TITLE 19/MEDICAID CHANGES ENACTED!

On February 8, 2006 President Bush signed into law the Deficit Reduction Act of 2005. This law places severe restrictions on a person's ability to transfer assets before qualifying for Title 19/Medicaid coverage.  These changes are fully effective in Wisconsin as of January 1, 2009.  There is still much confusion regarding the impact of this new law and how Wisconsin is applying the law.  If you are considering any asset transfers in connection with Title 19/Medicaid planning, please contact us immediately.  Please note, however, that we will not provide consultations over the telephone regarding this complicated area of law.

Applying for Title 19

How It Works

The Title 19 application process is one of documentation:

1. A detailed application must be completed.
2. Personal information is verified.
3. Income and asset information is documented:
   1. Asset information is required as of the date of entry into a nursing home facility -- the first snapshot.
   2. Asset information must be shown as of the date on which Title 19 eligibility begins -- the eligibility snapshot.
4. Account and asset information may have to be provided for the three-year period prior to the eligibility snapshot.

The Title 19 application and all documentation to verify the information on the application is filed with the county Department of Human Services.

Preparation -- Getting Organized

Nursing home admissions are often crisis events. It is an emotional and traumatic time. The search through files, cabinets, drawers, etc. for the documentation required for the Title 19 application can be frustrating and overwhelming. Avoid this frustration by knowing what information is required and organizing in advance.

Personal Information

1. Medicare Card.
2. Social Security Card.
3. Health Insurance Card.
4. Birth Certificate (or Baptismal Certificate).
5. Marriage License.
6. Veteran's Information.
7. Power of Attorney or Guardianship Documents.

Income Information

1. Social Security and Pension
   • If direct deposit, a copy of the bank statement showing deposit is sufficient. Otherwise, you will need a copy of the check.
2. Rent, Interest, Dividends
   • A copy of your tax return may show this information. If not, it may be obtained from your bank or financial institution.

Asset Information

1. Bank Accounts (checking, savings, and money market).
2. Certificates of Deposit.
3. Mutual Funds.
4. Brokerage Accounts.
5. IRAs, Profit Sharing, and Other Retirement Accounts.
6. Stocks and Bonds (including U.S. Bonds).
7. Deferred Annuities.
8. Real Estate.
9. Life Insurance

Remember:

1. The above information must be shown as of the first snapshot and the eligibility snapshot.
2. If you are married, it does not matter whose name is on the account. All information must be provided.

Tips:

1. How many bank accounts are there? Now may be the time to simplify and consolidate.
2. Do you have stocks and bonds in certificate form? There are many advantages to putting these in a brokerage account.
3. Do you have a thorough durable power of attorney? If you do not, you may be facing more problems than just a difficult Title 19 process.
4. Arrange for social security and pension checks to be direct deposits.
5. Keep your most recent life insurance statements which show cash value and death benefit information.
6. Purchase a big fireproof box. Keep all information and your most recent tax return in that box.

Gifts

Do not confuse the allowable annual exclusion gifts with Title 19 rules. The IRS allows annual gifts of $13,000 per person, but these gifts will create a period of ineligibility for Title 19. The Deficit Reduction Act of 2005 has increased the penalty period associated with gifting from three to five years. It is uncertain when this will become effective in the State of Wisconsin. It is important that you consult your legal advisor prior to making gifts.

Tip: Dedicate a folder for keeping copies of the most recent five years' bank statements, brokerage statements, etc.

Conclusion

Advance preparation and knowing what to expect will take the fear out of this process. Don't wait until the crisis. Prepare now and consult your legal advisor about thorough powers of attorney and the technical Title 19 rules and regulations.

Limitations and Disclaimer

THIS BROCHURE IS IN NO WAY INTENDED TO BE A COMPLETE EXPLANATION OF THE LAWS AFFECTING TITLE XIX. THE LAWS OFTEN CHANGE AND EACH INDIVIDUAL'S SITUATION IS UNIQUE. THE ASSET AND INCOME LIMITS CHANGE EACH YEAR. THIS BROCHURE WILL PROVIDE AN INITIAL UNDERSTANDING OF THE BASIC CONCEPTS. YOU SHOULD CAREFULLY EVALUATE YOUR PARTICULAR SITUATION AND CONSULT THE APPROPRIATE LEGAL ADVISOR PRIOR TO TAKING ANY ACTION.