Why Should You Consult With a Medicaid Eligibility Attorney? The Answer is Simple…”If You Don’t, You May Lose a Lifetime of Savings and Income.
Why Seek Legal Advice for Medicaid in New Jersey?
As life expectancies rise and long-term care costs increase dramatically, the challenge quickly becomes how to pay for these services. Many people cannot afford to pay $7,500 to $13,000 per month or more for the cost of a nursing home, assisted living residence, or even home-based care assistance, and those who can pay for a while may find their life savings wiped out in a matter of months, rather than years. It’s a frightening prospect.
Fortunately, there are NJ Medicaid Programs available to help. In fact, in our lifetime, Medicaid has become the subsidized long-term care program for the middle and upper middle class. But eligibility to receive Medicaid benefits requires that you pass certain tests on the amount of income and assets you have.
Why Do Medicaid Planning?
The reason for Medicaid planning is that without proper legal advice, many people spend more than they are required to, or they transfer property and savings inappropriately and are faced with months or years of ineligibility and penalties, jeopardizing their family’s financial security. In many cases, homes and resources are lost but could have been saved if planning was done properly and within the appropriate time frames and guidelines of the law.
HOW TO BECOME ELIGIBLE FOR NJ MEDICAID
To be eligible for New Jersey Medicaid, a person must meet these general requirements:
- Be a resident of New Jersey
- Be a U.S. Citizen or qualified legal resident alien
- Meet specific income and resource limitations
- Satisfy medical eligibility standards
PROGRAMS UNDER MEDICAID THAT CAN HELP
New Jersey Medicaid has several special long-term programs designed to meet the specific care needs of individuals who would not otherwise qualify for benefits.
- Medically Needy Medicaid programs for the aged, blind, or permanently disabled. These programs provide for a nursing home level of care for persons whose income and assets exceed current eligibility standards. The program is commonly referred to as Managed Long-Term Support Services (MLTSS). Let me explain this program further below.
(MLTSS) Managed Long Term Support Services for long-term care at home, in the community or in an assisted living residence provides numerous support services including personal aides to help with a person’s activities of daily living (ADL’s) like bathing, medication administration, toileting, meal preparation, home cleaning, etc. It also covers medical expenses, pharmacy and prescription needs, physical and speech therapy, diagnostic evaluations, medical equipment, etc.
Since 1996, the NJ Department of Health and Senior Services (DMAS) has administered all Medicaid and Managed Long Term Support Services and programs for eligible beneficiaries.
Benefits of Using an Elder Care Attorney to Qualify for NJ Medicaid Eligibility
ACTUAL CLIENT TESTIMONIALS
Mr. Niemann and his office successfully handled the filing of a Medicaid application for my Mom. They coordinated all the paperwork and detailed financial requirements requested by the County Board of Social Services. His office was courteous and professional to me and my family throughout the process. They answered our questions and responded back to us in a timely manner. The guidance and advice of Mr. Niemann and his staff is sincerely appreciated.
—Christopher Collins, New York City
I called the office about a Medicaid application and was given an appointment within a short time. I met with Mr. Niemann and our meeting was comfortable. Mr. Niemann asked questions to understand my current situation and needs. He offered opinions and options that were tailored to what I hoped to achieve. The meeting didn’t feel rushed and I felt Mr. Niemann listened closely. All work done was thorough and handled by a wonderful associate. I was so pleased by the entire process. I would recommend this firm for all legal needs.
—Pamela Madreperl, Middletown NJ
I used the services of Hanlon Niemann & Wright to help me with asset planning and a Medicaid application after my Dad had a severe stroke last year. We were fortunate to get Mr. Niemann’s expertise and the help of Diane, his paralegal. Diane was very helpful and was able to get us through this difficult process. We were able to achieve all our goals. We look forward to working with them again on our future needs in planning for my Mom.
—Michelle Roth, Howell NJ
The Hidden Dangers and Traps When Applying for Medicaid
ASSET TRANSFERS TO ACHIEVE MEDICAID ELIGIBILITY: BEWARE OF THE TRAPS!
Federal law states that when assets are improperly transferred by individuals anticipating long-term care in a nursing home, assisted living residence or at home under a community-based waiver program (MLTSS), penalties and periods of ineligibility must be imposed before the state will pay for the individual’s care.
States like New Jersey can “look back” at your finances and income to find transfers going back 5 years prior to the date you are institutionalized or, if later, the date you apply for Medicaid. (I call it the “5 year trap”).
This 5 year look back period applies to all transfers including gifts, charitable donations, etc. It also applies to transfers of assets and funds into a trust.
If a transfer of assets has been made for less than fair market value, New Jersey must withhold payment for nursing home (and certain other long-term care services) costs for a period of time often referred to as a “penalty period”.
The length of the penalty period is determined by dividing the value of the transferred asset(s) by the average monthly private-pay rate for nursing facility care in the State. The calculation of penalty periods is complicated so let me give you an example.
Here’s an Example of a Penalizing Transfer
You have a CD worth $100,000. New Jersey says if you make a gift of the CD within 5 years of applying for Medicaid you will be penalized approximately $11,000+/- per month (this figure is called the penalty divisor which is adjusted annually) and you will have to private pay the nursing home (or other care facility/caregiver) for approximately 9+ months ($100,000 ÷ 11,000 is around 9+ months). There is no limit to the length of the penalty period. It will always be a simple math equation of the gift amount divided by the monthly penalty divisor in effect during the calendar year of application which will equal the penalty period. Some penalties can last for years.
However, for certain types of transfers, Medicaid does not impose penalties. Exceptions to the mandatory penalties discussed above include:
- Transfers to a spouse, or to a third party for the sole benefit of the spouse (with limits);
- Transfers by a spouse to a third party for the sole benefit of the spouse (with limits);
- Transfers to disabled individuals, or to trusts established for those disabled individuals commonly called a Supplemental Needs Trust or a Special Needs Trust;
- Transfers for a purpose other than to qualify for Medicaid;
- Transfers where imposing a penalty would cause undue hardship.
Understanding penalty periods, the concept of gifting under NJ law and the timing of your Medicaid application requires years of diversified experience. Please do not attempt to do this on your own.
Contact Fredrick P. Niemann, Esq. on any questions concerning eligibility for NJ Medicaid or applying for Medicaid approval. He is a caring, sensitive, experienced Elder Law attorney who works daily in Medicaid eligibility planning.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, New Jersey Medicaid Attorney