The Deficit Reduction Act
With Krause Financial Services able to provide commercial Medicaid Compliant Annuities as short as 2 months, you may be asking yourself "How would my client EVER use such a tool?!" Such a short-term Medicaid Compliant Annuity is most often used in conjunction with a Gifting Plan, more commonly referred to as the Half-a-Loaf approach.
The goal of a Half-a-Loaf Plan is to allow the nursing home resident to give away approximately one-half of his or her spend-down amount, while retaining t ...
Many of the "Ask Dale" inquiries that I have received throughout the past week have been regarding the requirement of the beneficiary designations on Medicaid Compliant Annuities consisting of tax-qualified investments. At one time it was a federal rule that a state Medicaid agency was not required to be made a remainderman on annuities holding tax-qualified funds; however, this is no longer the case.
Most post-Deficit Reduction Act of 2005 ("DRA") states have dictated their own re ...
Almost four years have passed since President Bush signed the Deficit Reduction Act of 2005 ("DRA") into law. Forty-eight states have since passed the legislation, yet many elder law attorneys are not aware of an immense planning opportunity that still exists.
When DRA was signed into law in 2006, it was clear that some annuities required the state Medicaid program to be named as the beneficiary. If that was the case, the beneficiary designation was only to the extent that Medicai ...
In a typical Medicaid case involving a promissory note, the facts are clear. The Medicaid applicant transfers an asset to a family member, in exchange for a promissory note. In order for the promissory note to qualify as a viable Medicaid planning tool - which is intended to reduce or eliminate a spend-down amount, it must meet the requirements outlined in the Deficit Reduction Act (the "DRA").
The DRA states that if a promissory note is to be treated as a fully compensated transf ...
As a result of the Deficit Reduction Act of 2005 ("DRA") a community spouse can easily qualify an institutionalized spouse for Medicaid benefits by utilizing a Medicaid Compliant Annuity ("MCA"). The purpose of the MCA is to eliminate excess countable resources - the spend-down amount. In designing the MCA, the only issue facing the community spouse is for how long he or she should schedule the monthly payments - the income stream. Why is that an issue?
Under DRA, in order f ...
When the Deficit Reduction Act of 2005 ("DRA") was signed into law on February 8, 2006, by President Bush, the intent of the legislation was to reign in national spending. Part of the DRA included eligibility criteria for Medicaid benefits. States were required to be in compliance with the provisions of DRA as a pre-condition to receiving federal Medicaid funds. The US Department of Health & Human Services, Centers for Medicare & Medicaid Services ("CMS"), provides gu ...
In May of 2008 I worked with a Pennsylvania elder law attorney who had a Medicaid case involving a husband and wife, Mr. and Mrs. M. The institutionalized spouse, Mrs. M, entered a nursing home in March of 2008, and was expected to remain there indefinitely. After a resource assessment, Mr. M wanted to qualify his wife for Pennsylvania Medicaid benefits.
In order to eliminate the spend-down amount, pursuant to my suggestion, Mr. M purchased a Medicaid Compliant Annuity from Employ ...
Now, with the Deficit Reduction Act of 2005 ("DRA") firmly in place, to the exception of the District of Columbia, Hawaii, Illinois, and New Jersey, the question has been asked "Did DRA have a real impact on crisis Medicaid planning?" Without question, the answer is "Yes!"
The primary impact relates to the fact that all gifts within the 60 month look-back period are pooled together, and the resulting figure is then divided by the applicable monthly divestment penalty divisor, creatin ...
In 2006, I worked with a Pennsylvania elder law attorney who had a Medicaid case involving a husband and wife, the Weatherbees. The institutionalized spouse, Mr. Weatherbee, entered a nursing home in September of 2006, and was expected to remain there indefinitely. After a resource assessment, Mrs. Weatherbee wanted to qualify her husband for Pennsylvania Medicaid benefits.
In order to eliminate the spend-down amount, pursuant to my suggestion, Mrs. Weatherbee purchased a Medicaid C ...
A spouse who continues to reside in the community after the other spouse has entered a long-term care facility is entitled to retain a portion of the couple's resources, known as the Community Spouse Resource Allowance ("CSRA").
The first step in calculating the amount of the CSRA is to perform a spousal resource assessment. This may be performed by the local Medicaid office. The elder law attorney who is advising the client on a spend-down plan needs to do this calculation as ...
