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Ask Todd: Determining medicaid eligibility · The Financial Exchange Show

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: Visit Cushingdolan dot com. Now here's Todd Lutsky.
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  Speaker 2: We are now joined by the one and only Todd
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  Speaker 2: Lutsky from the law firm of Cushing and Dolan. Phone
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  Speaker 2: you doing today?
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  Speaker 3: I am never better and you I'm okay, ish, just
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  Speaker 3: okay ish. Well, I had a doctor's appointment yesterday.
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  Speaker 2: Yeah, how'd that go? Doctor asked why I drank the
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  Speaker 2: break fluid break fluid? Told him I couldn't stop.
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  Speaker 1: That.
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  Speaker 3: What makes sense?
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  Speaker 2: It wasn't a good appointment. Wasn't a good appointment, Todd.
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  Speaker 2: I want to talk to you a little bit about nursing,
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  Speaker 2: home planning and being able to qualify for Medicaid. When
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  Speaker 2: you look at how Medicaid examines assets and incomes of
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  Speaker 2: a family, what do they look at in order to
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  Speaker 2: determine eligibility.
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  Speaker 3: So it's a little different for a single person versus
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  Speaker 3: a married couple.
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  Speaker 2: Let's start with a single person then, so.
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  Speaker 3: The single person is a little easier because pretty much
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  Speaker 3: everything is countable. Let's start with that. But then let's
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  Speaker 3: try to back off assets. So you got this big pile.
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  Speaker 3: In order for an individual to become eligible for Medicaid,
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  Speaker 3: you need to have two thousand dollars. That doesn't seem
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  Speaker 3: like a lot of money, no, So however, if you
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  Speaker 3: have a house, it's your primary residence, and most people do.
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  Speaker 3: They can check a box on the application that they
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  Speaker 3: intend to return home and as long as the value
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  Speaker 3: of that home is less than about a million, thirty
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  Speaker 3: three thousand dollars. It very varies right around there, goes
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  Speaker 3: up and down and a it's it was your primary
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  Speaker 3: residence and it's located in Massachusetts. If you're applying in
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  Speaker 3: mass it'll be non countable. Yeah, but leanable. Okay, so
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  Speaker 3: they're gonna put a lean on it, but at least
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  Speaker 3: that won't prevent you from It won't count towards your
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  Speaker 3: two thousand dollars limit. All the rest of the money,
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  Speaker 3: if you have no other no other estate, all the
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  Speaker 3: rest of the money is accountable. How do I get
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  Speaker 3: rid of it?
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  Speaker 1: What?
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  Speaker 3: Can't give it away? It's too late, You have a
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  Speaker 3: five year waiting period. So the only thing you could
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  Speaker 3: do there is think about buying a Medicaid annuity if
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  Speaker 3: you need one, right to take those dollars. It's a
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  Speaker 3: special annuity. Can't do this on your own, and you
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  Speaker 3: follow the annuity rules that do provide a payback to
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  Speaker 3: the state in case the annuity doesn't expire by the
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  Speaker 3: time you do. You convert those assets into an income stream.
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  Speaker 3: So if I had a five hundred and two thousand
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  Speaker 3: dollars of assets, I would have to take five hundred,
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  Speaker 3: leaving the two. Buy the annuity for five hundred, pays
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  Speaker 3: out over my life expectancy based on a table, and
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  Speaker 3: then I get this stream of income. Well, that income
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  Speaker 3: goes to the nursing home, but the five hundred thousand
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  Speaker 3: went away. Now it looks like I'm worth two thousand
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  Speaker 3: dollars and I'm immediately eligible for Medicaid provide it. However
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  Speaker 3: that it does have a payback provision in case I die.
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  Speaker 2: Talk with Lotski from Cushing and Dolan. If you've got
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  Speaker 2: to zero five two two six three. That number again
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  Speaker 2: is eight eight eight to zero five two two six three. Todd,
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  Speaker 2: What about the situation for a married couple, how does
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  Speaker 2: that differ?
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  Speaker 3: Yeah, so take the same situation, and I'm not and
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  Speaker 3: i haven't discussed rental property or vacation homes. I'm just
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  Speaker 3: assuming a home and money. Those are the two assets, okay,
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  Speaker 3: which is mostly.
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  Speaker 1: What people have.
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  Speaker 3: Sure, And so with a married couple, it's a little different, right,
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  Speaker 3: It's it's actually a little easier because with a married
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  Speaker 3: couple you have again everything starts off as accountable, but
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  Speaker 3: the home is different. The home if the community spouse
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  Speaker 3: is living there and it's located in Massachusetts, there is
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  Speaker 3: no value limitation. Remember we talked about the value limitation
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  Speaker 3: for the single person. Remember if that home that the
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  Speaker 3: single person had was worth a million five, hard stop,
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  Speaker 3: they're not eligible for medicaid. That's a toughie. However, for
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  Speaker 3: a married couple, if your primary residence is worth a
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  Speaker 3: million five or two million or whatever it is, doesn't
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  Speaker 3: matter as long as this community spouse is living there,
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  Speaker 3: non countable, non leanable. What I would recommend, though, is
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  Speaker 3: that you take to jointly owned property and convey it
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  Speaker 3: to the survive, to the healthy spouse. Don't leave it
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  Speaker 3: own jointly, because if I leave it owned jointly, it's
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  Speaker 3: possibly going to be you know, I could die out
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  Speaker 3: of order, and then it goes back to the surviving,
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  Speaker 3: the health the six spouse who's in the nursing home.
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  Speaker 3: All the rest of the money, same deal. It's all
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  Speaker 3: at risk, except the community spouse gets about one hundred
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  Speaker 3: and fifty four thousand dollars give or take of money
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  Speaker 3: that she can reach in and take out of that
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  Speaker 3: pot of money, and that'll be non countable along with
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  Speaker 3: the house. Everything else countable unless you transfer it to
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  Speaker 3: the healthy spouse, which you can do because that's a
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  Speaker 3: permissible transfer, no five year waiting period, and then the
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  Speaker 3: healthy spouse buys that same annuity that we talked about
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  Speaker 3: for the single person. And like magic, you're on Medicaid.
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  Speaker 2: Network, talking with Todd Letski from the law firm of
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  Speaker 2: Cushing and Dolan Todd. We talked about, you know, the
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  Speaker 2: assets that are potentially at risk and income streams that
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  Speaker 2: are potentially at risk in the event that you have
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  Speaker 2: a long term care situation. Yeah, given all of that
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  Speaker 2: money that could be at risk, at what age does
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  Speaker 2: someone need to start getting their estate plan in order
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  Speaker 2: for potential long term care situations? You know?
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  Speaker 3: I would say I just as a general rule, I say,
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  Speaker 3: you know, sixty and over. If they come in and
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  Speaker 3: they and they are talking about doing long term care planning,
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  Speaker 3: I would say, you know, sixty and overs is a
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  Speaker 3: time in which I'm going to at least ask the question,
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  Speaker 3: because you know, it takes five years to protect stuff.
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  Speaker 3: And I know we've been talking about last minute planning
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  Speaker 3: a minute ago, but if you want to avoid that problem,
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  Speaker 3: it does take five years. So you know, if I
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  Speaker 3: can have this in my rear view mirror by the
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  Speaker 3: time I'm sixty five or seventy, why not.
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  Speaker 2: Is there downside to doing it sooner than that. Let's
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  Speaker 2: say that you're fifty five and you say, hey, should
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  Speaker 2: I start getting you know, things in order for potential
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  Speaker 2: long term care situations? Is there a problem with going
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  Speaker 2: that route?
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  Speaker 3: Well, I mean when you're when you're younger, you probably
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  Speaker 3: have younger children. You might not want them serving as
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  Speaker 3: trustee yet. You know, you might need more access to
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  Speaker 3: the assets to pay for college, or you know, mortgages
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  Speaker 3: exist on houses. So yeah, there can be some issues
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  Speaker 3: when you're when you're younger that you might just not
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  Speaker 3: be ready for that irrevocable trust. You haven't quite settled
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  Speaker 3: down yet.
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  Speaker 2: So so let's go forward. Now, Let's say that someone
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  Speaker 2: is approaching a nursing home situation where you know their
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  Speaker 2: health is failing, spouse can't keep them at home, or
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  Speaker 2: maybe they're just not you know, maybe they don't have
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  Speaker 2: a spouse. How does qualifying for medicaid to cover the
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  Speaker 2: cost of that nursing home actually work? Like, what are
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  Speaker 2: the steps that are involved in being able to say
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  Speaker 2: I'm going to have Medicaid cover the cost of this
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  Speaker 2: long term care situation.
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  Speaker 3: So this is more back to that last minute idea, right.
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  Speaker 3: You know, if you've not planned, if you have planned,
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  Speaker 3: there's always going to be some assets that are sort
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  Speaker 3: of kicking around that you have to deal with. And
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  Speaker 3: so the process itself is pretty arduous. I mean, you
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  Speaker 3: basically come in, you explain how all the assets are owned.
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  Speaker 3: You decide what assets are countable, what assets are not.
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  Speaker 3: Like a house we talked about might not be countable,
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  Speaker 3: you know, perhaps a rental property is not countable if
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  Speaker 3: it's making money, if it's generating income essential self support,
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  Speaker 3: but leanable. So you have to rearrange all the assets
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  Speaker 3: to find out what's countable and what's non countable. Once
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  Speaker 3: you do that, and you've met the financial requirements of
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  Speaker 3: eligibility again, for a married couple, that would be one
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  Speaker 3: hundred and fifty four thousand dollars ISSH for the healthy spouse,
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  Speaker 3: two thousand for the six spouse, and one home. So
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  Speaker 3: when you meet that eligibility requirement, now you can begin
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  Speaker 3: the application process. But the application process is going to require,
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  Speaker 3: you know, five years worth of bank statements, five years
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  Speaker 3: worth of brokerage statements, birth certificates, social Security card, three
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  Speaker 3: years worth a tax returns, on and on.
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  Speaker 2: There's a list. So it's not a simple and easy process,
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  Speaker 2: is what you're telling me.
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  Speaker 3: No, not, in fact, we do it all, but you've
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  Speaker 3: got to help me, help you by providing that support
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  Speaker 3: for everything I put on the application. Then you file,
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  Speaker 3: Then you wait thirty days for them to sniff it
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  Speaker 3: over and come back and say, you know what, we
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  Speaker 3: need more stuff. And then you have thirty days to
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  Speaker 3: get that more stuff. And then you wait another thirty
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  Speaker 3: days and if all has gone well, you should get
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  Speaker 3: a letter of eligibility retroactive back to the day we
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  Speaker 3: said you were financially eligible, the day we proved that
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  Speaker 3: you were financially eligible for medicaid. So it's a process,
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  Speaker 3: but it's one worth going down that road if you
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  Speaker 3: can save these assets. So, folks, we're talking now a
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  Speaker 3: little bit about what to do last minute. We just
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  Speaker 3: talked about the application process itself, which is time consuming
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  Speaker 3: and a little arduous, but again, the lawyers do most
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  Speaker 3: of the work. However, what do we do last minute
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  Speaker 3: to make sure these assets aren't taken? And that's what
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  Speaker 3: this guide is all about. Whether you're married or single,
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  Speaker 3: the rules are different, right, So how you treat assets
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  Speaker 3: that are accountable non countable? You know, think about a home,
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  Speaker 3: a vacation home, a rental property. What about life insurance,
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  Speaker 3: what about annuities four oh one k's. They're all treated differently,
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  Speaker 3: And there's even some information in here about how you
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  Speaker 3: can transfer some of these assets last minute without the
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  Speaker 3: five year waiting period. So don't just write the check, Folks,
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  Speaker 3: call and get the guide last minute Medicaid eligibility techniques
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  Speaker 3: to save it. It's for people who have planned and
• 12:14
  Speaker 3: people who have not planned eight six six eight four
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  Speaker 3: eight five six nine to nine or Legal Exchange Show
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  Speaker 3: dot com again eight six six eight four eight five
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  Speaker 3: six nine nine or Legal Exchange Show dot com.
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  Speaker 2: Todd as you're, you know, trying to navigate that situation,
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  Speaker 2: and you know, let's say that again, you've got a
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  Speaker 2: medicaid situation or a nursing home situation rather that you're
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  Speaker 2: trying to qualify for medicaid on Are there any differences
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  Speaker 2: from state to state and how that works in terms
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  Speaker 2: of qualifying or is it largely the same between most
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  Speaker 2: most states Depending on where people are listening.
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  Speaker 3: Right now, I'm gonna say that largely it's the same
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  Speaker 3: because it's a federal statute that is implemented by the state.
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  Speaker 3: But they are not all the same, right Like, for example,
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  Speaker 3: in Massachusetts, the value of a home when we talked
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  Speaker 3: about a single person, the value of the home was
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  Speaker 3: when the state passed the medicaid laws in twenty oh six,
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  Speaker 3: they said, a home will be considered non countable unless
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  Speaker 3: the value exceeds seven hundred and fifty thousand dollars or
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  Speaker 3: five hundred thousand dollars depending on where you live, right,
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  Speaker 3: because certain states have higher value real estate than others.
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  Speaker 3: So they put that option in there, and the state
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  Speaker 3: got to pick which value they used, and of course
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  Speaker 3: those were indexed for inflation. So that's why we're at
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  Speaker 3: a million plus in Massachusetts today. So Massachusetts opted for
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  Speaker 3: the seven hundred and fifty valuation, whereas many other states
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  Speaker 3: that didn't opt for that, five hundred was enough to
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  Speaker 3: make it non count because they're most of the values
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  Speaker 3: of the of the real estate in that state were lower,
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  Speaker 3: and so that that would be it. That would be
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  Speaker 3: a difference. But but generally the rules are are pretty
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  Speaker 3: pretty uniform, Todd.
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  Speaker 2: I know that with the latest reconciliation bill that just
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  Speaker 2: passed Congress and was signed by the President, there are
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  Speaker 2: some changes to Medicaid that happen as we go out
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  Speaker 2: a couple of years from now. Do any of those
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  Speaker 2: impact Medicaid coverage of nursing home costs?
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  Speaker 3: Yeah, the good news is not not really, except interestingly enough,
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  Speaker 3: this valuation on the home thing right. They've now decided
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  Speaker 3: to make it uniform and make the value one million
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  Speaker 3: dollars on the house going forward.
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  Speaker 2: Across the board.
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  Speaker 3: I'm still digesting the bill as we speak, but it
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  Speaker 3: it it appears to me that it's that it's going
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  Speaker 3: to be across the board. The thing I'm waiting on
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  Speaker 3: is is it going to remain index for inflation? And
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  Speaker 3: and then the question is if you're already at a
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  Speaker 3: million one like we are in mass is it going
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  Speaker 3: to fall back to a million or do we stay
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  Speaker 3: at a million one and go forward? These are some
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  Speaker 3: things that we need to work out. But nevertheless, folks,
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  Speaker 3: that's what I have for today.
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  Speaker 2: Mister Lutsky, thank you so much for joining us.
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  Speaker 3: Always a pleasure.
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  Speaker 1: This has been Asked Odd on the Financial Exchange Radio network.
• 15:20
  Speaker 1: Ask Todd with Todd. Lutsky has been presented by Cushing
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  Speaker 1: and Dolan, serving Massachusetts and New England for more than
• 15:26
  Speaker 1: thirty years, helping families with the state and tax planning,
• 15:29
  Speaker 1: Medicaid planning, and probate law. Call eight hundred and three
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  Speaker 1: nine three four thousand and one or visit Cushingdolan dot com.
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  Speaker 1: The views expressed in this segment are solely those of
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  Speaker 1: Cushing and Dolan Armstrong advisor. He does not provide any
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  Speaker 1: legal or tax advice. Please consult with your illegal or
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