The Myths of Senior Driving

There have been numerous articles written about senior driving, however most of them have one thing in common —  the overzealous desire to ensure that the independence of the senior citizen is preserved at any price. Many of these articles favor preserving the rights of senior who may be compromised in their ability to drive. They are written by extremely caring geriatric care managers with degrees in social service, writing from their heart, but not necessarily weighing the risks involved.  I call this the “bleeding heart” analysis, and frankly it’s dangerous.

Here are a few simple facts. In our mobile society, it is certainly critical for seniors to be able to leave their homes to commute to shop, go to supermarkets, senior activities,  church, etc.   Mass transit is not always readily available, and due to budget constraints, bus services have been severely curtailed in many communities. Senior transportation services exist, but are often inconvenient or inaccessible and seniors do not necessarily have the disposable income to take taxis.

As for family members, some may not live close by to their parents but may not be available to help and family members who do live close by may not want their lives disrupted by constantly having to drive relatives around.

Although the issues are a problem for senior mobility, they fail to address the one reality that  cannot be denied.  Seniors “do not want to admit that they are no longer able to drive safely” when their vision deteriorates or their reflexes are no longer adequate due to  physical limitations.  Seniors often do not recognize when early stage dementia has set in or choose not to admit it and do not want to give up their independence and be forced to rely on other people or services for transportion.  Underlying all of these reasons is their fragile egos, where they focus solely on their needs and don’t see the risk they present to others.

The harsh reality is that every time that a senior with early stage dementia or severe disability sets foot in a vehicle,  he or she is putting his or her life in danger and more importantly, putting the life of innocent people at risk. And stated very simply, putting others lives in danger to preserve the fragile ego of the elderly is too high a price.

Two recent episodes with clients demonstrate the critical nature of this issue.

Example 1:  A senior citizen was whose only other family was an elderly sister, was driving down to the Jersey Shore to visit a friend.  She exited the highway at the correct exit, but then had an episode.  She could not remember where she was going. She become highly agitated and crashed the vehicle into the side of a retail building. An ambulance arrived and she was taken to a local hospital. Her car was towed to the police lot. In the end, she was transferred to a nursing home, where she remained for approximately one year until her passing a few months ago.

Example 2:  We had been working with a family for years.  The mother had been in decline for some time with advanced dementia.   On several occasions, she had left her home to go shopping and called a family member to tell them that she had gotten lost and could not remember the way home.  We advised the family to “take away her keys” before she got into a serious accident or worse.  The mother refused to relinquish her keys. She would not accept her dementia, insisted that she was fine and was not going to stop driving.   The family lacked the fortitude to deal with the situation.  Several weeks later, she was driving a few blocks from her house, lost control of the vehicle and crashed into a neighbor’s home, totaling the car. After this episode, she finally gave up driving!

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We could cite numerous other similar cases.   The Division of Motor Vehicles is reluctant to revoke the license of a senior citizen because of the concern about age discrimination complaints from senior advocacy groups.   The police may issue summons to senior citizens if laws are violated, but it has been my experience that police officers also feel uncomfortable in these situations.  Even judges are lax in forcing senior citizens to retake a driver’s test.  All of this is well and good, until there is a major accident involving a senior and a life is lost unnecessarily, a tragedy that could have been prevented.

Children of seniors are reluctant advocates because they do not want to upset their parents for a variety of reasons.  For one, they sensitive to the loss of independence their parents are experiencing.  They also may not want to jeopardize any possible inheritance, not pleasant but it’s a variable.   They don’t want to alienate a parent, to incur their rath, and risk damaging a wonderful, loving relationship.  Children are also concerned that the burden will fall on them.  So the children sit by and let nature take its course.   And maybe after mom or dad has three accidents in a six -month period, the children will finally act.  Or maybe they won’t.

I know that this blog is not going to win any popularity contests with senior citizens.   The truth often hurts, but it is still the truth!   Yes, we need to improve the availability of alternative transportation in our communities for seniors.  But in the meantime, we have to be cognizant of the problems with senior driving and be vigilant about protecting the lives of the innocent victims that may be on the other side of the road.

 

REINCARNATING THE “MILLER TRUST”

Having professionally assisted families to navigate through the Medicaid application process for over 25 years, new regulations are considered an annual event.  Private experts like CARENET, Inc. roll with the punches, analyzing the new rules and adjusting our approach to ensure that every application is processed until final approval is received.

On December 1, 2014, private case managers were hit with a new “old” rule.  Medicaid decided to bring back what many years ago was denoted as a “Miller Trust”, but is, in essence, a “QIT or Qualified Income Trust”.   The original purpose of this trust was to protect assets for families, i.e. to preserve assets legally, while still qualifying for Medicaid.  Not surprisingly, the new regulations are “not designed” to help families protect assets.  Rather, these rules are designed to eliminate one of the Medicaid programs, i.e. Medically Needy.

The average individual has generally believed all these years that Institutional Medicaid was one singular program, financing individuals in nursing homes, and as of 1996, in assisted living facilities.  That has never been the case since the 1970’s.  There have always been three programs, Jersey Care for low income applicants (below $ 973 in 2015), Medicaid for average income, and Medically Needy for high income individuals ( $ 2197 or more in 2015).    However, the Medically Needy program has always had a major defect in the program.  High income individuals could not qualify for “Assisted Living Medicaid”.  The new regulations will now allow individuals with incomes over the income cap ($2197), to finally qualify for Medicaid as long as their income does not exceed Medicaid reimbursement to assisted living facilities.

For new Medicaid applicants who require skilled nursing care, this new regulation is an undue burden. There is no benefit that is recognizable at all.  Applicants will forced to set up a new account, arrange with the Social Security Administration and various pension plan administrators to transfer these direct deposits from current personal accounts to the new QIT.

With every new regulation, there are going to be problems with implementation.    In order to set up a QIT, which is essentially a bank account with a trustee, local banks have to be on board.   In 2014, the State of New Jersey held a webinar for Eldercare attorneys, banks, and other Medicaid experts,  in order to disseminate information on the proper procedures to be used to establish a QIT.  They also sent out information packets to banks, explaining the procedures.  Unfortunately, the average bank manager and/or platform person apparently was too busy soliciting customers to pay attention.  We have yet to encounter one banker who was up to speed on the procedure to establish a QIT.

A second issue is that one of the new parameters is in direct conflict with banking procedures.  A QIT must be an “irrevocable” trust.  Under banking protocols, irrevocable trusts must have a federal tax ID number.  However, the new regulations clearly state that the State of New Jersey mandates banks to set up the trust with the applicant’s Social Security number.   In trying to set up a trust, each banker with whom we worked had to first obtain clearance from their in-house legal department to set up this trust with the Social Security number.

When trying to explain this new regulation to clients, we have an extremely difficult time explaining the process and a more difficult time convincing them why it is necessary.  Our fallback position is always the same: “We don’t make the regulations; we just assist you with complying with them”.

The bottom line is as follows. If an individual’s total monthly income exceeds $2197, a QIT  (Qualified Income Trust) must be established in order to qualify for Medicaid benefits in a health care facility.   A professional case manager or Eldercare attorney should be able to assist with the process and solicit cooperation from the local banks.   This regulation is mandatory; i.e. all new applicants must comply.   For current Medicaid recipients, there is no retroactivity, i.e. no necessity to set up a QIT at this time.

Medicaid 2012

It is now 2012, five years after the implementation of the burdensome new Medicaid regulations by the Federal Government. Here are a few of the results: (1) The County Boards of Social Services take longer than ever to process a Medicaid application. They are short-staffed and are basically under a hiring freeze due to limited resources in the State budget. The cases are more complex and involve a great deal more paperwork; as a result the caseworkers are overwhelmed. (2) In some Counties, you cannot even get an appointment to process Medicaid for over one month. (3) Families are totally unprepared when they try to process an application on their own, as they do not even have the vaguest idea what the system entails and there is no resource on the market that can really prepare them. The more sophisticated families engage a professional. But for those that cannot afford professional help, they are basically at the mercy of the system. (4) More and more individuals are being disqualified from Medicaid for months as a result of gifting to relatives over the last five years. Most families do not understand that although the IRS allows gifts of $ 13,000 per year per individual, Medicaid will not approve these gifts. Medicaid treats these gifts as an illegal method of disposing of resources in order to qualify for Medicaid more quickly. (5) The County Medicaid Offices are also short-staffed, so the Community Choice Counselors who visit patients in the community to evaluate their medical conditions cannot respond quickly. Weeks or months go by before a patient who desperately needs placement in a nursing home can be seen. And under Medicaid guidelines, these individuals will not be eligible �medically� until seen by the counselor and may not qualify for Medicaid coverage as a result. Often, these individuals wind up going to hospitals by default. They are then placed from the hospitals. (6) When patients are disqualified from Medicaid after paying privately in nursing homes, the nursing homes have no payment sources. In recent years, there have been several lawsuits against family members as a result of the 2006 Medicaid regulations. The Medicaid system is broken, with no solution in sight. Government regulators have the goal of reducing Medicaid payments to nursing homes and assisted living facilities in order to balance the Federal budget and State budgets. The plight of these unfortunate families and of the health care providers is not their focus. As eldercare professionals, CARENET, Inc. can only do its best to provide quality services to those individuals in need. We will continue to work diligently to assist families with Medicaid issues, to provide financial plans that prevent Medicaid problems, and to counsel families regarding the medical issues of the elderly and how best to manage them.

MEDICAID’S FIVE-YEAR NIGHTMARE

On February 9, 2006, the Federal Government passed the Budget Reconciliation act of 2006 which included a rider that changed Medicaid regulations. It is not likely that it would not have passed on its own merits, so Congress decided to attach it as a rider to this bill.  Despite its being marginalized as a “rider”, this is one of the most important Medicaid regulations passed in the last twenty years and will affect millions of elderly residents of this country in the years to come.

Two specific parts of this legislation have already had a devastating effect on the Medicaid application process for many indigent elderly:

(1) Records must be provided for a period of five years prior to the month of application.Note:  this regulation was implemented in stages by stating that new applicants would not have to go back further than February 1, 2006, but is in full force at this time.

(2) During the five year period prior to the Medicaid application, no gifting to children, relatives or friends would be allowed.  All gifting would have created a disqualification period based on the amount of the gift (Medicaid calculating formula). The disqualification period would begin at the time of placement in a health care facility and the time of application.  Explanation:  Keeping a parent at home and applying for institutional Medicaid will not help as the disqualification period does not begin until placement in a health care facility.  A family would have to wait the entire five years after the gift to avoid the imposition of a penalty.

Congress justified the change in Medicaid regulations by stating that individuals should not be able to qualify for Medicaid if they transferred assets. But the IRS states that you may gift $13,000 per year to children or others.  The underlying truth is that the Federal Government is bankrupt, Medicaid is a huge expenditure in the Federal Budget every year and this was about SAVING MONEY at the expense of senior citizens.  The ramifications are devastating and it was shoved down the public’s throat.   And because it was passed as a “rider” on the Federal Budget Reconciliation Act of 2006, and not as a separate bill, it has never been effectively covered by the media.

Let’s consider the following case scenario’s:

Case I:        Jane Smith is an 86 year old female, lives off her income and can afford to gift $ 13,000 per year, (as per IRS guidelines)), to her children every Christmas. Her total assets are around $250,000. When Jane turns 88, she is disabled by a major stroke, requiring long term care in a nursing home.  (Many Nursing Homes in New Jersey cost over $120,000 per year.) After two years in the nursing home, Jane’s assets are depleted. She applies for Medicaid coverage, but is disqualified on the basis of the gifts that she gave to her children during the five year period.  (Note: Jane may appeal to Medicaid on the basis of “onset of catastrophic illness”, but based on her age, we speculate that her appeal would be denied.) Jane must now go to her children and request that they return the gifts.  Most probable case scenario:  the children have spent the money and would have to take out a loan to return it!!

Case II:       John March is a 90 year old man who has been in a nursing home for two years and has exhausted his resources and must apply for Medicaid.   His son, Jim, the designated Power-of-Attorney, goes to Medicaid on his father’s behalf.  John has never kept great records, but is able to locate three years of bank statements (with a few missing.)  He meets with the Medicaid caseworker, remits the paperwork and is given a list of missing documentation.    Jim looks at the list and is flabbergasted.  Going back five years, he must get all the missing bank statements and accompanying checks, documentation on all large deposits (including where they were generated, every 1099 and tax return) and a large number of  missing personal documents. Three weeks later, after going to several banks and ordering all the documents, he receives them, and remits them to Medicaid.   He gets another letter from Medicaid stating that several deposits showed that John had two closed accounts in another bank, cancelled a life insurance policy and cashed out an annuity four years ago.  Now Jim has to start all over with banks and insurance companies.  And this goes on and on.  FIVE YEARS IS A LONG TIME!!!

On the surface, one might shrug his/her shoulders and accept the ramifications of these regulations without giving them much thought.  But close examination shows how these regulations have discriminated against senior citizens in order to save money for the federal government.

Assisted Living Regulations in New Jersey Need Serious Revision

The State of New Jersey has totally failed to address the Assisted Living issue. What are the RESULTS?!:

 

(1)   There are residents in Nursing Homes that do not require that level of care and could function very well in assisted living but the Assisted Living Facilities will not accept them on Medicaid.

(2)   Assisted Living Facilities cannot meet costs with the reimbursement and therefore refuse to admit Medicaid residents.

(3)   The State of New Jersey loses money every year, money they can ill afford to lose, because Assisted Living Medicaid reimbursements will always be less than Nursing Home reimbursements even if the rates were increased to encourage facilities to participate.    

(4)   Residents of New Jersey with monthly incomes over $ 2022 may never qualify for assisted living Medicaid because the N.J. legislature put a cap on income and never came back to readdress this oversight. 

 

 

In 1996, the State of New Jersey began licensing Assisted Living Facilities to provide a service that prior to that time was unavailable. Until that time, elderly New Jersey residents had limited choices:

 

(1)   Living at home independently if they were capable.

(2)   Living at home with home health care if they could afford the costs. 

(3)   Luxury Care facilities where one could rent a private room, have elegant meals under the auspices of a dietitian and food service supervisor, housekeeping services and minimum supervision. The costs for these homes were beyond the means of the average person. 

(4)   Residential Health Care or Boarding Homes, which consisted of small facilities, mostly older homes with multiple bedrooms that had been converted to accommodate guests, where the costs were reasonable, but the accommodations were modest, most often sharing a room with one or more other residents and sharing a bathroom with many residents.  The meals would still be under the auspices of a dietitian and food service supervisor, but the fare was very average.  Some of these homes would accept SSI residents, which meant there monthly reimbursement ranged between $ 600 and $ 700 per month for “all services. 

(5)   Skilled nursing facilities for those whose medical needs exceeded the services provided by boarding homes and residential care facilities and who could not be managed in their own home due to lack of finances, or medical conditions that needed close monitoring. 

 

In order to fill the gap in care and to provide a facility for senior citizens with medical needs, but not requiring a nursing home, assisted living facilities were built in the State of New Jersey and became popular immediately.   Several large chains, e.g. the Marriot and Sunrise Assisted Living, led the way in New Jersey.  These facilities were luxurious, non-institutional in design and priced well below the cost of nursing homes. 

 

But, and it is a very big “BUT”, the State of New Jersey failed to mandate that these homes take Medicaid patients and failed to provide a reasonable reimbursement rate for these homes. Instead, they paid them a flat rate to be supplemented by SSI. The total reimbursement from the State approximated $ 2600 per month.  Now in 1996, that wasn’t so terrible as the rates for new Assisted Living Facilities were in the mid-$ 3000 per month to low $ 40000 per month range.  But, even in 1996, most of the Assisted Living facilities decided to forego accepting Medicaid as they felt that the reimbursement rates were too low and would never cover even their costs.  Additionally, most of the new facilities were designed with private rooms and Medicaid rates were based on semi-private rooms. 

 

Now, we are in 2010, FOURTEEN YEARS LATER!  Assisted Living costs have escalated and most of the up-scale facilities are charging $ 5000 to $ 8000 per month. But the State reimbursement rates remain below $ 3000 per month.  With the exception of a 2001 regulation which mandated that facilities built after 2001 would have to accept 10% Medicaid, few Assisted Living facilities accept Medicaid. And the ones that accept them may demand two to three years of private pay before they will accept the resident on the Medicaid program. 

ASSISTED LIVING & THE STATE OF NEW JERSEY

The State of New Jersey has totally failed to address the Assisted Living issue.  What are the RESULTS?!:

  • There are residents in Nursing Homes that don’t require that level of care and could function very well in assisted living but Assisted Living Facilities will not accept them on Medicaid.
  • Assisted Living Facilities can’t meet costs with the reimbursement and therefore refuse to admit Medicaid residents.
  • The State of New Jersey loses money every year, (money they can ill afford to lose,), because Assisted Living Medicaid reimbursements will always be less than Nursing Home reimbursements even if the rates were increased to encourage facilities to participate.
  • New Jersey  residents with monthly incomes over $2022 may never qualify for assisted living Medicaid because the N.J. legislature put a cap on income has never come back to readdress this oversight.

In 1996, to fill the gap in care and provide facilities for senior citizens with medical needs not requiring a nursing home, New Jersey built assisted living facilities and enjoyed immediate popularity.  Several large chains, e.g. the Marriot and Sunrise Assisted Living, led the way.  These facilities were luxurious, non-institutional in design and priced well below the cost of nursing homes.

But, and it is a very big “BUT”, the State of New Jersey failed to mandate that these homes take Medicaid patients and failed to provide a reasonable reimbursement rate for these homes. Instead, they paid them a flat rate to be supplemented by SSI. The total reimbursement from the State approximated $ 2600 per month.  In 1996, that wasn’t so terrible as the rates for new assisted living facilities were in the mid-$ 3000 to low $ 40000 per month.  But most of the assisted living facilities decided to forego accepting Medicaid because of the low reimbursement rates which would’nt even cover their costs.  Most of the new facilities were designed with private rooms and Medicaid rates were based on semi-private rooms.

Now, in 2010, fourteen years later, assisted living costs have escalated and most upscale facilities are charging $5K to $ 8K per month. Yet , the State reimbursement rates remain below $ 3000 per month.  With the exception of a 2001 regulation which mandated that facilities built after 2001 would have to accept 10% Medicaid, few Assisted Living facilities accept Medicaid. And the ones that accept them may demand 2 to 3 years of private pay before they’ll accept the resident on the Medicaid program.

This problem WILL NOT DISAPPEAR and our legislators are ignoring the issue!

For more detailed analysis of this issue, please visit our website at www.carenetinc.com.

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