According to the United States Census Bureau, almost half of seniors 95 years old or older live in skilled nursing homes. Slightly over five percent of the entire senior population 65 years and older occupy assisted living, congregate care, and board and care facilities while just over four percent live in skilled nursing homes (for a total of almost ten percent of the senior population). As bad as these statistics are, they are misleading. The reality is that you either have a 100% chance of being in a long-term care facility – or a 0% chance. Assessing your risk of needing long-term care based on the statistics of the senior population as a whole is a risky bet to make.
Many seniors are under the misconception that skilled nursing homes (previously referred to as convalescent hospitals) were paid for by Medicare. In fact, Medicare pays only for short-term stays in a nursing home and only after the senior has spent at least three days in a hospital before being transferred to the nursing home. A good long-term care policy will pick up much of the cost of a stay at a nursing home and possibly the cost for assisted living and in-home care. But, a study by Kaiser Health found only about ten percent of seniors have this type of insurance.
Long-term care coverage through Medicaid requires that the senior have minimal assets and income. However, seniors can engage in a variety of strategies with the assistance of an attorney experienced in elder law in order to attain eligibility for this type of coverage. Because of rules imposed by the Deficit Reduction Act of 2005, there are penalties imposed when assets are transferred by the senior in order to gain Medicaid eligibility. Due to the penalties, the availability of emergency planning for immediate (or near immediate) long-term care Medicaid eligibility is very limited. Therefore, all seniors should look into their options (including long-term care insurance) sooner rather than later. In addition, federal law provides for recovery of long-term care costs paid on behalf of the senior from the assets of the senior after his or her death. The types of assets that can be recovered against and the treatment of the surviving spouse of a Medicaid recipient varies greatly from state to state, so consultation with a qualified elder law attorney is essential.
While it may seem self-serving for our law firm to recommend seeking the assistance of a qualified elder law attorney when engaging in Medicaid planning, there is good reason for this advice. For instance, Kenneth Benigni applied for long-term care assistance from the State of Minnesota. In the case Benigni v. St. Louis County (Minn. Ct. App., No. A15-1154, June 13, 2016), Mr. Benigni alleged that the Medicaid application contained no warning that the State of Minnesota had a right to place a lien on his property in order to recoup some or all of the costs the State incurred in providing long-term care Medicaid benefits to him. He admits that in 2005 and 2007, the renewal forms he received from the State included information about the right of the State to put a lien on his property. He alleges that, after receiving these renewal forms, he asked two county officials about the lien and they both told him that his property would not be subject a to lien as the result of his Medicaid coverage. In 2007, he alleges he requested further information and determined that his property would in fact be subject to a lien. As a result of obtaining this additional information, Mr. Benigni canceled his long-term care Medicaid coverage.
Mr. Benigni sued the county for negligent misrepresentation, arguing that the county, through the two officials with whom he spoke, provided him false information regarding whether the State could place a lien on his property. The county brought a motion for summary judgment and the trial court granted the motion. Mr. Benigni appealed. The Court of Appeals affirmed, holding that county officials are not liable for negligent misrepresentation if the correct information is readily attainable by the general public unless the government officials are learned in the field or have a fiduciary relationship with the person they are giving the information. In this case, the court found no fiduciary relationship between Mr. Benigni and the county officials and it ruled that he could have obtained the information by seeking legal advice from an attorney.
Our firm is experienced in planning for long-term Medicaid and Veterans Aid and Attendance benefits as well as other elder law issues. As a member of the American Academy of Estate Planning Attorneys, our firm is kept up-to-date with information regarding new elder law and estate planning developments and planning strategies. You can get more information about a complimentary review of long-term care for your clients by calling our office.
Written By: The American Academy of Estate Planning Attorneys