Category: Medicaid New York

Understanding Life Insurance Policies And How They Relate To Medicaid

Post author By sps
Post date December 3, 2014

Understanding Life Insurance Policies And How They Relate To Medicaid

When an individual is applying for Medicaid and has assets that exceed Medicaid’s resource limit, a Medicaid spend-down is necessary. Assets in excess of the allowable amount must be spent down in order to achieve financial eligibility. Some kinds of life insurance policies are included in the spend-down with a few exceptions. Below is a breakdown of what needs to be liquidated in order to be eligible for Medicaid.

There are two popular types of life insurance policies that have different effects on the Medicaid application process.

Term Life Insurance Policies:

Term Life Insurance Policies have premiums that increase as the individual’s age increases. These policies only carry a death benefit. They are also referred to as protection policies; their purpose is to assist the beneficiaries in the event of the policy holder’s sudden death. Since there is no current cash value in term policies they are not considered an asset according to NJ Medicaid guidelines. These policies may remain active and will not impede one’s Medicaid eligibility. Once an individual is on Medicaid he/she will have minimal assets and may not have the money to cover the monthly premiums. Some beneficiaries choose to cover the monthly premiums so that they can ultimately benefit from the death benefit once the Medicaid recipient passes.

Whole Life Insurance Policies:

Whole Life insurance policies generally have fixed premiums, death benefit and cash value reserves. These policies may be liquidated at any time. Being that they carry a current cash value, they are not exempt from the Medicaid spend-down and must be liquidated in order to meet Medicaid’s financial eligibility requirements. There is one exception to the rule! If the Whole Life Policy has a face value of less than $1,500.00, regardless of the cash surrender value, it is exempt from the Medicaid spend down and may remain open and active. “Face Value” is the original death benefit amount on the day the policy was purchased, prior to the policy holder making monthly premiums. While the policy is active it will accumulate cash value from the premiums as well as dividends from reinvestment money. The cash value may exceed the original death benefit (or Face Value). Once the policyholder passes, the beneficiaries will then be able to claim the total death benefit from the policy.

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Utilizing A Special Needs Trust With The Excess “Spend-Down” Money

Post author By sps
Post date November 24, 2014

In order for an individual to be eligible for Medicaid, there are financial standards that need to be met. Many Medicaid applicants will have to spend some of their assets in order to meet Medicaid’s financial threshold. There are a few excludable resources that are exempt from the Medicaid spend down. These assets can be retained by the Medicaid applicant and will not impede Medicaid eligibility. An individuals personal possessions, a prepaid irrevocable funeral trust, and a special needs trust for a disable child are just a few excludable resources when applying for Medicaid.

Today we will discuss utilizing a special needs trust with the excess “spend-down” money. When a Medicaid applicant has a disabled child, a special needs trust allows the transference of assets from a parent to the child without jeopardizing the child’s government benefits.

Special needs trusts are also referred to as “supplemental care trust”. These trusts supplement the disabled child’s Supplemental Security Insurance (SSI) and Medicaid benefits. The money in a special need trust may only be used for specific items or services. The trust is meant to supplement and not pay for basics such as food and shelter. Some things that may be purchased through a special needs trust include:

• Home modifications to assist the disabled
• Medical treatments and equipment not already covered by government assistance programs.
• Education and recreation equipment
• Computers
• Musical instruments
• Sports equipment
• Travel expenses
• Prepaid funeral

When a parent creates a special needs trust for a disabled child, he/ she chooses a trustee. A trustee is an individual or institution who manages the assets in the trust. The trustee’s responsibility is to follow the terms and guidelines outlined in the trust as well as transferring the funds from the trust to the beneficiary or disabled child. A trustee can be a family member, attorney, bank or anyone that one chooses to assign as a trustee.

The trust restricts the beneficiary (or disabled child) and parent access to the assets in the trust. Only the trustee would have accessibility to the funds and therefore it’s considered an unattainable asset for both the parent and disabled child. To summarize, the Medicaid Applicant who transfers assets to a special needs trust for a child will not incur a Medicaid penalty. Additionally, the recipient will not jeopardize the government benefits which they receive.

Case Studies Medicaid New York

NY – Retroactive Medicaid Coverage

Post author By sps
Post date October 8, 2014

Senior Planning Services was retained on 1/30/2014 by a skilled nursing facility to assist them with a case that was submitted to Westchester County back in 2013. It was an application for a young mother of two that was placed in nursing care due to an unfortunate accident at her job. The Medicaid Caseworker requested significant amounts of bank statements and verifications of cash withdrawals seen on the client’s bank statements. The nursing facility was unable to fulfill the demands of the county caseworker and therefore chose to hire Senior Planning Services to handle the case. Marcella, the Senior Planning Services Caseworker quickly resubmitted the case in full within a very short time period. Marcella was in touch with the Medicaid office weekly to oversee the progress of the case.

The Medicaid Caseworker had left for vacation for several weeks and after doing a thorough investigation, Marcella was informed that the case was forwarded to a new caseworker in the Medicaid conversion department. Marcella proceeded to contact the new caseworker who was thoroughly confused about the case and seemed to have not had the slightest clue about the case. It was getting frustrating, but Marcella was not giving up. She phoned the Medicaid caseworker’s supervisor who said that he was unable to locate the case and that it had been misplaced.
Marcella contacted the supervisor of the nursing home eligibility unit and confirmed that she would see to it that our client would receive retroactive Medicaid coverage dated back to April 2013. Marcella then resubmitted the Medicaid application in May 2014 with proof of prior submission. After working with the supervisor for several weeks, Marcella received the most wonderful piece of mail on 7/3/2014-the case was officially approved with coverage from April 2013!

The nursing home could not be more grateful for Senior Planning Services’ persistence in the process. The client’s husband was thrilled with the news and was delighted that he can now focus on raising his two children without the worries of paying exorbitant nursing home bills.

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Medicaid Spend Down and Special Needs Trust

Post author By sps
Post date September 16, 2014

In order for an individual to be eligible for Medicaid, there are financial standards that need to be met. Many Medicaid applicants will have to spend some of their assets in order to meet Medicaid’s financial threshold. There are a few excludable resources that are exempt from the Medicaid Spend down. These assets can be kept by the Medicaid applicant and will not impede Medicaid eligibility. An individual’s personal possessions, a prepaid irrevocable funeral trust and a special needs trust for a disabled child, are just a few excludable resources when applying for Medicaid.

Today we will discuss utilizing a special needs trust with the excess “spend-down” money. When a Medicaid applicant has a disabled child a special needs trust allows the transference of assets from a parent to the child without jeopardizing the child’s government benefits.

Special needs trusts are also referred to as “supplemental care trust” these trusts supplement the disabled child’s supplemental security insurance (SSI) and Medicaid benefits. The money in a special need trust may only be used for specific items or services. The trust is meant to supplement, and not pay for basics such as food and shelter. Some things that may be purchased through a special needs trust include:

Home modifications to assist the disabled,
Medical treatments and equipment not already covered by government assistance programs.
Education and recreation equipment
Computers
Musical instruments
Sports equipment
Travel expenses
Prepaid funeral

When a parent creates a special needs trust for a disabled child, He/ She chooses a trustee. A trustee is an individual or institution who manages the assets in the trust. The trustee’s responsibility is to follow the terms and guidelines outlined in the trust as well as transferring the funds from the trust to the beneficiary or disabled child. A trustee can be a family member, attorney, bank or anyone that one chooses to assign as a trustee.

The trust is an excludable resource for government benefits for both the parent applying for adult Medicaid and the disabled child receiving SSI and Medicaid benefits. The trust restricts the beneficiary (or Disabled child) and parent access to the assets in the trust. Only the trustee would have accessibility to the funds and therefore it’s considered an unattainable asset for both the parent and disabled child. It is for this reason that it will not impede Medicaid eligibility for either.

One should consult with a competent elder care attorney for advise on if and when such planning strategies are advisable.

Medicaid New York

New York Medicaid – Prepaying a funeral

Post author By sps
Post date September 11, 2014

Are you considering prepaying your funeral or the funeral of a loved one? Medicaid will cover the cost of a very basic funeral for Medicaid recipients. However, many prefer a more desirable funeral that would exceed the cost that Medicaid will cover. Senior Planning Services recommends creating an irrevocable funeral trust prior to obtaining Medicaid.

In order to be eligible for Medicaid, one must spend down their funds until they reach the Medicaid asset limit. In NY State, the asset limit is $14,550 for a single person and $21,450 for a couple in which both spouses are getting onto Medicaid. (This is excluding any means of asset preservation that may have been taken). Prepaying a funeral is an exempt asset in the Medicaid spend-down process and will not impede eligibility. Medicaid applicants can prepay funerals for themselves, their spouse and in most counties for their children.

The Medicaid applicant may choose the funeral home and services of their choice. Services could include flowers, casket, transportation to and from the cemetery and any other services that their budget allows. When setting up the prepaid funeral contract for Medicaid purposes, it must be setup in an irrevocable trust fund. An Irrevocable burial/funeral trust, is a non-refundable purchase in which the funds may not be used or disbursed until the time of death. By NY State law, the prepaid funeral purchaser may select a different funeral home at any time.

For questions about Medicaid eligibility, contact Senior Planning Services toll free at 855.S.Planning (775-2664) or via email Consultations@senior-planning.com