Free instructional CD and Quick Reference Card
|
|
|
|
Robert Cullen speaks
|
|
|
|
New law impacts Medi-Cal asset-preservation strategies
By Robert J Cullen, CFP®
The Deficit Reduction Act of 2005,
passed in February 2006, does not change the basic eligibility requirements
for obtaining Medi-Cal
(Medicaid) assistance to pay for long-term care. The primary thrust of
this legislation is to restrict several popular methods for sheltering
assets. These include 1) Look-back periods extended 2) Half-a-loaf gifting
curtailed 3) Elimination of ‘rounding down’ of gifts that
are less than the Average Private Pay Rate (APPR) 4) Concurrent gifting
penalty periods eliminated 5) Limitations imposed on home equity exemptions
6) Annuity use curtailed 7) Expansions of Community Spouse Resource Allowance
restricted by implementation of 'income first' rules.
This is federal legislation; individual states must implement these
new provisions to make them effective for consumers. Until these new
provisions are implemented by individual states, county eligibility workers
will follow existing eligibility rules.
California has already implemented the ‘income first’ rules
for restricting expansions of the Community Spouse Resource Allowance.
This means income from both spouses must be considered when calculating
whether expansion of the Community Spouse Resource Allowance will be
allowed. This new provision will curtail greatly use of this planning
technique.
However, in recent conversations with state officials,
I confirmed that the use of spousal annuities to convert excess assets
to income payable
to the Well Spouse—as described in Chapter 5 and illustrated in
Graphic M5 and Graphic M6—is still acceptable under Medi-Cal regulations.
We will continue to furnish updates as California implements the new
rules.
May 2006.
CHAPTER 11 - CHOOSING A MEDI-CAL ADVISOR
Questions to ask prospective Medi-Cal advisors
First ask yourself: Am I typically penny-wise and pound-foolish? This
is an important consideration when seeking a competent elder finance
or elder law advisor.
If you answer ‘Yes’ to the above question, then you will
likely be satisfied working with advisors who charge lower fees and deliver
limited services. For example, former Medi-Cal eligibility workers advertise
their services as Medi-Cal advisors. While these advisors understand
Medi-Cal’s rules and regulations, they are often unschooled about
financial planning, investing and legal matters. If you are content to
pay for Medi-Cal-only guidance, such advisors may fulfill your needs.
They typically charge less than professionally credentialed financial
advisors and elder law attorneys.
Read more...
Chapter 5 – Scammers and Shysters alert
DAD AND MOM
Generous provisions for married couples
USE AND MISUSE OF ANNUITIES
As explained earlier, specialized immediate-pay annuities can be used effectively
in some situations to achieve Medi-Cal eligibility and preserve assets for
a Well Spouse.
Unfortunately, many seniors have been led to purchase ‘Medi-Cal
qualifying’ annuities that in too many instances were not appropriate
for their respective financial situations. Here are some guidelines for
evaluating annuities for Medi-Cal use.
Read More...
Excerpts:
"The doctors hoped to stabilize him to complete
a heart transplant. Jimmie’s $2 million of coverage from his health plan
plus $1 million of coverage from Jenny’s plan had been exhausted during
October. Jimmie and Jenny owed over $1 million to the hospital and counting."
Jennie
and Jimmie, page 38
"Richard was forced to pay $500 per day--$15,000
per month—for sub acute
care to maintain his wife in her comatose state."
Richard and Martha,
page 40
|
