Elder Law Issues including Medicare, Medicaid, and Long Term Care Planning
Presenter: Bill Askin and Lee Dykstra
Note: Askin & Hooker recorded this webinar presentation of which this is one episode. The webinar presentation is produced and recorded for the ear and it was designed to be either watched live on video or listened to via audio. If you are able to, we strongly recommend listening to/watching this episode which will include emotion and emphasis that isn’t obvious when reading a transcript. Our transcripts are generated using a combination of speech recognition software and humans. They may contain errors. Please check the corresponding audio before quoting in print. This is not meant to be legal advice.
Bill Askin
Hi everyone. This is Bill Askin, partner with Askin and Hooker here tonight for the elder law issues seminar. We’ll get started in just a few minutes, I think we’ve got a few people looks like still still logging on. Looks like we have six in the audience so far we’re expecting a few more. hope everybody’s doing well. We were hoping to start doing our seminars live again. Next year, we’ve been going with these zoom or webinars for the past year and a half due to COVID. And had planned to roll them back out to a live audience starting next year again, but who knows now in light of Omi, Omi cron, the new the new variant that may or may not be possible, but but we’ll see. Um, we’d have been for free presenting seminars on various legal topics for the past several years. We’ve done this one live several times. And we’re going to do it again this evening. And if you have any, any questions about our presentation tonight, please use the chat feature. In the zoom, I think everybody’s probably somewhat familiar with Zoom meetings these days, you can type in to the chat feature on there, and we’ll get to the chat questions if they’re already towards the end of the presentation. So the presentation itself will go for about an hour, we should finish at or maybe shortly before seven o’clock. I will be joined I am joined tonight by Lee Dykstra from thanks to financial who is an expert in personal lines of insurance, Medicare and private insurance. And he’ll be presenting on the Medicare options Medicare enrollment, which if you have not enrolled, or you’re thinking about making a change to your enrollment status, you’ve only got about seven days left at this point. So moving on, pay close attention there and he’s got a bunch of very valuable information that he’d like to share with you tonight. Before we get to Lee again, I’m Bill asking I’m partner here at asking him hooker, a local law firm here in Sparta and in Sussex County. We are a general practice Full Service Law Firm. My particular area of practice includes real estate law, I do an awful lot of real estate transactions and commercial and residential also lead a land use and zoning applications. There’s actually been a lot going on in the county in the past year. Very, very busy in land use and zoning here trigger words like variances or site plans or setbacks. Those are all kinds of hot buttons for people that want to do any kind of construction or development of real property. Even the addition and kind of an addition on a residential property where the development and construction of a commercial building legal legal advice and representations typically required. The other part of my practice is Elder Law. Elder law covers I guess, you know, I’ve been practicing law 30 years, I guess that makes me an elder lawyer. But it’s also it’s it’s the practice of providing legal counsel, advice and services to people and families as they age. So subtopics include estate planning, wills, trusts and estates. That was the subject of another seminar that we did earlier this year. That also includes Medicare planning, Medicare enrollment, Medicare options, Medicaid, Medicaid planning, Medicaid applications, and really the strategies for preparing for potentially filing an application for Medicaid. And typically, when we counsel clients about Medicaid and the process there, we’re talking about doing some sort of a long term care planning, advice and counsel. So long term care options become a consideration and in many cases of worry for a lot of our clients. We’ll get into this a little bit a little bit later today or tonight, but when it comes to planning for long term care, there are really only three ways to pay for long term care and hopefully you or your family has not been impacted in making those decisions and covering those options and expenses but Long Term Care is in many cases that wipes a family out of their assets. And in fact, you know, one of the ways to pay for long term care being Medicaid requires that basically you spend all your money prior to qualifying for Medicaid. So we’ll cover some of those topics as well.
Bill Askin
Other seminars that we’ve done this year, they’re all up on our website at asking lawyer.com This one will be on there as well after the the presentation tonight, so they’re always available. If you’d like to go back and review the estate planning, wills trusts and estates webinar, or the there’s a real estate webinar, tax appeals real property tax appeals on the website, and also a webinar seminar about starting an operating a small business in New Jersey. This evening, again, our topic we’re going to really focus on Medicare and Medicaid topics that fall underneath the elder law practice here. And just to kind of kick it off fundamental, there is a lot of confusion. Most people don’t fully appreciate and understand the difference, and they’re very big difference between Medicare and Medicaid. Medicare, which lead Dykstra is going to cover tonight is a insurance program a health insurance program where your medical bills are paid from trust funds, which those that have paid into Medicare. The Trust Fund then pays pays out pays the medical costs for people as they get older. All of us qualify for Medicare when we when we reach 65 years old, whatever your income, whatever your assets doesn’t matter. Your primary medic medical insurance will be or should be a Medicare when you turn 65. In fact, there are penalties I think we’ll probably cover for not enrolling in Medicare, I think it’s within six months of turning 65. But we will cover that. Medicare can also serve younger people if they’re disabled, or dialysis patients. So part of the patients paid part of the costs of Medicare through various medical or hospital deductibles and other costs and certain cases small monthly premiums are required for non hospital coverage. One of the other differences with Medicare is it’s a federal program, whereas Medicaid is administered by the states. Medicare is basically the same in every state in the country, Medicaid differs state by state. On the other hand, Medicaid itself isn’t is really an assistance program. And when although there are different forms of Medicaid, most of the work that we do with our clients is is talking about long term care planning and getting Medicaid to cover long term care nursing home care. Medicaid is not available for everyone like Medicare, Medicaid is restricted to people that qualify on a needs based analysis. And that analysis considers three things number one is you have to need it, you have to need Medicaid, you have to be a you have to need nursing home care, you have to be basically unable to care for yourself. So before you can get Medicaid you need to be considered disabled by second, it has a limit on the amount of money that you can earn, there’s an income limitation, if you don’t meet that income limitation, you will not qualify. And then third is an asset limitation. If you if your assets are above, believe it or not, it’s $2,000. If your assets are above $2,000, you will not qualify for Medicaid. So most of the legal work that we do, the planning work that we do is is designed to give advice and legal counsel to clients as to how they can legally and effectively transfer assets out of their name into the name of a family member or a loved one or somebody that they want to be an heir to their estate in a sufficient time and in a sufficient manner. So as those assets do not count against the long term care patient when they go to apply for Medicaid. So that’s called the Medicaid planning, gifting strategies. There’s trust strategies and different ways that we do that. So with that said, I’m going to turn it over at this point to Mr. Dykstra who’s going to take you through the slides on Medicare. And we’ll turn it over to Lee. There you go, Lee.
Lee Dykstra
I am here Hello, everyone. Happy holidays. for the occasion. I wore my Kris Kringle socks. Maybe I’ll show them to you later. But either way Yeah, happy holidays. Can you believe it’s already here? Oh, hang on one second. Are we? Okay, just trying to figure out something here. Okay, so we got a lot of material to cover on the slides, I’m not going to really read the slide verbatim. So I’ll just forward through them and just make comments on each slide as we go through them. This is a Medicare basics. So I’m not really allowed to talk about specific carriers, companies and specific plans, we’re just going to go over general information. All right. That’s how it all works. And we’re going to hang on, there we go. Here’s our first slide getting to know Medicare and what Medicare is about. So what is Medicare? A lot of people want to know. Okay, and yes. Is it Medicare, basically, as Bill alluded to, is for people aged 65 and older. Okay. This is actually a program that was way back in the Truman days. You know, some of you that might be joining us might just be that old. 76 years ago, President Truman had called for the creation a net of a national health insurance fund. That’s all the way back in 1945. The framework had begun, it took all the way to 1965, under Lyndon B Johnson, to actually enact Medicare into law, which the program started in 1966. Okay, and Bill, as you can tell by this slide talked about the difference between Medicare and Medicaid. Okay, so who qualifies for Medicare? Okay. A lot of people asked me this question. But yes, you do need to be a US citizen, a legal resident in the country for at least five years in a row. Most of the time, you want to be 65 or older, you do have qualifying events, if you are under 65, that you could get Medicare coverage. Okay. And again, it is a federal health insurance program for FREE CITIZENS funded by your taxes. Okay. Medicare basically comprises of two parts. Medicare Part A, which is the hospital insurance, and hospital services, and Medicare Part B, the basically what I call the outpatient, you know, doctor visits, lab or things like that. Okay, the hospital services, okay, this is the hospital rooms, meals, the things that are all related to hospital charges. Okay. Most hospitals throughout the country do accept Medicare, because they do get federal fundings. Okay. So if you’re in a hospital room and you want special Wi Fi or a private room or phones or big screen TVs, that’s not going to be covered. I think people could probably figure that one out. Right. All right. Here’s some facts for you for the hospital. Part A. For the most part, Medicare Part A is free for everyone that qualifies for it. And the most biggest criteria for quite for qualifying is the 40 quarters of work. On your tax return that you’ve worked 40 quarters, you can also qualify if you don’t have the 40 quarters through a married spouse. Okay, but that’s generally how it works. And, you know, you can see some of the coverages here on this slide. Okay, again, the Part B, it’s going to be your outpatient physician, lab work X rays, things like that.
Lee Dykstra
Here’s some medical insurance facts on the Part B. CMS, the Center for Medicare and Medicaid Services that just announced that sadly, rates for the Medicare Part B premiums are going up. The average person throughout the country in the average income bracket last year paid $148.50 a month, and that, sadly, is going up to $170. That’s about a 50% increase, which ironically matches the my small group marketplace, a Blue Cross Blue Shield increase for my groups of 15%. Okay, that that’s for people that say you’re single in making about $88,000 a year or less, you would pay that premium. If you make more than that. You’re going to have a certain charge tax on top of your Medicare premium if joints 176,000. Okay, that, again, it’s all income based about how that Medicare Part B premium is derived, okay, there’s several ways that you can pay the premium that can be deducted from your Social Security. If you’re a railroad retired, you can get that off your benefits. Or if you work for the Office of Personal Management, there’s other ways that you can have that premium paid. Here are some things that Medicare does not cover. Okay. And the key takeaway from this slide, okay, is just generally, Medicare’s Part A and B, will cover about 80% of your overall charges. Okay, everything goes by this big huge book. That’s top secret, you know, the CMS book on the covered charges, what Medicare pays, okay. So we’re going to go into different plans a little bit later. But generally, it’s about 80% of the Medicare approved amount. That’s a very important important term. We’ll talk about that a little bit later. The other thing takeaway on this slide is here, the second bullet point here, long term care or custodial care, okay? Medicare does not cover long term care, or at home health care. Alright, just remember that. Okay. So what else can we do to try to get coverage, you know, the plug that 20% or so that Medicare doesn’t cover, there’s basically two options that people usually tend to lean toward. One of them is called the Medicare Advantage. And I’m going to go definitely into that one. And the other one is the Medicare supplemental route. Okay. The Medicare Advantage, the one aspect of that, that people do need to realize is that you do drop your Medicare’s Part A and B. Sadly, you don’t drop the premium, you just drop the coverage. Okay. And now your coverage is going to be provided by a health insurance carrier in your region or area. That could be Blue Cross Blue Shield, Aetna, some major health insurance carrier is now going to be responsible for your care. Okay. Unlike the Medicare supplemental, you keep your Part A and B. Still, under both scenarios, advantage and supplement, you still pay that premium, you never escape that. But under the Medicare supplemental you have a and b as your chassis or the basis of your health coverage. Okay, that’s a big difference there. Okay, let’s talk a little bit about the Medicare Advantage plans. Okay. Again, this is offered through a private insurance carrier, okay, that offers the coverage in the area that you live in. Okay. That’s a very important point here, because a lot of times people tend to be mobile in their older years. They may be snowbirds in Florida, they may travel to out to Arizona. Okay, you do have to be careful with the Medicare Advantage plans that this service area that you bought your coverage in, what are your options for medical care if you’re outside that service area? Okay. Hopefully you guys are reading these slides fast enough. I’m not going too fast. Let me know. Okay. Okay. Again, some of the things that Medicare these parts, see, some people call it the Part C, with these plans do cover? All right, they’re pretty extensive. In terms of like a traditional health insurance plan, you’re going to have co pays, you’re going to have deductibles, you’re going to have precertification some plans absolutely require
Lee Dykstra
referrals and a primary care doctor designation, okay. Again, a lot of this coverage is dictated by the insurance carrier and not Medicare, okay, or CMS, okay. And you can out you can also get add on features such as dental, eyes, hearing and wellness programs. Okay, some of the more popular terms that people hear with these ADVANTAGE plans, and these are not terms that you guys are unfamiliar with. Remember, HMO, PPO, point of service, okay, these are the type of plans that are available under the advantage of format. So, again, please if you do look into these types of plans, make sure you understand what you’re getting and what’s covered and the service area that your coverage is going to be applicable for. Okay. Because you will again have to work with net works. Okay, again, here’s some fast facts about the Advantage plans or Part C. Again, you must be enrolled in Part Medicare’s Part B and live in that plan service area. Even though under the Advantage plans, Medicare’s Part A and B will not be a factor with your health care, okay, it’s the advantage plan carrier that’s going to be in charge of your health care. Okay, a regional network. Again, I cannot stress that enough, these plans are usually not national. So you don’t have national coverage. Okay, obviously, if you have a life threatening emergency care, treatment that you need, okay, that would always be covered. But these plans, again, do have co pays deductibles, and other costs associated with that. The one thing about the Advantage plans too, is that the prescription coverage is usually tied into the plan itself. Okay. Now, we’re going to talk just real quickly before we get into the supplements, the Part D prescription, and this is where I’m going to probably lose some people here because this is by far one of the most complicated features about Medicare that people get hung up on is the Part D prescription drug coverage. Okay? The two ways to get it basically is just to get it independently. And those are the people that usually buy the supplements that we’re going to talk about later. Or if you do buy that part C Advantage plan. A lot of the times they do have the prescription coverage built in, okay. But we’re talking about just a Part D prescription drug standalone plan, okay. And the reason I say this gets very complicated is because there’s so many carriers in this arena that offer the Part D prescription, you’ve got Walgreens, Walmart, CVS, these are actual drug carriers. You’ve got Humana, you’ve got a ERP. Alright, the difference being that, on the bottom right here on this slide, you can see the formulary tiers, but one carrier might consider a tier one, another one may consider a tier two. And that’s why right now, during this open enrollment period for prescription coverage, you absolutely want to make sure you got the right drug plan going into 2022, because this formulary list and the pricing of the product, the prescription plan, and the co pays, and deductibles change every year. So you definitely want this reviewed every year, talk to us if you need help doing that, okay, and that’s where the confusion comes in. Okay, but basically, you have what they call an annual deductible not all plan, you can spend more money and get a plan without a deductible. So you can say I have a zero deductible, that’s great. But basically, the plans as scripted by CMS should have an annual deductible, then you have your initial coverage limit where you pay co pays. And then you have this coverage gap, which used to be referred to as the doughnut hole where you don’t have any coverage or you get very little coverage or co pays maybe for generics. And then after the other side of the doughnut, you get into the catastrophic coverage, where you get great coverage. Okay, all calendar year, deductibles and co pays. That’s generally how they scripted. It’s a little bit confusion how the government does this, but that’s how they do it. They like to confuse us.
Lee Dykstra
Okay, and some fast facts on the Part D you do need to be enrolled in Medicare Part A and B again, okay. You may have a pharmacy network coverage and costs are definitely different between carriers. Alright, so that’s where you want to do your homework or have an expert do it for you. Okay, and now we get into the supplemental or Medigap, there’s a lot of different terms for this. This works with Original Medicare, okay. This is not an advantage plan. There’s no network of doctors or anything else. These are definitely private insurance plans that you buy through an insurance carrier, but these are all standardized as the we’re going to get into here. Okay. These plans help pay for everything that you can see here on this slide. I’ve been doing this 3034 years it still makes me wonder why they don’t pay for the first three pints of blood, but your Medicare supplemental plan will do that for you. Okay, these are very comprehensive plans to help flush the gap that 20% gap that you don’t have coverage for under Medicare’s Part A and B. What you do need to get with a Medicare supplemental insurance plan is a prescription drug plan, okay, or anything else like routine dental, eyeglasses, or anything like that. And of course, never do any of the plans cover long term care. Okay, the nice thing about the Medicare supplemental market, which we all wish they would do with a prescription for D, it is on the supplemental plans, they’ve standardized these back in the early 1980s. They basically with the confusion out there and said, we are going to make a platform where everybody can understand what the plan differences are. And we’re only going to offer so many plans. And those plans have to be exactly the same between all the carriers, which makes it a lot easier for everybody to shop. So a Plan G which was by far one of the most popular plans being sold today definitely is standard between every carrier, what you’re basically looking for is a great carrier with a great rating, a five star rating or whatever. And you’re also looking for price. Okay, other than that, a Plan G no matter what carrier you’re looking at, is going to be the same exact benefits no matter what carrier. Alright, so that makes it nice and simple. Here are some more fast facts for you on just the Medicare supplemental again, you obviously always need to be enrolled in Part A and B, especially with the supplemental because obviously they’re going to be your primary coverage. The supplement will be secondary, all bills go to the primary Medicare Part A and B, and then they go to your supplement. And that’s usually paperless, so paperless claims either on the advantage or the supplement. So that makes it nice and easy. Okay. The other thing that I forgot back on the other slide, too, is the Medicare Supplements are national. So it doesn’t really matter if you travel or not. Usually, you will always have no, no problem having services if you need to go to an urgent care doctor or anything throughout the country. They’re not regionalised like the Advantage plans. Okay. So when it comes down to what are some of your costs, what am I paying for really, when I sign up for all this, you said a lot. Okay, so you’re going to have a premium for these coverages. Okay, so that’s going to encompass Medicare Part A is usually always free. So you got your Medicare Part B, which again is a based on your income, but the average person is going to pay possibly up to $170 a month starting in 2022. You have your either your advantage premium, or your Medicare supplement, and Part D. Okay, so usually, you have your advantage plan that has the prescriptions in it, and your Medicare Part B premium, or you have your supplement, your Part D coverage for drugs and your Medicare Part B premium. Usually those three are two premiums that you’ll be paying. Okay, you do have deductibles co pays, especially with Advantage plans and coinsurance is
Lee Dykstra
okay. Again, with this slide, you can see some of the differences, okay with the Medicare advantages. You do get a lot lower premiums, maybe zero premiums, depending on which service area you’re in, but you will have deductibles co pays and coinsurance. The Part D we talked about the doughnut hole, your monthly premium again, deductibles, co pays and coinsurance the Medicare Supplement depending on the plan you pick, you really don’t have deductibles and co pays. But they are they’re uncertain plans. Okay, here’s a little bit more confusion that we get a lot of questions passed that bill alluded to before he enrollment period, open enrollment periods, special enrollment periods, all these kinds of things. And you know, I’m not going to go through the slides. But basically what you want to do is if you’re not sure, okay, when you should be enrolling, you really need to do your homework or speak to a specialist because you don’t want to miss your open enrollment period or your initial enrollment period. Okay. The initial enrollment period is basically for people that are turning 65 starts three months before the month you are 65 and three months out So it’s actually seven months that you do get. But you don’t want to get this because the nice thing about this initial open enrollment period is there’s no questions asked. And there’s no penalty for being late enrolling. Okay. Again, here’s the chart on basically how that works. You do have opportunities throughout the year like we are in right now, to do enrollment periods. It depends on what you’re enrolling in and what you’re dropping. Right now, the big enrollment is for Medicare Advantage plans, and the Medicare prescription drug PDP, Medicare Part D, those open enrollments are going on right now. And they’re going to end very soon here on December 7, all this coverage is going to start for January 1, those are the ones that you need to work on right now. Okay. Medicare supplemental. Now this is a little misleading, because, of course, we just covered when you turn 65, okay, you basically get the six months, which is really seven months, because it includes the month of your birthday to enroll in a Medicare supplemental plan. But that’s no questions asked. You also get another qualifying event, say you’re on a group plan, because a lot of people 65 are not retired yet. They’re still working. So if you’re on a group plan, and you have coverage through your employer, and now say you’re 68 or 70, you could and then now you’re retiring, and you’re dissin rolling from that employer plan, or you’re just starting to buy your Part B because you didn’t need it before. That also creates a special open enrollment where you would have no questions asked, and no penalty. Okay, for enrolling late. That’s nice. Those are called qualifying events. Okay. And we just talked about that a little bit. If you work past 65. The key here is just tried to make sure you to everything within 60 days, 63 days, alright, to get this coverage after you’ve dropped your other plan. Okay, there are penalties, lots of penalties if you enroll in plans late or especially with the prescription. That’s the one that people are getting themselves into trouble the most. I don’t take any prescriptions Why should I be buying a plan plans can be as little as $5 a month. Okay, but these penalties could get quite high. If in fact, you do need to get prescriptions and get prescription coverage at a later date if you wait 510 years. Okay, so now you’re 75 and you’ve never had prescription coverage, you’re going to pay a big penalty for enrolling late. And of course, you have to wait till October 15 through December 7, to get the enrollment period, you just can’t enroll anytime of the year. Okay, so now I’m going to turn it back over to Bill and he’s going to cover Medicaid.
Bill Askin
Alright, before we get there early, a couple couple quick things. How long before somebody turns 65 years old? Should they begin investigating and maybe reaching out to somebody like a specialist like you?
Lee Dykstra
That’s an excellent question. And I’ve just said this today and yesterday, because I get these phone calls a lot. We always say start at least three months prior three months prior to your 60 you know, the month that you turn 65 Because Medicare is actually going to start at the beginning of the month. So if your birthday is on the seventh or the 15th, your coverage is going to start that you know say May 1. Alright, so you want to start and make sure you’re enrolled, you can do this online. ssa.gov. Nice and easy. But if there’s a snafu, especially with COVID people are having a big problem when they get to the point where they’re trying to enroll in Medicare Part A and B, and it says you need to come in, there’s a problem. Okay, that is where you get a time lag. And you don’t want to miss that deadline. Because obviously you want it to plan to start on the month of the beginning of the month of your birthday. So three months
Bill Askin
that the the the effective date of Medicare coverage. Is it your birthday itself? No, it’s the beginning
Lee Dykstra
of the month unless your birthday is on the last day of the month. Okay, so if you’re like my birthday is May 7, don’t forget that people. My coverage would start may 1. So you want to start as early as possible three months prior to that to make sure because when I come see you, we’re going to do a beautiful presentation and the first thing we’re going to say is did you will enroll in Medicare Part A and B and most of the time people are going to have to show us their Medicare card with their Medicare claim number on it to get the coverages Whether it’s the advantage or the supplemental, and then,
Bill Askin
as you’ve discussed and thoroughly confused me, Medicare, the application or enrollment process, and all the options can be terribly difficult and confusing and complex to understand. And I think it kind of changes every year. Right, the options and the coverages and the programs that are available. And is it? Is it been important for customers or people to review it every year and perhaps meet with you or somebody that does what you do?
Lee Dykstra
Believe it or not, it really depends on what you’re doing. Okay, if you have your coverage through the advantage plan, okay, where the insurance carriers are, basically, in charge of the networks and the co pays and the deductibles that you absolutely want to make sure you’re looking at almost every year, just like your prescription coverage. If you have a supplement, those plans don’t really change that much besides a little deductible or copay. Usually, I really don’t hear from my supplemental clients that much the only thing sadly, that ever really changes our premium.
Bill Askin
And if if somebody does want to meet with you, how do they get in touch with you and set up, you know, a meeting? Or how does that all work?
Lee Dykstra
Yeah, yeah, the best thing to do is just contact our office, our contact information will be on the last slide. Okay, so we can set up an appointment and just discuss what your needs might be.
Bill Askin
Great, thanks. And Leo is going to come back after I talk about Medicaid. Now he’s going to come back and talk about long term care insurance. Before we continue, though, I just wanted to remind everyone that if you do have any questions, there is a chat feature on the Zoom screen that you’re looking at on your computer or your iPhone or whatever it happens to be where you can enter any questions or information that you might have. Our contact information is on the last slide that you’ll see at the end. So if you want to jot down Lee’s email and phone number, you’ll be able to do that right towards the end. So then then jumping to Medicaid, which again, as I mentioned earlier, is often confused topic with Medicare. Again, Medicaid is not a health insurance program, there’s not a it’s not it’s not a program that you pay into through payroll like you do while you’re working yours, you pay into Medicare, and then you get a benefit back when you retire. Medicaid is different, you don’t pay into Medicaid throughout your career through payroll. It is a hybrid program, hybrid state and federal program. It is funded by the federal government, but it is 100% administered by the states by every state has its own program to to administer the Medicaid applications and process and, and benefits. In New Jersey, it’s run through your local social services office in Sussex County that’s in Newton. That’s where you would if you want to do it on your own, get a hold of a Medicaid application and start the process of applying for Medicaid. I’m having trouble advancing the slides here for some reason. There we go. So that the type of work that we get involved with as attorneys in Medicaid is we do represent clients both in the application process to the county in which our clients live. And then if there is at the end of that application process if there is unfortunately a Medicaid denial, and we believe that the denial is mistaken or that there there are means and legal legal precedents to overturn that there is a process to appeal the Medicaid denial to a state administrative court. So those are the types of things that we do and in counseling our clients most often our clients concern is the cost of long term care. We all face it, you know, the older we get, the more more likely it becomes that we may need long term care at some point. I deal with it regularly. Hopefully you haven’t had much of any experience with long term care nursing home care, but if you have you you know that it’s very, very expensive. To start with in New Jersey, it’s at least five or $6,000 a month. The average cost of of a nursing home bed in New Jersey now was over eight or $9,000 per month. And depending upon the level of care the level of nursing services, the timing if you need wrap people might need 24 hour care, the cost of care the cost of the month. costs of long term care facility in the highest realms of treatment and care that are needed can can be 1314 $15,000 per month. And with that in mind, as you can imagine, that can wipe out families or a person’s life savings rather quickly. So the kind of legal work that we do in counseling clients in the Medicaid legal realm is to address their concerns, and their desires to leave a legacy for their family. We often clients think that, you know, they save all this money, and then if they need long term care, the government or the state’s gonna, quote unquote, take all their money. Well, first of all, the government or the state doesn’t take anybody’s money in that that regard, the state and the funding to the federal government, there is a program to pay. So that, you know, long term care is available to every citizen of the country that’s at least 65 years old, and meets the medical requirements, everybody has that as a backstop.
Bill Askin
But with that said, if you do want to, you know, have a plan to hopefully maybe preserve some assets for your heirs, least said you need to begin planning a few months before Medicare enrollment, you would need to prepare at least five years before filing a application for Medicaid. And that’s because of the five year look back. And we’ll get through some of these slides we’ll go through rather quickly on the slides. But the Medicaid program has some pretty significant qualification requirements. So I’m, again talking about long term care nursing home care, I mentioned at the beginning, there are only three ways to pay one way the one way that Leah is going to cover as long term care insurance. The second way is, is Medicaid. And there are some pretty significant and limited income and resource limits that you have to meet in order to qualify. So the third way is you pay out of your own pocket. And that’s where people start to get a little bit nervous and concerned about not having a legacy for their for their family. If that’s your goal to have a legacy and you plan a sufficient amount ahead of time, you can implement a gifting strategy, which would potentially include gifting assets, money, real estate, retirement savings, investments to family or loved ones. And then as long as that gift is made at least five years before the triggering of the filing of a Medicaid application, they those gifts, those assets will not be countable against the Medicaid applicant. So income and asset limits for eligibility for Medicaid, I mentioned that it is an entitlement, everybody is entitled to it. If you meet the income, medical requirements, income limitations and asset limitations, income for eligibility in New Jersey. Believe it or not, the Jersey New Jersey thinks that you if you make more than $2,382 in a month, that you don’t need governmental assistance to pay for long term care. I don’t know how they come up with these numbers. But if you know the average Long Term Care bed in New Jersey is 8000. The government thinks that if you have income of $2,382 per month that you don’t need that just doesn’t really add up. But in any event, that is the income limit for a single person. If it’s a married couple in both spouses are applying for Medicaid 4764 per month is the income limit. And if you’re married and only one spouse is applying, it goes back to the 2003 82. Asset limitations in New Jersey, believe it or not, before you can qualify for Medicaid as a single person you need to spend all your assets all the way down to less than $2,000. If you’re married, again, a little bit of an increase to 3000. And if you’re married and only one spouse is applying the limit is again 2000. These are numbers. The income numbers are for 2021 they do increase based on a cost of living adjustment every year slightly. The asset limitation has not increased or changed in many years. If you are married, though, and only one spouse is in need of long term care and there’s going to be what is is known as a community spouse, the other spouse living in the community at home The community spouse is also entitled to keep $130,380. So there is a little bit of a cushion there for situations where only one spouse is in need of Medicaid. countable assets, which are all counted up to determine whether or not a Medicaid Apple case applicant meets the income or the asset limit. They count cash, stocks, bonds, investments, IRAs, retirement accounts, Credit Union Savings checking in real estate in which you do not reside as an investment that counts.
Bill Askin
For the community spouse, there are other exemptions. The other exemptions are a car, the house that you live in one strategy for asset protection is to pay off the mortgage on a house because the house is protected in the house, equity in a home up to almost a million dollars is protected. So unless you have I think it’s over 960, some $1,000 in equity in your home, it’s all protected. So you know, if you have a mortgage on your home of $200,000, and you have $200,000 in assets that you can use to pay down that mortgage, and then your assets fall below $2,000. That’s a way to qualify for, for Medicaid and protect the home. There are other ways to protect assets as long as we have significant or sufficient time to do so by implementing a gifting strategy. Prior to the triggering of an application by at least five years. Gifting can be done outright to children, grandchildren, other relatives or friends. Gifting can be done to Medicaid qualifying trusts or a Medicaid qualifying annuity. And there are other options that we could discuss if you know it’s very subjective, but in certain circumstances, there are other ways that we can, we can talk about a gifting strategy. Aside from that, if you are planning to, you know, look at options for potentially applying for Medicaid, there’s what’s called a Medicaid spend down period. Obviously, you are allowed to spend your money, you’re just simply not allowed to give it away for less than fair market value in return. And when a Medicaid application is triggered or filed with the county social services agency, they there just over this past year, they have become more ruthless than ever, in looking for illegal or disqualifying transfers or gifts. With a Medicaid application, we have to submit monthly bank statements for every account in the name of the applicant going back five years. So that’s 60 statements for every account. And believe me, they go through those statements with a fine tooth comb. They also now require credit card statements for five years every month. And they’ll look for unusual or suspicious credit card bills that may be actually gifts or track, you know attempts to transfer assets to somebody else that are not, you know, purchases for fair market value. And they also require tax returns for five years and we’ll go through the tax returns and look to identify other assets where the Medicaid applicant is receiving income, assets or any other assets that may be throwing off some income. How to Apply for New Jersey Medicaid, it’s done through the New Jersey Family Care aged blind and disabled program and online you can look it up at NJ family care.com. Or you can call that 800 number to get information direct. But again, if you do need help or assistance where you have a rather complicated estate or you want to start planning for the eventual need for long term care, it’s best to do that at least five years ahead of time. Long Term Care itself is something that is a is a potential for all of us. There was a recent study that said if we are lucky enough to live to the age of 65, right the age when you would technically be eligible for Medicaid and Medicare. If we reach the age of 65, there is actually a 25% chance better than a 25% chance that we will live for at least one year in a nursing home or long term care facility. I mentioned earlier the medical the medical requirements that must be met in order to get to to Medicaid and Lee’s going to cover these gonna cover that one so here’s Long Term Care Insurance, the third and maybe the best way to be able to pay for Medicaid.
Lee Dykstra
Okay, thank you, Bill. Thank you, I’m back. Okay, let’s just go back on what is long term care for this, this is a good one, because this is probably one of the biggest potential crisises. Now, that’s going to be evolving here in our country, and the next 10 to 15 years as the the baby boomers get older, and start needing this type of assisted care, okay. But this is generally what long term care is. And it’s really just having assistance when you need it and you’re old. One term that you’re going to hear a lot of when it comes to long term care is the ADLs, the activities of daily living, there’s usually five of them, you know, the dressing, eating convenience, toilet transferring, which is driving, or things like that. So if you can’t do some of these things, you’re certainly going to need some type of assistance. Now, what happened here, we just lost the There we go. Give us a second here, trying to. Okay, so what are some of the types of long term care services that we have out there? Okay, you have home health care, adult care, hospice, assisted living, things like that, that we talked about? Okay, you can all read that slide here. Okay, I need to go back. I think we skipped over a crucial slide here. Okay. This is basically long term care insurance. In a nutshell, people always ask me how, or what does this comprise of, you know, the insurance itself. Okay. So basically, you have these main components of a benefit amount. And that’s how much we’re going to pay out on a monthly basis, a benefit period, which is the length of time where we are going to pay that benefit to, to a provider, an elimination period, you know, that could be like zero to 90 days, and that’s how long you have to wait before the benefits start being paid out. Um, and then inflation protection, that these are just add on features. But those main benefit, those three components, the benefit, amount, benefit period elimination period, are three important components that help derive the pricing for long term care insurance, and you can only guess what the other two major components are, and that’s your age, and your health. Okay. Sadly, long term care insurance is becoming a really hard product to get. The underwriting has just gotten tougher and tougher for people to qualify for good standard rates on this type of coverage.
Lee Dykstra
Okay, we just covered that slide. Okay, traditional long term care policies. They have a lot of different things built into them.
Lee Dykstra
The nice thing about that, you can because you can read this slide is that there is the potential that if you have a business that you own, or an employer that really likes you, you can purchase this coverage through work and take advantages of some tax deductibility either on the employer and or actually on the employee. And there’s also what’s going on in some of the states, I’m not sure I think it’s Wyoming or one of those Midwest states that they’re starting to actually enact pools, like you have unemployment, disability pools of money, they’re actually going to start creating a tax that’s going to put it into a pool of money to help fund long term care because they know that this is going to be a major problem down the road. A lot of other states are following suit and are watching how this is going to play it out. Because they too are concerned. Okay. Basically, there’s a bunch of different ways that you can get these long term care policies or what we have called hybrid policies. Um, you can get them with a death benefit, or life insurance with a long term care rider. You can get them with an annuity with a long term care rider. There’s certain investments that you can do. But the nice thing is, again, depending on how you purchased it, you definitely want to talk to an agent and seeing how it could potentially be tax advantage. Tax favorable to you, especially if you have a business that can pay for or even if you own Business yourself, okay. Again, here’s some of the things the protection that it does have can’t have a death benefit attached to it. But you do have that monthly benefit amount. Um, the thing here to remember also is you don’t have to be in a nursing home to collect Long Term Care Benefits. A lot of times people want to stay home so they have home health care benefits that you can qualify for. Okay. Here, this slide just talks about how people can wrap Long Term Care coverage as a rider with life insurance, which is very popular life insurance or an annuity. This we’re finding big sales and recently, okay. And then again, that’s just basically it. That’s long term care again, call us reach out to us. We’ll talk to you. We’ll talk to you for free, no charge, obviously, in talk to you about your coverages and get you some quotes on either one of the coverages. All right, there you go, Bill. Yeah. Hey, thanks,
Bill Askin
Liam. We’re just looking in the chat feature here. And we do have a question. I think this is probably better directed to you. If you are retiring mid year and are covered by company insurance. When should you apply for Part B and supplemental insurance? Medicare?
Lee Dykstra
That’s an excellent, excellent question. And the answer, sadly, I cannot give you directly because a lot of times, it’s based on what your employer human resource departments going to tell you. They may say, Hey, listen, guess what, you’ve got sick days, you got vacation days, you have this that the other thing your coverage is actually going to be for another two or three months. But whatever that employer tells you, your finite date is that your coverage is going to end, okay. Or if you know you’re going to be retired and your coverage is going to be ending at the end of that month. Of course, you want to start again with that three month rule. start as early as possible planning. So if you’re retiring at the end of May, you definitely want to be talking to somebody about February or so.
Bill Askin
Great, great. Makes a lot of sense, Lee and if there are any other questions, feel free to reach out to either one of us. Our contact information is here on the screen. And we also will be circulating copies of all the slides tonight via email. So if you did sign up and we have your email address, we’re going to send out the slides to you after the conclusion of the presentation. Tonight. We do appreciate your support your attendance tonight. We will keep you on our list and let you know if we’re going back to in person seminars next year in case there are any seminars that you would think would be of interest to you or your family. And we wish you well and remember in this time of the COVID environment, think positive and stay negative. All right. Good night, everyone. Happy holidays.