Recent changes to New York State Medicaid laws have expanded the definition of an “estate” for Medicaid estate recovery purposes.

Upon the death of a Medicaid recipient, Medicaid can recover expenses paid on behalf of the recipient from his or her estate, under certain circumstances.  Before the new regulations were put into place, Medicaid limited its claims to the decedent’s probate estate, which generally included only those assets that passed through a will or intestacy.  Now, with the expansion of the definition of estate, Medicaid is also taking into consideration assets outside of the probate estate, including jointly held real or personal property, retained life estates and interests in trusts.  Therefore, assets that were previously protected from a Medicaid claim may now be at risk.

Despite the changes in the law, you can still effectively plan for your future long-term care needs and preserve some, if not all, of your assets.  Now, more than ever, it’s important to review your current plan with an Elder Law attorney to be sure that you are in the best possible position to preserve your life’s savings and protect your property.  Call the Elder Law attorneys at Lamson & Cutner at (212) 447-8690, to schedule a consultation.

We’ve been asked several times whether or not a Medicaid applicant can have a primary (and in many instances secondary) health insurance plan, and, if so, if he or she must give up such plans once accepted to the Medicaid program.  People often believe that their medical insurance coverage precludes them from becoming Medicaid eligible, and are worried that they may lose their current benefits by becoming a Medicaid recipient.

Having medical insurance, either through Medicare or any other private plan (such as GHI or Blue Cross Blue Shield), does not prevent an individual from becoming Medicaid eligible.  Additionally, if an individual is accepted to the Medicaid program, he or she will not be forced to give up any existing health insurance plans.

Since medical insurance does not pay for the catastrophic cost of long term care, it is often necessary for an individual to access Medicaid for assistance with paying for home care or nursing home care, even if he or she has ample health insurance.

When it comes to medical coverage, Medicaid is the “payor of last resort,” so a patient’s primary and secondary insurance policies will be accessed before Medicaid contributes.  In fact, Medicaid advises that a Medicaid recipient maintain all insurance policies he or she currently has, and even offers incentives such as deducting the cost of the premiums from the recipient’s monthly income calculation or paying the premiums under certain situations.  Also, it is advisable that current health insurance be maintained so that the Medicaid recipient can continue to see his or her doctors and specialists, even if they don’t accept Medicaid.

The fact that you have Medicare or a supplemental health insurance plan should not keep you from accessing Medicaid benefits if you need assistance with paying for long-term care.  Elder law attorneys can advise you on how to get the most benefits available to you, without giving up any insurance you already have.

This fall, Partners in Care, one of the premier providers of home care and geriatric care management in New York City, has been hosting a series of free online seminars focused on helping you make difficult elder care decisions.

The next online seminar, “The Financial Realities of Home Care” takes place on November 16 at 1 PM EST. It will be moderated by Mary Alice Williams, an Emmy Award-winning television journalist and health educator. The online seminar includes an informative presentation by three experts in the home care field, followed by an interactive question and answer session.

The three panelists for the online seminar will be Marki Flannery, the President of Partners in Care; Paula Brancato, a representative of Northwestern Mutual and an expert in long-term care insurance; and Elder Law attorney David Cutner, a founding partner of Lamson & Cutner, P.C.

Individuals interested in learning about the costs of long-term care, and how to plan and pay for it, should plan on joining the seminar, which can be viewed conveniently and privately on your own computer.  You’ll have an opportunity to send your own questions to members of the panel, and the seminar is free.

You can register for the seminar at www.caregiverseminar.org

Lamson & Cutner has published a New Updated Second Edition of its popular and highly regarded “25 Strategies to Prevent Financial Ruin from Long-Term Health Care Costs.”  A copy of the informative Special Report is available free of charge.  Click here to access a free download of the report, or contact the law firm by email or telephone to obtain a printed hard copy.  If you represent an agency or organization that provides assistance or services to the elderly or disabled, please call Lamson & Cutner for delivery of multiple copies that you can provide to your population and their families.

While the “25 Strategies” Special Report deals with complex legal issues and strategies, you will find that it is clearly written and easy to understand.  David Cutner, the principal author of the report, explains:  “I believe it is important to de-mystify the legal process, and state in plain language what we do and how we do it.  It makes no sense for attorneys to speak to clients in the same way they speak to other attorneys or judges. Clients are entitled to understand what is involved when they seek our advice, so they can make an informed decision about what is best for them.”

The NYS Department of Health has finally issued long-awaited regulations implementing changes in New York law regarding recovery and reimbursement from estates of Medicaid recipients. These changes have been very controversial because the law’s new definition of what constitutes the “estate” is in conflict with other, long-established, laws affecting estates, trusts, and real estate. In essence, under the new laws and regulations, Medicaid will seek to recover from non-probate assets, i.e., assets that have never been considered to be part of a decedent’s estate, or even to exist at all after death.  A prime example is that Medicaid will seek to recover the value of life interests in real estate (which, under real estate law, are extinguished upon death). Lamson & Cutner is currently analyzing the new regulations, and will be posting additional advisories once we have a clear view of their implications.

New York’s recently-enacted gay marriage law is a great emotional and symbolic victory for New Yorkers, and for gay couples everywhere. It also has significant practical benefits in many areas that touch the legal rights of married persons. For those of us concerned with the health care, and particularly long-term care, of seniors, New York’s law will have a significant impact. For example, gay couples who marry will have spousal rights under the Medicaid laws to make exempt transfers of money and property to their spouses, and to claim the benefits of the Community Spouse Resource Allowance and the Minimum Monthly Maintenance Needs Allowance. To find out more, contact your Elder Law attorney.

State experimentation to cut expenditures on Medicaid continues: Florida is planning to funnel almost all of its Medicaid recipients into for-profit H.M.O. networks that will manage long term care of the elderly. This decision indicates a shift from caring for many of the elderly in nursing homes to expanding home care, which is currently very limited in Florida.

While pending legislation in Florida might succeed in curtailing the Medicaid budget, it seems clear that patient care will suffer. As for-profit insurance companies seek to maximize their profits, reimbursement rates to providers will be under pressure, doctors will opt out of networks, and patient care and benefits will be restricted.

At Lamson & Cutner, we recognize that the Federal and State governments are going to be trying out different tactics to reduce Medicaid costs. While it may be important for budgetary reasons to do so, we believe that patient care must remain the first priority, and that there are available solutions for government to reduce costs that do not imply reductions in care.

The current “attacks” on the Medicaid system make it all the more important for patients and their families to seek competent legal advice.   If you need help with Elder Law issues, please feel free to contact our firm.

Arizona’s governor has proposed an unconventional way to raise money for the state’s economically strapped Medicaid program. Governor Jan Brewer has proposed a fee of $50 to those individuals enrolled in the state’s Medicaid program who are obese or are smokers, and don’t follow their doctor’s orders to get healthy.

Proponents of the fee claim that if the proposal were ratified by the state’s legislature, and the fee was enforced, many service cuts that have been made to balance the budget would be offset, including the revival of coverage of organ transplants.

The Arizona surcharge would apply to childless adults who are obese and those who smoke. Patients that do not meet specified goals according to a personal wellness plan developed with a primary-care physician would be required to pay the $50 fee. At this point, the measure to determine obesity, or whether an obese person is following his or her wellness plan, has yet to be finalized.

While surcharges and higher premiums for unhealthy habits such as smoking have been implemented by private insurance companies, this would be the first time that such fees have been proposed by a state for imposition on recipients of Medicaid. It has been suggested that federal Medicaid rules would prevent the state from enacting such a law, but the law’s proponents believe that federal rules would not apply in this instance.

This type of proposal may soon be mirrored by other states attempting to develop creative ways to balance their budgets. If Arizona is successful in passing this law we may find other states following suit.

While New York State has not sought to impose an obesity fee to date, the recent proposals of the Medicaid Redesign Team reflect a growing concern with Medicaid costs. Your Elder Law attorney needs to be up-to-date regarding the most recent proposals and developments affecting New York’s Medicaid program, in order to assist you with navigating through the program’s ever-changing rules.  If you need advice, please feel free to contact Lamson & Cutner.

Two of the New York Medicaid Redesign Team’s proposals that were most damaging to the elderly and their spouses, and to the parents of disabled children, were not included in the final budget approved by the Legislature on March 30, 2011.

We can all breathe a sigh of relief that New York is not going to impose a “look back” period for gifts and transfers for Community Medicaid or Medicaid Home Care, which would have caused devastating penalties. In addition, spousal refusal and parental refusal for community based Medicaid will not be eliminated. Both of these proposals are discussed in an earlier post on this Blog.

At the same time, however, the Legislature enacted an amendment to the definition of an individual’s “estate” for Medicaid purposes, with the obvious purpose of expanding Medicaid’s ability to recover greater amounts from the estates of Medicaid recipients. The expanded definition now includes retained life estates, jointly held property, and interests in trusts.

We believe that the expanded definition is problematical in a number of respects, and will likely lead to litigation. Unfortunately, it may be some time before we have clarity from the courts regarding the reach of these definitional changes.

In the meanwhile, it may be important to have your estate plan reviewed by an Elder Law attorney.

New York’s newly created Medicaid Redesign Team (“MRT”) are proposing dramatic changes in our Medicaid program. While it is early in the process, and the proposals may not be implemented in their present form or at all, budgeting pressures at all levels of government make it likely that some changes in the Medicaid program will occur. Here are a couple of the particularly troubling features of the MRT’s proposals:

Elimination of Spousal/Parental Refusal.Currently, a spouse or other legally responsible relative may refuse to provide, or contribute to, the support of an applicant for Community Medicaid or Medicaid Home Care. When this occurs, Medicaid is obligated to provide care or services to the applicant if he is individually eligible, even if the spouse or other relative could afford to pay. The MRT is proposing that the resources and income of the spouse or other legally responsible relative should be counted in determining whether the applicant is eligible for Medicaid. This means that spouses, and parents of disabled children, will be required to spend down virtually all of the household’s assets, and contribute a share of their income, before their ill spouse or disabled child will be eligible to receive care.

Implementation of the 5-year “Look Back” for Community Medicaid and Home Care. Currently, the 5-year look back and transfer penalties apply only to applicants for Medicaid Nursing Home Care. This means that applicants for Community Medicaid or Home Care are currently free to transfer their assets to family members, friends, or trusts, and thereby become eligible for Medicaid benefits. The MRT’s proposal would extend the 5-year look back to Community Medicaid and Home Care, which means that many potential applicants will find that they are ineligible for Medicaid, or subject to a lengthy penalty period before benefits can be obtained.

Impact of these proposals. If the above proposals become law, many Medicaid applicants and their families will be severely affected. Some will find their financial situation and lifestyle significantly diminished, and others may find it difficult to pay for even basic living expenses. People, including disabled children, who could otherwise have been cared for at home may find that institutional care is the only viable option once the family’s resources have been exhausted.

What to do? Now, more than ever, people who need, or may need, long-term care should make it a top priority to consult an Elder Law attorney. Planning steps may need to be taken earlier than previously seemed advisable. It will still be possible to improve your situation, even if these draconian new measures find their way into law.