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VA Benefits and Medicaid EligibilityMeeting Complex Requirements for Benefits Qualification and Application

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THURSDAY, FEBRUARY 16, 2012

Presenting a live 90-minute webinar with interactive Q&A

Yale S. Hauptman, Atty, Hauptman & Hauptman, Livingston, N.J.

Laurie A. Hauptman, Atty, Hauptman & Hauptman, Livingston, N.J.

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V.A. Aid & Attendance Benefits

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Korean War Dec 7, 1941 — Dec 31, 1946 June 27, 1950 — Jan 31, 1955

Aug 5, 1964 — May 7, 1975Feb 28, 1961 if served in Vietnam

World War II

Vietnam War

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To Qualify for Pension:the Wartime Veteran must have served in the U.S. Armed Forces and….

Served at least 90 days active dutyServed at least one day during wartimeWas honorably discharged

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To Qualify for Pension: (Continued)Is over 65 years old,

blind or disabledHas substantial recurring,

unreimbursed Medical Expenses Has Limited Household income

and assets to pay medicalexpensesHas Expectancy of living and

paying future medical expenses 8

Basic Criteria for NeedRegular Aid & Attendance:Inability to dress/undressInability to keep oneself presentableInability to feed oneself Inability to attend to the wants of

natureAn incapacity that requires

assistance 9

Definition of “Housebound” that triggers qualification:

Substantially confined to home or premiseDue to disability or

disabilities Reasonably certain to

last for life10

Proof of Medical ExpensesNeeded

A Physician must provide a diagnosis supporting the scope

of care and corresponding expenses being provided 11

The Net Worth Limitation

Exempt Assets:Your house

Your car

Your household and personal goods

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About $80,000 for a couple

About $40,000 for a single person

Countable Asset Limitation

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The Critical Calculation:Gross Household Income

Recurring Unreimbursed Medical Expenses(UME)

Income for Veteran Administration Purposes(IVAP)

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Maximum Available Pension Resource (MAPR) MAPRis the maximum available

pension per category of need

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Special Monthly Pension Rates Paid to Veterans Age 65 or Older, Permanently and Totally Disabled, or a Surviving SpousePermanently and totally disabled veteran in need of

regular aid and attendance

With one dependent

Surviving spouse

MAPR * MMC

$20,436 $1,703

$24,228 $2,019

$13,128 $1,094 16

Case Study 1: Married Couple, Vet needs A&A

Couple’s Gross Income:

UME (home care, prescriptions, co-pays): $57,600

$45,000

$(12,600)

Couple’s Gross Income:

UME (home care, prescriptions, co-pays): $57,600

$45,000

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(IVAP):$(12,600)

Rounded to $0

Couple will receive $2,019 monthly Benefit, tax free!

When IVAP is less than MAPRa benefit may be awarded

MAPR: $ 24,228

Case Study 1: (continued)

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Case Study 2: Widow of Veteran

UME (home care, prescriptions, co-pays):

$18,000

$3,000

Gross Income:

UME (home care, prescriptions, co-pays): $15,000

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(IVAP): $3,000

When UME fails to meet or exceed Gross Income,

a partial benefit is available.When IVAP is greater than MAPR

NO benefit is awarded

MAPR: $ 13,128Case Study 2: (continued)

Partial Benefit!: $10,128

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Any VA penalty for gifting assets?

VA currently has No Penalty Period of ineligibility for gifting

“excess” assets to other family members

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Should one give assets away to qualify?The answer depends on:Family dynamicsLife expectancyLikelihood of increased future medical

expensesTax consequencesFinancial benefit vs. financial lossThe “Medicaid Trap” caused by gifts within

5 years to nursing home need22

If one needs Medicaid within

5 years of any gift, he or she will be penalized

by a period of Medicaid benefit ineligibility!

“Beware the Medicaid Trap!”

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How Does Medicaid Work?

Exempt Assets Countable Assets

For A Single Person

House

Car

Funeral

Life Insurance

Household Goods

Almost Everything Else

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A Single Person Example

$100,000

$2,000 25

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$500,000

Married Couple (Example)

$2,000

(John)

$109,560(Sally)

$109,560

John & Sally Smith

$219,080

Look Back Period 5 Years

Penalty Starts When:In Nursing Home (or need

nursing home level of care)

“Otherwise Eligible”

$2,00027

All Trusts Are Not Created EqualRevocable Living TrustCredit Shelter TrustIrrevocable Life Insurance TrustSpend Thrift Trust

Income Only Type TrustVeterans Eligibility Trust

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Trust to Qualify for MedicaidIrrevocablePrincipal cannot be distributed Income typically can be distributedThis is a problem for qualification for VA benefits under the “relinquishment” ruleVA will count the trust assets under VA asset rules

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Veterans Eligibility TrustCan be grantor trust or notIncome payable to lifetime beneficiaries and not to grantorAssets in trust not countablefor VA purposes 30

Veterans Eligibility Trust(Continued)

Home can be placed in trust and qualify for Section 121 exclusionLimited testamentary powerof appointment to allow forstep up in basis upon death

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How is VA benefit treated by MedicaidAid and Attendance is NOT treated as income for Medicaid eligibility purposesOther VA benefits are treated as incomeCheck your state’s Medicaid regulations 32

How is VA benefit treated by Medicaid (continued)

However VA benefit is available to be used towards care when on MedicaidOnce VA knows you are receiving Medicaid they will reduce pension to $90 per month

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V.A. Aid & Attendance Tips

Fax VA ApplicationsDementia issues are a red flagWaive 60 day due process

periodInvolve local Congressman 34

V.A. Aid & Attendance Tips(Continued)

Healthy veteran with sick spouse can collectExpediting a claim if claimant is

on hospiceVeterans that received honors

may get preferential treatment35

Be Nice To Me –I Pick Your Nursing Home!

How to Provide For Your Parent’s Care Without Going to

the Poorhouse or Nuthouse

www.BeNiceToMeBook.com

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Yale S. HauptmanLaurie A. Hauptman

HAUPTMAN & HAUPTMAN, P.C.570 West Mt. Pleasant Avenue, Suite 101Livingston, NJ 07039(973) 994-2287contact@hauptmanlaw.com

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