1. The Law Offices of Daniel Timins 477 Madison Avenue, Suite 240
Attorney Advertising Medicaid Planning & Medicare Benefits in Rockland County, New York
Daniel Timins
The Law Offices of Daniel Timins
477 Madison Avenue, Suite 240
New York, New York 10022

2. Your Tax Dollars at Work

3. Financial Eligibility Requirements for an Individual
Eligibility is based on people who are “Medically Needy,” “Categorically Needy” and “Legal US Residents”
Medicaid is “Means Tested,” meaning the recipient must have limited financial means
ASSETS
$13,800 in the recipient’s name
EXCEPTIONS:
“Burial Allowance” of $1,500
Life Insurance: $1,500 cash value
Personal Property (unlimited)
Your House (ONLY for Home & Community care)
Supplemental Needs Trusts
Income Only Trusts
Retirement Plans (IRAs) are exempted from assets if they are in “payout status” (Required Minimum Distributions or Separate and Equal Periodic Payments if recipient is under age 59 ½), in which case payments are included in Income
MONTHLY INCOME
HOME CARE: $767 per month
Any excess income must go to the recipient’s “SPEND DOWN”
INSTITUTIONAL (at a Nursing Home): ALL of the recipient’s monthly income in excess fo $50 must be paid to the NH to offset Medicaid payments

4. Types of Medicaid Community Care Institutional
The type of Medicaid benefit you receive determines “look back” periods (I.e. the penalty for transferring assets)
Community Care
Personal care, physical therapy, home health care and home health aid services; clinical or out-patient basis; includes physicians, dentists, pharmaceutical, nursery
Institutional
Hospitals, medical facilities, nursing homes

5. Transfer Penalties Home & Community Care Nursing Home
Department of Social Services and Medicaid impose a “Loockback Period” for transferring assets outside of the proposed recipient’s name
Home & Community Care
1 MONTH Lookback
One Strategy:
Transfer all financial assets (except $13,800) to a non-spouse, wait one month for bank statements to be updated, then apply for Home Care.
DOWNSIDE: If the recipient needs Nursing Home care the 5 Year Lookback rule applies
Nursing Home
5 Year Lookback Period, and the Homestead can be attached by Medicaid
EXAMPLE: In January, 2007 Mary transfers her Coop and most of her assets to her son Joe (total of $280,000), and applies for Home Care. In March 2011 Mary goes to a Nursing Home. She failed to make the 5 year Lookback (4 years & 2 month). Nursing Home Care is Rockland equals approximately $10,105 per month.
$280,000 (amount gifted) = MONTH
$10,105 (monthly benefit) “Penalty Period”
Medicaid will not pay Mary’s Nursing Home benefits for almost 28 months. ..and Joe is liable for the payback
Joe should have paid for Mary’s care for 10 more months to get through Mary’s Lookback Period.

6. What is a “Supplemental Needs Trust”?
Creates the Trust
CREATOR
BENEFICIARY
Receives the Benefits of the Trust
Can pay for ANYTHING Medicaid does not pay for (clothing, television, vacations)
Downsides:
1. NO ACCESS TO CASH!
2. Beneficiary CANNOT be the Trustee
TRUSTEE
Administers the Trust
Pays Bills
Invests Trust funds
Entitled to a Commission

7. Types of SNTs
FIRST PARTY: The Beneficiary’s money is used to fund the Trust
Upon death trust funds MUST be used to pay back Medicaid before remaining funds are transferred to desired contingent beneficiaries
Individual Trusts:
The individual’s excess assets and “spend down” income can go into this Trust
To avoid Transfer Penalties
(1) the funding Beneficiary must be under 65 years old,
(2) individual must be “Disabled” under Social Security Laws,
(3) must be established by a parent, grandparent, legal guardian or court order, and
(4) there MUST be a payback provision to Medicaid
Pooled Trusts: Available to people who are over 65 and have no one to establish the Trust (#3 above)
THIRD PARTY: An outside individual’s money funds the Trust
Upon the Beneficiary’s death any remaining funds go to the contingent beneficiary
NO Medicaid Payback is required (because the Trust was never the Beneficiary’s property)
HOWEVER, a Spouse cannot avoid support obligations

8. Considerations of SNTs and Effects on Benefits
SSI
Medicaid
Is it a Resource?
NO, if SNT is drafted properly:
Individual trust for persons under 65
Pooled trusts
Individual trust if under 65
Transfer Penalty?
(see chart below)
NO transfer penalty if under 65
YES if over 65 (3 year max)
NO for Community Care at ANY age; Institutional: varies
SNT Disbursements treated as Income?
Payments by SNT to 3rd parties for FOOD or SHELTER are considered “In Kind Support”; lower SSI by the lesser of:
Actual value, or
1/3rd of monthly benefit + $20
Shelter: rent, mortgage, R.E. taxes, heating, fuel, gas, electricity, water, sewer, garbage
Direct payment of other goods and services do NOT reduce SSI benefit:
Cable, phone, cell phone, internet, travel, education, local transport, entertainment
Pre-payment of burial expenses is ok with a “Funeral Agreement”
Cash paid directly to bene DOES reduce SSI dollar for dollar
CASH given to beneficiary is ALWAYS income; DO NOT give it
Trustee CAN make direct payments to 3rd parties that provide goods and services to the bene (thus NOT income)
Can include RENT
Credit Cards: Okay only if NO cash can be withdrawn from the card
Can Income be place in an SNT to reduce “countable income?” NO
Income transfers NOT permitted, thus no SSI benefit increase
Only assets may be transferred into an SNT w/out penalty (if < 65)
SOMETIMES

9. Penalties for Transfers into SNTs: SSI v. Medicaid
Penalty for ASSETS?
Penalty for INCOME?
SSI
SSI (Age 65+)
YES – up to 3 year disqualification
YES – not permitted
SSI (Under 65) NO
Medicaid
(Age 65+)
Institutional
(nursing home, waiver)
YES – depending on $ transfer for one’s own SNT
NO – if SNT is fbo another person under age 65
Unsettled; income deposits in “pooled trusts” will not be later penalized when entering nursing home if $ was spent on client’s needs
Community
NO – but transfer now will affect future institutional eligibility
YES - for nursing home / institutional / waiver care
NO – can reduce or eliminate spend down
(Under 65)
NO (BUT currently being challenged)
NO – may use pooled or individual trust to deposit excess income and reduce / eliminate spenddown

10. Income Only Trusts (a “Medicaid Qualifying Trust”)
These Trusts are used to distribute income or hold property (including a primary residence) in Trust to avoid Medicaid from attaching assets
The Creator chooses the residuary beneficiaries
The Creator can be the recipient, spouse, the recipient’s Power of Attorney or an Administrative body
The Beneficiary and his/her spouse can ONLY receive income (NO principal) from the Trust
The 5 Year Lookback DOES apply if the recipient needs nursing home care, so these may not be a good idea if Nursing Home care is imminent
The Trust is Irrevocable / cannot be amended

11. What About the “Well” Spouse?
The “Community Spouse” is entitled to some assets and income, but they are limited
If spouse is in a Nursing Home:
$2,739 of income per month
$74,820 - $109,560 of resources
If spouse has Home Care:
Combined income of `$1,120 per month
During the Medicaid Application process the well spouse may exercise a “Spousal Refusal” to avoid inclusion of his/her assets and income
Medicaid may accept this, but will have a claim against the well spouse when he/she dies

12. Things to Remember
If a Trust is created it is essential to have future gifts / estate transfers go to the TRUST
Example: Father dies, leaving funds to disabled daughter Dora in Dora’s name, NOT her SNT  Dora is now over Medicaid’s $13,8000 limit and is taken off Medicaid. His Will should have left his estate to “The Dora Supplemental Needs Trust”
If a person is on SSI they automatically qualify for Medicaid (the person still needs to apply to DSS for Medicaid)
Several other exceptions and exemptions exist
If DSS denies you Medicaid you are entitled to a “Fair Hearing” in front of an administrative law judge
Plan early: New York has some of the most favorable Medicaid benefits, but many require time and planning
Hire an Attorney: This is tough stuff! There are multiple pitfalls, and many exceptions to the rules presented here. Mistakes cost time and valuable money; you will usually make back the legal fees in 1-2 months of benefits

13. PART A - Inpatient Hospital Care (Only)
Medicare: Part A
PART A - Inpatient Hospital Care (Only)
What is Covered?
Operating expenses, Semi-private room and meals, Nursing services, Social services, Use of hospital equipment, Rehabilitation services, Diagnostic testing
Skilled Nursing Facility for up to 100 days
Physician must certify rehab is needed for a hospital treatment in last 30 days
There is an ~ $130 per diem charge for day 21 – 100
Home Health Care
Pays for full cost up to 100 home visits, but MUST occur after a hospital or skilled nursing facility stay
Recipient MUST be confined at home
PART B may cover additional expenses
What is NOT covered?
“Luxury” and Elective surgeries
Most services performed outside of US
Procedures performed in federal facilities

14. Medicare: Part A How is coverage calculated?
Covers hospital expenses for up to 90 days for each “benefit period” (spell of illness)
A “benefit period” ends only AFTER recipient has been out of a hospital OR skilled nursing facility for 60 consecutive days
At that time a new benefit period begins
First 60 days of benefit period are paid in full with an ~ $1,000 deductable
Next 30 days of benefit period are paid in full with an ~ $260 coinsurance charge for EACH day
Also, there is an additional 60 “lifetime reserve days”
over an individual’s lifetime
Recipient can choose when to use these days
Example:
Gertrude goes into the hospital for 45 days, goes home for 2 weeks, and returns to the hospital for 80 days. Gertrude’s 125 days of hospitalization will be considered to be within one benefit period because there was not a gap of 60 days between hospital visits. She is covered for 90 days under this benefit period and in addition, if she chooses, Gertrude has also used 35 of her lifetime reserve days (leaving her with only 25 more during her lifetime).
90 Days + 35 Days = 125 Days.

15. Medicare: Part A Eligibility for PART A (I.e. at NO cost)
(1) Everyone aged 65 and older who is receiving a monthly Social Security retirement benefit (including survivor’s benefits), or
(2) People aged 65 and over who have deferred receiving Social Security retirement benefits (must apply for Medicare; others in “pay status” are automatically enrolled), or
(3) 65 year old civilian employees of the federal government who did not elect into the Social Security system under the 1983 law, or
(4) People who receive or are eligible to receive railroad retirement benefits, or
(5) Any spouse aged 65 and over of a fully insured worker who is at least aged 62
What if I am not eligible for PART A?  You have to pay for it!
If insured worked for less than 30 quarters of his or her life:
Can voluntarily enroll by paying premiums of approximately $400 per month
Premium can increase monthly
If insured worked between 30 and 39 quarters of his or her life
Can voluntarily enroll by paying premiums of approximately $240 per month
Any person enrolled in PART A can enroll in PART B for ~ $95 per month
Enrollment in PART A and PART B is automatic at age 65
If you do not want PART B you must reject it in writing within 2 months of receiving Medicare Notice

16. PART B – Supplemental Medical Insurance
Medicare: Part B
PART B – Supplemental Medical Insurance
What is Covered?
Physician and Surgeon fees, Diagnostic tests in hospitals and Dr. offices, Physical or occupational therapy, Radiation therapy, Medical supplies and devices, Ambulance service, Pap smears and one yearly mammogram, Flu and pneumonia vaccinations, Emergency room care, Drugs that CANNOT be self-administered
What is NOT covered? 
Custodial care, routine physical, eye & hearing exams and tests, Eye glasses and hearing aids, Routine foot care and orthopedic shoes, Immunizations, Cosmetic surgery ,Dental care & dentures
How is coverage calculated?
 PART B pays 80% of approved medical expenses after an ~ $150 annual deductable

17. PART C – Managed Care Under Medicare
Medicare: Part C
PART C – Managed Care Under Medicare
Participants can elect to have Medicare benefits provided by a managed care plan
I.e. an HMO, PPO or insurance company (but MUST use a preferred provider unless an emergency)
The Participant still pays PART B premiums, and usually pays more for PART C…
…BUT deductibles are usually eliminated and copays are lowered to reasonable amounts
A Medigap policy may not be necessary (because coverage is often redundant)
Benefits must be at least equal to (and sometimes better than) those available under Medicare
Additional Benefits:
Prescription drugs
Eyeglasses and hearing aids
routine physical exams

18. PART D – Perscription Drug Benefits
Medicare: Part D
PART D – Perscription Drug Benefits
You MUST have PART D unless you have supplemental health insurance
A voluntary program available to all people entitled to PART A and enrolled in PART B
Run through private plans that develop a list of covered drugs
Plans do NOT need to cover EVERY prescription drug…
…BUT must cover at least TWO in each therapeutic category and class
Premium is approximately $50 per month (depending on the chosen plan)
Costs and Coverage:
Annual deductable = ~ $250
After deductable  Plan pays 75% of next $2,000
of prescription drug costs covered by the plan
Benefits then CEASE until total drug costs reach ~ $5,100
Plan then pays for 95% of all additional drug costs
This means that you have to pay $3,600 ($250 + ($2000 x 25%) + $2,850) out of pocket BEFORE you reach 5% prescription copays

19. Final Comments “Planning” is best done in advance
(1) Fixing problems in the future may cost 5x as much as completing the process earlier.
(2) Benefits are subject to change in the future
Coordinate designing an Estate Plan with any Medicaid Planning
Well crafted Powers of Attorney and Health Care Proxies avoid future Guardianship Proceedings
Ask you doctors if they accept Medicaid (some don’t), and treat them kindly – a doctor is your greatest asset for receiving government benefits
Choose the correct Medicare Part C program based on your physician’s insurance participation
Apply for SSI/SSDI and Medicaid correctly the first time
~70% of Medicaid applications are denied the first time because the desired recipient makes an avoidable mistake
“Fair Hearings” are expensive, sometimes time consuming, and are opposed by SSA & DSS
When possible, include spouses, parents and other potential donors in the process
Spousal participation allows the “well” spouse to feel like a husband/wife and not a caregiver
Parental participation allows continued program benefits in addition to eventual estate distributions
Consider letting children know your desires (but not always)
Figure out people you trust to determine your fiduciaries and future caregivers