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Frequently Asked Questions About Long Term Care Insurance from AARP |
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Have a question about AARP Health Care Options? You're not alone. Many people have submitted questions on a variety of topics and we've posted the ones that have been most frequently asked right here. You can look through them all, or, to browse by topic, click on a link below. Still can't find your answer? Click below for assistance: Browse Frequently Asked Questions by Topic:
About the AARP Health Care Options Program
ABOUT THE AARP HEALTH CARE OPTIONS PROGRAM What is AARP Health Care Options? AARP Health Care Options is not the insurer. It's a unique program that offers access to health insurance, special savings services and health information exclusively to AARP members (age 50+). AARP did a lot of research to create its health insurance and service program which they named AARP Health Care Options. They interviewed a long list of companies on benefits and costs before choosing the providers and services they felt were best for people 50+ and they contracted with the various insurers listed below in order to make coverage available to their members.
How many insured participants are in the AARP Health Care Options program?
How long has the Program been in existence?
What companies offer health insurance through AARP Health Care Options?
Metropolitan Life Insurance Company is the insurer of the AARP Long-Term Care Insurance Plan and was rated A+ by A.M. Best in 2006. A.M. Best is an independent organization that evaluates insurance company financial performance.
Who can get AARP Health Care Options products and services?
What products and services are available?
What kind of savings can I get on prescriptions?
Can I save on vitamins and supplements and other healthy living products?
Do you sell Medicare Part B reimbursed medical supplies?
Can I save on glasses and contacts?
*AARP Pharmacy Services and AARP Vision Discounts are
How do the changes in Medicare affect me?
I have lost my Medicare Supplement health coverage. Will the
AARP Health Care Options program be able to help?
If you have any questions on your guaranteed right to coverage, you may wish to contact the administrator of your prior health plan or your state's Department on Aging.
Can I enroll on line and how do I access the enrollment application?
You will be required to be an AARP Member and login to an AARP Health Care Options account to apply online so that we can save your application should you choose to continue at a later time. (If you are not currently registered, you'll need to register). You can also Join AARP or Renew your membership online. Once you've confirmed your personal information, you will be able to complete and submit an application online or print a copy of the application to mail or fax. You may also save your online application to continue at a later time. Additional detailed instructions and "help" information are included within the application process. In some instances, the applications are formatted as PDF (Adobe Acrobat) documents. You must have a copy of the Adobe Acrobat Reader program to view and print the application. You can print the application by clicking on the printer icon at the top of the Adobe Acrobat Reader window. You can then complete and return it in accordance with the instructions.
Once you have successfully downloaded the Adobe Acrobat Reader program, you can open any PDF document by clicking on the desired link.
How do I access a saved online application?
Will a saved application remain on my account indefinitely?
Can I delete an online application?
I need to send a Medical Release Authorization to complete my application process.
Where can I get a copy of this form?
If I want to mail or fax an enrollment application or Medical Authorization
to Release Authorization Medical Information, where should I send it?
AARP Health Care Options
Fax Number: 888-836-3985
Do you have a listing of addresses and phone numbers for AARP and the AARP Health Care Options program?
Can I authorize someone to help me with my health insurance?
Can I authorize someone to make payments on my behalf?
How do I request replacement materials?
I'm moving-will my AARP coverage remain intact?
I have received my coupon book, but where are my payment envelopes?
Why can't you send me a bill with an envelope each month?
These payment materials show that my rate doesn't stay the same throughout the
year. Why would my rate change?
You offer annual payer discounts; why don't you offer quarterly or semi-annual
discounts as well?
May I have my payments drawn from my checking or savings account automatically
each month?
For residents of Louisiana and Idaho, all checks or money orders must be made payable to United HealthCare Insurance Company.
Can I make a payment over the phone?
How long does it take to process a claim?
How do I submit a claim?
AARP Health Care Options
Be sure to note you name and membership number in the upper right hand corner. We suggest that you keep a copy for your records. If you would like additional claim filing instruction please call 1-800-444-6544.
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Real Estate Investing Coaching - Brian Gibbons
Creative Real Estate Investing with Brian Gibbons - Buy, Sell, Get Private Money, Protect Your Assets, and More!
Posts categorized "Elder Care Law"
June 08, 2007
Frequently Asked Questions About Long Term Care Insurance from AARP
Posted at 07:52 PM in Elder Care Law, Insurance All, Long Term Care Insurance, Nursing Home Insurance | Permalink | Comments (0) | TrackBack (0)
June 06, 2007
THE BASIC RULES OF NURSING HOME MEDICAID ELIGIBILITY
Disclaimer - We are not Elder Care Lawyers. Get an Elder Care Lawyer PLEASE!!
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THE BASIC RULES OF NURSING HOME MEDICAID ELIGIBILITY
Introduction For all practical purposes, in the United States the only "insurance" plan for long-term institutional care is Medicaid. Medicare only pays for approximately seven percent (7%) of skilled nursing care in the United States.
Long term care insurance which is designed specifically to pay for these costs, although a wise financial investment for many people, may be unavailable or too costly for others. The result is that most people pay out of their own pockets for long-term care until they become eligible for Medicaid.
While Medicare is an entitlement program, Medicaid is a form of welfare -- or at least that's how it began. So to be eligible, you must become "impoverished" under the program's guidelines. Despite the costs, there are advantages to paying privately for nursing home care.
The foremost is that by paying privately an individual is more likely to gain entrance to a better quality facility. The obvious disadvantage is the expense.
In New York, nursing home fees average $6,000 - $12,000 a month.
Without proper planning, nursing home residents can lose the bulk of their savings.
For many individuals, the object of long-term care planning is to protect savings (by avoiding paying them to a nursing home) while simultaneously qualifying for nursing home Medicaid benefits.
This can be done within the following rules of Medicaid eligibility.
The Asset Rules
The basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $3,950 (effective 1/1/04) in "countable" assets in his or her name.
"Countable" assets generally include all belongings except for
(1) personal possessions, such as clothing, furniture, and jewelry,
(2) one motor vehicle,
(3) the applicant's principal residence, and
(4) assets that are considered inaccessible for one reason or another.
The applicant's home will not be considered a countable asset and, therefore, will not be counted against the asset limits for Medicaid eligibility purposes as long as the nursing home resident intends to return home or his or her spouse or other dependent relatives live there.
As a result, for all practical purposes nursing home residents do not have to sell their homes in order to qualify for Medicaid.
The Transfer Penalty
The other major rule of Medicaid eligibility is the penalty for transferring assets. If an applicant (or his or her spouse) transfers assets, he or she will be ineligible for Medicaid for a period of time beginning on the date of the transfer.
The actual number of months of ineligibility is determined by dividing the amount transferred by a regional monthly nursing home rate as determined by the New York State Department of Health ("DOH").
- For example, if an applicant made gifts totaling $60,000 and assuming the regional monthly nursing home rate is $6,000, he or she would be ineligible for Medicaid for 10 months ($60,000 ÷ $6,000 = 10). Another way to look at this is that for every $6,000 transferred, an applicant will be ineligible for nursing home Medicaid benefits for one month. There is generally no cap on the period of ineligibility.
- So, for instance, the period of ineligibility for the transfer of property worth $420,000 is 70 months ($420,000 ÷ $6,000 = 70).
- However, the DOH may only consider transfers made during the 36-month period (60 months in the case of transfers to trusts) preceding an application for Medicaid, the "look-back" period. Effectively, then, there is a 36-month cap (60 month cap for transfers to trusts) on periods of ineligibility resulting from transfers assuming an individual does not apply for Medicaid prior to the expiration of the look-back period.
- Exceptions To The Transfer Penalty Transferring assets to certain recipients will not trigger a period of Medicaid ineligibility.
- These exempt recipients include: (1) a spouse (or anyone else for the spouse's benefit) (2) a blind or disabled child (3) a trust for the benefit of a disabled individual under age 65 (even for the benefit of the applicant under certain circumstances)
- Special rules apply with respect to the transfer of a home. In addition to being able to make the transfers without penalty to one's spouse or blind or disabled child, or into trust for other disabled beneficiaries, the applicant may freely transfer his or her home to:
- (1) a child under age 21 (2) a sibling who has lived in the home during the year preceding the applicant's institutionalization and who already holds an equity interest in the home (3) a "caretaker child," who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided such care that the applicant did not need to move to a nursing home
Estate Recovery
The state has the right to recover whatever benefits it paid for the care of the Medicaid recipient from his or her probate estate.
Given the rules for Medicaid eligibility, the only property of substantial value that a Medicaid recipient is likely to own at death is his or her home. Under current law, the state may make a claim against the decedent's home only if it is in his or her probate estate.
NOTE: Property that is jointly owned, in a life estate, or in a trust is not included in the probate estate and thus escapes estate recovery.
Treatment of Income
When a nursing home resident becomes eligible for Medicaid, all of his or her income, less certain deductions, must be paid to the nursing home.
The deductions include a $50-a-month personal needs allowance, a deduction for any uncovered medical costs (including medical insurance premiums), and, in the case of a married applicant, an allowance he or she must pay to the spouse that continues to live at home.
Spousal Protections
Assets Medicaid law provides for special protections for the spouse of a nursing home resident, known in the law as the "community" spouse.
Under the general rule, the spouse of a married applicant is permitted to keep the greater of $74,820 of assets or one-half of the couple's combined assets (as of the date of institutionalization) up to $92,760.
So, for example, if a couple owns $50,000 in countable assets on the date the applicant enters the hospital, he or she will be eligible for Medicaid immediately and the at-home spouse would be able to keep the entire $50,000.
If the couple owned $300,000 in assets, the spouse in need of care would not become eligible until their savings were reduced to $96,710 ($3,950 for the nursing home spouse plus a maximum of $92,760 for the community spouse).
Income
The income of the community spouse will generally continue undisturbed and he or she will not have to use his or her income to support the nursing home spouse receiving Medicaid benefits.
In some cases, the community spouse is also entitled to share in all or a portion of the monthly income of the nursing home spouse.
The DOH determines an income floor for the community spouse, known as the minimum monthly maintenance needs allowance, or MMMNA, which, for 2004, is $2,319/month.
(Where the community spouse can show hardship, the DSS may award a larger MMMNA, but only after an appeal to fair hearing.)
If the community spouse's own income falls below his or her MMMNA, the shortfall can be made up from the nursing home spouse's income.
If the community spouse’s own income exceeds his or her MMMNA, the DOH requests that he/she contribute 25% of the excess to the care of the nursing home spouse.
If the community spouse refuses to contribute, the nursing home spouse continues to qualify for Medicaid but the DOH, based on the particular circumstance, may sue the community spouse for that contribution.
Increased Resource Allowance Community spouses whose incomes are less than their MMMNAs even after considering the income of the nursing home spouse, may petition the DOH for an increase in the standard resource allowance so that these additional funds may be invested in order to generate income to make up the shortfall.
Given current low rates of return, this often can permit the community spouse to retain a substantial level of savings.
Unfortunately, the DOH may not award an increased resource allowance upon application.
The intake worker must award the standard allowance described above and the applicant must appeal the determination to a fair hearing.
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Medicaid Rules for Long Term Care
When it was first created in 1965, Medicaid would only pay for nursing home care for recipients over the age of 65.
But allowances were made in the legislation for exceptions or "waivers" to the nursing home coverage. In recent years, many states have applied for waivers to allow their state programs to pay for care in assisted living or at home.
These waiver slots are typically administered by the local area agencies on aging. As a rule, the vast majority of elderly Medicaid recipients are still receiving their care in nursing homes.
Financial Eligibility Rules Financial eligibility for Medicaid nursing home and community waivers requires the recipient to have less than $2,000 in resources. ($3,000 if a couple needs care)
Resources are defined as any asset that can be utilized to produce income or cash payments.
There are numerous rules as well as gifting look back provisions that define what a resource is and is not.
Some important assets that aren't required to be counted as resources are
- a personal residence,
- a life insurance policy with less than $1,500 cash value,
- a prepaid funeral and burial plan and
- a car (if necessary for transportation and care).
If the recipient is married, the spouse at home keeps the residence and a vehicle worth any value.
These excluded assets do not count against the eligibility of someone applying for Medicaid.
If the recipient is single but plans on returning home, the residence in most states is not included but is excluded for purposes of eligibility.
The house would however, be subject to lien recovery at the death of the recipient.
Any rental income must be applied towards the care of the recipient.
- An important rule change this year takes into account the market value of the home.
- If the home is worth more than $500,000 it prevents any single person from qualifying for Medicaid.
- This penalty does not apply if a spouse or dependent child is living in the home In most states, money invested in an IRA, a 401(k) or any other tax qualified account is not counted as a resource if the Medicaid recipient is older than age 70 1/2.
- Mandatory withdrawals from these accounts are considered income and not assets.
- It's possible these assets might be subject to recovery after the death of the recipient or require assignment on tax qualified annuities.
- After meeting the resource and level of care (need for care assessment) tests and qualifying for Medicaid, a recipient is required to share Medicaid costs by contributing all of his or her income to the total cost of care and Medicaid picks up the balance, if any.
- An allowance of $45 a month is added back in to provide monthly personal care.
- Also, an allowance for medical costs and insurance premiums not covered by Medicare is added back in.
Spousal Impoverishment Rules
There are special rules that apply to couples and prevent the healthy spouse from being impoverished due to a lack of assets or income.
Regardless of who owns them, all assets are considered jointly owned by the couple.
Assets are totaled and then split in half and a healthy spouse at home keeps his or her half and the Medicaid applicant must spend down his or her half until it is less than $2,000.
This money need not be spent on care but can be spent on any legitimate purchase.
Tax qualified savings accounts under the rules above are not considered assets.
If the total amount of assets are less than $20,328, the spouse at home keeps the entire amount and does not have to split in half.
If the spouse at home gets more than $101,640 after the assets have been split in half, that spouse can only keep $101,640 and all the rest of the assets have to be spent down by the person applying for Medicaid.
- As an example, a couple owns $400,000 in resources.
- The spouse at home can only keep $$101,640 and the spouse applying for Medicaid has to spend $298,360 less $2,000 before that spouse can qualify for Medicaid.
- Incomes are not considered jointly owned and do not have to be split in half.
- If John has $3,000 a month in income and Sarah has $800 a month, and John applies for Medicaid, then John's entire $3,000 will go towards his care and Sarah will presumably be left impoverished with only $800 a month.
- The reverse is also true if Sarah needs the care. John can keep his $3,000 and the state must make up the difference between Sarah's $800 and the cost of the nursing home.
- If John is applying for Medicaid, and in order to avoid complete impoverishment of Sarah, (she only has $800 a month) the state will transfer enough of John's income to bring Sarah's income up to $1,650 a month. This is called the community spouse monthly income impoverishment allowance.
- For people receiving community waiver care there are additional allowances. The asset and income allowances are adjusted each year for inflation.
Gifting Rules
New rules adopted in 2006 require any gift or a transfer-for-less-than-value within 60 months of a Medicaid community waiver or nursing home application to be counted as a resource to the extent of the amount of transfer. A transfer within 60 months from application is considered a gift whether made outright or conveyed in a trust. It makes no difference.
- There is a new penalty associated with these transfers.
- Disregard what you have heard in the past about gifts and penalties.
- Here's how the new version works.
- Suppose Mary replaces her name with her daughter's name on the title of Mary's residence with a net value of $280,000. Mary applies for Medicaid 59 months after the title transfer and one month shy of the look back limit. Because she is inside the look back period, the gift of the house becomes a transfer for less than value.
- Mary has less than $2,000 in resources and could qualify for Medicaid. Medicaid will not pay a dime for Mary's care until the equivalent spend down for her gift has been paid.
- In other words, the state considers the gift to be cash-in-hand that should have been spent before Mary qualified for Medicaid assistance.
- This spend down requirement now becomes a penalty after the fact.
- The penalty is determined in months of care and is calculated by dividing the amount of the gift by the state Medicaid rate which in this example is $4,000 a month.
- Dividing the gift by the monthly rate yields 70 (almost 6 years) months of penalty.
- From the date that Mary would have been approved for Medicaid someone must pay for 70 months of her care before Medicaid will take over.
- Note in this case the penalty is longer than the look back period.
- With a large gift, penalty periods could last up to five to ten years or more.
- If Mary applied for Medicaid 60 months and one day after making the gift there would be no penalty.
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Medicaid Recovery Medicaid recovery rules were initiated by Congress in 1993.
After the death of the Medicaid recipient, Medicaid has a claim against the home that was previously excluded for eligibility. The claim is in the amount that Medicaid paid for the recipient's care.
In some states a lien against the property, called a TEFRA lien, can be filed in anticipation of Medicaid's cost.
Not all states file a TEFRA lien but typically file a debtor lien after the death. As a matter of policy, some states do not make a claim against the property if the surviving spouse is living in the house. The debt is forgiven. This is only current policy since rules allow the state to initiate recovery through a lien on the property.
There are also rules allowing the family to request a hardship hearing if recovery puts a burden on the family and the state also has authority to waive recovery on homes worth less than a certain dollar amount.
Common rumor among professionals who do Medicaid planning is that Medicaid recovery in many states is more "bark than bite". Numerous articles and studies indicate that states do an extremely poor job of recovering money from assets that should be subject to recovery.
There is a suspicion that some property transferring in trusts or through joint tenancy may be escaping from recovery services.
Do not let these statements lull you into a false sense of security.
Continuing Medicaid budget deficits and a change in state leadership could result in Medicaid becoming much more aggressive about recovering money it can legally go after.
The first step would be changing state code allowing for TEFRA liens.
The use of such liens would preclude any transfer of property prior to satisfaction of the lien.
Posted at 06:34 PM in Elder Care Law, Medicaid Eligibility | Permalink | Comments (0) | TrackBack (0)
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