Wednesday, October 24, 2012
Friday, June 15, 2012
|E. Wyles Johnson|
When it comes to long-term care, most people much prefer to receive services in the comfortable surroundings of their own home, where practical, rather than in an institutional setting. Those preferring to receive at-home care may want to consider North Carolina’s Long-term Care Partnership program. This legislation, which became effective January 1, 2011, is a public/private approach to encourage North Carolinians to plan for and manage the costs of long-term care by investing in private long-term care insurance as a means of protecting some or all of their assets. The Partnership targets North Carolina’s aging baby boomer generation, the largest segment of our population. It provides North Carolinians a means to exclude some or all of their “countable” assets from Medicaid spend down requirements, while protecting the same amount from estate recovery. It also requires that the policy automatically include an annual cost-of-living benefit as protection against inflation.
The Partnership’s overall objective is to reduce North Carolina’s Medicaid expenses associated with the escalating cost of long-term care. Here is how it works: A person purchases a commercial long-term care insurance policy which is “Partnership-qualified.” In the event that the policyholder cannot perform two or more of the six “Activities of Daily Living” (or ADLs; i.e., transferring into or out of bed or chair, toileting, bathing, dressing, eating and maintaining continence) without assistance, the typical policy pays for services such as in-home care, community-based services, assisted living care, or skilled nursing home care. The Partnership allows the policyholder to protect one dollar of Medicaid-determined “countable assets” for every dollar the policy pays out in benefits. When the policy's lifetime benefits are exhausted and the policyholder applies for Medicaid long-term care benefits, Medicaid when determining qualification will disregard a dollar amount of countable assets equal to the total amount of benefits paid out under the policy. Such assets are above and beyond the basic allowance for countable assets which an applicant and his spouse are allowed to keep under the Medicaid program. In addition, Medicaid could not recover the disregarded amount from the recipient’s estate at his death.
For example, assume you are married and purchase a Partnership-qualified policy providing a monthly benefit of $5,000 over a period of five years for a total of $300,000 in initial lifetime benefits, with a five-percent compounded inflation rider. Ten years later, you suffer a stroke or accident, resulting in you requiring assistance with the ADLs of transferring, bathing, and dressing. Because of the inflation rider, your policy’s monthly benefit has grown to $8,144, thus increasing the lifetime benefit over five years to $488,668. You hire caretakers to provide in-home care to assist with these ADLs. You file a claim under the policy and receive payments of $8,144 per month over a period of five years for a total payout of $488,668, thereby exhausting the policy limits. You still need long-term care and apply for Medicaid benefits. In considering your application, Medicaid determines that you and your spouse combined own a total of $500,000 in countable assets, including savings and retirement accounts, a family-owned business, and a beach cottage which is not your primary residence. Medicaid would allow your spouse to keep the basic spousal allowance of $113,640 of such assets (in 2012), with the balance of $386,360 being allocated to you. Ordinarily you must “spend down” those funds to $2,000 before you would be eligible for benefits, which may include paying an average of $6,300 per month at a nursing home. However, because of the Partnership-qualified policy, Medicaid would disregard up to $488,668 of the countable assets allocated to you, which in this case covers the entire $386,360. In addition, Medicaid could not recover any of the $386,360 from your estate upon your death.
Assume the same facts as above, except that you are single with $500,000 in countable assets. Because there is no spousal allowance, the entire $500,000 is allocated to you which you must spend down to $2,000. You could protect $488,668 of those assets, thereby reducing your spend down to only $9,332. The end result of participating in the Partnership is that, whether you are married or single, you get to keep some or all of what you’ve earned and saved and still meet Medicaid eligibility requirements.
The out-of-pocket cost to you is the premium you pay for the policy.
In addition to purchasing a Partnership-qualified long-term care policy, there are other methods by which North Carolinians can potentially protect their otherwise countable assets and still qualify for Medicaid long-term care benefits. The rules regarding Medicaid long-term care benefits and estate recovery are exceedingly complex, so be sure to retain an elder law attorney experienced in asset protection and estate recovery to assist you.
Attorney at Law
Wyles's practice is concentrated in commercial law, general civil litigation, complex business litigation and construction law. His work also has an emphasis on issues encompassed by elder law including Medicaid Planning and Eligibility. In 2009, Wyles earned accreditation for preparation, presentation, and prosecution of claims for veterans benefits before the Department of Veteran Affairs. The above article is not intended as legal advice nor does it create any attorney-client relationship
Friday, May 18, 2012
The average private pay cost of skilled nursing home care in North Carolina in 2012 is $6,300.00. However, veterans and their families may be eligible for assistance from the U.S. Department of Veterans Affairs (VA). A qualifying veteran can receive skilled nursing home coverage through two VA systems. The VA operates its own nursing homes and contracts with private facilities throughout North Carolina. Veterans may qualify for nursing home care if they have a service-connected disability rating of at least 70. In addition, North Carolina operates several skilled nursing facilities for veterans, one of which is a 100-bed facility slated to open this spring in Kinston, North Carolina. Eligibility requirements include two years of North Carolina residency. These facilities are state-licensed and approved for Medicare, Medicaid and third-party insurance.A veteran may also be eligible to receive the VA’s non-service-connected benefit, known as “Aid and Attendance”. This program provides supplemental funds to veterans and their surviving spouses who are struggling to pay for high medical costs, including the cost of home health care, assisted living and skilled nursing home care. Eligibility for this benefit does not require a service-connected disability. Instead, the veteran must have served 90 days or more of active duty, one day of which must have been during a war-time period, been honorably discharged, have a total and permanent disability and meet certain income and asset limits.A qualifying veteran or surviving spouse may receive monthly benefits (in 2012) of $1,703 for a single veteran with no dependents, $2,019 for a veteran with one dependent and $1,094 for a surviving spouse of a veteran.Wyles Johnson is an experienced White & Allen attorney accredited by the VA for the preparation, presentation, and prosecution of claims for veterans benefits. He and his staff can clarify applicable eligibility requirements, review individual income and assets, and develop strategies for reducing countable income and transferring assets without triggering transfer penalties that may negatively impact the veteran’s or surviving spouse’s future eligibility for Medicaid nursing home benefits.
Wyles Johnson, Jr.
Attorney At Law
Thursday, March 22, 2012
|Wyles Johnson, Jr.|
Well, there is a “rest of the story” regarding Medicaid nursing home benefits. People sometimes engage in effective planning to protect assets during their lifetime, only to lose those same assets upon their death. For Medicaid purposes, some assets are excluded for eligibility purposes, including the primary residence, one automobile, certain life insurance policies, all household goods and personal effects. This means that the State of North Carolina cannot touch these assets while you are receiving benefits.
Now for the rest of the story. These assets are excluded only during your lifetime, not after you are gone. At the time you become eligible for Medicaid nursing home benefits, Medicaid establishes an account in your name and bills that account for every dime it spends on your behalf. Upon your death, all these that were excluded at the time you applied for benefits become part of your estate. If you received benefits after reaching age 55, the State of North Carolina will have a statutory claim against your probate estate for the value of all such benefits Medicaid paid on your behalf. This process is called “estate recovery”. Even if you have a will, the assets in your estate cannot be distributed to your beneficiaries until the claim is satisfied. The practical result is that these assets often must be sold to pay off the claim, leaving little to nothing for your family members. Under certain circumstances, estate recovery is waived.
You can potentially prevent recovery against your estate by holding title to certain assets and designating life insurance beneficiaries in such a way so those assets do not end up in your probate estate, but instead pass automatically to those whom you want to get them at your death. The rules regarding Medicaid nursing home benefits and estate recovery are exceedingly complex, so be sure to hire an attorney experience in elder law and asset protection to help you.
And now you know the rest of the Medicaid nursing home benefits story.
Wyles Johnson, Jr.
Attorney At Law
Saturday, February 11, 2012
Attorney at Law
Friday, January 13, 2012
White & Allen, P.A. attorney C. Gray Johnsey has been selected to BUSINESS NORTH CAROLINA magazine's Legal Elite for Tax and Estate Planning. This honor was published in the magazine's January edition.
Now for the 11th year, the magazine's Legal Elite lawyers are chosen by their peersâ€”more than 19,000 ballots are sent to lawyers all across the state. About three percent of the state's attorneys are chosen as the best practitioners, according to magazine officials.
Johnsey is no stranger to professional accolades. Johnsey has received numerous awards including every edition (18) of Best Lawyers in America and Super Lawyers, North Carolina 2006, 2008, 2009, 2010, and 2011.
Johnsey has handled tax, probate, and estate and business planning matters in Eastern North Carolina for more than 30 years. He is a board certified specialist in Estate Planning and Probate Law and a Fellow in the American College of Trust and Estate Counsel. Johnsey is a member of the Southeastern Trust School Faculty at Campbell University.
White & Allen, P.A. is a full-service law firm with offices in Kinston, New Bern, and Snow Hill. The firm has offered a wide range of legal services to Eastern North Carolina for many years. The firm's practice includes concentrations on bankruptcy and creditors' rights, civil litigation, personal injury, commercial law, corporate law, criminal law, elder law, employee benefits, employment law, estate planning and administration, family law, health care law, real estate and tax planning. Please visit our website for more information, www.whiteandallen.com.