Long-term medical care is expensive – but where does the money come from?
This week I want to talk about TennCare Estate Recovery. Over the last few blog posts, we have gone over the benefits available to those who qualify medically and financially for TennCare Choices, Tennessee’s long-term care Medicaid program. We have also discussed how we can help our clients adjust their finances so that they can qualify. This week we want to discuss how TennCare recoups the cost of providing long-term care services.
TennCare rules can be confusing
A long time ago, my friend told me that her grandmother had to give away her house because she could not afford to pay for medical care and needed to qualify for Medicaid. This is really unfortunate! Her grandmother clearly didn’t understand the rules of Medicaid. Unfortunately, people like my friend’s grandmother get bad information about Medicaid, the services that are available, and the requirements to become eligible. I wish I could have told my friend’s Grandmother that she could have kept her house. This leads me to my main point…
TennCare will not take your house while you are living in it.
However, TennCare estate recovery allows TennCare to get reimbursed for any funds that they spent on behalf of someone after that person dies. In other words, the state will eventually try to get reimbursed for the money they spent on your long-term care.
According to current TennCare rules, a single person can own a house that is worth up to $603,000, or land with a house worth over $603,000, without any concern about being ineligible for TennCare due to their home. However, you will want to talk to your attorney and financial advisor about how you may be able to continue to pay the costs of maintaining a home if you are in skilled nursing care.
How and when does TennCare get reimbursed for your long-term care?
For most of us, TennCare is not going to take your home even if you are living in a facility. Concern about your real estate should arise if you were hoping to pass your real estate to your family when you die. While TennCare will not try to get repaid for their expenditures during your lifetime, they will seek reimbursement after you pass away.
Roberta has a home worth $250,000 and no other assets. She was in a skilled nursing facility for two years and received TennCare services for which they paid $125,000. After Roberta passes away, her estate will be expected to pay $125,000 back to TennCare before the family receives any money. Since there is a house worth $250,000, the family would be expected to sell that house and give half the proceeds to the state. This process is called estate recovery.
Is there any way we can keep the house in the family?
Estate recovery is something that TennCare takes seriously, and will go to great lengths to make sure that they are properly reimbursed. However, they will not take your home while you are living in it.
I want to be clear: A loved one receiving TennCare benefits while alive does not mean that Tennessee will later attempt to collect the money from YOU. The debt is not yours. If you have a loved one who passes away while on TennCare, your probate attorney will work with you to resolve that estate recovery claim so that TennCare can get reimbursed for any funds they spent on behalf of the deceased.
You can find more information through the Estate Recovery division here.
If you have a family member that was on TennCare or needs to get on TennCare, contact us at 615-846-6201. We’re here to help!
Many people have sufficient income to maintain a regular lifestyle but are unable to afford the high cost of long-term care. With the average cost of long-term care around $7,000.00 a month, it is incredibly difficult for most families to afford it, even more so after retirement. That’s why it’s a good idea to plan for qualifying for TennCare, also known as Medicaid.
Evaluate and restructure your assets to qualify for TennCare
As we discussed in our blog last week, there are certain criteria you need to meet to be eligible for TennCare. As an elder law attorney, one of my jobs is to help families get their loved ones qualified for TennCare while maintaining resources available for the rest of the household.
One of the ways that we do this is by restructuring a family’s assets. We do this by turning resources that are countable for TennCare purposes into items that TennCare does not count as part of its eligibility assessment
This process is known in the elder law community as a spend-down. The goal of the spend-down is to make you or your loved one eligible for TennCare as far as your assets are concerned. If you are overqualified for income-based criteria, we can use a special type of trust called a Qualified Income Trust, or a Miller Trust, to reduce your income. The goal of a spend-down is to maintain the quality of life for all family members including those who need long-term care.
What is a “spend-down”?
Bob needs to go into long-term care. Bob is eligible based on his income. He makes $2,000.00 a month of social security retirement income. Bob also has a house, a car, and $50,000.00 in the bank. Bob is widowed and his children are adults.
We need to do something with at least $48,000.00 from Bob’s bank account in order to make him eligible for TennCare. His house and his car are not countable for TennCare purposes in most cases. What can we do?
Make improvements to his home that would improve his quality of life and access to the things that he needed in the home. This might include:
Grab bars in the shower or hallway.
A ramp into the main entrances.
Paving the driveway or expanding it closer to the door
Buy some things for Bob that his Medicare did not cover, such as:
Top of the line mobility devices
There may be other things that would improve Bob’s quality of life. There are things we can spend money on or convert into income. I am also going to suggest to everyone that they use the money to make arrangements for end-of-life needs if they have not done so already. Since at some point Bob’s children will need to make arrangements for his burial or cremation, paying for it now from his excess funds is a great way to make those funds unavailable for TennCare purposes and meet a future need.
Bob might want a Care and Savings Assessment
It’s not easy getting approved for TennCare / Medicaid, and we know it! That’s why we offer help in planning your steps to qualify. It doesn’t matter what your starting point is, we’re here to help you navigate the process with one goal: get our clients the quality of care that they need. Contact us if you would like to make plans for qualifying for TennCare.
Last week we defined TennCare and how it applies to our clients. This week I want to go more in-depth with how TennCare serves Tennesseans with long-term care.
Many people believe that Medicare benefits will cover nursing home care once an individual is 65 or older, but this simply isn’t true. While Medicare covers the first 100 days, it doesn’t cover long-term assisted living. Read more about Medicare here.
Back to TennCare/Medicaid…
My Mom doesn’t have long-term healthcare insurance. What are my options?
Payout of pocket until you run out of cash – This is an unrealistic option for most families. Nursing home care is expensive. Not a lot of people have an extra $7,000-$11,000 a month in their bank accounts.
Do a reverse mortgage on her home.
Qualify for the TennCare / Medicaid program called “CHOICES”.
As you can see, options 1 and 2 are very unpleasant and leave nothing left for a loved one’s legacy. However, option 3, CHOICES, is definitely something worth looking into.
What is CHOICES?
CHOICES is the category of TennCare that provides Long-Term Services and Supports (LTSS) such as nursing home care.
What is the process for getting qualified for CHOICES?
In order to be eligible to receive benefits from TennCare/Medicaid your loved one must first qualify within these three categories:
How does someone become medically eligible for TennCare CHOICES?
The state of Tennessee will determine who is medically eligible to receive TennCare Long-Term Services and Support (LTSS) by using a pre-admission evaluation (PAE). This PAE is used to determine if the applicant can do basic life skills on their own without help. The PAE will also determine if the applicant is safe in their current environment.
The PAE is a strict evaluation and it is performed on a case-by-case basis. An applicant must receive a score of 9 or higher on a 26 point scale in order to be considered medically eligible for TennCare Long-Term Support Services.
For example, a caregiver or healthcare provider may be asked about a patient’s level of ability to do things and how much assistance is needed.
The following Activities of Daily Living (ADLs) are covered in the PAE evaluation:
If you or your loved one is unlikely to get to a nine or higher on the PAE, it is always appropriate to ask for a “safety determination” evaluation as an alternative route of becoming medically eligible for Choices.
How can someone become financially eligible to receive CHOICES?
You must be able to prove that the applicant has a low income and little assets. As of January 2022, an individual applying for TennCare CHOICES cannot have an income exceeding $2,523.00 per month. Additionally, the applicant cannot have more than $2,000 in assets. This includes any money in the bank and investment accounts but also requires consideration of retirement accounts, life insurance policies, real estate, artwork, jewelry, and any other valuables. When we talk about the assets for a couple of things get a little more complex. The most important thing is that both the applicant and their family are taken care of, both medically and financially.
My Mom is over the limits for income and assets? What do we do?
If the applicant is in excess of the amounts we can plan for that! We have a tool to help people who have excess income and assets yet need to qualify for TennCare/Medicaid called the “Care and Savings Assessment”. With this Care and Savings Assessment, we work to determine the best way to structure you or your loved one’s finances, either now or in the future. We plan so that our clients have the peace of mind knowing they can qualify for TennCare if and when they need it!
It is often helpful to have an attorney assess your financial situation and offer recommendations on how those finances may be restructured to qualify for TennCare Long-Term Services and Support (LTSS). As an experienced TennCare planning attorney, I can help you evaluate your risk and create a plan that takes care of everyone in the family.
Are you ready for help with TennCare planning? Contact us and we can discuss your plan. Next week we will go over some examples of how we restructure an individual’s finances to meet their needs for long-term care.
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