchild), provided the
The Hidden Costs of Transferring Your Home (Part 2)
In my post last week I told you about Joe’s call concerning the sale of his mother’s home. A few years ago she went to an attorney to prepare a deed transferring the home to Joe and his sister, but keeping a life estate for herself. A life estate is a legal right to live in the home even though it was now owned by her children. She did this because she wanted to protect it from being spent towards nursing home care. As I explained last week when the home is sold the life estate does equate to an ownership interest for purposes of calculating the capital gains tax, in her case about 25%. The other 75% is considered owned by Joe and his sister. Joe estimated the gain on the sale to be about $250,000. Mom can exclude up to $250,000 of gain on her share so she would not owe tax on her one quarter share, however, Joe and his sister didn’t live in the home so ¾ of the gain would be subject to tax. They will owe about $50,000 in capital gains tax depending on their tax bracket. I could tell Joe was getting