The Connecticut Elder Law Blog

Medicaid and Annuities

The Medicaid program's treatment of annuities is one of the biggest sources of confusion for my clients.

So...if you have an annuity and you apply for Medicaid, is that going to be a problem?  The answer is the same as it is for most legal questions:  "It depends".

The current rule regarding annuities, which has been in place since February of 2006, is that an annuity is not a countable asset for Medicaid eligibility purposes if the following requirements are met:

1.  "Actuarilly sound".  In other words, the payment term of the annuity cannot exceed the annuity owner's life expectancy.  Furthermore, the grand total of the annuity's planned payments cannot exceed the cost of the annuity.

2.  Non-transferable.  Pursuant to the annuity contract, the annuity owner must be prohibited from transfering ownership of the annuity to another person.

3.  Irrevocable.  Except for the regular annuity payments, the annuity owner cannot withdraw funds from the annuity.

4.  State as Beneficiary.  Here's the one that my clients find the most frustrating; the State must be the primary beneficiary upon the annuity owner's death, up to the cost of care that the State has provided for the annuity owner.   If there is a spouse or a minor or disabled child, then the State must be the secondary beneficiary.

The State is generally wary of annuities and they will strictly apply this test.  So keep this information in mind if you are a senior and considering the purchase of an annuity.

"Available" Assets under Medicaid

When the State of Connecticut tallies up your assets in order to determine if your asset level is low enough to qualify for Medicaid, they will only look at your "available" assets (and your "non-exempt" assets).

"Available" assets is defined under Connecticut General Statutes section17b-261(c): "For purposes of determining eligibility for the Medcaid program, an available asset is one that is actually available to the applicant or one that the applicant has the legal right...to obtain or have applied for the applicant's general or medical support" (emphasis added).

So, cash in the bank in an account with your name on it is obviously something that is "available" because it's "actually" available.  You can go to the bank whenever you want, grab the cash and spend it for your own long term care.

But what about money in a trust for which you are the benefiary?  Well, it depends.  If the State reviews the trust and finds any language that allows the Trustee to use the money for your medical care then it's "available" to you.  Whether the Trustee actually uses the trust funds for your benefit is irrelevant.  The mere fact that the Trustee is authorized to use the trust funds to pay for your medical care means that the trust funds are "available" to you under Medicaid.

So remember...just because assets are in a trust and beyond your direct control doesn't necessarily mean they are protected from a Medicaid spend-down!

 

Java and the Elderly

I was a late-comer to coffee drinking, just taking it up a few years ago.  I get up at 4am for my morning workout, which means that I hit a significant mental lull around 3pm or 4pm each day.  Now I rely on that afternoon cup o' joe to push me through the end of the workday!

Therefore, I am delighted to pass on to you this report on the latest research regarding coffee and the elderly.  Click here.

And, if you have the time, here's a lengthier article on the same study posted on the wellness blog for the New York Times.  Click here.

An excellent article on broaching the subject of Alzheimers and assistance with money management:

http://paper.li/ElderLawGeorgia/1308259502 .

New T19 Application-Processing Approach at DSS

I'm happy to report on a positive development at Connecticut's Department of Social Services (DSS), which is the entity that is in charge of processing Medicaid applications and determining eligibility.

You're probably aware that there is a five-year look-back period (it was a three-year look-back until 2006) associated with Medicaid applications.  In other words, DSS will essentially audit your financial records for the five-year period leading up to the filing of your Medicaid application.  Up until now, that required your submission of five years worth of monthly statements for every account/asset that has (or had) your name on it.  That's an awful lot of paperwork.

Well, now DSS has apparently acknowledged that IF a Medicaid applicant has gifted money out of her name with the intent of protecting it from the nursing home, that transfer has most likely taken place in the past two years.  I'm not sure if this conclusion is based on hard data or if it's just a guess.  But either way, I suppose the logic makes sense.

Anyway, in light of this conclusion, DSS is now going to require monthly statements for assets over the past TWO years (no longer five) and then one statement for every six-month period for the other three years of the look-back. 

In other words, it's still a five-year look-back, but now they're going to take a "hard" look at the past two years and a "soft" look at the other three years.  The result is much less paperwork to collect and submit. 

And, presumably, applications will be processed more quickly.  This may be the main driving force behind this change since most DSS caseworkers seem to be struggling with an unholy backlog of applications to review.

IMPORTANT: Please note that I'm providing this update based on a brand new memo that is being circulated through DSS regional offices.  However, I do not have any first-hand experience with this new process, and I'm not aware of any elder law colleagues who have any first-hand experience with this either. 

So now we just need to hope that this new approach is actually implemented.  We'll see...

 

 

ASA Webinar on Navigating the Senior Care Maze

The American Society on Aging is offering a free webinar on "Navigating the Senior Care Maze" on May 16th.  It looks like the presenters are top-notch and they will be covering some important topics.

Click here for the details.

Happy Friday!

CT Legislature Passes Hospice Bill

The CT legislature passed a bill yesterday aimed at making hospice care more widespread for the terminally ill and their families.  Click here for the details.

Of course, being a life-long runner, this article at the New York Times' Wellness Blog about exercise and brain power caught my attention.

Couldn't help thinking about the implications of aerobic exercise for my Alzheimers clients...

My legs are finally starting to feel normal again after completing the Cox Sports Marathon in Providence, RI on Sunday. I clocked a 2:59:12 (6:50 per-mile pace), which was good for 32nd place. Luckily, the weather was perfect for running and the race was very well-organized. Nonetheless, I'm glad that's over with!

I enjoyed presenting "The Pitfalls of Estate Planning" to the Glastonbury Senior Center yesterday as part of their popular "Lunch & Learn" series. It was a good-sized crowd with tons of questions...a sure sign of an engaged audience!