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Most Certified Medicaid Planners™ generally applaud the trend of the last decade to move people from institutional care into home-based settings, but the results are mixed.

Medicaid covered home based care, known as Home and Community Based Services (HCBS) was originally only allowed through special, limited Medicaid waiver programs as Medicaid’s focus on long-term care had been principally focused on institutional care. The landmark Olmstead¹ decision by the Supreme Court in 1999 set up a push nationally for programs to find the least-restrictive care setting possible, including using Medicaid dollars to move patients from nursing homes to assisted living or back home with home care.

In September of this year, a group of U.S. Senators pushed further for more home care in a letter to The Centers for Medicare & Medicaid Services (CMS). They encouraged CMS to loosen regulations in order to allow more people to receive care in the community rather than in nursing homes.

Besides the obvious personal dignity issues for the patient, the overriding factor for transitioning patients from the nursing home to HCBS is cost. Homecare, on average, costs much less than skilled nursing facility care. As states dealt with tightening budgets in the recent economic downturn, many have pushed to expand their HCBS rolls from their existing nursing home patient roster as a way to ease state Medicaid budgets.

People can go home where their more comfortable and states don’t have to pay as much – a win-win. So what could be the downside?

When the patient comes home, they often don’t do it in a vacuum. The state provides a certain level of care through home caregivers, but this care does not always align with the full needs of the patient – or a patient’s problems don’t always align with the schedule of provided caregivers. Spouses or family members often have to pick up the slack. What has been overlook is the heavy economic reliance upon friends and family which is often not considered when calculating the total costs of HCBS care.

This burden is not exclusively economic. Recent studies show that a large percentage of those caring for an elder have symptoms of depression, and a large percentage of those suffer from major depression – at rates far greater than society as a whole.

Medicaid is not completely deaf to these issues. Through the Medicaid “Cash and Counseling” program, family members can get paid to provide home care to Medicaid recipients in their own home. This can help family members who have to leave jobs or reduce their employment hours to help manage and care for a loved one.

However, the societal costs have even bigger impact. The economic value provided by family caregivers to frail elders has been estimated to range from $45 billion to $200 billion annually.² It is estimated that the cost to U.S. businesses exceeds $25 billion a year in lost productivity.³

As the holidays approach, caregiver stress can be acute. AARP reports that caregiving stress coupled with holiday stress can lead to unhealthy behavior and feelings of helplessness. Anyone providing care during this time of year has to be aware of the extra burdens placed on them so as to avoid burnout or unhealthy consequences of being overstressed.

A Certified Medicaid Planner™ are trained and equipped to help people dealing with the care of a loved one determine whether home care is the best choice. There is a huge variance from state to state as to how home care programs are run – with much less continuity between the states than nursing home level of care. Often within a state, Medicaid’s home care rules differ dramatically from the Medicaid rules for nursing home level care – only adding an extra layer of stress to the family who need to understand not only the best care setting but also the best financial situation based on eligibility criteria. The help of a Certified Medicaid Planner™ can assist in giving you the peace of mind you need to navigate these complex programs effectively.

To find a Certified Medicaid Planner™ near you click here.

¹ Olmstead v. L.C., 527 U.S. 581 (1999).

²Caregivers of Frail Elders: Updating a National Profile, Wolff and Kasper, The Gerontoligist, January 3 2006.

³Caregiving Costs U.S. Economy $25.2 Billion in Lost Productivity, Gallup, July 27, 2011.

⁴10 Tips for Caregivers During the Holidays, AARP, December 6, 2103.

Free Download Boston College Study Click Here

If you haven’t read the study released in November by Boston College, you should be aware of its findings.

Boston College’s Center for Retirement Research published findings that focused on single adults who need to face long-term care – a segment of society which now makes up the majority of Americans. The study finds that long-term care insurance makes financial sense only for the richest 20 to 30 percent of unmarried people.

For the remaining people, it concludes that it makes more financial sense to go without and incur the risk of a financial spenddown for Medicaid. If a person needs care under this concept, it finds that the person is better off spending down assets and then letting Medicaid pay the bill than using up necessary funds for long-term care insurance.

The study claims that patients in a nursing home stay dramatically longer, on average when measuring their length of stays by month instead of by year. However, the study does not appear to differentiate between rehabilitative stays (which are often short) and custodial stays (which tend to be longer). Because rehabilitative stays are often covered by Medicare and or a combination of Medicare and private health insurance, the cost of those stays are not included in most long-term care insurance plan coverage periods.

“Medicaid and Medicaid planning has never been a replacement long-term care insurance,” said Mike Anthony, JD, CMP™, Chairman of the CMP™ Governing Board. He continued, “Good long-term care insurance is often the best first line of defense to the high costs of long-term care because it can help pay for home care, assisted living and nursing home care without the need to deplete assets. While policies have become more expensive in recent years many of the financial service companies have developed hybrid investments with enhanced payouts for long-term care if the person needs it.”

High premium costs and strict underwriting have led to a decline in long-term care insurance ownership and have put many companies financially at risk for providing the insurance because of billowing costs (See: Long-term care insurance takes another hit). The lack of long-term care insurance coverage and growing senior population has led to a greater number of people needing help navigating the long-term care Medicaid program.

The newspaper of record recently issued a scathing report against the nursing home five-star rating system.[1]

Medicare operates on a five-star rating system for nursing homes, where a top rating indicates the highest quality. However, nursing homes appear to be gaming the system to get higher star ratings than they deserve – calling into question the entire ratings system.

A rating system is used to help families evaluate a nursing home when deciding which facility to place a parent or loved one. The Medicare rating system uses three main data points to determine the star level: quality-of-care measures, staffing levels and health inspections.

According to the Times, nearly half of the nation’s nursing homes had either a 4- or 5-star rating. More shockingly, two-thirds of facilities on federal watch list received high ratings. The reason: the system requires self-reporting of data used to determine a nursing home’s rating – data that Medicare does not verify before issuing a final rating. The star rating system does not take into account state data of violations or complaints, which is the level that most violations are reported.

With such a microscope focused on the five-star system, there is likely to be a huge push to reform the rating system. Consumers should not rely on the Medicare rating system when determining which nursing home is best for a loved one. When evaluating a nursing home, it is recommended that a family look at the facility, talk to other residents when possible, and look at state reports about operational or health code violations.

Certified Medicaid Planners™ are often very helpful in assisting their clients with nursing home placement. As an experienced long-term care planner, a CMP™ will have a plethora of anecdotal evidence of past clients’ experiences in local facilities.

Patients often do not get to choose their initial nursing home. Hospital discharge units are forced to place patients in the first beds available at the time of discharge. That leaves the family facing a facility that may or may not be in the best interest of the patient overall. Most people think that a Medicaid patient has no choice in facilities; however, a Medicaid patient can transition from one facility to another provided that the new facility accepts Medicaid. A CMP™ can help families get a patient on a waiting list and transition the patient to a better facility.

For more information on how to find a CMP™ in your area, click here.

[1] New York Times, August 24, 2014: “Medicare Star Ratings Allow Nursing Homes to Game the System”

Exam day is here. It’s game time … time to sit for the CMP™ exam. Are you ready?

So you’ve studied. You’ve scheduled your exam. The alarm goes off on the morning of test and you want to be ready. Not just mentally ready, but ready for what to expect.

The CMP™ exam is administered at secure testing centers throughout the US, mostly situated on college campuses. The CMP™ staff will help you locate a testing facility nearest you that can accommodate your test proctoring.

The following are a series of tips that will help you prepare for the CMP™ exam:

Pre-Visit the Testing Center: If the testing center is within a reasonable drive, make a point to visit the testing center before your exam day. Many testing centers on college campuses and are easier to access if you’re a student living on campus than if you drive to campus. If you’re not familiar with the campus layout, locate the facility and find out where the closest parking facilities are and how long it takes to get from one spot to another.

Check the Calendar: Did you schedule the exam on the same date as the big game? Maybe you did. You should check the university’s academic and sports calendar to determine if you’ll be fighting with 30,000 fans for parking. If so, you may want to re-schedule the exam for a more convenient day or time. If you’re committed to the date, you may want to allow for extra time to find parking.

Make a Checklist: You will need to bring with your clearance email to take the exam and a photo ID. Testing centers are considered a secure facility and cellphones and other recording devices are not allowed in the testing room. Not every testing center has a place to stow these items, nor do they want the liability of holding on to them. Make a list of what you can and need to take in with you and leave the rest at home or in the car. If you leave it in the car, secure it in the trunk or a locked glove compartment. Does your facility require a proctor fee? Be sure to bring a check or credit card to pay for the proctor fee.

Parking: Most testing centers are located on university campuses. In denser or urban campuses, parking is at a premium. Most lots require payment for parking in the non-student lots. Be sure to bring money for parking just in case you need to park in a pay-for lot. Print out a campus map to find backup parking in case the parking structure closest to the testing facility is full.

Skip Starbucks: Extra bathroom breaks will cut into you exam time. The exam is 160 questions and you are given 3 hours to complete the exam. That’s one minute, seven seconds per exam question. Time is critical to the successful completion of the exam. Too much coffee in the morning might get the brain working, but may cost you critical exam time.

Extra Time: The CMP™ staff tries to schedule all exams during business hours or makes someone available after hours in case there is an issue at the testing center. Issues come up all the time. Just getting to the facility can be problematic if you encounter random traffic issues or unexpected road closures. The best way to handle these issues is to be proactive and give yourself extra time to get to the facility and extra time before your exam to make sure that any outstanding issues can be resolved before your actual testing time. Any delays that push your exam window after the closing time of the exam facility will force you to either have less time to take the exam or to have to re-schedule the exam. By allowing for extra time to get to the facility and to deal with unexpected problems, you will better insure a full exam time with full CMP™ staff support to help work with the testing center to ensure a positive exam experience.

Report Testing Center Issues: If there are any issues which come up during the administration of the exam, ask the proctor to document the problems. While most testing centers do their best to provide you with a quiet, distraction-free environment there are certain issues that are outside of anyone’s control. If a fire alarm goes off in the middle of your exam, make sure it is reported. If a tornado forces you to cut your exam short to go to a designated shelter, report it. The CMP™ Board uses these reports to determine if a candidate can re-sit for an exam.

Several Medicaid applicants sued the state of Ohio’s Department of Job and Family Services – the program which administers the state’s Medicaid program – over improper treatment of Medicaid-compliant annuities that led to wrongful denials of assistance for long-term care services.

In each of the three cases, the Department denied Medicaid coverage to nursing home or assisted living patients whose spouses purchased a Medicaid-compliant annuity as part of the spenddown to asset eligibility. Under very precise federal rules, a Community Spouse can convert excess retirement assets into an income stream through an annuity that meets the requirements. These annuities are known as being “Medicaid compliant” if they meet the strict Medicaid rules set by the Deficit Reduction Act of 2005 (DRA).

Each state was required to enact the DRA rules and states are prohibited from enacting Medicaid eligibility requirements more restrictive than the federal rules. However, some counties in Ohio have taken it upon themselves to reject the Medicaid-compliant annuities despite their compliance with the state and federal law. In doing so, they denied applicants for Medicaid who should have been approved.

In a bold move, lawyers on behalf of the Medicaid applicants filed suit in federal court requesting an injunction that the state either follow the rules or be disenrolled from the federal Medicaid system altogether for violating its rules. In an even bolder move, the federal judge overseeing the case granted the injunction and gave the state until October 7, 2014 to comply with the federal and state Medicaid law concerning compliant annuities or risk having the state completely disenrolled from federal Medicaid program.

A federal court issues an injunction when it believes that the plaintiffs in a case are likely to be successful on the merits if they make it to trial. Since nursing unpaid care bills had been accruing to the point where the patients were at risk of being discharged or evicted for lack of payment, the court moved swiftly to bring the state into immediate compliance and approve Medicaid eligibility for those denied.

The state blinked and fully complied with the court’s decree – certifying before the federal judge that they had reversed the Medicaid denials for the plaintiffs and approved their Medicaid applications retroactive to the appropriate filing dates.

The court stopped short of making the injunction apply to all applicants in Ohio who have been denied Medicaid coverage improperly by the state; however, if there are others in a similar situation, the court’s ruling would stand as a powerful precedent for action on their part.

State overreach is, unfortunately, a common theme when dealing with Medicaid eligibility. While states are prohibited from making it harder to get Medicaid coverage than the federal rules require, several adopt nuanced rules that have the same effect. In many cases, local Medicaid caseworkers often insert their own judgment into cases to deny eligibility to an applicant that they feel should have to pay more for care – despite the fact that the applicant fully follows the eligibility rules. County Medicaid departments are well known for enacting informal policies at the application level in an effort to curb Medicaid eligibility in a number of cases, as illustrated. Applicants have no choice but to seek recourse through administrative appeals or court intervention. Good advocacy is often out of reach for an already impoverished family. Because Medicaid case workers are not held accountable for improper denials, these things can often go unchecked without adequate advocacy.

Medicaid compliant annuities are often used by community spouses during the spenddown to convert retirement assets into an income stream to the healthy spouse. These can be effective to keep a community spouse from further becoming impoverished, as the income can be used to help the community spouse live or get necessary help later on when he or she may have health problems. The Medicaid rules allow for conversion of a retirement asset into an income to encourage retirement savings.

To receive the CMP™ designation, a Certified Medicaid Planner™ is vigorously tested on the applicable use of Medicaid compliant annuities in the planning process as well as advocacy issues during the Medicaid application process. A Medicaid compliant annuity ise not your run-of-the-mill annuity contract and, as such, requires the experienced hand of a Certified Medicaid Planner™ to determine the proper structure and appropriate use. Many insurance agents try to sell non-compliant annuities as “Medicaid friendly” without either the full knowledge or disclosure on the proper use of annuities in the planning process. To avoid costly mistakes, seek out the advice of a CMP™ who can assist you with the proper use of a Medicaid compliant annuity or help you determine if a Medicaid compliant annuity is right for you.

For more information about Medicaid compliant annuities, click here. To find a CMP™ to assist you with your Medicaid compliant annuity needs click here.

Recent news of NCCA accreditation of the Certified Medicaid Planner™ (CMP™) designation has raised awareness of the designation and has increased interest from many professions involved in Medicaid Planning.

The CMP™ program has received full national accreditation earlier this year by the National Commission for Certifying Agencies (NCCA).

A quick check of the FINRA website reveals that although there are numerous designations, only six financial designations have national accreditation in the United States – the newest being Certified Medicaid Planner™.

Navigating the world of Medicaid long-term care is one of the most challenging ventures, even for those with an extensive legal, financial, or medical background. Our CMP™ certificants have proven that they have the knowledge and ability to successfully advise families of how to protect assets and provide the best care for their aging loved ones.

Prior to the existence of the Certified Medicaid Planner™ Governing Board, there was no universal accountability for those assisting consumers with Medicaid eligibility and planning. Long-term care planning overlaps a number of professions involved in the Medicaid Planning process. The CMP™ Governing Board has created a standard of ethics to which all certificants – regardless of professional background – can be held accountable.

High standards for ethics, accountability, and exam performance provide families in need of Medicaid Planning services with the confidence they need to know that a CMP™ is capable to handle their loved ones’ Medicaid eligibility issues.

To learn more about how becoming a CMP™ can help you get ahead in your career and stand out in your profession, visit the program website at www.cmpboard.org or download the CMP™ Candidate Handbook.

Every so often the GAO reviews the tools and techniques used by some to achieve long-term care Medicaid eligibility. Their recent report, although skewed to high-asset communities, is rather revealing in the ways that people are and are not achieving Medicaid eligibility.

The GAO report investigation found four principal methods used to reduce countable assets to qualify for Medicaid that are done in full compliance with current Medicaid rules.

The most commonly used method is to spend resources on non-countable goods and services, such as prepaid funeral arrangements. Irrevocable funeral trusts can be a very effective and legal way to reduce countable assets in a way that does not trigger a penalty period.

The second most used method is to transfer countable assets into non-countable income streams by way of an annuity or promissory note. While promissory notes have become cumbersome in many states, the Medicaid compliant annuity is still used universally as a way to convert excess resources into an income stream for the healthy spouse. In some places, it can also be used effectively to create an income stream caused by a transfer penalty from gifting other, non-liquid assets.

The fourth most used method is gifting assets. The GAO report does not differentiate between allowable gifts (gifts to spouses, disabled children, etc.) and penalty-causing transfers. For penalty-causing gifts, a penalty period is instated for transfers made within the last five years once an applicant is “otherwise eligible” for Medicaid. Penalty periods can be used in conjunction with other methods (e.g., re-gifting, partial reconveyance, Medicaid compliant annuities, etc.) to achieve eligibility; however, from the scant use of gifting revealed by the GAO report, it appears that either this strategy is not be heavily used or only applicable in a limited number of cases.

Also, the practice of gifting and waiting out the 5-year lookback would not be recognized in the GAO study report. When a person applies for long-term care Medicaid, there is only a duty to report gifts or transfers that occurred in the last 5 years and none outside of that window need be reported.

A Certified Medicaid Planner™ is skilled in the techniques described in the GAO Report and the pitfalls associated with them. It is highly recommended to seek out the services of a CMP™ to see if these techniques are appropriate for your circumstances. If you are an advisor providing advice in the long-term care arena, you should consider increasing your knowledge and training in the Medicaid Planning field and getting certified as a CMP™ to provide the highest quality advice. For more information, visit the CMP™ program website.

For a copy of the GAO report, click here: GAO Report.

Private financing of long-term care is becoming even more difficult as companies are finding that their business models are unsustainable. Recent news from Genworth financial indicates that even the largest long-term care insurance provider is not immune.

Genworth Financial offers the most popular long-term care insurance in the nation. Recently, they have begun the most serious review of their product since their start in 1871 – particularly their claim reserves. One plan in particular,
Genworth’s long-term care insurance, seems to be losing popularity among clients. So much so, in fact, that if they cannot acquire regulatory approval for the needed changes, they may have to withdraw from the market altogether.

Genworth is seeking to not only shorten benefit periods, but to also lower day-to-day benefits, and more tightly underwrite policies – as if their standards weren’t already tight. All of these changes are not only making long-term care insurance more difficult to acquire, but increased cost makes paying for it an even bigger challenge. If you are fortunate enough to qualify, you will then have to pay increased premiums, which are likely to be followed by frequent and significant rate hikes as costs skyrocket.

Genworth Financial is not the only company feeling the pain. Other companies like John Hancock have pulled back or have gotten out altogether (e.g., MetLife and Prudential) from the long-term care insurance market.

Medicaid Planning assists those who need long-term care and cannot afford or purchase the insurance or qualify. What most consumers don’t understand is that any uninsured person who needs long-term care automatically becomes part of the Medicaid spenddown – and are required to spend their assets down to a pre-set formula in order to get assistance for their long-term care expenses. Because of the complexity of the formula, many married couples end up spending more than they are required in order to qualify.

For those who have long-term care insurance policies that cannot sustain them because rate hikes have made them too expensive or for anyone who has been denied long-term care insurance coverage because of a pre-existing health condition, a Certified Medicaid Planner™ can help make sure that you don’t pay more for long-term care than the Medicaid rules require. This type of planning can be provided in advance or even during a medical crisis – often helping a family avoid total financial ruin.

[1] Genworth Financial Provides Additional Disclosure On Long Term Care Insurance, The Wall Street Journal, July 31, 2014.