WELCOME TO OUR LONG TERM CARE ASSET PROTECTION CLASS

1. WELCOME TO OUR LONG TERM CARE ASSET PROTECTION CLASS Presented by ESTATE PLANNING & ELDER LAW SERVICES, P.C.

2. WHY SHOULD I CARE ABOUT LONG TERM CARE? Persons aged 65 to 69 years face a 1 in 2 risk of entering a nursing home.1 1House Select Committee on Aging

3. WHY SHOULD I CARE ABOUT THE COSTS OF LONG TERM CARE? • The average monthly cost of “attendant” nursing care in Michigan for 2008 is $6,191.00.1Skilled nursing care can be three times as much. • 1MI Department of Human Services WHAT DOES LONG TERM CARE COST?

4. If discharged from a hospital, Medicare only covers “skilled” nursing care costs for up to 100 days, so long as skilled care is required • 20 days are covered at 100%, but you are required to pay a co-payment for the next 80 days unless your Medigap policy pays for the deductible • Benefit renewable via the “60 day/3 day”rule • Medical Insurance does not pay for Nursing Home care AREN’T NURSING HOME COSTS PAID BY MEDICARE OR MEDICAL INSURANCE?

5. Pros • Covers assisted living and in-home care, not just nursing home care • Provides most flexibility • Prevents loss of assets with least complications • Cons • Eligibility requirements • Cost prohibitive • Loss of investment/ premiums if not used • Strength of insurance company • If you can afford it - get it! EVALUATING LONG TERM CARE INSURANCE

6. In most cases, by planning ahead, you can shield a substantial percentage of your assets from the cost of long term care. • Planning ahead requires the creation of a flexible estate plan including, at a minimum, “Medicaid friendly” Financial and Medical Powers of Attorney. Sometimes action is required now versus later. WITHOUT LTC INSURANCE CAN I PROTECT MY ASSETS FROM LTC COSTS?

7. Medicaid is a Federal Program established by the Social Security Act. • Medicaid exists to ensure the availability of essential healthcare services, including Nursing Home Care, for people meeting certain income and asset requirements. WHAT IS MEDICAID?

8. The rules for Medicaid eligibility differ somewhat depending upon whether the applicant is single or married. • However, for both married and single applicants, to become Medicaid eligible three tests must be met: • Needs/“Seven Doors” Test • “Countable” Income Test • “Countable” Asset Test MEDICAID ELIGIBILITY RULES

9. CAUTION! ELIGIBILITY RULES JUST CHANGED! • On 2/8/06 President Bush signed into law the Deficit Reduction Act of 2005. Michigan’s DHS implemented these and other substantial changes throughout 2007.

10. If an applicant meets the income eligibility rules for Medicaid, asset eligibility can often be achieved by: • Strategic gifting • Transforming countable assets into exempt assets • Transforming countable assets into unavailable assets • Utilizing Medicaid Type A or B Trusts & SBO Trusts • Maximizing the Community Spouse’s PSA BECOMING MEDICAID ASSET ELIGIBLE