Financial Protection When Your Spouse Needs Nursing Home Care - Part 2

This article concludes a two-part series about state and federal law can save a nursing home resident’s spouse from poverty, and how an experienced elder law attorney can help the spouse increase the amount of assets that can be saved from expensive long-term care. In first article, we described the Medicare Catastrophic Coverage Act (MCCA) passed by Congress in 1988, and some basic Indiana and Illinois asset (resource) and income eligibility concepts. In this article, we explain how the Indiana Medicaid system evaluates and married couple’s resources and we describe basic principles of how elder law attorneys help protect a married couple’s resources.

Terminology review

Medicaid law is full of jargon and acronyms. It helps to write this article concisely if we use some of the jargon and acronyms. Therefore, we will use the following terms and acronyms:

• The community spouse lives independently in the community and the institutional spouse lives in a nursing home.

• Resources are non-exempt assets under Medicaid resource laws.

• The CSRA is the maximum resource value that the community spouse may keep and the ISRA is the resource value that the institutional spouse may keep.

Important Dates for Indiana Community Spouses: Snapshot and Eligibility Target Date

Record keeping is a big deal for Indiana community spouses. The resource evaluation process determines the couple’s total resource value on two different dates. The first evaluation date, commonly known as the “snapshot date,” is the institutional spouse’s initial admission date to a hospital or other health care facility for continuous care outside the home in one or more facilities for at least 30 consecutive days.

The Medicaid caseworker examines all of the couple’s financial records to determine the total value of the couple’s resources (sometimes called the “snapshot value”) on the snapshot date to calculate the CSRA. If the couple’s snapshot value exceeds the combined total of the CSRA and ISRA, the couple must spend the excess resources or invest them in exempt assets that not counted as resources. Here are some examples of these calculations:

1. If the snapshot value is $300,000, the combined resource allowance is $121,220 ($119,220 maximum CSRA, plus $2,000 ISRA) and the excess resource value is $178,780 ($300,000, minus $119,220 CSRA, and minus $2,000 ISRA).

2. If the snapshot value is $200,000, the current combined resource allowance is $102,000 ($2,000 ISRA, plus the CSRA, which is 50% of $200,000) and the excess resource value is $98,000 ($200,000, minus $100,000 CSRA, and minus $2,000 ISRA).

Elder Law Attorneys’ Case Management & Resource Protection Services

A typical institutional spouse’s Medicaid application can include hundreds of pages of income tax returns, account statements, deeds for real estate, and other documents. Elder law attorneys have document management systems that help organize the paper mountain and avoid time-consuming eligibility delays. Experienced elder law attorneys study Medicaid caseworker preferences so that they can anticipate caseworker document requests and provide required documentation quickly and efficiently.

An elder law attorney helps a community spouse protect resources by a advising the community spouse on legitimate investment decisions that lawfully convert countable resources into exempt assets. Some investment decisions can be as simple as trading a couple of old vehicles for a brand-new, reliable vehicle with a manufacturer’s warranty. Other investment strategies range from home-improvements to investments in specially designed annuities or certain other kinds of income-producing assets. It is important to remember, however, that general practice lawyers, nursing home employees, and investment advisors lack the advanced training and knowledge that enable experienced elder law attorneys to provide sound asset protection advice.

Beware of Amateur Medicaid Planning

Community spouse’s that try to qualify for Medicaid without experienced elder law attorney assistance risk tens of thousands of dollars. Medicaid law is full of tricky rules, constantly changing policies and procedures, and asset transfer penalties. Experienced elder law attorneys know how to avoid Medicaid traps because they monitor the Medicaid system daily and share information with each other about sudden, unannounced changes in Medicaid policy and procedures that occur almost every month.

Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and Jeff is a Fellow of the American College of Trust and Estate Counsel. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator and was the 2014-15 President of the Indiana State Bar Association.