Pierro Law Blog

In many cases, one spouse will need long-term care either in a nursing home or at home, while the other “well” spouse continues to live in the community. If Medicaid Home Care is sought, the income and assets of both spouses will be looked to, and according to NYS Dept. of Health rules the couple will be allowed to keep a paltry $1,117.00 per month of income, and total assets of $20,100.00, COMBINED!!!  How can a married couple live on that amount of income?  And, once both spouses’ assets are spent down to the $20,100.00 level, how can the well spouse provide for his or her own needs in the future?  The Rules create a perverse incentive to ship the ill spouse to a nursing home, which would allow the community spouse to retain $2,739.00 per month in income for him- or herself, a minimum of $74,820 of assets (not including exempt assets such as a home and one automobile), while the institutional spouse is allowed to retain $13,800 of assets and $50 per month of income. With no planning, income and assets above those levels must be spent down.  With planning, there are options.

 

For Spouses, the process of qualifying for Medicaid typically starts by shifting assets into the name of the well spouse.  Once transferred to the well spouse, the Medicaid spouse can apply, and if income and/or assets are over the limits discussed above, the well spouse can sign a statement refusing to turn over the “excess” income and assets.  DSS must approve the Medicaid application, but they do get a right to pursue contributions from the well spouse in Family Court.  Further planning is therefore necessary, and once Medicaid is approved for the ill spouse, it is common practice for the well spouse to transfer any excess resources to a Trust or another individual to safeguard against their own need for Medicaid, and to avoid a recovery in the event that the community spouse predeceases the institutional spouse. In the recent ruling of Matter of Steele, however, a NY Appellate Court seeks to crack down on these types of spousal transfers by applying the “Debtor and Creditor Law”, and by considering certain transfers as “fraudulent conveyances”.  In so doing, the Court has enhanced the ability of the county and state to collect against a community spouse.

 

The Steele case is significant in that it goes against prior case law, and calls into question many of the traditional Medicaid Planning techniques utilized by families to prevent the community spouse from being bankrupted by the high cost of care necessary for their spouse. Some believe that this decision is in violation of a federal law that provides protection for the community spouse’s assets. Those versed in Medicaid law and asset protection planning will be able to avoid the fraudulent conveyance rules, and preserve assets through legal transfers.  Others will fall prey to them.  It will be interesting to see if the decision is appealed.

 

This case once again illustrates the importance of prudent planning with an Elder Law attorney versed in navigating the “mine field” of Medicaid Planning. As we await new rules for the recovery of assets from a Medicaid recipient’s estate in New York, in Washington we are rapidly approaching the historic and potentially disastrous date of August 2, 2011, and the debate over drastic cuts to Medicare and Medicaid continues to rage.  If Congress and the President cannot reach a compromise on legislation needed to raise the debt ceiling, the United States of America could for the first time in history default on its obligations.  The $14.3 trillion debt our country has run up is causing a sea change in America, which if not addressed may well swamp the boats of many seniors and persons with disabilities.  And, just like Nero, politicians on both sides of the aisle choose to fiddle as Rome burns.

The new Estate Recovery regulations were not published on June 15 as previously indicated. The internal time for Social Services Districts to comment on the draft ADM, to accompany the undistributed regulation language, was extended from June 1 to June 15. Sources suspect that the volume of comments has probably caused some delay in the submission of the proposed regulation and/or the proposed ADM to the Governor's office for review before being published.

The next issue of the State Register will be on Wednesday June 22 and every Wednesday thereafter. The regulations cannot become effective until they are published in the State Register. There is no indication (as of now) when exactly the new regulations will be published. The Pierro Law Group has been tracking the situation and will have updates as soon as they become available.

If you have been tuning into our radio program Life Happens, Saturdays from 11:00am to 12:00pm on WGY 810AM, 103.1FM or on www.wgy.com, you know that one of the central topics has been the New York State changes in Medicaid. In addition, there have been Federal Estate and Gift Tax changes that create both opportunities and complexities for planning. Listeners have been calling in to ask how these changes will impact them, their families and loved ones. There are still many unanswered questions on how one should properly plan for Long-Term Care.

 

Join Life Happens radio hosts Lou Pierro, Bob Vandy and Brian Johnson on the last Saturday of the month for a free Long-Term Care workshop. The series of one-hour workshops will explore various timely and important topics on Medicaid, paying for Long-Term Care and planning options. Have your questions answered and feel free to bring guests! The workshop is open to the public, but we ask that you RSVP as seating is limited.

 

Life Happens Long-Term Care Workshop

Date: Saturday, June 25

Time: 9:00am - 10:00am

Location: New York Long-Term Care Brokers - 11 Executive Park Drive, Clifton Park NY

Cost: Free

Register: 518-688-8155

  

If you are unable to attend the workshop, you can still ask questions live on air by calling the WGY Studio on Saturdays between 11:00am and 12:00pm, by calling the Pierro Law Group at 518-459-2100 or 866-951-PLAN, or by emailing us your questions at info@lifehappensradio.net.

Future Workshop Dates:
July 30, August 20, September 24, October 29, November 26

The NYS Department of Health conducted a conference call on Thursday, May 26th with local DSS counsel to review a new ADM (Administrative Directive) which will be issued to implement the pending Regulations on estate recovery.  Curiously, they did not disclose the regulations, only the ADM, which raised questions with local counsel as to how they can comment on and prepare to enforce Regulations that they have not seen.  Based upon a conversation with a government official, the target date for release of the regulations is June 15, with an effective date of June 1.

 

Although no specific information was given, we believe that the new law will be imposed retroactively to certain transactions, which may include deeds with retained life estates.  It appears that specific valuation methodology for such interests is included in the ADM.  The issue of whether a retroactive application of the new law to transactions undertaken prior to its enactment is constitutional appears to have been discussed, which DOH believes will not apply as the new measures do not impact eligibility, merely a “right” to pass on property to the next generation at death.  There will likely be a great deal in the new Regulations that will impact our clients, and that we will object to through litigation, although the impact on trusts is still uncertain.

In our last conversation with counsel for NYS DOH, he indicated that he would attempt to provide the Regs to us prior to issue for review and comment, but based upon the current time table we are not sure whether that is still the plan.

 

Our firm will be scheduling workshops to educate our clients and others about the changes to the Medicaid law, and to provide ways to plan to salvage existing deeds and other arrangements – the schedule will be published next week.  We are also covering this topic on our radio show “Life Happens” on Saturdays from 11am to 12 noon on WGY (810AM and 103.1FM).

By: Louis W. Pierro, Esq. for the New York Law Journal and Open Letter to New York Senators Charles Schumer and Kirsten Gillibrand

Long-term care is a broad phrase, which encompasses an array of goods and services required by people with chronic illnesses, disabilities or advanced age. The cost of long-term care has become unaffordable for most New Yorkers, with monthly bills for nursing homes and home care topping $15,000 per month in some parts of the state. The passage of Medicare and Medicaid in 1965 addressed the problems of health care for seniors and the poor, respectively. Now, more than 45 years later, the demographics of New York State and the nation are so changed that those programs are unsustainable. Yet we cling to the same two programs that are bankrupting our government, while providing health care services that are inadequate and disproportionately expensive when compared to services offered in other countries, which spend far less. More important, due to cuts enacted to keep Medicare and Medicaid solvent, individual health care and long-term care costs are rising, forcing more people into poverty. Over the next 50 years, these costs could do more to destroy America’s middle class than any other single factor.

In 1991, the Elder Law Section of the New York State Bar Association was formed in response to the growing needs of seniors and people with disabilities. Ten years later, in 2001, the Section formed a Task Force on Long-Term Care Reform, to address the problems of health care and long-term care for seniors and people with disabilities.

In response to the current budget crisis, Gov. Andrew Cuomo appointed a Medicaid redesign team and tasked it with proposing cuts to the Medicaid budget of $2.8 billion. The proposals encompassed ideas intended to make the existing Medicaid system more efficient, but the external factors that have impacted Medicaid, including the erosion of Medicare benefits and the explosion in the number of seniors and people with disabilities who require government-funded health care and long-term care services, have already resulted in significant cuts to programs and services. The complex problems inherent in long-term care reform mandate that the safety net provided by Medicaid for the "current poor" be preserved. It is also necessary to recognize that certain individuals of substantial means, the "current wealthy," can absorb the devastating costs of long-term care without becoming poor themselves. It is the middle class that is left at risk, facing impoverishment in their "golden years" due to the staggering costs of long-term care services. Having studied the problem from the perspectives of the government, providers, insurers and consumers, the Elder Law Section developed, and the NYSBA has proposed, the "Compact for Long-Term Care."

The Compact will not solve all the public and private long-term care financing problems in the current system, but it is the first multi-source health care financing program truly aimed at New York’s middle class. It offers middle class New Yorkers a way to pay for care without threat of impoverishment and allows them to preserve the assets and income necessary to remain at home, in their communities and neighborhoods. Another important benefit of the Compact is that it lowers governmental costs. The actuary engaged to examine the program concluded that under reasonable scenarios, the Compact saves public funds and provides significant benefits to participants who have sufficient financial resources to meet the thresholds needed for sustainability in the program. The Compact does not replace other programs – resource-poor individuals will still need to use the state’s publicly financed care systems, and the rich will use their own money for care as they always have – but for the majority of middle-class individuals who need long-term care, the Compact offers benefits in the form of retained wealth and control over health care.

The Compact for Long-Term Care would also facilitate the development of a provider network that could offer comprehensive solutions to individual consumers in their own neighborhoods, financed with private-pay dollars with an increased level of reimbursement supplemented by the consumer once public funds become available. In addition, the sale of private long-term care insurance, which has failed to penetrate a shrinking marketplace, would be enhanced by capping the risk which an individual policy holder would have to insure, thereby allowing a reduction in the premiums that have put the purchase of such policies out of the reach of middle-class consumers.

The Compact was first drafted into legislation in 2006, and a later version of the Compact was enacted into law in N.Y. Social Services Law § 366-I, part of Gov. David Paterson’s 2010 budget. Unfortunately, however, due to the current state budget crisis, and the focus on immediate budget cuts, the Compact program has not been funded, nor has staff been allocated to implement the pilot program which the legislation calls for.

Middle-class America deserves a chance to avoid becoming impoverished by the ravaging costs of long-term care. Likewise, the taxpayers of New York deserve a budget that is not threatened by a bloated Medicaid system. The innovation offered by the Compact can strike that balance, and the Elder Law Section will continue to advocate for its implementation.

On Thursday, May 26, 2011 The Pierro Law Group and the Capital District Funeral Directors Association will host a "Lunch and Learn" seminar at Wolfert's Roost Country Club. Members and non-members are welcome and there is no charge. Please RSVP to Steve Basinait (518) 369-6631 or news@pierrolaw.com.

May 26, 2011 - Crossing the Threshold: Planning for End of Life and Post-Death Matters
Lunch and Networking - 12:00pm-1:00pm
Continuing Education Program - 1:00pm-2:00pm
Credit: 1.0 Law
Cost: No Charge
RSVP: Steve Basinait (518) 369-6631 or news@pierrolaw.com

Some of the topics to be discussed include: Lack of Planning, Use of Advanced Directives, Pre-Paid Funeral Expenses for Medicaid, Estate Administration and Probate Proceedings.

BULLETIN:  Among the changes to Medicaid discussed at the Elder Law Forum was the topic of expanded estate recovery, including the proposed language from the New York State Bar Association (located in the Forum materials on the USB drive). Today, I had an opportunity to speak with Dan Tarantino, Counsel at the NYS Dept. of Health, regarding the new Regulations on Estate Recovery, and he indicated that they may be published as early as June 1st.  He also indicated that he has spoken with counsel in several states, and that the plan for NY will be unique, but will borrow from some of the existing programs.  The State is aiming at implementing the estate recovery rules with regs. that are enforceable and effective – and work for all.  So, Dan is expecting that all interested parties will have something to cheer, and something to complain about.  We will have to wait and see, but once the Regs are published we will provide our own analysis and comments, with insight as to how they affect all of our clients.

Stay tuned and we will provide updates as soon as the new Medicaid Estate Recovery Regulations are made available.

Thanks to all of the participants who helped make this our largest Elder Law Forum yet!

Thanks also to our Sponsors including New York Long-Term Care Brokers, MetLife Home Loans, SEFCU Insurance Agency, Living Resources and the Wesley Community. We hope you will join us in 2012 for our 17th Annual Elder Law Forum.

  

The 16^th Annual Elder Law Forum held last Thursday is in the books (or on the USB drive as the case may be), and as promised it’s time to let the blogging commence.  It was energizing and satisfying to have such a high caliber group of presenters, and attendees, at this year’s program, which made for a very spirited and enlightened discussion.  I learned a great deal.

Special thanks go out to Senator Hannon, who gave generously of his time and knowledge, and who pulled up the  shade on state government for all to see.  As a member of the Medicaid Redesign Team, and the chair of the Senate Health Committee, his perspectives on the budget process, the 2011 budget, and the legislative initiatives he is involved with were priceless.  The other panelists were equally generous with their time and talents, and how often do you see someone in Mark Kissinger’s position post his e-mail on the screen with an open invitation?

 

We have been reviewing your Survey results, and I am happy to report that 100% of those who responded would attend the program in the future, and would also recommend the program to others.  So, it looks like we’ll be back for #17.  We are also carefully analyzing the comments, feedback, recommendations for future breakouts and suggestions for improvement, and we will use them to shape next year’s Forum presentations.  If you think of anything after the fact, just e-mail it to us at btromans@pierrolaw.com.

 

We hope that you took something away from the Forum that was unexpected and useful in your work.  We also encourage you to navigate the USB drive, as there is a wealth of information there, some of which you will likely not find elsewhere.  Please help us keep this discussion alive, as we continue to search for answers to the perplexing issues of aging in America, and in New York State.