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July 17, 2008
AFFORDABLE ASSISTED LIVING – PART 2
There’s good news! My last article talked about my friend, Ron Hennan, who for the last 5 months has been going through some medical problems. He is currently a nursing home resident in Melrose. The good news is that last Thursday, Angela Warren, marketing director for Prospect House, an assisted living facility in Revere, called and said that she has a room available for my friend, Ron! Now, all he has to do is pass the screening test to make sure that his needs can be met at the assisted living.
The room is a studio apartment with refrigerator and a microwave oven. Meals, snacks and all utilities, including cable tv, are included, except for telephone. To rent this unit, it would cost about $4,000 per month. Ron’s income is not high enough to be able to afford this type of apartment, but due to the PACE program and the Low Income Housing Tax Credit Program, Ron’s rent will be reduced to $1,118. Here’s how it works:
The PACE program is a community based program designed to help residents stay living at home as long as possible. It is designed for individuals in need of both medical and financial assistance whose monthly income is below $1,911 and have less than $2,000 in assets. PACE pays for all of your medical expenses and since a large portion of the assisted living cost is medical care, it pays a large portion of the monthly rental cost. If your medical needs increase, the cost is automatically absorbed by the PACE program.
If your income is below $1,118, residents may apply for Supplemental Social Security (SSI) and that will increase their income to $1,118. So, if your income is $1,118 and the cost of renting the apartment is $1,118, that doesn’t leave much spending money. For residents whose income is below $1,118, the assisted living facility will give you about $75 per month for necessities. In Ron’s case, his income is above $1,118 and that means, he gets to keep the excess. He’ll have about $600 per month spending money.
You must be on Community MassHealth (Medicaid), as opposed to MassHealth for long term nursing home care, to be part of the PACE program. To qualify your assets must be below $2,000. One of the major differences between these two forms of MassHealth is that for Community MassHealth, there is no penalty for giving away assets. So, you could give away all of your assets and qualify financially for Community MassHealth, but before you consider doing this, please seek the advice of your attorney or financial advisor!
In Ron’s case, we are also applying for the Low Income Housing Tax Credit Program. This is part of the reason that he is getting to keep so much of his monthly income. This program knocks off about $400 per month from the rent and is available to individuals whose annual income is below $36,000.
Finally, for veterans, or spouses of veterans, there is a government benefit called Aid & Attendance that could help with payment for assisted living. You must have served at least one day during wartime and have less than $80,000 in assets. They look at your income as compared with your medical expenses and figure out some kind of cash flow analysis to determine your financial needs. The VA will pay you anywhere from $100 to $1,500 per month. In Ron’s case, even if he got the maximum benefit, he still wouldn’t have had enough money to pay the monthly rent, but for some families, this can make assisted living affordable.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org