Medicare Launches App to Help Beneficiaries Find Out What’s Covered

Posted on August 19, 2019 by Hope Elder Law

At the doctor’s office and want to know if a procedure is covered by Medicare? There is an app for that. Medicare has launched a free app that gives beneficiaries a quick way to see whether the program covers a specific medical item or service.

The “What’s Covered” app allows you to search or browse to learn what’s covered and not covered under Medicare Parts A and B, how and when to get covered benefits, basic cost information and other eligibility details. You can also see a list of covered preventive services. The app does not give results for extra benefits that Medicare Advantage plans may cover but that Original Medicare does not, such as certain vision, hearing or dental benefits.

Examples of the types of questions the app can answer include:

When are mammograms covered?
Is home health care covered?
Will Medicare pay for diabetes supplies?
Can I get a regular cervical cancer screening?
Will my Medicare benefits cover a service to help me stop smoking?

Although the app provides beneficiaries with basic information, it doesn’t provide personalized information. It doesn’t ask details about each user’s specific insurance information, so it doesn’t take into account the user’s supplemental insurance, co-insurance, and deductibles. Essentially, the app provides another way for Medicare beneficiaries to get the same information that is available online and in the Medicare handbook.

The app is part of an initiative by the Centers for Medicare and Medicaid Services (CMS) focused on modernizing Medicare and empowering beneficiaries. Other initiatives include:

Enhanced interactive online decision support to help beneficiaries better understand and evaluate the coverage options and costs of original Medicare compared to Medicare Advantage plans.
New price transparency tools that let consumers compare the national average costs of certain procedures between settings, so people can see what they’ll pay for procedures done in a hospital outpatient department versus an ambulatory surgical center.
A new webchat option in the Medicare Plan Finder.
New easy-to-use surveys across Medicare.gov so consumers can tell CMS what they want.

To get the new “What’s Covered” app, go here: https://www.medicare.gov/blog/whats-covered-mobile-app.

How Gifts Can Affect Medicaid Eligibility

Posted on August 12, 2019 by Hope Elder Law

We’ve all heard that it’s better to give than to receive, but if you think you might someday want to apply for Medicaid long-term care benefits, you need to be careful because giving away money or property can interfere with your eligibility.

Under federal Medicaid law, if you transfer certain assets within five years before applying for Medicaid, you will be ineligible for a period of time (called a transfer penalty), depending on how much money you transferred. Even small transfers can affect eligibility. While federal law allows individuals to gift up to $15,000 a year (in 2019) without having to pay a gift tax, Medicaid law still treats that gift as a transfer.

Any transfer that you make, however innocent, will come under scrutiny. For example, Medicaid does not have an exception for gifts to charities. If you give money to a charity, it could affect your Medicaid eligibility down the road. Similarly, gifts for holidays, weddings, birthdays, and graduations can all cause a transfer penalty. If you buy something for a friend or relative, this could also result in a transfer penalty.

Spending a lot of cash all at once or over time could prompt the state to request documentation showing how the money was spent. If you don’t have documentation showing that you received fair market value in return for a transferred asset, you could be subject to a transfer penalty.

While most transfers are penalized, certain transfers are exempt from this penalty. Even after entering a nursing home, you may transfer any asset to the following individuals without having to wait out a period of Medicaid ineligibility:

your spouse
your child who is blind or permanently disabled
a trust for the sole benefit of anyone under age 65 who is permanently disabled

In addition, you may transfer your home to the following individuals (as well as to those listed above):

your child who is under age 21
your child who has lived in your home for at least two years prior to your moving to a nursing home and who provided you with care that allowed you to stay at home during that time
a sibling who already has an equity interest in the house and who lived there for at least a year before you moved to a nursing home

Before giving away assets or property, check with your attorney to ensure that it won’t affect your Medicaid eligibility.

Tips on Creating an Estate Plan that Benefits a Child with Special Needs

Posted on August 5, 2019 by Hope Elder Law

Parents want their children to be taken care of after they die. But children with disabilities have increased financial and care needs, so ensuring their long-term welfare can be tricky. Proper planning by parents is necessary to benefit the child with a disability, including an adult child, as well as assist any siblings who may be left with the caretaking responsibility.

Special Needs Trusts
The best and most comprehensive option to protect a loved one is to set up a special needs trust (also called a supplemental needs trust). These trusts allow beneficiaries to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose their eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiaries in determining their eligibility for public benefits.

There are three main types of special needs trusts:

A first-party trust is designed to hold a beneficiary’s own assets. While the beneficiary is living, the funds in the trust are used for the beneficiary’s benefit, and when the beneficiary dies, any assets remaining in the trust are used to reimburse the government for the cost of medical care. These trusts are especially useful for beneficiaries who are receiving Medicaid, SSI or other needs-based benefits and come into large amounts of money, because the trust allows the beneficiaries to retain their benefits while still being able to use their own funds when necessary.
The third-party special needs trust is most often used by parents and other family members to assist a person with special needs. These trusts can hold any kind of asset imaginable belonging to the family member or other individual, including a house, stocks and bonds, and other types of investments. The third-party trust functions like a first-party special needs trust in that the assets held in the trust do not affect a beneficiary’s access to benefits and the funds can be used to pay for the beneficiary’s supplemental needs beyond those covered by government benefits. But a third-party special needs trust does not contain the “payback” provision found in first-party trusts. This means that when the beneficiary with special needs dies, any funds remaining in the trust can pass to other family members, or to charity, without having to be used to reimburse the government.
A pooled trust is an alternative to the first-party special needs trust. Essentially, a charity sets up these trusts that allow beneficiaries to pool their resources with those of other trust beneficiaries for investment purposes, while still maintaining separate accounts for each beneficiary’s needs. When the beneficiary dies, the funds remaining in the account reimburse the government for care, but a portion also goes towards the non-profit organization responsible for managing the trust.

Life Insurance
Not everyone has a large chunk of money that can be left to a special needs trust, so life insurance can be an essential tool. If you’ve established a special needs trust, a life insurance policy can pay directly into it, and it does not have to go through probate or be subject to estate tax. Be sure to review the beneficiary designation to make sure it names the trust, not the child. You should make sure you have enough insurance to pay for your child’s care long after you are gone. Without proper funding, the burden of care may fall on siblings or other family members. Using a life insurance policy will also guarantee future funding for the trust while keeping the parents’ estate intact for other family members. When looking for life insurance, consider a second-to-die policy. This type of policy only pays out after the second parent dies, and it has the benefit of lower premiums than regular life insurance policies.

ABLE Account
An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give him money.

Created by Congress in 2014 and modeled on 529 savings plans for higher education, these accounts can be used to pay for qualifying expenses of the account beneficiary, such as the costs of treating the disability or for education, housing and health care, among other things. ABLE account programs have been rolling out on a state-by-state basis, but even if your state does not yet have its own program, many state programs allow out-of-state beneficiaries to open accounts. (For a directory of state programs, click here.)

Although it may be easy to set up an ABLE account, there are many hidden pitfalls associated with spending the funds in the accounts, both for the beneficiary and for her family members. In addition, ABLE accounts cannot hold more than $100,000 without jeopardizing government benefits like Medicaid and SSI. If there are funds remaining in an ABLE account upon the death of the account beneficiary, they must be first used to reimburse the government for Medicaid benefits received by the beneficiary, and then the remaining funds will have to pass through probate in order to be transferred to the beneficiary’s heirs.

Get Help With Your Plan
However you decide to provide for a child with special needs, proper planning is essential. Talk to your attorney to determine the best plan for your family.

Medicare’s Different Treatment of the Two Main Post-Hospital Care Options

Posted on July 29, 2019 by Hope Elder Law

Hospital patients who need additional care after being discharged from the hospital are usually sent to either an inpatient rehabilitation facility (IRF) or a skilled nursing facility (SNF). Although these facilities may look similar from the outside, Medicare offers very different coverage for each. While you may not have complete say in where you go after a hospital stay, understanding the difference between the two facilities can help you advocate for what you need and know what to expect with regard to Medicare coverage.

An IRF can be either part of a hospital or a stand-alone facility that offers intensive physical and occupational therapy under the supervision of a doctor and nurses. IRFs offer a minimum of three hours a day of rehabilitation therapy. An SNF, on the other hand, provides full-time nursing care. Patients also receive physical and occupational therapy, but the care is generally less intensive and specialized than in an IRF.

IRFs and Medicare

Medicare Part A covers a stay in an IRF in the same way it covers hospital stays. Medicare pays for 90 days of hospital care per “spell of illness,” plus an additional lifetime reserve of 60 days. A single “spell of illness” begins when the patient is admitted to a hospital or other covered facility, and ends when the patient has gone 60 days without being readmitted to a hospital or other facility. There is no limit on the number of spells of illness. However, the patient must satisfy a deductible before Medicare begins paying for treatment. This deductible, which changes annually, is $1,364 in 2019.

After the deductible is satisfied, Medicare will pay for virtually all hospital charges during the first 60 days of a recipient’s hospital stay. If the hospital stay extends beyond 60 days, the Medicare beneficiary begins shouldering more of the cost of his or her care. From day 61 through day 90, the patient pays a coinsurance of $341 a day in 2019. Beyond the 90th day, the patient begins to tap into his or her 60-day lifetime reserve. During hospital stays covered by these reserve days, beneficiaries must pay a coinsurance of $682 per day in 2019.

To qualify for care in an IRF, you must need 24-hour access to a doctor and a nurse with experience in rehabilitation. You must also be able to handle three hours of therapy a day (although there can be exceptions).

SNFs and Medicare

Medicare’s coverage of skilled nursing care is more limited. Medicare Part A covers up to 100 days of “skilled nursing” care per spell of illness. Beginning on day 21 of the nursing home stay, there is a copayment equal to one-eighth of the initial hospital deductible ($170.50 a day in 2019). However, the conditions for obtaining Medicare coverage of a nursing home stay are quite stringent. Here are the main requirements:

The Medicare recipient must enter the nursing home no more than 30 days after a hospital stay (meaning admission as an inpatient; “observation status” does not count) that itself lasted for at least three days (not counting the day of discharge).
The care provided in the nursing home must be for the same condition that caused the hospitalization (or a condition medically related to it).
The patient must receive a “skilled” level of care in the nursing facility that cannot be provided at home or on an outpatient basis. In order to be considered “skilled,” nursing care must be ordered by a physician and delivered by, or under the supervision of, a professional such as a physical therapist, registered nurse or licensed practical nurse. Moreover, such care must be delivered on a daily basis. (Few nursing home residents receive this level of care.)

A new spell of illness can begin if the patient has not received skilled care, either in an SNF or in a hospital, for a period of 60 consecutive days. The patient can remain in the SNF and still qualify as long as he or she does not receive a skilled level of care during that 60 days.

Keep in mind that some or all of Medicare’s deductibles and co-payments for both IRF and SNF care may be covered by Medicare supplemental insurance, also called Medigap coverage.

Protecting Your House from Medicaid Estate Recovery

Posted on July 22, 2019 by Hope Elder Law

After a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient’s care. This is called “estate recovery.” For most Medicaid recipients, their house is the only asset available, but there are steps you can take to protect your home.

Life estates
For many people, setting up a “life estate” is the simplest and most appropriate alternative for protecting the home from estate recovery. A life estate is a form of joint ownership of property between two or more people. They each have an ownership interest in the property, but for different periods of time. The person holding the life estate possesses the property currently and for the rest of his or her life. The other owner has a current ownership interest but cannot take possession until the end of the life estate, which occurs at the death of the life estate holder.

Example: Jane gives a remainder interest in her house to her children, Robert and Mary, while retaining a life interest for herself. She carries this out through a simple deed. Thereafter, Jane, the life estate holder, has the right to live in the property or rent it out, collecting the rents for herself. On the other hand, she is responsible for the costs of maintenance and taxes on the property. In addition, the property cannot be sold to a third party without the cooperation of Robert and Mary, the remainder interest holders.

When Jane dies, the house will not go through probate, since at her death the ownership will pass automatically to the holders of the remainder interest, Robert and Mary. Although the property will not be included in Jane’s probate estate, it will be included in her taxable estate. The downside of this is that depending on the size of the estate and the state’s estate tax threshold, the property may be subject to estate taxation. The upside is that this can mean a significant reduction in the tax on capital gains when Robert and Mary sell the property because they will receive a “step up” in the property’s basis.

As with a transfer to a trust, if you transfer the deed to your home to your children and retain a life estate, this can trigger a Medicaid ineligibility period of up to five years. Purchasing a life estate in another home can also cause a transfer penalty, but the transfer penalty can be avoided if the individual purchasing the life estate resides in the home for at least one year after the purchase and pays a fair amount for the life estate.

Life estates are created simply by executing a deed conveying the remainder interest to another while retaining a life interest. In many states, once the house passes to the remainder beneficiaries, the state cannot recover against it for any Medicaid expenses that the ife estate holder may have incurred.

Trusts
Another method of protecting the home from estate recovery is to transfer it to an irrevocable trust. Trusts provide more flexibility than life estates but are somewhat more complicated. Once the house is in the irrevocable trust, it cannot be taken out again. Although it can be sold, the proceeds must remain in the trust. This can protect more of the value of the house if it is sold. Further, if properly drafted, the later sale of the home while in this trust might allow the settlor, if he or she had met the residency requirements, to exclude up to $250,000 in taxable gain, an exclusion that would not be available if the owner had transferred the home outside of trust to a non-resident child or other third party before sale.

Contact your attorney to find out what method will work best for you.

What Is the Difference Between a Living Will and a Do-Not-Resuscitate Order?

Posted on July 15, 2019 by Hope Elder Law

It is a very good idea to create advance directives in order to plan for the possibility that you may one day be unable to make your own medical decisions. In doing so, there can be confusion about the difference between a living will and a “do-not-resuscitate” order (DNR). While both these documents are advance medical directives, they serve different purposes.

A living will is a document that you can use to give instructions regarding treatment if you become terminally ill or are in a persistent vegetative state and unable to communicate your instructions. The living will states under what conditions life-sustaining treatment should be terminated. If you would like to avoid life-sustaining treatment when it would be hopeless, you need a living will. A living will takes effect only when you are incapacitated and is not set in stone — you can always revoke it at a later date if you wish to do so.

When drawing up a living will, you need to consider the various care options and what you would like done. You need to think about whether you want care to extend your life no matter what or only in certain circumstances. A living will can dictate when you want a ventilator, dialysis, tube feeding, blood transfusions, and other life- saving or life-prolonging options.

A DNR is a different document. A DNR says that if your heart stops or you stop breathing, medical professionals should not attempt to revive you. This is very different from a living will, which only goes into effect if you are unable to communicate your wishes for care. Everyone can benefit from a living will, while DNRs are only for very elderly and/or frail patients for whom it wouldn’t make sense to administer CPR.

In addition to a living will, you will also need a health care proxy or broader medical directive.

Maximizing Social Security Survivor’s Benefits

Posted on July 8, 2019 by Hope Elder Law

Social Security survivor’s benefits provide a safety net to widows and widowers. But to get the most out of the benefit, you need to know the right time to claim.

While you can claim survivor’s benefits as early as age 60, if you claim benefits before your full retirement age, your benefits will be permanently reduced. If you claim benefits at your full retirement age, you will receive 100 percent of your spouse’s benefit or, if your spouse died before collecting benefits, 100 percent of what your spouse’s benefit would have been at full retirement age. Unlike with retirement benefits, delaying survivor’s benefits longer than your full retirement age will not increase the benefit. If you delay taking retirement benefits past your full retirement age, depending on when you were born your benefit will increase by 6 to 8 percent for every year that you delay up to age 70, in addition to any cost of living increases.

You cannot take both retirement benefits and survivor’s benefits at the same time. When deciding which one to take, you need to compare the two benefits to see which is higher. In some cases, the decision is easy—one benefit is clearly much higher than the other. In other situations, the decision can be a little more complicated and you may want to take your survivor’s benefit before switching to your retirement benefit.

To determine the best strategy, you will need to look at your retirement benefit at your full retirement age as well as at age 70 and compare that to your survivor’s benefit. If your retirement benefit at age 70 will be larger than your survivor’s benefit, it may make sense to claim your survivor’s benefit at your full retirement age. You can then let your retirement benefit continue to grow and switch to the retirement benefit at age 70.

Example: A widow has the option of taking full retirement benefits of $2,000/month or survivor’s benefits of $2,100/month. She can take the survivor’s benefits and let her retirement benefits continue to grow. When she reaches age 70, her retirement benefit will be approximately $2,480/month, and she can switch to retirement benefits. Depending on the widow’s life expectancy, this strategy may make sense even if the survivor’s benefit is smaller than the retirement benefit to begin with.

Keep in mind that divorced spouses are also entitled to survivor’s benefits if they were married for at least 10 years. If you remarry before age 60, you are not entitled to survivor’s benefits, but remarriage after age 60 does not affect benefits. In the case of remarriage, you may need to factor in the new spouse’s spousal benefit when figuring out the best way to maximize benefits.

How to Fight a Nursing Home Discharge

Posted on July 1, 2019 by Hope Elder Law

Once a resident is settled in a nursing home, being told to leave can be very traumatic. Nursing homes are required to follow certain procedures before discharging a resident, but family members often accept the discharge without questioning it. Residents can fight back and challenge an unlawful discharge.

According to federal law, a nursing home can discharge a resident only for the following reasons:

The resident’s health has improved
The resident’s needs cannot be met by the facility
The health and safety of other residents is endangered
The resident has not paid after receiving notice
The facility stops operating

Unfortunately, sometimes nursing homes want to get rid of a resident for another reason–perhaps the resident is difficult, the resident’s family is difficult, or the resident is a Medicaid recipient. In such cases, the nursing home may not follow the proper procedure or it may attempt to “dump” the resident by transferring the resident to a hospital and then refusing to let the him or her back in.

If the nursing home transfers a resident to a hospital, state law may require that the nursing home hold the resident’s bed for a certain number of days (usually about a week). Before transferring a resident, the facility must inform the resident about its bed-hold policy. If the resident pays privately, he or she may have to pay to hold the bed, but if the resident receives Medicaid, Medicaid will pay for the bed hold. In addition, if the resident is a Medicaid recipient the nursing home has to readmit the resident to the first available bed if the bed-hold period has passed.

In addition, a nursing home cannot discharge a resident without proper notice and planning. In general, the nursing home must provide written notice 30 days before discharge, though shorter notice is allowed in emergency situations. Even if a patient is sent to a hospital, the nursing home may still have to do proper discharge planning if it plans on not readmitting the resident. A discharge plan must ensure the resident has a safe place to go, preferably near family, and outline the care the resident will receive after discharge.

If the nursing home refuses to readmit a patient or insists on discharging a resident, residents can appeal or file a complaint with the state long-term care ombudsman. The resident should appeal as soon as possible after receiving a discharge notice or after being refused readmittance to the nursing home. You can also require the resident’s doctor to sign off on the discharge. Contact your attorney to find out the best steps to take.

For more on protecting the rights of nursing home residents, see the guide 20 Common Nursing Home Problems–and How to Resolve Them by Justice in Aging.

What’s a Health Care Proxy and Why Do I Need One?

Posted on June 24, 2019 by Hope Elder Law

If you become incapacitated, who will make your medical decisions? A health care proxy allows you to appoint someone else to act as your agent for medical decisions. It will ensure that your medical treatment instructions are carried out, and it is especially important to have a health care proxy if you and your family may disagree about treatment. Without a health care proxy, your doctor may be required to provide you with medical treatment that you would have refused if you were able to do so.

In general, a health care proxy takes effect only when you require medical treatment and a physician determines that you are unable to communicate your wishes concerning treatment. How this works exactly can depend on the laws of the particular state and the terms of the health care proxy itself. If you later become able to express your own wishes, you will be listened to and the health care proxy will have no effect.

If you are interested in drawing up a health care proxy document, contact your attorney.

Medicare Beneficiaries Need to Know the Difference Between a Wellness Visit and a Physical

Posted on June 18, 2019 by Hope Elder Law

Medicare covers preventative care services, including an annual wellness visit. But confusing a wellness visit with a physical could be very costly.

As part of the Affordable Care Act, Medicare beneficiaries receive a free annual wellness visit. At this visit, your doctor, nurse practitioner or physician assistant will generally do the following:

Ask you to fill out a health risk assessment questionnaire
Update your medical history and current prescriptions
Measure your height, weight, blood pressure and body mass index
Provide personalized health advice
Create a screening schedule for the next 5 to 10 years
Screen for cognitive issues

You do not have to pay a deductible for this visit. You may also receive other free preventative services, such as a flu shot.

The confusion arises when a Medicare beneficiary requests an “annual physical” instead of an “annual wellness visit.” During a physical, a doctor may do other tests that are outside of an annual wellness visit, such as check vital signs, perform lung or abdominal exams, test your reflexes, or order urine and blood samples. These services are not offered for free and Medicare beneficiaries will have to pay co-pays and deductibles when they receive a physical. Kaiser Health News recently related the story of a Medicare recipient who had what she assumed was a free physical only to get a $400 bill from her doctor’s office.

Adding to the confusion is that when you first enroll, Medicare covers a “welcome to Medicare” visit with your doctor. To avoid co-pays and deductibles, you need to schedule it within the first 12 months of enrolling in Medicare Part B. The visit covers the same things as the annual wellness visit, but it also covers screenings and flu shots, a vision test, review of risk for depression, the option of creating advance directives, and a written plan, letting you know which screenings, shots, and other preventative services you should get.

To avoid receiving a bill for an annual visit, when you contact your doctor’s office to schedule the appointment, be sure to request an “annual wellness visit” instead of asking for a “physical.” The difference in wording can save you hundreds of dollars. In addition, some Medicare Advantage plans offer a free annual physical, so check with your plan if you are enrolled in one before scheduling.

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