For all but the very wealthiest among us, the cost of aging, becoming increasingly dependent, and having to pay for our long-term care, can be frightening to consider. While some lucky portion of seniors manage to live to a ripe old age while maintaining relative independence in their own homes, 68 percent of those over the age of 65 are statistically likely to become disabled in at least two activities of daily living or to become cognitively impaired. Unpleasant though this is to contemplate, realistically we should all prepare for the long-term care of our older relatives and ourselves.
One of the best ways to accomplish this is to consult with a law firm that specializes in elder law and Medicaid planning. If you live in the greater Detroit metropolitan area, Keating Law, PLC is an excellent choice.
The High Cost of Long-Term Care
There are several options for long-term care, but all of them are expensive. Unless you have planned well, your life savings could be swallowed quickly by the cost of private in-home aides, assisted living facilities, or nursing homes, which can run $10,000 per month or even more. Financial ruin is a terrible prospect. Planning for the incapacity of yourself or a loved one can be a wonderful gift, bringing a sense of preparedness and peace of mind to the whole family.
Long-Term Care Options
Those who are extremely well-to-do can simply pay for prolonged care in pleasant surroundings. Those of us who are less fortunate may have tried to avert catastrophic costs by purchasing long-term care insurance. There are, however, several possible problems with long-term care insurance:
It may have high deductibles
It may not be as inclusive as you thought
Its premiums may be unaffordable for middle class individuals or families
It may have clauses that make you ineligible
Many people who have thought they could depend on long-term care insurance find that they still have to apply for Medicaid.
What Is Medicaid?
Medicaid is a U.S. health care program designed to service low-income individuals and families. For the elderly, however, it becomes a safety net, protecting us from being untended when our resources run out. While Medicare provides a good portion of health care to seniors who are living on their own, Medicaid is a government insurance program for anyone whose income and/or resources are not sufficient to pay for their health care. More frequently than we would like to think, this definition includes the elderly who need extended care at the time of life when their only income they have may be Social Security.
Eligibility for Medicaid
Medicaid is funded by both federal and state governments. Though not legally required to participate in Medicaid, all 50 states have done so for over 30 years. Medicaid is a means-tested program; to be eligible you must not have over a certain amount of money. You must also be a U.S. citizen or permanent legal resident to qualify for Medicaid benefits. For a great many older people in this country, Medicaid is literally life-saving, since it is the single largest payer of nursing home bills.
It has become increasingly difficult to qualify for Medicaid since more restrictive rules have been enacted in recent years. The rules concerning your level of need have become quite complex. It is, therefore, essential to have an experienced elder law/Medicaid attorney to guide you through the process of applying for Medicaid and to assist you in protecting your assets at the same time.
It used to be simpler to be eligible for Medicaid in regard to long-term care, but over the years the regulations have become more stringent. Where applying used to primarily involve reviewing one’s bank statements, the procedure has become increasingly complex. The Deficit Reduction Act of 2005 established stronger regulations -- including income caps, waiting periods, and transfer penalties. The way Medicaid works is that your own savings must be used for long-term nursing care until they are exhausted, at which point Medicaid kicks in.The look-back period at present is 5 years.
Because of the complications of elder care and Medicaid laws, and the fact that they can change, it is important to have a lawyer with knowledge and experience to guide you through the complicated issues of Medicaid eligibility.
The Affordable Care Act ("Obamacare")
The Affordable Care Act (ACA) expanded eligibility for, and federal funding of, Medicaid. This law provides that all U.S. citizens and legal residents with incomes up to 133 percent of the poverty line, including adults without dependent children, qualify for coverage in all states that participate in the Medicaid program. Although The United States Supreme Court subsequently ruled that states do not have to agree to this expansion and can continue to receive Medicaid funding even if they do not comply, Michigan, like the majority of states, has gone along with the expanded eligibility.
Other Medicaid Stipulations
There are other regulations that apply to eligibility for Medicaid in Michigan, including:
If you are over 65 and disabled, you can “spend down” your income on medical bills
If you live in a nursing home, you have to spend almost all of your income on your care
If your medical expenses are higher than the extra amount of your income, you may still qualify for Medicaid
To receive Medicaid for nursing home care you must qualify as an individual requiring nursing supervision and assistance with daily living activities in an institutional setting
Medicaid Also Covers Home Health Services
Of course, not everyone who needs assistance requires an institutional setting. In some cases all that is necessary is some limited home healthcare services. Medicaid will pay for such services only if they are prescribed by your doctor and are determined to be part of a plan to cure or rehabilitate you.
In situations in which you require ongoing home care services to help you with tasks of daily living or medication management, Medicaid will only cover you if you qualify for Michigan’s Medicaid Waiver program, known as MI Choice. To qualify for MI Choice you must meet certain income and asset limitations. You must also demonstrate that (i) without these homecare services you would have to live in a nursing home and (ii) with these services you will be able to live at home safely. If you do qualify for MI Choice, you may be entitled to:
In order to qualify for MI Choice you must be eligible for Medicaid and present a letter from your doctor what your medical condition is and why you need home care. You will then be visited by an assessor from the Department of Human Services who will evaluate your needs and determine how many hours of care you qualify for. You should also be aware that neither Medicaid nor MI Choice will cover your room and board if you choose to reside at an assisted living facility, but will cover costs of physical therapy or prescription medications.
Michigan’s PACE Program and Other Resources
If you live in Michigan there are two other programs that may be of assistance to you: PACE (Program of All-inclusive Care for the Elderly) and AAA (Area Agencies on Aging Association).
As you can see, elder care and Medicaid are complicated topics, both legally and logistically. If you live in the greater metropolitan area of Detroit, Keating Law, PLC is here to serve you with efficiency and concern for your individual needs. That’s why we provide you with clear advice and guidance based on your unique situation. We can be contacted through our Keating Law, PLC website or by calling 586.501.8399.