What should I expect when faced with long-term care needs?
Growing older is different for everyone. With people living longer than ever, research shows that a lot of us will need some form of long-term care at some point in the future. This may include help with the smaller things such as transportation, house or yard work, or meal preparation. However, this may also include more involved care and the possibility of needing assisted living or nursing home levels of care.
The first thing most people realize is that assisted living and nursing homes are expensive. It is not long before our parents, grandparents, or spouses are forced to utilize life savings to pay for this care. After this, we start to ask what forms of assistance are available to help with these costs, as Medicare generally does not cover room and board in an assisted living facility or nursing home. Most families are directed towards the Medicaid program and the qualifying rules associated with it.
Balancing day-to-day life with new concepts, types of care, and available programs can be immediately overwhelming. Knoxville Elder Law seeks to ease some of that burden and provide guidance through the process.
What is Medicaid?
Medicaid, not to be confused with Medicare, is a joint federal and state program. It is a great program to help family members get the care they need. TennCare Medicaid is Tennessee’s Medicaid program that provides health care to eligible Tennessee residents that otherwise lack access to the necessary insurance. TennCare’s CHOICES program is specifically for adults aged 21 and older who suffer from a disability, as well as seniors age 65 and older. There are currently three CHOICES groups available to Tennesseeans:
Group 1: This group is for people of all ages who receive nursing home care.
Group 2: This group is for adults age 21+ who suffer from a qualifying disability and seniors who qualify to receive nursing home care, but choose to receive home care services instead.
Group 3: This group is for adults age 21+ who suffer from a qualifying disability and seniors who do not qualify for nursing home care, but can utilize a modest amount of home care services to delay or prevent the need to move into a nursing facility.
There are three basic requirements to be eligible for long-term care under TennCare’s CHOICES program:
Requirement 1: "Medically Needy"
Requirement 2: Resource Eligibility a.k.a. the Asset Test ($2,000.00 as of 2017)
Requirement 3: Income Requirements ($2,205.00 as of 2017)
If you or your loved one have been faced with seeking long-term care at an assisted living or nursing facility, you are probably aware of these base rules. However, these simple rules prove to be more complex than they first appear.
The Pre-Admission Evaluation (PAE): The purpose of the PAE is to determine the medical eligibility for long-term services and support through TennCare CHOICES. The applicant must have a medical necessity of care and a need for inpatient level of care. Care in a nursing facility must be expected to improve the individual’s condition, prevent a deteriorating condition, or delay the progression of a disease or condition. Moreover, the individual’s condition must require daily inpatient nursing care.
The PAE determines a total acuity score that assesses particular functional needs and limitations of activities of daily living; such as eating, toileting, and mobility; as well as addressing deficits in an individual’s functional capacity (communicating, behavior, and orientation). An individual must reach an acuity score of nine to qualify as medically needy.
Countable v. Exempt Assets: An applicant’s assets are first divided into countable versus exempt assets, and whether that person is married or single at the time of institutionalization. For instance, an individual’s home that has an equity value of less than $560,000.00 is not counted for eligibility, nor is a vehicle of any value. Exempt assets can also include qualifying prepaid burial contracts and plots and life insurance with no cash value. Most other assets will be countable in a resource assessment.
The Lookback Period: It is usually one’s first instinct to give away property to spouses, children, or grandchildren in order to reach the minimum amount needed to qualify. Be aware, however, that TennCare can penalize many transfers that are made for less than fair market value, including outright gifts. This refers to the “lookback period.” They will look back five years from the date of application for any transactions that were for less than fair market value. This includes gifts and transfers of property to many types of trusts.
The Penalty Period: This is the timeframe that an applicant will be ineligible to receive benefits due to any disqualifying transfers that occurred within five years from the date of application. The penalty period is calculated by taking the total amount of disqualifying transfers and dividing that amount by the average rate of nursing home care ($5,472.00). This will leave the applicant with a number of months and days that he or she will be ineligible to receive benefits.
An individual’s income cannot exceed $2,205.00 (as of 2017). Although there are exceptions, most forms of income will be countable to the individual. If an individual’s income exceeds this amount, they will need to use a Qualified Income Trust (QIT) (a.k.a. “Miller Trust”). A QIT is a relatively simple tool to remedy excessive income when seeking long-term care.
Married couples face different challenges when planning for long-term care; particularly when regarding the determination of assets and income. The Community Spouse Resource Allowance (CSRA) and the Community Spouse Resource Maintenance Allowance (CSRMA) provide different rules on how to determine the financial eligibility seeking long-term services and support.
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