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By Swogger Bruce & Millar, Jan 31 2018 02:08PM

Medicare does not provide indefinite coverage for long-term care. Medicare coverage is only for rehabilitation and can be ended when a patient stops making progress. In any case, Medicare coverage is limited to 100 days. So, the survey findings that nearly 40% of Americans expect to rely on Medicare are troubling.

Nearly 80% of Americans would prefer to receive care in their home, and nearly 70% of their children would like their parents to receive care in their home. There are few government benefits that will help pay for in-home care. The Michigan MI Choice Waiver program can help pay for in-home care, but the coverage is limited by funding issues. PACE programs also attempt to keep people in their homes. However, the program is not widespread. The good news is that PACE will be opening in Northern Michigan in 2019. Veterans pensions, known as aid and attendance or housebound, are the last significant source of government payments for in-home care. All these programs have asset and income limitations.

Despite the limited government benefits, 33% of older Americans have not made any plans to cover care. 72% of Americans support family leave programs to care for a loved one, and the majority support policies to help finance long-term care.

We suggest consulting an elder law attorney and financial professional to learn about your planning options and potential benefits. The link to the full report is provided below.

AP-NORC Poll

By Swogger Bruce & Millar, Jan 4 2018 09:02PM

Community Spouse Resource Allowance: $24,720 - $123,600

The community spouse resource allowance (CSRA) is the amount of countable assets a person can keep while still qualifying their spouse for Medicaid long-term care benefits. The CSRA is calculated by dividing in half the couple's countable assets on the first day of continuous long-term care. The CSRA has a minimum and maximum amount, which is shown above.

Community Spouse Income Allowance: $3,090 (maximum)

The community spouse income allowance (CSIA) is the amount of income from the spouse in long-term care that can be diverted for the use of the community spouse. The CSIA is calculated by a formula; the maximum result of the formula is $3,090.

Divestment Divisor: $8,261

The divestment divisor is the average monthly cost of a nursing home in Michigan. The divisor is used when calculating a penalty period for gifts made during the five-year look-back period. All gifts made during the five years are added together and divided by the average monthly cost of a nursing home in Michigan; the result is the number of months and day that Medicaid will not pay for long-term care expenses. For example, if all the gifts made during the five-year look-back period added up to $82,610, Medicaid would refuse to pay for long-term care expenses for ten months.

Home Equity Limit: $572,000

The home equity limit only applies when there is not a community spouse living in the home. If a single person enters long-term care, their home equity must be below $572,000 to qualify for Medicaid. The limit also applies if both spouses are in long-term care.

MI Choice Waiver Income Limit: $2,250 or $3,375

The MI Choice Waiver Program allows Medicaid to cover some in-home care, and some assisted living expenses. Medicaid for long-term care does not have an income limit; the waiver program is different. There is an income cap for the waiver program; $2,250 for a single person receiving benefits, and $3,375 for a couple receiving benefits. If you qualify for the waiver program, Medicaid allows you to keep all your income to pay for expenses that it does not cover.

By Swogger Bruce & Millar, Apr 10 2017 02:56PM

On December 13, 2016, President Obama signed the 21st Century Cures Act. One section of the law made an important change to estate planning for disabled individuals. In the past, a disabled individual could not establish their special needs trust. It would need to be established by a family member, guardian or court order. Courts in Northern Michigan are very helpful in establishing these trusts, but the process takes time, effort and money. Now a disabled individual, who is competent, can sign and establish his trust without having to rely on others.

Special needs trusts are often used to provide a disabled beneficiary with assets to improve his lifestyle without those assets counting against eligibility for most government benefits. The new law applies to first-party special needs trusts which are also known as Medicaid payback trusts. Assets belonging to the disabled individual are placed in a trust and become excluded for purposes of applying for government benefits. Because the assets belonged to the individual, there must be a provision that provides that at the disabled beneficiary’s death any state that provided Medicaid must be paid back before distributing the remainder to a beneficiary’s heirs.

The two most common times to establish a first party special needs trust: (1) receiving an inheritance or (2) receiving an award from a lawsuit. We recently had two special needs trusts approved by the Benzie County Probate Court for two gentlemen who received criminal restitution.

Third-party special needs trusts are established as part of a family member’s estate plan. The provisions are similar, but because the assets never technically belonged to the beneficiary there do not have to be any Medicaid payback provisions. A third-party special needs trust allows a better result than receiving an inheritance and then putting it into a Medicaid payback trust.

If you have a disabled child or grandchild, a third-party special needs trust can improve his quality of life without causing him to lose government benefits. If you have received an inheritance or an award from a personal injury lawsuit, a first-party special needs trust can protect the benefits you are already receiving.

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