VA Aid and Attendance Proposed Changes
Below are the top areas of concern. You can help impact this change by submitting comments, with stories from your residents on how this benefit helped them remain in assisted living. All comments must be responded to, which can delay the effective date. Comments should explain what should be changed and how this would affect veterans. You may submit your comments here http://www.regulations.gov/#!docketDetail;D=VA-2015-VBA-0003.
We also encourage you to write your congressman since they are not aware that VA is changing the rules without making a law.
Now it is more important than ever that you only refer your clients to an accredited attorney or agent who is on top of how VA is reviewing claims. We involved in national efforts to effect this change. Just as there were changes made to Medicaid’s look back several years ago, we are confident that planning options will emerge.
We encourage you to reach out to all inquiries that were veterans or widows so they can get planning done quickly under the existing rules. Based on all the information we’ve received at this time, we have a 3-6 month window left for people to plan to become eligible. Many more people will automatically qualify under the new rules with the higher asset limit. Planning can still be done for those with a home as well.
Concerns about VA’s New Proposed Rule Changes to Aid & Attendance Pension:
Many of the facilities are unlicensed with supportive care, either by a homecare agency or personal services agency. The rule also requires unlicensed assisted livings to have 24-hour caregivers on duty which will drive up the cost of care, effecting even more veterans and widows with modest resources who really need this benefit in order to receive the care they need.
- Physician must order vet to live in assisted living to count all costs
In order for all costs associated with an assisted living be a countable medical expense their physician must order they live in the facility. Many seniors choose to make the move to assisted living well before a physician would say they must live there. This puts an unnecessary responsibility on the dr.
- Caregivers must be licensed
The rule initially states that “relative caregivers” are not a qualified expense because they must be licensed. Later in the rule, it states that if a physician certifies they must be cared for by this person it would be allowed. These conflicting statements are very confusing. It is important to allow family members to care for their loved ones and be able to be compensated for taking time off their usual job. Otherwise this would force them to have to hire an agency, which is way more expensive than what most people would pay a relative. Again those veterans and widows with modest means may be forced into nursing homes and apply for Medicaid much sooner.
- Home care hours limited to hours actually caring for their ADLs
Home caregivers provide much more support to seniors that are essential to remaining at home. Allowing these activities like, housekeeping, cooking, laundry, shopping, bill paying and others are different than counting the things and assisted provides for a senior. Again this will force many veterans and widows out of their home and if they can’t afford the cost of assisted living, they will end up in a nursing home applying for Medicaid.
- Hourly rate of caregiver limited
Rates for caregivers vary greatly across the country. This is unfair to those living on east and west coast by using an average rate. Again this will force veterans and widows who cannot qualify because of their caregiver’s rate is too high out of their home and possibly into a nursing home applying for Medicaid.
- Primary residence limitations
- Primary residence where taxes are filed
Under the proposed rule the primary residence is consider the home where they file their taxes. Many seniors are snowbirds and own two homes and have to file taxes where they spend more time there. This may not be where their lifetime home is, which is usually more expensive. Medicaid puts no restriction on where your primary residence can be. They mention they are trying to mirror Medicaid but they are not following the same rules.
Medicaid requires a second home to be producing income to not be counted as an available resource. Many veterans and widows have all their assets in their home and they may not have the liquid resources to pay for care without the A & A pension. This would prevent them from getting the care they need.
- Primary residence limited to two acres
The new rule the primary residence is limited to two acres. This would prohibit veterans and widows who live in more rural areas or live on a family farm from qualifying. It appears they have presumed that all large pieces of ground larger than two acres are farms. Again Medicaid allows for farms to be except, however any farm income is countable.
- Net worth
- Allowable maximum unclear
The new rule references Medicaid’s Community Spouse Resource Allowance but it isn’t clear whether that amount also applies to single veterans.
- Annuities are counted as an asset
The new rule states the annuities are counted as an asset. There are actually two types of annuities. One type is a deferred annuity that is accumulating interest and should be a countable resource if they can liquidate it without a reasonable penalty to pay for care. The second type is a Single Premium Immediate Annuity, which is often referred to as an income annuity or income only annuity. This is not an exchange for less than fair market value because all of their premium is returned, over their life expectancy and with interest. These have no cash value and cannot be liquidated. Under Medicaid rules they are only counted as an income. This would prevent many veterans or widows from receiving the care they need.
- IRA counted as a resource
A large number of veterans and widows have IRA’s as a source of savings. The new rule does not allow them to convert this to a Medicaid compliant single premium immediate annuity and it only be countable as an income. Medicaid says it must be irrevocable, unassignable, non-commutable and non-transferable to qualify. If a veteran had to use their IRA savings to pay for care withdrawals are considered it is taxable income. This can have a substantial impact on many veterans and widows.
- Transfer of Assets
- Penalty for transfers unfairly calculated
Under the new rule the penalty period for transfers made within the past 36 months, would be derived by dividing the total amount transferred by the amount of the pension for veteran or widow. This unfairly penalizes the widow for a much longer period than it does the veteran. The pension amount is also much lower than the divisor that Medicaid uses.
The maximum penalty period is 10 years.
- All trusts are considered transfers
Many seniors use a revocable living trust as a means to avoid probate. This rule should specifically state an irrevocable trust where the grantor has given up control of the asset.
- Strict definition of disabled child for allowable transfers
How will they determine if a disable child is capable of supporting themselves? We would prefer they use the same definition as Social Security disability and Medicaid. Some children can become disabled as an adult and veterans and widows should be allowed, as they are allowed under Medicaid, to make provisions for them to be cared for throughout their lifetime. This would cause them to have to choose between their children and their care.
- Are they capable of evaluating transfers
It is an involved process to evaluate transfers
- No provision to rebut transfers were not for the purpose of qualifying
If a veteran or widow gave their child money to help care for a sick child, helped pay for their grandchildren’s college, added on to their children’s home so they could life with them or even loaned their child money under the new rule they are given no opportunity to rebut that this transfer was not made for the purpose of qualifying for the pension. Medicaid gives applicants this opportunity. The rule needs to include a Hardship Provision. This could again prevent a veteran or widow from getting they care they need and force them into a nursing home on Medicaid.
- Gifts must be returned within 30 days of application
With no specified date this new rule would take effect, claimants would not know when applying that gifting is now prohibited. This rule should be within a reasonable period of time from denial. .
- Allowable Spend Downs
The only mentioned allowable spend downs mentioned in the rule were household and medical expenses. Under Medicaid claimants are allowed to spend down in the following areas. We ask that the VA give claimants the same allowances. If a veteran or widow cannot pay for their funeral or fund a prepaid funeral trust as an allowable spend down to become eligible this again has a substantial impact on them getting the care they deserve.
- Funeral expenses or funeral trust
Medicaid allows them to spend down their resources to cover funeral expense.
Many veterans and widows need handicapped accessible vehicles or larger vehicles as they age. There is no allowance for them to purchase a new vehicle.
The new rule does mention they can sell their home and purchase a new one however it does not allow for them to purchase a portion of their children’s home or a life estate as Medicaid allows.
- No Effective Date or Grandfather Clause
- There is no stated effective date only that there is a 60 day period for comment
Most veterans and widows don’t even know about this benefit until they need care, much less the change in rules. Sixty days is a very short period to get the word out so that they have an opportunity to comment.
- No Grandfather clause for pending applicants, existing claimants or new claimants
Nothing in the rule states how pending applicants prior to the rule being adopted would be treated, under the old rules or new rules. There is no mention if they will impose the look back and other new rules to those already on claim. This lack of information also puts those who were about to apply in the next few months at risk for be denied without knowing all the final rules. We ask that the VA makes a clear decision on this known.
If their goal was to truly make sure that veterans receive quality care and be responsible with the government resources, we’re not convinced that they achieved their goal. These new rules will actually increase the backlog of claims by it taking much longer to evaluation all the qualifications that go into it.