Serving the Birmingham, AL Area

What is Medicaid?

Medicaid is a “needs based” government program established during President Johnson’s administration to pay for the medical costs of the indigent population. As health care costs (particularly long-term care custodial costs), have outpaced the rate of inflation, the middle class and upper middle-class have also looked to the Medicaid program to pay for skyrocketing long-term care expenses. Asset protection and Medicaid planning are very complicated areas of law and we highly recommended that you see an elder law attorney to develop a plan to qualify for Medicaid.

How can I ease the transition into assisted Living?

Moving a loved one into an assisted living facility, especially someone as close as your mother or father can be a difficult process. Start by putting yourself in their shoes, be empathic towards their situation. You can let them know that you too, wish them to remain independent, but that they could also benefit from some assistance.

Work with the assisted living facility to help introduce them to the staff and even the residents. The first few months are the most difficult, so visit as often as you can to help ease the transition.

Check in with them frequently to see if their needs are met, even asking if they need some new books or videos are a good idea, try to make them feel at home as much as possible. The small things go a long way, and you want to make sure they feel loved and as close to everyone as they were before.

Will Medicaid pay for assisted living?

Not in Alabama.

Does Medicare pay for assisted living?

Unfortunately, Medicare does not cover assisted living. The coverage for any long term care under Medicare is very limited.

However, Medicare will cover short term stays in a skilled nursing facility, or rehabilitation facility while recovering from illness or surgery. Learn more about Medicaid and pre-planning for nursing home living here.

Is assisted living covered by my dad’s veteran’s benefits?

Although VA will not directly pay the assisted living facility your dad may receive a disability pension of up to $2,120/month from VA that can pay for any of his needs which would include the assisted living cost.

How many financial records must be submitted to the Alabama Medicaid Agency for review with a Medicaid application?

Sixty (60) months of financial records are reviewed for nursing home Medicaid. This review period is a “lookback period.” If during the lookback period, the Alabama Medicaid Agency discovers that an uncompensated transfer of assets (i.e., a gift) was made to a third party, it will apply a formula to determine how long an individual must wait before becoming eligible for nursing home Medicaid. Such a waiting period is a “penalty period.”

May an individual transfer assets and still qualify for Medicaid and, if so, how is the “penalty period” calculated?

Yes. There is, however, a penalty period resulting from a gift made when the donor of the gift will apply for nursing home Medicaid. If applying for nursing home Medicaid during the applicable lookback period, most transfers of assets will cause a penalty period (i.e., delay in qualification for Medicaid) equal to one month for every $5,800 transferred. $5,800 is fixed by Alabama as the average monthly nursing home cost in Alabama during the year 2016 and is revised annually.

Such penalty period is computed by taking the amount transferred during the lookback period and dividing such transferred sum by the rate Alabama mandates as the average monthly nursing home cost in Alabama (i.e., $5,800). The quotient of such formula is the penalty period because it determines how many months an individual applying for nursing home Medicaid must wait until eligible.

Alabama has fixed $5, 800 as the average monthly nursing home cost in 2016. Therefore, if the donor gifted $58,000 during the lookback period, such a transfer would cause a penalty period of ten months ($58,000 ÷ $5,800 = 10 months).

When does the penalty period begin?

The penalty period to receive nursing home Medicaid commences on the first day of the month following the later of such date or “the date on which the individual is eligible for Medicaid and would otherwise be receiving institutional care services based on a Medicaid application for such care but for the application of the penalty period.” The legislation indicates that to start the penalty period running, all of the following must occur:

  • The Medicaid applicant must have less than $2,000 in non-exempt resources; and
  • The Medicaid applicant must be in a nursing home; and
  • The Medicaid applicant must have formally applied for Medicaid benefits.

Applying the current law to our example would have this result. If the Medicaid applicant transferred $58,000 in June 2012, and was admitted to a nursing home and also submitted a Medicaid application in June 2016, the lookback period (which extends back 60 months prior to the application) would capture the transfer made 48 months before the date of the application and the resulting penalty period would cause the Medicaid applicant not to be eligible for Medicaid until May 2017. May 2017 becomes the Medicaid eligibility or “pickup” date because the commencement of the 10-month penalty period would run in July 2016 as that is the first month in which the Medicaid applicant had: 1) no more than $2,000 in his or her name, 2) entered the nursing home and 3) submitted the Medicaid application.

Are there assets which can be transferred which will not cause a transfer penalty period delaying Medicaid qualification?

      1. The asset is transferred to the Community Spouse (however, a subsequent transfer by the Community Spouse may cause additional transfer penalties);
      2. The asset is transferred to a blind or disabled child;
      3. The asset was transferred to a trust established solely for the benefit of any disabled individual;
      4. The asset is the Medicaid applicant’s residence and the residence is transferred to a sibling of the Medicaid applicant with an equity interest in the house;
      5. The asset is the Medicaid applicant’s residence and the residence is transferred to a child of the Medicaid applicant who is blind, disabled or less than 21 years of age; or
      6. The asset is the Medicaid applicant’s residence and the residence is transferred to a child of the Medicaid applicant who has resided with and cared for the Medicaid applicant for two years prior to institutionalization, which care allowed the Medicaid applicant to remain at home (“Caretaker Child” exception).

Can assets still be protected even after an individual has been admitted to a nursing home?

Yes, under current law, it is possible to protect assets even after an individual has been admitted to a nursing home. The percentage of the assets that may be protected, however, will not be as significant as if advanced planning had been done.

Can Medicaid take my assets after I die?

If you received Medicaid during your lifetime, a claim will be made against your estate for the benefits you received after age 55. If your estate is greater than the total of benefits received, Medicaid’s total recovery is limited to the benefits provided; on the other hand, if your estate is less than the total of benefits received, the claim is limited to the funds in your estate. Funeral expenses, taxes, administrative expenses of the estate, including legal fees, and commissions earned by the estate fiduciary could all be paid first, and will reduce the amount available to pay this claim.

Estate claims are limited to probate assets, and do not include jointly-held bank and investment accounts, retained life estates created in property, and/or jointly-held real estate.

If I need a break from caregiving, what are my options?

What you are looking for is respite care. What type of respite care that is best would depend on your exact situation.

Respite care can be provided in the home, most large home care providers and home care agencies provide these temporary services. Some facilities also will accept residents who require room and board temporarily.

Is hospice care covered by Medicare?

If someone is covered by Medicare Type A, and is deemed to have less than six months of life remaining, the hospice services will be covered. Medicare will cover the costs of her hospice are in 2, 90-day increments, covering the six-month period she will receive care.

If your mother should continue to live past the six-month period, it is possible for either you or your mother’s caregiver to re-apply for Medicare benefits in 60-day increments.

Should I hire a private caregiver or a home care company?

We recommend a home care company because they have insurance policies to back up their caregiver vetting process. You are not responsible for caregiver oversight and management either. You also need not worry about withholding and paying payroll taxes or worker compensation premiums for private caregivers. And finally. the home care company employees are bonded in case of theft.

How can I find a home care provider in my local area?

The best way is to have our Elder Care coordinator assess the patient and suggest a home care company that can provide the services needed and has worked successfully with us before.

There are several ways to find a home care provider that can address your needs. Some refer to their services as in-home care or at home care, or non-medical home care.

A good place to start would be to ask any friends or family members if they’ve ever hired a caregiver. Personal referrals are always helpful. Directories and books such as the yellow pages will also point you in the right direction what providers are located close by.

Remember that trusting the care of a loved one to a stranger is a large risk, screen thoroughly, and ask for plenty of references when interviewing potential providers.

What is the difference between home care and home health care?

  • Home care is a broad term used to describe several forms of care provided in-home. It covers personal care (bathing, dressing, grooming), homemaking services (light housekeeping and chores), and companionship services.
  • Home health care provides medical care in the home. Several examples are therapy (physical, occupational and speech therapy), infusion services, wound treatment, and medication management.

If you have any other questions about Medicaid or Medicare, estate planning, or VA benefits, please don’t hesitate to contact the Elder Law Firm of Steve Bailey. Our team of staff has years of experience and personal histories of helping their parents transition to a nursing home and the many challenges that go along with it. Whatever your needs are, having a knowledgeable estate planning lawyer on your side will help ease the stress and worry. Learn more about Steve Bailey and get in touch with us today.