Laying the Foundation for Success in Home Mods: Funding! GAMES 2015 Spring Meeting - Therapy for Revenue Replacement May 12, 2015 Savannah, GA
Presented by Mark Higley, MBA Vice President Regulatory Affairs VGM Group, Inc. mark.higley@vgm.com Office: 888.224.1631 Cell: 319.504.9515
Home Modification Funding Sources As attendees today are likely aware, traditional health insurance, Medicare and Medicaid typically do not cover Accessible Home/Bathroom/Auto Modifications There are however programs that, at times and if applied for properly, may offer some financial assistance Generally, there are 4 different types of assistance for home modifications: loans, grants, labor and equipment loans.
Possible funding sources include: Federal State County Community Charities Philanthropists Fund Raisers
But let s start with a few of the obvious, beginning with Private Payment (self funding) The AARP reports that about 80 percent of home owners bear the full costs of making home modifications. Frequently, people use their own money plus funds from another source. If the home modification meets certain conditions, it may be tax deductible. Part of the expense of building a ramp or modifying the bathroom for accessibility, or other modification, may be deductible if they increase the resale value of the property and have been prescribed as medically necessary. Suggest to your clients they consult with a tax professional AND You should order several copies of the free IRS Publication 502 to offer potential clients more information. Use this link to the IRS website www.irs.gov/pub/irspdf/p502.pdf and look under Capital Expense or call 800-829-3676.
Self funding via Reverse Mortgages Again, contractors should be aware and inform their potential clients - that in many circumstances the cost or a portion of the cost of home modifications are tax deductible. Reverse mortgages are an option for home modifications. Be aware of the basic fundamentals: With a reverse mortgage, the borrower always retains title or ownership of the home. The lender never, at any point, owns the home even after the last surviving spouse permanently vacates the property. The amount of funds that a borrower is eligible for depends on his or her age (or, in the case of couples the age of the younger spouse), the value of the home, interest rates and upfront costs. The older the borrower, the more proceeds he or she may receive.
The key benefits: Tax-free funds for as long as your client lives in the home No loan repayment for as long as they live in the home No income, medical or credit requirements (*) Retains ownership of the home for life; this is guaranteed as long as they maintain the home, and pay their insurance and real estate taxes Homeowners may select a variety of cash flow plans tailored to their needs No restrictions on how the homeowner may use the funds A tax-advantaged way to pass on part of their estate (*) Starting on April 27, 2015, lenders will start conducting "financial assessments" of every reverse mortgage borrower to ensure the person has enough money to pay ongoing costs, such as property taxes and homeowners insurance, over the life of the loan. The financial assessment determines whether the lender will need to set aside a certain amount of money to pay for property taxes and other expenses over the course of the loan. The "set aside" will reduce the amount of loan proceeds available to the borrower.
There is a limit on the amount of funds a borrower can access during the first 12 months after closing. If a borrower is eligible for a $100,000 loan, for example, no more than $60,000, or 60 percent, can be accessed. In month thirteen, a borrower can take as much or as little of the remaining proceeds as he or she wishes. There are exceptions to the 60 percent rule. A borrower can withdraw a bit more if there is an existing mortgage, or other liens on the property, that must be paid off. A borrower can withdraw enough to pay off these obligations, plus another 10 percent of the maximum allowable amount -- in which case that's an extra $10,000, or 10 percent of $100,000. Read more at reversemortgage.org; details from the not-for-profit National Reverse Mortgage Lenders Association
Area Agencies on Aging Funds The Older Americans Act provides funds for the elderly that are distributed through the local Area Agencies on Aging (AAA). This network of some 600 agencies has flexibility in how these funds are used. Many AAA offer eligible seniors small grants to make home modifications and repairs. The state of Georgia, through its network of 12 Area Agencies on Aging, offers a variety of services and supports which help elderly residents to remain living in their homes. Inquire at your service area AAA s! Find your Georgia (by county) AAA at http://www.n4a.org/ Contractors can read more information about these services on Georgia's Department of Human Services website at https://aging.dhs.georgia.gov/home-community-based-services
Georgia Department of Human Services Division of Aging Services (DAS) Two Peachtree Street, NW, Suite 9385 Atlanta, GA 30303-3142 Toll-free: 1-866-552-4464 While most of the assistance is for seniors, some programs can benefit the disabled as well. This includes the aging and disability resource connection, home-delivered services including delivered meals, health promotion and disease prevention, home modification and repair, and counseling.
Medicaid & Home Modifications
Medicaid Waiver Definition Medicaid for the elderly was historically provided only in nursing homes. Medicaid Home and Community Based Services or HCBS Waivers, permit individuals to receive services at home or in their "community" instead of in a nursing home. Nursing home Medicaid is an entitlement, anyone eligible will receive care. Waivers, on the other hand, are not entitlements. Typically these programs have limited enrollments and sometimes waiting lists exist for services.
How Waivers Help Most commonly the intention of HCBS Waivers is to enable an aging individual to continue living at home or to "age in place". In doing so, some of these waivers will pay for home modifications. These are more formally referred to as Environmental Accessibility Adaptations. Some waivers pay for assistive technologies such as special equipment for a washroom and adaptive lighting and others waivers pay for physical modifications to the home such as the addition of wheelchair ramps, stairlifts, walk-in or wheelchair accessible bathtubs and showers. Another area is the widening of internal spaces such as landings or doorways to accommodate for wheelchair access. Some waivers include resources for both technologies and modifications. In other words, both the hardware and the services to install the hardware.
List of Waivers that Cover Home Modifications Medicaid waiver programs are state specific; they can also be condition-specific and / or age-specific. In each state, they have different names. I have researched and found that Georgia has some waiver programs that include some level of assistance for home modifications / environmental adaptations. (There is also a Medicaid program called Money Follows the Person or MFP that helps individuals who currently reside in nursing homes to return to living at home. On occasion this program will fund home modifications. I will discuss this shortly )
Georgia Medicaid https://dch.georgia.gov/waivers offers two waiver options that help with home care; CCSP and SOURCE (*). Both waivers offer home care benefits but NOT specifically home modification assistance. However, the Independent Care Waiver Program (ICWP) waiver allows persons with physical disabilities (such as TBI), aged 21-64 who meet the nursing facility or hospital level of care to remain living at home and in the community. Services offered under this waiver include service coordination, respite, specialized medical equipment and supplies, counseling and home modification.
Other factors also help determine whether eligible applicants can receive waiver services, including: currently residing in a hospital or nursing facility, length of time on the waiting list, ability to live independently and the estimated cost of care (based on the projected care plan). People who are considering nursing home or other institutional care may be eligible for home- and community-based services as an alternative through Georgia s Medicaid waiver program. More information here: http://altrus.us/wp-content/uploads/icwp- Program-Overview.pdf (*) CCSP = community-based social, health and support services as an alternative to institutional placement in a nursing facility; SOURCE waiver provides enhanced primary care case management program that serves frail elderly and disabled beneficiaries to improve the health outcomes of persons with chronic health conditions, by linking primary medical care with home and community-based services.
How to Apply for ICWP To apply for ICWP, contact the Georgia Medical Care Foundation (GMCF) at 1-678-527-3619 or 1-800-982-0411, ext. 3619. GMCF will ask potential recipients questions over the phone, have them submit an application and schedule an in-person assessment. Based on the information provided, applicants may be eligible for ICWP and approved to receive services as funding becomes available.
NOW/COMP NOW Waiver (New Options Waiver) and COMP Waiver (Comprehensive Supports Waiver) The Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) administers a Medicaid Home and Community Based (HCBS) waiver program called NOW and COMP Waivers. The NOW Waiver (New Options Waiver) provides supports to people with developmental disabilities who live in their own home or with family members and require services costing less than $25,000 a year. The COMP Waiver (Comprehensive Supports Waiver) provides supports to people who need a full range of intensive in-home or out-of-home services with costs of over $25,000 a year.
Some of the services under the NOW/COMP waivers include: Environmental Accessibility Adaptation Services. Financial Support Services, Individual Directed Goods and Services, Natural Support Training Services, Pre-vocational Services, Specialized Medical Equipment Services, Specialized Medical Supplies Services, Transportation Services and Vehicle Adaption Services The State of Georgia, Department of Behavioral Health and Developmental Disabilities (DBHDD), Division of Developmental Disabilities (DDD) implements the COMP Program as approved by CMS. Complete information here: http://dch.georgia.gov/sites/dch.georgia.gov/files/imported/vgn/ima ges/portal/cit_1210/49/43/92560099now_comp_fy12.pdf
COMP offer home- and community-based services for people with a developmental or intellectual disability. A diagnosis of developmental disability includes mental retardation or other closely-related conditions such as cerebral palsy, epilepsy, autism or neurological problems. There are about 12,000 people with developmental disabilities served by the NOW/COMP programs in Georgia. People who are considering Georgia nursing institutional care such as Intermediate Care Facilities for people with mental retardation (ICF-MR) may be eligible for home- and community-based services as an alternative through Georgia s Medicaid waiver programs. In order to qualify for the waiver programs, the individual must first meet the criteria for Medicaid payment in an institution and certain other criteria. The person is then offered the choice between community-based services or institutional care.
General eligibility for Georgia Community Care Services Program Medicaid Waivers To qualify for the CCSP waiver, individuals must first qualify for Georgia Medicaid. Medicaid has both functional and financial eligibility requirements. Functionally, applicants must require the level of care provided in a nursing home. Unlike some states, Georgia has the same income limits for individuals receiving care in nursing homes as those receiving care in the community (on HCBS waivers). For 2015, this monthly gross income limit is $2,199 (or $26,388 per year). The value of an individual s resources or assets, excluding their home and vehicle, must be less than $2,000. Couples are allowed to retain up to $3,000. The asset limit excludes the applicant s primary vehicle and the value of their home equity up to $828,000. An exception to the income limit also exists when one spouse of a married couple is not applying for Medicaid. A certain percentage of their joint income can be shifted to the non-applicant spouse to provide them with a livable income. HCBS Waivers often have the same requirements as long term care Medicaid, but waivers limit enrollment. Therefore, some individuals may be eligible but are required to go on a waiting list until a space becomes available in the program.
Money Follows the Person (MFP) This is a Medicaid program designed for individuals that currently reside in nursing homes and wish to return to living at home or in the homes of their family. The MFP program provides up to $45,000 for home modifications however there are multiple requirements to be eligible. First and foremost, one must be an active participant in the MFP program which means they must be on Medicaid and be living in a nursing home. They must exhaust other Medicaid waivers (*) funds available for home modifications first and there also must be funds available in this program. Funds are distributed on a first-come, first-serve basis. Finally, they must have authorization for the modification from the Department of Medical Assistance. (*) Again, Medicaid waivers are state specific; they can also be condition-specific and / or age-specific. In each state, they have different names; we previously covered the Georgia waiver programs.
Some details and caps in Georgia Specialized Medical Supplies This can provide a range of supplies such as disposable diapers, chux pads, latex gloves, wipes, disinfectant cleaners, etc. There is a yearly cap of $1,659.84. Specialized Medical Equipment This service can provide equipment that is not otherwise covered by Medicaid. It might include certain types of bath chairs, ceiling track lift systems, communication systems, customized molded chair seats, etc. There is a $13,474.76 lifetime cap. Personal Emergency Response Systems The waiver will pay for installation and the monthly fee for a lifeline type emergency response system. Environmental Modifications The waiver can pay for home modifications that are not permanent structures. It could pay for a ramp, widening of doorways, etc. There is a $10,400 lifetime cap. Vehicle Adaptation - This service can pay for vehicle adaptations such as wheelchair brackets, special seat belt harnesses, portable ramps. There is a cap of $3,120 which means it usually is not enough to pay for a wheelchair lift.
Details relative to the Georgia MFP are here: https://dch.georgia.gov/sites/dch.georgia.g ov/files/related_files/document/mfp_polic IES_AND_PROCEDURES_MANUAL_Release_ Feb_2013_Final.pdf See Chapter 602.6, 602.8 and 603.20-21!!
Next: Veterans Programs for Home Modifications There is home modification assistance available to veterans from both the VA and from unassociated, non-profit organizations. The VA provides multiple grants including SAH Grants, SHA Grants and HISA Grants. Also available are Veterans Directed Home and Community Based Services. This program provides veterans with financial assistance to help them remain living in their homes and provides them with a certain amount of discretion to use those funds as they see fit. Making home modifications to accommodate for a disability would usually be an acceptable use of funds regardless of whether or not their disability was connected to their military service. Finally, the national, non-profit organization, Rebuilding Together, offers home modification assistance both in the form of labor and some materials to US veterans through its Heroes at Home Program. Some details next
SAH Grants SAH Grants, also referred to as 2101(a) Grants, provide financial resources to veterans for home modifications to make their place of residence wheelchair accessible. However, unlike the HISA Grant, this assistance is available only to veterans with service connected disabilities that include the loss or loss of function in at least one of their legs. As this grant is for service related disabilities only, most elderly veterans are not eligible. However, there is no time limit therefore some individuals may be eligible if they have a disability related to their military service that has become progressively worse with age and eventually required them to use a wheelchair. Eligibility: Veterans must have a service related disability that results in the loss of function in at least one leg. More detailed disability requirements are available from the VA at http://www.benefits.va.gov/homeloans/documents/docs/part1_va_pamp hlet_26_jrd_edits_doc.pdf
Benefits and Limits: The maximum allowable limit for 2015 is $70,465. This figure is adjusted annually based on a cost of construction index. Application Process: Veteran should complete VA Form 26-4555 and submit it to their local VA Regional Loan Center at http://www.benefits.va.gov/homeloans/contact_rlc_info.asp
Special Home Adaptation - SHA Grant SHA Grants, also known as 2101(b) Grants, are provided to disabled veterans to make home modifications necessary to allow them to continue to live independently despite blindness or the loss of use of their hands resulting from an injury sustained during their military service. Eligibility: Veterans must be blind in both eyes or have lost the use of both hands or have lost function due to a burn. Benefits and Limits: The maximum SHA grant benefit amount for 2015 is $14,093. Application Process: Veterans can apply at any VA office. More information can be found in this VA pamphlet: http://www.benefits.va.gov/homeloans/documents/docs/part2_va_p amphlet_26_jrd_edits_doc.pdf
Home Improvement and Structural Alteration - HISA Grant HISA Grants offer financial resources to disabled veterans to make modifications to their homes to improve access, mobility and in particular to facilitate use of the lavatory facilities. The veteran s disability does not have to be related to their military service. However, those whose disability is service-connected are eligible for a higher grant amount. Eligibility: Veterans must have a doctor s prescription that states the diagnosis and the medical reason for needing the home modification. The veteran does not necessarily need to own the home in which the modification is being made provided they have the permission of the homeowner. Benefits and Limits: In 2015, the maximum HISA benefit limit for veterans whose disability is not related to their military service is $2,000. For veterans with serviceconnected disabilities that limit is $6,800. This limit was last adjusted in 2010. Application Process: An application for HISA grant is available for download here: http://www.prosthetics.va.gov/docs/vha-10-0103-fill.pdf
Veterans must have a medical prescription stating the need as well as bids from 3 contractors for the cost of the work. More information is available from the Veterans Administration at http://www.prosthetics.va.gov/psas/hisa2.asp
Rebuilding Together - Home Modification Projects for the Elderly Rebuilding Together, formerly known as Christmas in April, is a national organization that has several programs and community building projects which help low income families, veterans and the elderly to remain living at home and age in place by providing free home modifications services. The major programs offered by this coalition of non-profits, volunteers and agencies are the Safe at Home Program, the Heroes at Home Program and the National Rebuilding Day. Some details:
Safe at Home This program is targeted towards low income seniors and families that own their homes and require assistance maintaining their home in livable condition or whose disabilities require that home modifications are made to enable them to continue residing in their home. Note! The installation of ramps, handrails, special lighting and other safety improvements is often performed by the organization s volunteers. http://rebuildingtogether.org/affiliates/
Heroes at Home This program is targeted towards veterans, their families, caregivers and/or widow and widowers. Most frequently the program modifies homes and home access to make them accessible to wheelchair bound veterans, this includes the construction of ramps and remodeling bathrooms, hallways and kitchens to help veterans maintain their independence. Applications: The program is open to all honorably discharged veterans who own their homes and are in need of home modifications to maintain their independence. Services are provided by the local Rebuilding Together affiliates and applications are accepted and reviewed at the local level. Again, the local Rebuilding Together affiliate may be found here: http://rebuildingtogether.org/affiliates/
Non-Medicaid Government Assistance for Home Modifications Many state governments and several agencies within the federal government have programs which help seniors with home modifications. The Department of Housing and Urban Development offers HUD Home Improvement Loans, and the US Department of Agriculture has Rural Repair and Rehabilitation Grants. Many states have a category of assistance program referred to as nursing home diversion programs. These programs, as their name implies, are intended to prevent or delay nursing home placement and as such they offer financial assistance and support services to help the elderly remain living at home. Some of these programs include home modifications as a benefit.
HUD Property Improvement Loans and Home Modifications for the Elderly The US Department of Housing and Urban Development, better known as HUD, insures loans made by private lenders against consumer default with the intention of making it easier for families to borrow money to make home modifications. To be clear, HUD does not subsidize these loans, rather by providing insurance, they enable approved lenders to offer loans to individuals with a wider range of credit scores who might otherwise not be eligible. http://portal.hud.gov/hudportal/hud?src=/localoffices
HUD Property Improvement loans are best suited for families that wish to have an elderly loved one move onto their property instead of as a loan to the individual that requires care directly. The reason for this is that seniors in poor health with fixed incomes are less than ideal candidates for these loans as they have limited ability to re-pay them. In the context of long term care for the elderly, these loans are often used to make a home more accessible for frail individuals, perhaps to accommodate a wheelchair or re-do a bathroom with handrails and a seated shower or walk in tub. They can also be used to build an accessory apartment that would enable an elderly relative to live on the property of their adult children or caregivers. As these loans are made by private lenders, most eligibility requirements are specific to the lender and the market in which the loan is provided. However, HUD does mandate that to qualify the borrower must either own the property or have a lease that extends 6 months beyond the loan repayment date. Consumers can borrow up to $25,000 for improvements to a single family home. Residents of multi-family units, such as apartment building borrow up to $12,000. The loan can be used to pay for any improvement to the safety, livability or utility of the property. Costs and Fees: These loans are made by private lenders that charge market rates for their loans. They can be taken for a loan period of up to 20 years.
How to Apply One must apply for a HUD loan through a HUD approved lender. On the HUD webpage, one can find a HUD approved lender using this search tool: http://www.hud.gov/ll/code/llslcrit.cfm More information about this program is available at: http://portal.hud.gov/hudportal/hud?src=/program_offices/housing /sfh/title/title-i Note: Contractors, if conducting further research on this option, should be aware that HUD Property Improvement Loans are also referred to as FHA Loans, Federal Housing Authority Loans and / or the Title 1 Insurance Program.
Loans Bank of America has Home Modification Loans for Homeowners under their Access Loans category. The program includes fixed interest rates and low minimum loan amounts. More information here: https://homeloanhelp.bankofa merica.com/en/bank-ofamerica-home-loanmodification.html
Lastly Medicare's Benefits for Home Modifications Many of your potential clients might immediately think of Medicare as potential source of financial assistance. Unfortunately, Medicare and most other private insurance typically do not pay for the cost of home modifications. However, there are some exceptions to this rule. Medicare may pay for assistive technology devices that are part of the modification process provided they are required for medical reasons and prescribed by a doctor. One might also receive assistance from Medicare in determining what home modifications are medically required. Medicare Part B will pay for an occupational therapist to evaluate a home and determine what changes are required. Finally, in some rare instances, Medicare will pay for bathroom modifications and walk-in tubs.
Paying for Walk-in Tubs: Medicare's Benefits Unfortunately for most seniors, walk in bathtubs are not considered to be durable medical equipment by Medicare and therefore Medicare will not pay for the cost of a walk-in tub nor will they contribute to the cost of installation. However, there may be rare situations in which Medicare does provide assistance. When this occurs, the support comes as reimbursement not in advance of the purchase. The tub would have to be considered an absolute medical necessity. The beneficiary would need a medical diagnosis which proves their need as well as a written prescription which outlined the reasons for which a walk in tub is necessary. Even with all this support, there is no guarantee of Medicare's assistance. When it comes to Medicare, It is best to suggest to your clients that of the tub will be an out-of-pocket purchase, but they may submit a claim and hope for the best but be financially prepared to pay the full cost including installation or look for other sources of assistance.
Medicare's Policy on Stair Lifts Generally, for all practical purposes, Medicare does not pay for stair lifts. The one possible exception to this rule is Medicare might pay for a small portion of the cost if the stair lift has an elevating seat which helps the rider to sit down and get up from the chair safely. However, such a feature would only be available in a high-end stair chair which would cost considerably more than the amount Medicare would reimburse the purchaser. In other words, the amount of financial assistance would be less than the additional cost for a stair lift which has that feature. Medicare supplemental insurance policies also do not cover stair lifts. These policies are intended to help with co-payments and deductibles for goods and services covered by Medicare. Since, Medicare does not help, neither would a Supplemental or Medigap policy.
Final issue: Tax Deductions and Credits Almost all home modifications or improvements made to accommodate aging-related disabilities can be tax deductible in some fashion. The purchasing cost of any special equipment for example, hand rails and kitchen and electrical fixtures as well as the service costs for the installation of this equipment are tax deductible as a medical expense. The cost of permanent modifications made to a home which increase the value of the home are also tax deductible within certain parameters. For example, if one builds an accessory apartment, sometimes called in-law apartment, to accommodate the move-in of an elderly parent, typically the value of the home will increase. If the modification costs $20,000 and the value of the home is increased by $15,000, then $5,000 can be considered a medical expense.
Interested in more information or additional research for the state of Georgia? Contact me at: Mark J. Higley Vice-President, Regulatory Affairs VGM Group, Inc. mark.higley@vgm.com (O) 888.224.1631 (C) 319.504.9515