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Davidow, Davidow, Siegel & Stern, LLP
Long Island's Elder Law, Special Needs & Estate Planning Firm

Tuesday, November 25, 2008


As nursing home and long-term care costs continue to rise, the Deficit Reduction Act has made it more difficult to qualify for Medicaid to pay for nursing home costs. Long-term care insurance can help cover expenses, but long term care insurance contracts are notoriously confusing. How do you figure out what is right for you? The following are some tips to help you sort through all the different options.

Find a strong insurance company.
The first step is to choose a solid insurance company. Because it is likely you won’t be using the policy for many years, you want to make sure the company will still be around when you need it. Make certain that the insurer is rated in the top two categories by one of the services that rates insurance companies, such as A.M. Best, Moodys, Standard & Poor or Weiss.

What is covered.
Policies may cover nursing home care, home health care, assisted living, hospice care or adult day care, or some combination of these. The more comprehensive the policy, the better. A policy that covers multiple types of care will give you more flexibility in choosing the care that is right for you.

Waiting period.
Most long-term care insurance policies have a waiting period before benefits begin to kick in. This waiting period can be between 0 and 90 days, or even longer. You will have to cover all expenses during the waiting period, so choose a time period that you think you can afford to cover. A longer waiting period can mean lower premiums, but you need to be careful if you are getting home care. Look for a policy that bases the waiting period on calendar days. For some insurance companies, the waiting period is not based on calendar days, but on days or reimbursable service, which can be very complicated. Some policies may have different waiting periods for home health care and nursing home care, and some companies waive the waiting period for home health care altogether.

In Part II, we will discuss Daily Benefits, Benefit Periods and Inflation Protection.

Source: www.elderlawanswers.com

Monday, November 10, 2008

Crucial Elder Law Numbers for 2009

The new numbers for 2009 for Medicaid, Medicare, Social Security and other figures that are of interest to the elderly and their families have been released. In an attempt not to overwhelm everyone, we will publish the updated numbers in two separate newsletters. This is Part I and will outline Medicaid, Annual Gift Tax Exclusion and Long Term Care Premium Deductibility. Next week, in Part II, we will discuss Medicare and Social Security benefits.

Medicaid Spousal Impoverishment Figures for 2009

In 2009, the spouse of a Medicaid recipient living in a nursing home (called the “community spouse”) may keep as much as $109,560 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2009 will be $21,912.

Meanwhile, the maximum monthly maintenance needs allowance for 2009 will be $2,739. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse’s income. The minimum monthly maintenance needs allowance of $1,750 took effect July 1, 2008 and will not rise until July 1, 2009. The new figures are effective January 1, 2009.

Annual Gift Tax Exclusion Rises to $13,000

The annual gift tax exclusion will increase from $12,000 to $13,000 effective January 1, 2009, the Internal Revenue Service (IRS) has announced. The gift tax exclusion is the amount the IRS allows a taxpayer to gift to another individual without reporting the gift.

Long-Term Care Premium Deductibility Limits for 2009

The Internal Revenue Service has announced the 2009 limitations on the deductibility of long-term care insurance premiums from taxes. Any premium amounts above these limits are not considered to be a medical expense.

The following attained ages reached before the close of the taxable year would yield this maximum deduction:
40 or less - $320
More than 40 but not more than 50 - $600
More than 50 but not more than 60 - $1,190
More than 60 but not more than 70 - $3,180
More than 70 - $3,980

Benefits from per diem or indemnity policies, which pay a predetermined amount each day, are not included in income except amounts that exceed the beneficiary’s total qualified long-term care expenses or $280 per day (for 2009), whichever is greater.

In honor of Veterans Day, we’d like to share this trivia: Veterans Day is an annual American holiday honoring military veterans. Both a federal holiday and a state holiday in all states, it is usually observed on November 11th. It is celebrated on November 11th because major hostilities of World War I were formally ended at the 11th hour of the 11th day of the 11th month of 1918 with the German signing of the Armistice.