Gilligan’s Island Meets Elder Law

Gilligan

So what happened after the rescue? These are my thoughts (just for laughs):

Gilligan

A simple well-meaning man, after his rescue, his celebrity status generated a substantial income.   But his generosity to friends and good causes left him without sufficient resources to provide for adequate care options as he aged.  He died ignobly at age 90 in a Medicaid bed at the Sailors and Seafarers Nursing Home in San Francisco.

Captain

Full of himself but in reality much less sophisticated than he believed, after attending multiple chicken dinner seminars, he was convinced to put all his money in annuities and risky investments; and further to create a series of complex but unbeneficial irrevocable trusts. Entirely fleeced and ruined, he sailed off in a small dingy at the age of 77 and was never heard from again.  An investigation of his computer suggested he was aiming for the island sanctuary where he had spent the happiest years of his life.

Ginger

Egotistical and high-living, she enjoyed her moments of fame upon her return to civilization. After a series of marriages to increasingly younger men, she was left without resources, and died in a shabby apartment in Los Angeles from a drug and alcohol overdose.  It is said she was clutching a photograph of the Professor when she passed.

Maryanne

Prudent and practical, Maryanne hired skilled legal counsel upon her return to the continent. She smartly negotiated her book and T.V. rights and invested her earnings. She lived happily and comfortably to a ripe old age on her family farm in the Midwest; leaving her substantial estate to family and charities.

The Howells

Lovey died shortly after the couple was rescued leaving Thurston depressed and vulnerable. Thurston lived on a several more years, and suffered from age-related cognitive decline.  In his last years he purportedly married a care-giver in a secret ceremony.  Following his death the care-giver spouse battled with distant relatives over the estate.

The Professor

Smart but quirky, he returned to teaching in Southern California but suffered a series of grave medical conditions. After a particularly brutal medical procedure, he elected to end his life using California’s assisted suicide law, and through his example advanced assisted-suicide legislation in several other states.  He left his estate to research.

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Four Companies Approved to Sell LTCI Partnership Policies

Topic: The Long Term Care Insurance Partnership Program.

Background: This topic was previously addressed in these posts: LTC Insurance Partnership Shows Signs of Life (posted March 29, 2015); and LTCI Partnership Update (posted August 19, 2015).

What’s New?

Public Act 198 of 2015 which implemented the Long Term Care Insurance Partnership Program in Michigan took effect February 22, 2016. Along with the implementation date came a deadline for insurance companies interested in issuing policies that will qualify as partnership policies.  The four companies that applied and have been approved to issue partnership policies are:

Bankers Life and Casualty Company

John Hancock Life Insurance Company

Thrivent Financial for Lutherans

Massachusetts Mutual Life Insurance Company (approval pending)

These four companies are the only companies obtaining approval at this time. It is possible other companies will seek approval in the future.  These companies are presumably ready to sell these policies now or in the very near future.  Expect to start hearing about them.

Conversion policies

Be on the lookout for people who purchased LTCI insurance policies after January 1, 2008. The law allows individuals who purchased LTCI insurance policies after that date to “convert” their policies to partnership policies.  However, for this to occur, they would have to have purchased policies from one of the companies identified above who are authorized to issue partnership policies in Michigan, and those companies would have to agree to the conversion.  People who have such policies should consider contacting their agents and exploring their options with respect to conversion.

Friends in High Places

As mentioned in prior posts, implementation of the LTCI Partnership Program has been a priority of State Rep. Kevin Cotter, elder law attorney, now Speaker of the State House. As a result of Rep. Cotter’s interest in the subject and in educating his colleagues and the public about this topic, I was granted a very nice meeting yesterday with several people from DHHS, the Speaker’s office, and the State House Republican Policy Office.  Very generous of them to spend time answering questions.  Thanks all.

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New Medicaid Policy on VA Income

Understanding the way Medicaid programs treat income-like benefits paid by the Veterans Administration have always been confusing (at least to me). Until now, Medicaid policy on the subject was sparse.  Good news, as of April 1, we have a lot more detail.  Bad news, I still don’t understand.

It’s important because people who can combine VA benefits (especially Aid and Attendance) with Medicaid Waiver or PACE benefits, have more options. And it comes up a lot.  But it’s dicey because if a client accesses VA benefits and by doing so receives income that puts them even one dollar over the income cap, they lose the ability to obtain benefits through either Waiver or PACE.

At least part of the confusion stems from the fact that the checks a Veteran (or their spouse) receives from the VA typically represent a composite of pensions and supplemental payments (or as Medicaid calls them “allowances”). The challenge is determining how much, if any, of a check they receive is going to be considered income when applying for Medicaid benefits. (Veterans who were injured in service receive “compensation.”  Compensation is clearly income, and is not the subject of this blog post.)

As of April 1, DHHS issued expanded language in BEM 503 (click here to read the bulletin). The BEM now says:

Bridges counts the gross amount of the pension or compensation as unearned income.

Exceptions:

  • Bridges excludes any portion of a payment resulting from an Aid and Attendance or Housebound allowance; see VA Aid and Attendance and Housebound Allowances in this item.
  • Bridges may exclude augmented benefits; see Augmented Benefits in this item.

Bridges excludes any portion of a payment resulting from unusual medical expenses; see VA Adjustment for Unusual Medical Expenses in this item.

So it clearly says they will exclude “any portion resulting from unusual medical expenses” and “any portion of the payment resulting from Aid and Attendance or Housebound Allowance.”  (emphasis added).

Then it says:

Payments are made to veterans, spouses of disabled veterans, and surviving spouses who are:

      •  Housebound.

      •  In regular need of the aid and attendance of another individual.The payment is included with the pension or compensation payment.Bridges excludes as income and as an asset the portion of a VA pension or compensation that is the aid and attendance or house-bound allowance.

Again “excluded,” but again, that annoying word “portion.”

And it says:

VA increases some pension and compensation payments due to unusual medical expenses.

Bridges excludes the increase due to unusual medical expenses as income and as an asset.

OK, so we have an “Aid and Attendance benefit” and a “housebound benefits.” Both excluded. Likewise, increases resulting from unusual medical expenses are excluded.  But we are told that these payments may only represent aportion of the payment that Veteran or his/her spouse receives, and that it is only this “portion” that is excluded.  So naively, I ask: What portion? How do we calculate it?  How do we prove what it is?

Well, policy says:

These allowances are not identifiable on a check stub or award letter. Accept the client’s statement that the payment does not include any of these additional allowances.

But I’m not asking about how to prove that the payment does not include an excluded “allowance.” I want to show that it does include an allowance, and I want it to be excluded.  Although the VA will, upon request, provide a written explanation of benefits, the process for obtaining that information is slow, unreliable, and often incomplete; especially with respect to unusual medical expenses.

There’s more – and you can read it yourself. I know I can be dense.  So I asked some of the smartest people I know (Thanks Amy and David), yet I remain uncertain.

I believe the changes were intended to make things better. After all, the State clearly understands that every Federal dollar they capture from the Veterans Administration is one less dollar they have to spend; and that forcing people who would otherwise be getting Waiver or PACE services into nursing homes because they went over the income cap doesn’t help anyone.

I don’t like posting information that doesn’t provide guidance – but thought: (1) some of you might not be aware of the changes, and (2) maybe it will make more sense to you. If so, please feel free to drop me a line.

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Like Batman v Superman – only darker: The Coming Generational Battle

Boomer

People sometimes ask me how our firm is being impacted by the aging of Baby Boomers. I try to avoid the topic, because once I get started I hear myself becoming dark and foreboding – not a role I like to play.  So if you prefer uplifting topics with your coffee or tea – read no further.

Baby Boomers were born between 1946 and 1964.  So this year they are between the ages of 52 and 70. Of the 76 million of them born, 65 million are still alive.

There are 83 million Millennials now alive. They are now between 16 and 34 years-old.

Forever Young

Boomers think a lot of themselves. When I am questioned about the impact of Boomers, it is often by a Boomer who expects me to endorse their perspective that Boomers aren’t going to age like old people do now.  One recently said to me “We’ve changed everything we’ve touched.”  There was such arrogance to it.  Do they think that physical frailness, cognitive decline, and all of the indignities and discomforts of the aging process will just disappear because they have arrived?  Or, more likely, are they simply convinced that regardless of the cost or inconvenience to the rest of society, new systems, programs, devices and medical breakthroughs will have to come about so that their expectations can be realized.

Young and Hungry

But these Millennials have dreams too. They are just biding their time.  Although they grew up watching their parents, these Boomers, enjoy a lifestyle supported by good jobs and seemingly unlimited access to credit, they enter a much less friendly global economy, where earning a living is tough, even with a college degree, and credit is hard to come by (except for the massive student loans they are burdened with).

Political Theatre

Much of the arrogance of the Baby Boomers is no doubt a product of the political clout they’ve enjoyed since coming of age. Boomers have owned the political process for 40 years.  As a result, the most taboo topic in politics, the topic that neither side of the aisle has been or is willing to even seriously discuss, is how to manage the crushing costs associated with an aging population.

So go back to the top. There are already more Millennials than Boomers, and the Boomers are dying off much more rapidly.  While many Millennials are now either too young to vote or too young to be seriously engaged in the political process; project out just ten short years.  Then, ask yourself, how will these young adults feel about the expectations of these arrogant old codgers who earned more money than they could ever hope to earn, pissed it all away, and now stand before them demanding they be cared for at the highest standard possible?  It’s a rhetorical question.  Another rhetorical question:  If the political decision is, for instance, a choice between forgiving student loans and paying for more healthcare for retirees, which way do they vote? I think the answer is that everything, Social Security, Medicare, end of life choices, will be on the table.  Or as I sometimes tell my Boomer clients: “The nursing home you feel uncomfortable placing your mother in today, may be a castle compared to what will be available when we get there.”

Conclusion

I am a Baby Boomer. I take no great joy in my vision of the future. And, yes, I wasted $8.00 on the Batman v Superman movie.  Nice to see East Lansing’s awesome art museum prominently featured – other than that….

Supplemental Resources:

Census Bureau: Millennials Outnumber Baby Boomers.

Population Reference: How Many Baby Boomers?

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