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Whether we like it or not, we are all getting older. Well, not all of us; some of us are dying; the rest of us are getting older. Unfortunately, living longer does not necessarily mean you will have a good quality of life for all your years. Many of us spend our final years needing long-term care at home, in an assisted living facility or in a nursing home. Long-term is expensive; sometimes costing upwards of $200,000 a year in the New York metropolitan area. To make matters worse, the cost of long-term care is not covered by Medicare except for short-term rehabilitation for certain kinds of care. Thus, if you don’t have long-term care insurance you must pay privately out of your own pocket, unless you qualify for Medicaid. For many middle-class families, the cost of long-term care can be catastrophic, especially considering that someone with dementia or Alzheimer’s Disease can spend several years in a nursing home. Medicaid has strict income and asset requirements, and you have to be destitute in order to qualify. In fact, in New York an individual is allowed no more than $16,800 in non-exempt assets in their name. Once the financial requirements are met, a detailed and comprehensive Medicaid application must be submitted to the local county Department of Social Services (in NYC, it is called the Human Resources Administration). Many long-term care facilities have a Medicaid coordinator who can assist in this process. The question for today is, should you work with the Medicaid coordinator or should you hire a lawyer to represent you in this process?
First, let me acknowledge that if you ask a lawyer whether you need to hire a lawyer to do something, you are more likely to receive an affirmative reply than if you asked a non-attorney the same question. It’s sort of like asking a surgeon whether or not you need an operation; it might be prudent, in some cases, to take the advice with a grain of salt. Having said that, let me tell you about legislation being proposed by the New York chapter of the National Academy of Elder Law Attorneys (NAELA) regarding the unlicensed practice of law regarding Medicaid applications submitted by non-attorneys. While federal regulations allow non-attorneys to prepare and submit routine Medicaid applications on behalf of an applicant, often submitting Medicaid applications requires more than simply filling out a form.
For example, you might wish to consider certain strategies, including setting up a trust, exempt asset transfers, promissory notes, beneficiary changes or some other technique which would allow you and your family to preserve some of your hard-earned assets. This type of work goes beyond the mere act of filling out a Medicaid application form and requires legal advice from an experienced elder law attorney. If you don’t receive proper advice, it could result in a significant loss of personal assets or a denial of the Medicaid application, in which case you could be responsible for the approximately $15,000-$20,000 monthly nursing home cost.
One area where we see a lot of mistakes when Medicaid applications are submitted by non-attorneys is estate recovery. Many folks don’t realize that once a Medicaid application is approved, Medicaid still has the right to place a lien on your property or to recover the cost of care out of your estate when you pass away. With proper planning, this can be avoided in most cases. Perhaps one of the reasons we see a lot of errors in this particular area is that the nursing home Medicaid coordinator is focused primarily on making sure that the nursing home gets paid and not on protecting your assets.
The impetus behind the NY NAELA proposed legislation is to protect consumers. People have the right to know that there may be complex issues involved in their situation and that they may benefit from proper legal advice. The bill, if enacted, would require nursing homes to provide written notice as part of the admission process and posting in the facility, that the consumer has the right to hire an attorney to assist with the Medicaid application, as well as advise of the potential pitfalls of relying on non-attorney entities for the Medicaid application process. Non-attorney entities are not allowed to provide legal advice, implement legal strategies, or even advise the consumer of their rights. Moreover, many of the non-attorney entities have conflicts of interest that they are not required to advise the consumer about. Bottom line: The decision to hire an experienced elder law attorney and learn about options to protect your assets as you navigate the Medicaid maze is yours to make; however, you should at least know that you have the right to do so.