Generally, there are two government agencies that pay the costs of long-term care on an ongoing basis, if you qualify. One is Medicaid, which administers a joint federal and state program, the other is the Veteran’s Administration (VA), for veterans and certain surviving family members.
Aid and Attendance (A&A) is one of three VA “pensions”, for non-service related disabilities. A&A pays the greatest amount of care of all of the pensions. It is generally used for veterans who qualify and surviving spouses (based on the veteran’s record) to pay for their nursing home costs, although it can be used for assisted living facilities’ costs as well.
I will not cover the requirements for Medicaid eligibility to a large extent as this article focuses on the VA rules and its recent changes. Suffice to say that the A&A benefit is limited while Medicaid can pay the entire cost of the long-term care facility (income is a factor for both benefits as well).
The Medicaid program “penalizes” an applicant if certain gifts were made within five years prior to the application. The penalty is the number of months Medicaid will not pay for the costs of the long-term facility.
Until this month, the VA was not permitted to impose such a penalty. On more than one occasion over the past few years the VA attempted to have Congress approve a penalty but was denied.
On September 18, 2018, the VA published a new rule of its own which changed the eligibility factors for veterans and spouses to qualify for the A&A pension benefit. The new rule becomes effective on October 18, 2018.
The new rule affects the maximum amount of assets a veteran and/or a spouse can own and be eligible for the A&A pension (the new rule combines assets and income for VA eligibility determination). The new rule also limits the amount of acreage to be considered part of the “residence”, an excluded asset. They also determine what is counted as a “medical expense” that can be deducted from assets/income in determining eligibility.
The new rule also imposes a penalty for gifts made. If gifts were made within three years prior to the VA application, the VA will impose a penalty period, or a number of months the veteran or a spouse will not be eligible for the pension. There is a maximum penalty period of five years for the pension. Medicaid has an unlimited penalty period.
The new VA rule has made it more difficult to create an asset-protection plan to qualify for the A&A pension and Medicaid benefits.
If you have any questions about the new VA rules, Medicaid or other elder law and estate planning issues, please contact Joe Mattera at 937-223-1130 or at email@example.com