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June 2016

Cost of Rhode Island Long-Term Care Services Increase

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The cost to receive long-term care services at home with a health aide has increased in Rhode Island, according to Genworth’s 13th annual Cost of Care Study.

The cost to receive long-term care services at home with a health aide has increased both in Rhode Island and nationally, according to Genworth’s 13th annual Cost of Care Study.

Released Tuesday, the study said long-term care costs across all care settings in Rhode Island, including home care, adult day services, assisted living and nursing facilities, are higher than last year.

“Although home care costs are much less expensive than those in facility-based settings, the costs can add up to as much as $57,200 per year in Rhode Island, which is why it’s imperative for consumers to begin planning now for how they will pay for that care should they need it,” Tom McInerney, president and CEO at Genworth, said in a statement.

He said at least 70 percent of Americans over age 65 will need some form of long-term care services and support during their lives.

In Rhode Island, the median monthly cost of a home health aide is $4,767, a 0.48 percent increase from 2015. That’s also higher than the national median monthly cost of $3,861, which also increased in cost over the year by 1.3 percent.

The cost of adult day services in Rhode Island rose 12.8 percent, for a median monthly cost of $1,625. That compares with the national median monthly cost of $1,473, which fell 1.3 percent over the year.Monthly Cost Chart 2016

Median monthly private nursing home costs also rose in the Ocean State, to $9,581, an 11.5 percent increase, as well as semi-private nursing home costs, which rose to $8,304, a 7.1 percent increase. Annually, the cost for private nursing home care amounts to $114,975, which has increased 2 percent over the last five years. That is also higher than the national cost for private nursing home care at approximately $92,000.

Nationally, the monthly median cost for a private nursing home rose 1.2 percent to $7,698, and semi-private nursing home costs climbed 2.3 percent to $6,844.

Two services that declined over the year in Rhode Island were homemaker services and assisted living, by 2.1 percent and 7.4 percent, respectively, for totals of $4,385 and $4,931 per month. Nationally, those segments increased 2.6 percent to $3,813, and 0.8 percent to $3,628, respectively.

Other report findings:

  • The cost of semi-private nursing home care is 11.72 percent more expensive in the Providence-Warwick-Fall River metropolitan area than the state average at $9,277 per month.
  • The cost of adult day services is 6.65 percent less expensive in the Providence metro area than the state average, at $1,517 per month.
  • Homemaker services costs are 1.1 percent less expensive in the Providence metro area than the state average, at $4,338 per month.

A home health aide will typically help with bathing, dressing, transferring and toileting, but not with catheters or injections. Most agencies also provide homemaker services that typically include assistance with shopping, finances, cooking, errands and transportation. Homemaker services may also be employed for the purpose of providing companionship.

“The annual Cost of Care study is our way of helping Americans fully understand the financial implications of long-term care so that they can plan ahead and, when the time comes, focus on getting the best care without the worry and stress of how they’re going to pay for it,” McInerney said.

The 2016 Cost of Care Survey covers more than 15,000 long-term care providers in 440 regions throughout all 50 states, including all U.S. metropolitan statistical areas.

Source: Providence Business News


Myths and Realities of Long-Term Care Planning

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Long Term Care Planning?

True or Falselong term care planning and smiling
1. ________ ________ I will never end up in a nursing home.
Of those Americans reaching age 65 in any year, 24 percent are expected to spend a year or more in a nursing home. Fifty-seven percent will never enter a nursing home and 19 percent will spend less than a year in a nursing home. Nine percent will spend more than five years.

2.________ ________ An average nursing home costs $5,000 a month.
In Rhode Island, typical nursing homes cost $10,000 a month, or more than $120,000 a year.

3.________ ________ Medicare will pay for any long-term costs I may have.
No. It will pay for up to 100 days of skilled nursing facility care if you meet the certain requirements, including: (1) you must have moved to the nursing home within 30 days of a hospital discharge, the hospital stay having lasted at least three days; and (2) you must receive a skilled level of care. Medicare pays entirely for the first 20 days and everything above a copayment of $114 a day for days 21-100. The copayment is generally covered by Medigap insurance. The general rule of thumb if your coverage is denied or terminated due to the lack of need for skilled care is to ask for the bill to be submitted to the fiscal intermediary anyway. This review costs nothing and may result in coverage.
Medicare pays for home health care on a part-time or intermittent basis. Part-time generally means up to 20 hours a week. You must require a skilled component to your care to get this coverage.

4.________ ________ Medicaid is a program only for “poor” people (not me).
In 2010, the total cost of nursing home care was approximately $342 billion. This amount was paid from the following sources:

  • 41% Medicaid
  • 20% Medicare
  • 15% Out-of-Pocket
  • 17% Miscellaneous
  • 7% Private insurance

5.________ ________ To qualify for Medicaid I will have to give up my home
False. In Rhode Island you may keep your home as long as you intend to return to live there, no matter whether you really can or do. However, if the house is in your estate at your death, the state will have the right to recover whatever it has spent on your care

6. ________ ________ If my spouse enters a nursing home all our joint savings will have to be spent on his/her care.
False. You are entitled to keep half of your combined liquid savings up to $119,220 for 2016. In some circumstances, you may be entitled to keep more than this amount.

7.________ ________ If I give money to my children I will be ineligible for Medicaid benefits for 60 months.
Maybe. You will be ineligible for 60 months for every penalized transfer. There are some exceptions to this transfer penalty.

8. ________ ________ If I apply for Medicaid, the Department of Human Services and the nursing home staff will reliably guide me through the process.
Yes, and in most cases their help will be sufficient. However, they may not know the intricacies of spousal impoverishment and other rules. They may not be able to advise you on when to appeal a denial. You should be aware that applications for Medicaid require extensive documentation and can be quite time-consuming.

9.________ ________ Legally I can give away only $14,000 to each of my children each year.
You can give away any amount, but have to report gifts in excess of $14,000 per recipient per year ($28,000 if both husband and wife make the gift). The reporting requirement is not an issue for most people because an estate must be greater than $10.9 million in 2016 to be taxable under federal law (In Rhode Island the reporting requirement is when an estate exceeds $1.5 million). MAKING GIFTS AND UNCOMPENSATED TRANSFERS CONSTITUTE A DISQUALIFY TRANSFER UNDER THE MEDICAID RULES AND SHOULD NOT BE DONE UNLESS YOU ARE ASSURED YOU WILL NOT NEED TO APPLY FOR MEDICAID WITH THE 5 YEAR LOOK-BACK PERIOD.

10. ________ ________ I can wait to do long-term care planning until I or my spouse gets sick.
Yes and no. Usually there are things that can be done even if no advance planning steps have been taken. However, you will be much better off if you have taken planning steps in advance. Here are the steps that we recommend that our clients at least consider.

You cannot predict whether you or a family member will require long-term nursing home care. But if we define “long term” as a year or longer, one in four of you will. That means one in four will face costs of more than $70,000-more than one in four couples will face such costs.
Medicare will not pay these costs, which leaves you with three choices:

  1. Long-term care insurance
  2. Out-of-pocket
  3. Medicaid

Long-term care insurance is great if you can afford it. But follow these ground rules:

  1. Buy an individual policy, not a group policy.
  2. Buy home care coverage.
  3. Get an inflation rider.
  4. Buy enough coverage.
  5. Buy at least three years of coverage.
  6. Tell the agent the complete truth about your current condition and situation.
  7. Make sure you can afford the policy. This means you are paying for it with 5 percent or less of your income or with money you would otherwise add to your savings. Do not change your current standard of living for the policy, or get your kids to buy it.

Key Medicaid rules:

  1. Only $4,000 in countable assets.
  2. Countable assets are everything that you and your spouse own (individually and jointly) other than your home and other noncountable or inaccessible assets. You never need to give up your home in order to qualify for Medicaid.
  3. The at-home spouse is entitled to retain up to $119,220 in total countable assets. In some cases the at-home spouse can appeal for a higher resource allowance.
  4. All income of a nursing home Medicaid beneficiary goes to the nursing home, except for (1) $50.00 a month personal needs allowance, (2) the cost of any health insurance premiums, and (3) any allowance for the at-home spouse or minor children.
  5. The community spouse is entitled to a share of the nursing home spouse’s income if the community spouse’s own income does not meet a minimum guarantee.
  6. The state may recover whatever it pays for the Medicaid recipient’s care from his or her probate estate.
  7. The Medicaid application process is long and cumbersome. Do not expect to get sound advice from health care workers, friends, or anyone but an experienced elder law attorney.
  8. Plan ahead, especially with a durable power of attorney and health care proxy.

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Probate Process – The Pain After The Passing

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Probate Process and Probate Courts – Dealing With A Deceased Assets

What is the probate process?

Probate is the process by which a deceased person’s property, known as the “estate,” is passed to his or her heirs and legatees (people named in the will). The entire process, supervised by the probate court, usually takes about a year. Although distributions from the estate prior to its closing is possible – it would be done at the risk of the executor so it is often avoided until the claims period has expired and a court has approved the terms of distribution to the heirs and beneficiaries.

What propertprobate process4y is subject to the probate process?

The probate estate includes all property held in the decedent’s name. Certain kinds of property, such as property owned jointly by the deceased and another person, life insurance, and property held in trust, are not part of the probate estate and are not subject to the probate process. For example, jointly owned bank accounts pass automatically to the surviving joint owners upon the death of one of the owners without going through probate. The nonprobate property, however, is part of the decedent’s taxable estate (see below).

How is the probate process started?

First, a petition for probate of the will must be filed with the probate court, along with the original will and a certified copy of the death certificate. Each City and Town in Rhode Island has its own probate court and the petition should be filed with the probate clerk of the city or town the decedent lived in. Notice must be mailed to all of the decedent’s heirs at law (usually the surviving spouse, children, and children of any deceased children), to those named as beneficiaries in the will, the Division of Medicaid Assistance and, if a charity is involved or there are no heirs at law, to the Attorney General. Notice must be also published in a local newspaper. If no one objects by a deadline set by the court, the personal representative or executor named in the will is appointed by the court.

What does the personal representative/executor do?Probate

The personal representative or executor is responsible for collecting the probate property and for paying any debts of the estate. The personal representative or executor must file with the probate court an itemized list, known as an “inventory,” of the probate property, including the value of each item. The personal representative must file an estate tax return within nine months of the date of death. This is true even if no estate tax is owed, if the decedent owned real estate or the personal representative wants his or her final accounting (see below) allowed by the probate court. Creditors of the estate have one year from the date of death to bring claims against the estate. Personal representatives generally wait until this claim period has expired to complete distribution of the estate according to the terms of the will. As his or her final responsibility, the personal representative must file an accounting with the probate court showing the income and expenditures of the estate administration.

The probate process is one that many people wish to avoid because of the time and expense involved. Through the drafting of a proper estate plan, many of the issues and inconveniences can be avoided. Contact our office to discuss the probate process in greater detail and a estate plan that best works for you.

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GUARDIANSHIP: What You Need To Know

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What is guardianship?

Guardianship is a legal relationship whereby the Probate Court gives one person (the guardian) the power to make personal and financial decisions for another (the ward). Some states have separated guardianship into two roles—a guardianship or power over the person, and a conservatorship for power over the finances. A guardian may be appointed when a Probate Court determines that an individual is unable to care for herself and her estate by reason of mental illness, inguardianship-handstellectual disability, or physical incapacity.

When is guardianship appropriate?

Guardianship is appropriate when impaired judgment or capacity poses a major threat to a person’s welfare. A medical evaluation by a licensed physician is necessary to establish the proposed ward’s condition. However, only a court can determine the need for a guardian.

How can I become a guardian?

Assuming that a physician is prepared to attest to the proposed ward’s incompetence, a petition must be filed with the Probate Court requesting the appointment of a guardian. Two petitioners must sign the petition and the proposed guardian must file a bond with the court. Then, the court directs that the heirs of the ward and the ward herself receive notice of the filing of the petition for guardianship. The court sets a date by which anyone wishing to object may do so, including the proposed ward. Then a hearing is held where a judge decides whether a guardian should be appointed.

How long does this appointment last?

A temporary appointment can last 90 days. A permanent appointment may last until the death of the ward or the guardian, until the ward is able to establish that she is competent, or until the guardian resigns or is removed by the Probate Court.

What authority does the guardian have?

Unless limited by the court, the guardian has total control over the finances and the personal decisions of the ward. This includes deciding where the ward will
live, determining how the ward’s funds will be spent, and making routine medical decisions for the ward. For medical decisions involving extraordinary medical care, the administration of antipsychotic drugs, commitment to a mental health facility, or the sale of the ward’s real estate, the guardian has to seek the approval of the court in a separate proceeding to expand his or her powers.

guardianWhat are the responsibilities of the guardian?

In addition to those concerning authority to consent to medical treatment, the guardian must account carefully for all of the ward’s income and any expenditures made on his or her behalf. This is accomplished by the guardian filing an inventory listing the ward’s assets with the court as of the date of appointment and by filing annual accounts with the court detailing all the income and expenses the ward has. A final account must be filed when the guardianship is terminated. The guardian is liable for her acts until the court allows (approves) the account.

What are the alternatives to guardianship?

There are several less restrictive alternatives to guardianship. These include the durable powers of attorney, representative payees, trusts, and health care proxies. Each of these options may avoid or delay the need for a guardian. These documents need to be executed before the individual is incapable of doing so due to mental impairment.

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Income Tax And Medicaid

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Q: My mother has been in a nursing home for the last eight years. She is enrolled in the Medicaid long-term care program, so her Social Security and pension checks are turned over to the nursing home each month. She receives a personal-needs allowance of $50.

Her adjusted gross income is $45,000, but when she takes allowable deductions and exemptions, including the deduction for itemized medical expenses, she has no federal income tax liability. However, after filing her state personal income tax return, she owes Rhode Island $1,170. How can she pay this tax bill when her net income is $50 a month?

A: Your question spans three different, but related, issues: federal income tax, state income tax and Medical Assistance (Medicaid) long-term care. Looking at each issue in order will help answer your question.

Internal Revenue Service rules require that a single person age 65 or older must file a federal tax return for 2013 if his/her gross income exceeds $11,500. Adjusted gross income is total gross income minus specific reductions, such as alimony payments made to a former spouse, contributions to certain retirement accounts or interest derived from certain types of bonds.

Taxable income is adjusted gross income minus itemized deductions and personal exemptions. The IRS allows a tax deduction for qualified medical expenses that exceed 10 percent of adjusted gross income. There is a temporary exemption, from Jan. 1, 2013 through Dec. 31, 2016, for individuals who turned 65, or whose spouse turned 65 during the tax year, that sets the qualified medical expense deduction threshold at 7.5 percent of adjusted gross income.

The IRS allows the deduction for nursing home expenses, including meals and lodging, if the primary reason for being in a nursing home is for medical care. If the person is in a nursing home for personal care, the IRS allows a deduction only for the cost of the medical care.

In your mother’s case, her total deductions, including medical expenses and personal exemption, probably resulted in no federal income tax liability. For more information about medical expenses and other deductions, contact the IRS at (800) 829-1040, or go to

In 2011, Rhode Island changed its personal income tax structure. When the state income tax became effective in 1971, it was a “piggyback” based system; state personal income tax was a percentage of your federal income tax. Generally, you received credit for deductions and exemptions reported on your federal income tax return.

Most likely, if you didn’t have a federal income tax liability, you had no state income tax liability. According to the Rhode Island Division of Taxation, one of the changes that took effect for 2011 and after eliminated the option to itemize deductions, including the medical expense deduction.

The new law effectively reduced the top marginal tax rate; broadened the lower-rate income brackets; reduced the number of tax brackets; introduced a single, uniform set of tax brackets; eliminated the state alternative minimum tax; and expanded the standard deduction. The Division of Taxation declared that these changes benefited more than 60 percent of Rhode Island taxpayers, mostly in lower income brackets.

As you saw, however, eliminating itemized deductions, such as medical expenses, created a new reality; it’s possible to owe no federal income tax and still have a state personal income tax liability. That’s why your mother owes $1,170 in state income tax. (For more information on state personal income taxes, call the Division of Taxation at (401) 574-8829, or go to

Here’s the good news. The state administration realized that these changes could affect Medicaid long-term care clients who were using most of their income to pay for nursing home care. In other words, you might not be able to pay state personal income taxes and contribute to the cost of nursing home care. The Executive Office of Health and Human Services has developed a process that allows Medicaid long-term care clients, such as your mother, to decrease the amount they contribute to their care by the amount of the state income tax liability. Based on information provided by that agency, here’s an outline of the process:

The state tax liability must be directly related to the change in law regarding the deduction of medical expenses. The tax liability must be paid first. You will have to send the following documentation to your mother’s long-term care caseworker at the Department of Human Services field office:

A letter indicating that the state tax liability is a direct result of the inability to deduct medical expenses.

A signed and dated copy of her R.I. 1040 tax return that shows the tax owed.

A copy of the check or proof of electronic transfer that paid the tax liability.

A copy of the bank statement showing that the check was cashed, if applicable.

If necessary, submit a copy of Power of Attorney Form 2848.

The caseworker will review the documentation. If all the information is acceptable, your mother’s patient liability to the nursing home will be decreased in the amount equal to the tax liability payment. For instance, let’s say that your mother has a patient liability of $2,100 each month that she pays the nursing home directly. She has a state income tax liability of $1,170 that she pays in April. If the only funds she has to pay her taxes are the same funds she uses to pay the nursing home, she would pay the state $1,170 for the tax bill owed and the difference of $930 ($2,100 minus $1,170) to the nursing home for the April bill. The state will then reimburse the nursing home for the unpaid patient liability of $1,170 that she paid in state personal income tax.RI State House



This is a shared article written by Larry Grimaldi is the chief of program development at the Rhode Island Department of Human Services, Division of Elderly Affairs and published in the Providence Journal on September 22, 2014. CLICK HERE to see the original article.