October, 2014, Friedman Law

Archive for October, 2014

Social Security rates rise in 2015

Posted on: October 27th, 2014 by Mark R. Friedman

The Social Security Administration (SSA) announced today that social security rates will rise by 1.7% in 2015, as a cost-of-living adjustment.

In addition to social security retirement benefits that most seniors get, this rate increase will also benefit people who receive Social Security Disability Insurance (SSD) and Supplemental Security Income (SSI).

The maximum federal SSI benefit will be raised from $721 (2014) to $733 (2015), although in New Jersey the rate will be slightly higher because of a modest state supplement.

This increase also benefits seniors and people with disabilities who seek Medicaid for long term care, in a nursing home or other facility or with home care aides. The income limit for long term care Medicaid is three times the federal SSI rate, so in 2015 the income limit should be $2,199. However, the income cap is somewhat less important than it was previously given that NJ Medicaid will soon allow the use of Miller trusts.

For more information on social security, disability benefits or Medicaid, call or email us today.

The Trouble with Legal Forms

Posted on: October 24th, 2014 by Mark R. Friedman

E-commerce is seeping into everything these days, including estate planning. Online for-profit companies offer to generate a Power of Attorney document for you, using pre-fabricated forms that you plug your information into without ever consulting an attorney.

On the non-profit side, hospitals and other providers offer form Healthcare Directive documents that you write your information into, at no cost. The State of New Jersey even offers a free form online.
This is all fine, until it isn’t. The problem is that form power of attorney (POA) and healthcare directive documents often are inadequate when you really need them.

A POA and healthcare directive allow your loved ones to manage your affairs if you lose mental capacity, due for example to progressive dementia, Alzheimer’s or a stroke or coma. Once you lose capacity, it’s too late to make a new POA or healthcare directive, so it’s very important to get it right the first time.

Yet most generic form documents I see don’t include important provisions. New Jersey’s proxy directive says nothing about HIPAA privacy rights or visitation rights, which could leave loved ones with no right to access patient information or visit the patient. And I’ve yet to see a POA form document that includes the provisions necessary to do Medicaid planning. In other words, if you use a form POA and lose capacity, your loved ones couldn’t use the POA to preserve your nest egg from long term care costs, which is an important goal for many of our clients.

Everyone should have a healthcare directive and consider a POA, and form documents are better than nothing. But if you lose capacity, then your family will rely on these documents to make things easier during a very difficult time. For something that important, in my view it’s worth consulting an expert who can make sure your goals are met. I wouldn’t trust it to a form.

Visiting your Grandchildren after a Divorce

Posted on: October 22nd, 2014 by Lawrence A. Friedman

The relationship between a grandchild and grandparent can be very special, but when the child’s parents divorce or die, tension can arise between the grandparents and surviving parent or other decision maker. In that case, an NJ senior may want to seek visitation rights to preserve a relationship with a grandchild. While New Jersey law provides for grandparent visitation, obtaining such rights is not so simple.

Visitation rights can only be granted in a court order. However, because competent parents have a due process right to decide how to raise their child, a grandparent who applies for visitation can be seen as meddling. Thus seniors must tread lightly when seeking grandchild visitation rights. A senior seeking grandparent visitation should be prepared to convince a judge that the child could be harmed if the grandparent doesn’t visit but court mandated visitation will not impair the relationship between parent and child. A delicate balance should be the order of the day.

The New Jersey Supreme Court is currently considering the issues inherent when a New Jersey senior seeks grandparent visitation rights and should rule this term.

What You should Know about Miller Trusts in New Jersey

Posted on: October 15th, 2014 by Mark R. Friedman

Note: See our Miller Trust page for more current information on Miller trusts / Qualified Income Trusts (QIT’s).

Miller trusts are coming to New Jersey. We’ve covered the basics in previous posts, and now I want to cover some current issues with Miller trusts and Medicaid that consumers and practitioners should be aware of. Here’s what you need to know:

Miller trusts won’t be up and running on November 1, but will hopefully be up by the end of 2014. The Centers for Medicare and Medicaid Services (CMS) has yet to approve New Jersey’s Medicaid State Plan Amendment.

When Miller Trusts start, Medically Needy will end. The Medically Needy program will cease to take new applicants, and people with high income will instead apply using Miller trusts. However, folks who currently receive assistance under Medically Needy will be grandfathered in, and won’t have to switch to Miller trusts.

Miller trusts can be used in a nursing home, assisted living facility or for home care. Since Medically Needy only covers care in a nursing home, this creates new options for seniors and disabled people with higher income.

It’s not clear yet whether Miller trusts can be used to obtain DDD services. New Jersey’s Division of Developmental Disabilities (DDD) has said that people who seek group home care and other expensive services must obtain Medicaid through the Community Care Waiver. It’s not clear yet whether Miller trusts can be used to do that for people with higher incomes. Medicaid officials have said no, DDD officials have said yes. My suspicion is yes, but stay tuned.

NJ Miller trusts limit how beneficiaries can use income. NJ miller trusts allow trust funds to be used to pay the beneficiary’s personal needs allowance, spousal allowance, and medical costs. This is more limited than other states. Arizona, for example, allows broad medical expenses, special needs allowances and guardian and trustee fees. New Jersey is much more limited, for now.

It is unclear who will serve as trustee for beneficiaries without family support. A Miller trust requires a trustee to manage the trust and distribute income. In most cases, beneficiaries will rely on their spouse or children to serve in this role. But for people who don’t have family support, it’s not clear who would serve as trustee. Nursing homes have an inherent conflict of interest, it’s outside the statutory mandate of New Jersey’s Office of Public Guardian and most non-profits don’t want the job. New Jersey does allow a very modest trustee fee, and my guess is that private businesses will rise up to fill this role.

DMAHS now has a Miller trust website. The website includes FAQ’s and a trust template. However, a word of caution: Don’t try this at home. Medicaid laws are exceedingly complex, and if you try to do Medicaid planning without understanding the rules you could end up being disqualified from Medicaid for a long time or losing a big chunk of your assets. For something this important, it’s worth working with an expert.

We will post more information on Miller trusts as it becomes available. Stay tuned, or call or email us today for specific information on your situation.

Medicare Advantage plans may not be Advantageous

Posted on: October 13th, 2014 by Mark R. Friedman

Medicare open enrollment begins on Wednesday. To kick off the season, the New York Times reported over the weekend that federal officials have repeatedly criticized and fined Medicare Advantage health plans for violations, including improper rejection of claims for medical services and unjustified limits on coverage of prescription drugs.

Medicare Advantage plans are private health plans that consumers may choose instead of getting Medicare directly through the government. These plans are offered by private insurers like Horizon BCBS and Aetna, and typically provide the same benefits as Medicare Part B and D through a private network. Medicare Advantage plans may be attractive to seniors because they offer a different cost structure than traditional Medicare, and may save you money on things like prescription drugs.

However, these plans won’t save you money if insurers unfairly deny coverage for things they’re supposed to cover, as federal officials charge. It’s a message to seniors to be wary shoppers when selecting between original Medicare and a Medicare Advantage plan, and to all of us that sometimes the law is only as good as its enforcement.

Child Can be Liable for Parent’s Health Care Costs

Posted on: October 10th, 2014 by Lawrence A. Friedman

Pennsylvania (like many other states) has a filial responsibility law that generally requires children with means to support an indigent parent. While it may seem unfair, a Pennsylvania court recently enforced the law to hold a son liable for his mother’s $93,000 nursing home bill despite the son’s claim that he couldn’t afford to pay. Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012). In addition, the son bore full responsibility because his initial response to the lawsuit didn’t raise claims against other family members who could have shared the obligation. While the case occurred in Pennsylvania, it may have repercussions throughout the country.

Another fairly recent case illustrates what can go wrong when a child signs a care facility agreement without fully understanding its terms and their ramifications. Nursing homes may not require a child to guaranty a parent’s bill, but courts sometimes say a guaranty is enforceable because it is voluntary. This situation typically arises where a child signs documents to admit a parent to a care facility but doesn’t have a lawyer explain the document. In addition to so-called voluntary guaranties, care facility contracts may have other unfavorable provisions that can be difficult to understand or even notice. Nevertheless, courts can enforce a contract against an individual who later claims he/she didn’t realize that the contract imposes undesirable obligations.

In Cook Willow Health Center v. Andrian (Conn. Super. Ct., No. CV116008672, Sept. 28, 2012), the care facility claimed the resident’s daughter’s signature on the admission papers required the daughter to take steps to pay the facility with her mother’s assets or qualify the mother for Medicaid but the daughter didn’t follow through. The daughter tried to avoid liability based on the prohibition of guaranty requirements, but the court held that there was no guaranty. Instead, the court said in signing the admission contract as “responsible party,” the daughter voluntarily agreed to take steps to have the nursing home paid and the facility had a right to rely on that undertaking and sue the daughter for breach of contract.

How could the daughter have avoided liability? First and foremost, she should have had a lawyer review the admission papers so she could make informed decisions and not agree to obligations she wasn’t prepared to honor. While most states don’t automatically make a child liable for a parent’s health care costs, children also should be proactive to make sure parents don’t run up high bills in light of the Pittas case discussed above. That shouldn’t be difficult since a person with little money and major health care needs often can qualify for Medicaid, although legal guidance can be essential

So what IS the take away from these two cases? It is crucial to consult a lawyer before signing any care facility agreement (or other contract).

A lawyer can explain the impact of admission documents and may try to negotiate changes. For instance, FriedmanLaw often helps clients understand facility agreements and negotiate more favorable terms. Since ignorance of contract terms doesn’t excuse their breach, it is risky to sign any contract without first consulting a lawyer. In addition elder law attorneys like FriedmanLaw often can help people qualify for Medicaid to pay for care instead of leaving children to be saddled with high nursing home bills. The moral of these cases is pretty simple; consulting elder law counsel early on can yield major savings down the road.

Further information on funding long term care without going broke and other subjects is available throughout SpecialNeedsNJ.com. To subscribe to our frequent blog updates, click on “Subscribe RSS” at the top of the side bar to the left.

Miller Trusts Lift NJ Medicaid Income Cap for Assisted Living & Home Health Aides

Posted on: October 6th, 2014 by Lawrence A. Friedman

For many years New Jersey’s medical assistance program (“Medicaid”) could help seniors and disabled people with modest incomes fund long term care in nursing home, assisted living facility, or residence with home health aides. However, New Jersey’s Medicaid income cap ($2,163 per month in 2014) limited seniors and disabled people with incomes above the Medicaid income cap to long term care Medicaid in nursing homes. This meant seniors and disabled people exceeding New Jersey’s Medicaid income cap couldn’t get long term care Medicaid for assisted living or home health aides. Fortunately, for New Jersey seniors and disabled people who can receive long term care outside a nursing home, “the times they are a changing.” (apologies to Boy Dylan).

Beginning Nov. 1, 2014, New Jersey seniors and disabled people can use Miller Trusts to bypass the Medicaid income cap and obtain long term care Medicaid in nursing home, assisted living facilities, or residence with home health aides. Originating in the case Miller v. Ibarra, 746 F. Supp. 19 (D. Colo. 1990) Miller Trusts are now memorialized in federal law 42 U.S.C. 1396p(d)(4)(B) in states without Medically Needy Medicaid long term care programs.

Until this fall, Medically Needy Medicaid funded long term care in New Jersey, but only in nursing homes. Even though New Jersey limited long term care Medically Needy Medicaid to nursing homes, New Jersey seniors couldn’t use Miller Trusts for Medicaid in assisted living or with home health aides. Thus, Medicaid couldn’t pay for fund long term care outside a nursing home even if a person with income above the Medicaid income cap could live in a less restrictive environment. However, New Jersey has modified its Medicaid program to eliminate the bar to Miller trusts. Now New Jersey seniors and disabled people with incomes beyond the Medicaid income cap can use Miller Trusts to qualify for Medicaid funded long term care care at home with aides or in an assisted living facility.

This is good news for seniors, people with disabilities and other folks who may need long term care. Miller Trusts give FriedmanLaw a powerful new tool to help our clients receive care in the most appropriate setting– whether nursing home, assisted living, or at home with aides.
For more information on Medicaid and long term care, please see our Practice Areas and Q&A pages, or call us at (908) 704-1900.

Supreme Court will hear Idaho Case on Medicaid Reimbursement Rates

Posted on: October 6th, 2014 by Mark R. Friedman

The U.S. Supreme Court will decide whether states can be sued to raise Medicaid reimbursement rates, in a case that will undoubtedly impact the future of Medicaid.

Armstrong v. Exceptional Child Center arises out of a lawsuit by Idaho healthcare providers who contended that Idaho was unfairly keeping Medicaid reimbursement rates too low for state budget reasons, in violation of federal law.

The healthcare providers won in lower courts, and Idaho has appealed to the Supreme Court, arguing that private healthcare providers can’t sue to force the state to increase its Medicaid rates. 27 other states have joined Idaho in its appeal, including Pennsylvania (but not New Jersey or New York).

Higher Medicaid reimbursement rates mean more choices for consumers, since more doctors will accept Medicaid patients if Medicaid pays more. However, it’s a balancing act, since Medicaid can be a major drain on state budgets.

However, the impact of this case will be somewhat blunted in New Jersey, at least for now. That is because New Jersey no longer pays healthcare providers directly, instead paying private HMO’s who pay their own rates to healthcare providers. New Jersey is even transitioning long-term care patients to this model.

Nonetheless, the Supreme Court’s decision promises to have a deep impact on Medicaid generally, on how states balance state budget concerns with obligations to care for citizens, and on the influence private parties have on state policy.

NJ Mother loses Guardianship due to Boyfriend’s Conduct

Posted on: October 1st, 2014 by Mark R. Friedman

A recent judicial opinion made clear that in deciding who to appoint as guardian, New Jersey courts will look not just at the proposed guardians themselves but at the company they keep.

A contested guardianship is one where different people want to be guardian or where the ward doesn’t want a guardian. In the Matter of S.H. was a contested guardianship in which the mother and sister both wanted to be guardian of a young woman with developmental disabilities, named Sarah.

Under New Jersey law, courts should appoint a parent over a sibling. And the Court in this case seemed to find that Sarah’s mother was a loving caretaker and would make an appropriate guardian on her own. However, the Court also found that the mother’s live-in boyfriend was inappropriately touching Sarah. While the touching didn’t rise to the level of sexual abuse, it was excessive enough to cause harm to Sarah, and her mother failed to stop it.

In light of the boyfriend’s behavior, the Court appointed Sarah’s sister as guardian, despite New Jersey’s statutory preference for appointing a parent over a sibling and Sarah’s own statements that she would prefer her mother.

This case sheds light on how New Jersey courts will appoint a guardian, looking not just at the guardians themselves but at company the guardians keep who may affect the ward. While courts also will respect a ward’s autonomy to the extent practicable, the priority is keeping the ward safe from harm, which is the core purpose of a guardianship.

For more information on guardianships see our prior blog posts and Practice Areas page, or email or call us at (908) 704-1900.