Elder Law
1. What is the difference between Medicare and Medicaid?
Medicare, part of the Social Security Act, is intended to provide medical insurance benefits for any individual over age 65 who is eligible to receive Social Security old-age benefits. Medicare Part A provides a hospital insurance program and Medicare Part B provides supplementary medical insurance. After the Balance Budget Act of 1997, beneficiaries have the option of receiving benefits through private health insurance plans commonly known as Part C, or Medicare + Choice. Medicare Part D covers prescription drugs. Each Part has separate rules and regulations. Medicare is designed to address acute care issues and is not designed for chronic conditions or long-term care needs. Medicaid is a welfare-based program designed to help pay for the medical expenses of those individuals who are financially destitute. Medicaid does, however, have long-term care benefits if eligibility criteria are met.
2. What are the options for paying for a nursing home?
The options for paying for long-term care are fairly limited. The cost of a nursing home stay in Kansas can easily run $4,500.00 a month or more. A resident can self-pay from his/her own funds or use the benefits from a long-term care policy. These policies have rules and restrictions shown in the policy limiting the maximum amount and time that such policies will pay. After any private coverage is exhausted and the person's assets have been spent, Medicaid can pay for long-term care. Medicaid is a welfare-based program and eligibility criteria are strictly enforced. Medicare will not pay for nursing home care except in very limited circumstances and only for a very limited amount of time.
3. How do you qualify for Medicaid?
An individual needing Medicaid assistance must file an application with the local Kansas Health Policy Authority (KHPA) office. In Kansas, KHPA is responsible for administering Medicaid. Applicants will need to show that they have a limited amount of resources and income. Resources are limited to exempt resources (a home, a car, etc.) and $2,000 of non-exempt resources. If the limitations are met, an applicant will generally be allowed $30.00 per month of discretionary income and the remaining income must be paid to the nursing home facility and for the payment of premiums on a supplemental insurance policy. Medicaid will pay the difference. "Spousal Impoverishment" rules for qualifying for Medicaid may also apply if the Medicaid applicant has a spouse who does not need long-term care.
4. What is a division of assets?
A division of assets, also known as spousal impoverishment, is a program designed to address the situation where one spouse medically needs to live in a nursing home, but the other spouse is still able to live in the community. The program allows the community spouse to keep a certain amount of assets and income to help sustain them in the community. The remaining assets must be "spent down" to the eligibility criteria. Thereafter, the nursing home spouse can qualify for Medicaid.
5. Can I give property away to qualify for assistance?
Giving property away in order to qualify for Medicaid can result in a period of ineligibility where the nursing home resident is impoverished, but unable to obtain governmental assistance. When an applicant applies for Medicaid, Medicaid will look back for gifts made within the last five years of the application. If Medicaid finds such a gift, a period of ineligibility is imposed from the date of the application.
6. What is Social Security?
Social Security is a broad federal statute that encompasses old age, survivors and disability programs in addition to Medicare. Social Security is and always has been financed by payroll taxes. Both the employer and employee pay tax, at a prescribed rate, to help fund the system.
7. What effect does my spouse's death have on my Social Security?
If your spouse dies, there is a limited death benefit payable to help cover the funeral expenses. Currently, this benefit is extremely limited and will only pay a small portion of a typical funeral. Additionally, Social Security will look at the surviving spouse's Social Security income to see if an adjustment needs to be made. If your spouse was earning more in Social Security benefits than you were, your payments will be increased to help make up for the loss of income. However, if your spouse was making the same or less than your Social Security benefits, no change in benefits will occur.
8. How are my affairs managed when I no longer can?
If you become legally incompetent and measures have not been previously established, a guardian of the person and conservator of the estate can be appointed by the District Court in the County in which you live. A guardian would be responsible for your personal care, including medical decisions. A conservator would be responsible for your finances. Both of these individuals must report to the District Court on at least an annual basis.
However, if you have durable powers of attorney for financial decisions, durable powers of attorney for health care decisions and a revocable living trust, the likelihood of needing a guardian and conservator in the event you become disabled is significantly decreased. People you have selected in these documents can perform the usual functions of a guardian and conservator without the necessity of court intervention.
9. Should I put my children as joint tenants on my accounts?
This is common practice, but not recommended. Although putting your children on your accounts as joint tenants allows them to pay your bills and avoid probate at your death, it also places your assets at substantial risk. Your children's creditors may garnish and take your assets. If your child gets involved in a divorce, your funds could be divided in your child's divorce action. If your child is sued and a judgment is obtained against him or her, that creditor can come and take your funds. A preferred method may be to put your children on as authorized signers of your account while you are alive with a pay-on-death designation to transfer the account to them at your death. With this technique, all the advantages of joint tenancy are achieved without the risk. However, caution should be used with transfer-on-death and pay-on-death beneficiaries because if a beneficiary predeceases the owner, that family line is "cut off."