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A Modest Social Security Increase for 2021

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The Social Security Administration has announced a 1.3 percent rise in benefits in 2021, an increase even smaller than last year’s.

Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a slight boost in 2021. The 1.3 percent increase is similar to last year’s 1.6 percent increase, but much smaller than the 2.8 percent rise in 2019. The average monthly benefit of $1,523 in 2020 will go up by $20 a month to $1,543 a month for an individual beneficiary, or $240 yearly.

The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $137,700 to $142,800.

For 2021, the monthly federal Supplemental Security Income (SSI) payment standard will be $794 for an individual and $1,191 for a couple.

Some years a small increase means that additional income will be entirely eaten up by higher Medicare Part B premiums. But this year, that shouldn’t be the case. The standard monthly premium for Medicare Part B enrollees is forecast to rise $8.70 a month to $153.30. However, due to the coronavirus pandemic, under the terms of the short-term spending bill the increase for 2021 will be limited to 25 percent of what it would otherwise have been.

Most beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2020. While you can still receive your increase notice by mail, you have the option to choose whether to receive your notice online instead of on paper.

For more on the 2021 Social Security benefit levels, click here.

The Ins and Outs of Guardianship and Conservatorship

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Every adult is assumed to be capable of making his or her own decisions unless a court determines otherwise. If an adult becomes incapable of making responsible decisions, the court will appoint a substitute decision maker, usually called a “guardian,” but called a “conservator” or another term in some states.

Guardianship is a legal relationship between a competent adult (the “guardian”) and a person who because of incapacity is no longer able to take care of his or her own affairs (the “ward”). The guardian can be authorized to make legal, financial, and health care decisions for the ward. Depending on the terms of the guardianship and state practices, the guardian may or may not have to seek court approval for various decisions. In many states, a person appointed only to handle finances is called a “conservator.”

Some incapacitated individuals can make responsible decisions in some areas of their lives but not others. In such cases, the court may give the guardian decision making power over only those areas in which the incapacitated person is unable to make responsible decisions (a so-called “limited guardianship”). In other words, the guardian may exercise only those rights that have been removed from the ward and delegated to the guardian.

Incapacity

The standard under which a person is deemed to require a guardian differs from state to state. In some states the standards are different, depending on whether a complete guardianship or a conservatorship over finances only is being sought. Generally, a person is judged to be in need of guardianship when he or she shows a lack of capacity to make responsible decisions. A person cannot be declared incompetent simply because he or she makes irresponsible or foolish decisions, but only if the person is shown to lack the capacity to make sound decisions. For example, a person may not be declared incompetent simply because he spends money in ways that seem odd to someone else. Also, a developmental disability or mental illness is not, by itself, enough to declare a person incompetent.

Process

In most states, anyone interested in the proposed ward’s well-being can request a guardianship. An attorney is usually retained to file a petition for a hearing in the probate court in the proposed ward’s county of residence. Protections for the proposed ward vary greatly from state to state, with some simply requiring that notice of the proceeding be provided and others requiring the proposed ward’s presence at the hearing. The proposed ward is usually entitled to legal representation at the hearing, and the court will appoint an attorney if the allegedly incapacitated person cannot afford a lawyer.

At the hearing, the court attempts to determine if the proposed ward is incapacitated and, if so, to what extent the individual requires assistance. If the court determines that the proposed ward is indeed incapacitated, the court then decides if the person seeking the role of guardian will be a responsible guardian.

A guardian can be any competent adult — the ward’s spouse, another family member, a friend, a neighbor, or a professional guardian (an unrelated person who has received special training). A competent individual may nominate a proposed guardian through a durable power of attorney in case she ever needs a guardian.

The guardian need not be a person at all — it can be a non-profit agency or a public or private corporation. If a person is found to be incapacitated and a suitable guardian cannot be found, courts in many states can appoint a public guardian, a publicly financed agency that serves this purpose. In naming someone to serve as a guardian, courts give first consideration to those who play a significant role in the ward’s life — people who are both aware of and sensitive to the ward’s needs and preferences. If two individuals wish to share guardianship duties, courts can name co-guardians.

Reporting Requirements

Courts often give guardians broad authority to manage the ward’s affairs. In addition to lacking the power to decide how money is spent or managed, where to live and what medical care he or she should receive, wards also may not have the right to vote, marry or divorce, or carry a driver’s license. Guardians are expected to act in the best interests of the ward, but given the guardian’s often broad authority, there is the potential for abuse. For this reason, courts hold guardians accountable for their actions to ensure that they don’t take advantage of or neglect the ward.

The guardian of the property inventories the ward’s property, invests the ward’s funds so that they can be used for the ward’s support, and files regular, detailed reports with the court. A guardian of the property also must obtain court approval for certain financial transactions. Guardians must file an annual account of how they have handled the ward’s finances. In some states guardians must also give an annual report on the ward’s status. Guardians must offer proof that they made adequate residential arrangements for the ward, that they provided sufficient health care and treatment services, and that they made available educational and training programs, as needed. Guardians who cannot prove that they have adequately cared for the ward may be removed and replaced by another guardian.

Alternatives to Guardianship

Because guardianship involves a profound loss of freedom and dignity, state laws require that guardianship be imposed only when less restrictive alternatives have been tried and proven to be ineffective. Less restrictive alternatives that should be considered before pursuing guardianship include:

  • Power of Attorney. A power of attorney is the grant of legal rights and powers by a person (the principal) to another (the agent or attorney-in-fact). The attorney-in-fact, in effect, stands in the shoes of the principal and acts for him or her on financial, business or other matters. In most cases, even when the power of attorney is immediately effective, the principal does not intend for it to be used unless and until he or she becomes incapacitated.
  • Representative or Protective Payee. This is a person appointed to manage Social Security, Veterans’ Administration, Railroad Retirement, welfare or other state or federal benefits or entitlement program payments on behalf of an individual.
  • Conservatorship. In some states this proceeding can be voluntary, where the person needing assistance with finances petitions the probate court to appoint a specific person (the conservator) to manage his or her financial affairs. The court must determine that the conservatee is unable to manage his or her own financial affairs, but nevertheless has the capacity to make the decision to have a conservator appointed to handle his or her affairs.
  • Revocable trust. A revocable or “living” trust can be set up to hold an older person’s assets, with a relative, friend or financial institution serving as trustee. Alternatively, the older person can be a co-trustee of the trust with another individual who will take over the duties of trustee should the older person become incapacitated.

Contact your attorney to discuss ways to protect against a guardianship.

Medicare Beneficiaries May Be Eligible for an Extra 100 days of Skilled Nursing Coverage Due to Pandemic

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The COVID-19 pandemic has been particularly devastating for nursing homes and their residents. Aside from the tragically disproportionate loss of life, care for surviving residents has been delayed or interrupted due to infection, facility lockdowns or other health system disruptions. In such cases, Medicare beneficiaries who qualified for skilled nursing facility (SNF) coverage may be eligible for an additional 100 days of coverage. Whether all qualified beneficiaries will actually get the extended coverage is another question.

Medicare does not pay for long-term care, just for “medical” care from a doctor or other health care professional or in a hospital. But there’s a partial exception to this rule. Medicare will pay for up to 100 days of care per “spell of illness” in an SNF as long as the following two requirements are met:

1. Your move to an SNF followed a hospitalization of at least three days; and

2. You need and will be receiving skilled care.

After the 100 days of coverage ends, a new spell of illness can begin if the patient has not received skilled care, either in an SNF or 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, but only custodial care, during that 60 days.

Following the declaration of a public health emergency this spring, the federal Centers for Medicare and Medicaid Services (CMS) issued a letter granting a waiver to allow Medicare beneficiaries coverage for an additional 100 days in an SNF, without satisfying the new spell of illness requirement, in certain COVID-19 related circumstances. The letter stated that the policy will apply only to skilled-care beneficiaries whose process of care was interrupted by the public health emergency. (The letter also waived the three-days-in-a-hospital rule in certain cases.)

Six months after that letter, however, there is still confusion about which COVID-19 related circumstances qualify for the waiver. Importantly, according to the Center for Medicare Advocacy, CMS recently confirmed that beneficiaries do not necessarily have to have a COVID-19 diagnosis to qualify for the additional 100 days of coverage. Rather, as described by Skilled Nursing News, “[t]he question is whether the emergency situation interrupted the patient’s path to 60 consecutive days of non-skilled, custodial care.”

In an August 26, 2020, memorandum, CMS attempted to clarify how it would determine whether a disruption in care was related to the public health emergency: “This determination basically involves comparing the course of treatment that the beneficiary has actually received to what would have been furnished absent the emergency. Unless the two are exactly the same, the provider would determine that the treatment has been affected by – and, therefore, is related to – the emergency.”

However, in some cases, nursing homes do not understand how the waiver applies or are not inclined to help patients with a waiver application. The Center for Medicare Advocacy offers a detailed case example of an individual who appears to meet the criteria for additional Medicare coverage but who has encountered multiple barriers in getting it.

In addition to confusion over who qualifies for the extended coverage, the Center for Medicare Advocacy has found that the “waiver that extends SNF benefits by up to 100 days does not appear to afford beneficiaries the same rights as the first 100 days of statutory coverage,” including rights to appeal coverage denials. The Center reports that it “has received an increasing number of requests for guidance on expanded Medicare coverage in skilled nursing facilities.” In response, the organization has compiled self-help materials to assist beneficiaries and their advocates.

The Center is asking those with experiences pursuing coverage under the public health emergency rules, waivers, or guidance to contact it at Communications@MedicareAdvocacy.org

Nursing Home Residents Face Even Greater Barriers to Voting Amid Coronavirus Pandemic

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The coronavirus pandemic has forced nursing homes to place a number of restrictions on their residents. These constraints are having the unintended consequence of making it more difficult for nursing home residents to vote. Hundreds of thousands of nursing home and assisted living community residents could be disenfranchised.

Older Americans are some of the most reliable voters, but nursing home residents face challenges to voting even in normal times, and they are encountering even greater barriers this election season. In response to the coronavirus pandemic, nursing homes have locked down, prohibiting family and friends from visiting residents and residents from leaving the facilities. This means residents may not be able to leave to vote and also will not be able to have help from family members or organizations in obtaining and filling out mail-in ballots.

In past years, nursing homes and assisted living facilities often acted as polling places, but many of those are being moved due to the pandemic. In addition, nonpartisan organizations have historically been able to enter nursing homes to assist residents with their ballots, but it is unclear whether this will be allowed this year. North Carolina and Louisiana specifically prohibit nursing home staff from assisting residents with their ballots, but even in states that don’t explicitly prohibit it, overworked staff may not have the time to help residents.

While federal law requires nursing homes to protect their residents’ rights, including the right to vote, it is “a really open question to what extent people in long-term care institutions are going to be able to participate in our election in November,” says Nina Kohn, a law professor at Syracuse University who has studied facility residents’ voting-rights issues. Kohn warns that “we should be clear that there is tremendous reason to be concerned that nursing home residents will be . . . systematically disenfranchised in this election,”

Medicare Open Enrollment Starts October 15: Is It Time to Change Plans?

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Medicare’s Open Enrollment Period, during which you can freely enroll in or switch plans, runs from October 15 to December 7. Now is the time to start shopping around to see whether your current choices are still the best ones for you.

During this period you may enroll in a Medicare Part D (prescription drug) plan or, if you currently have a plan, you may change plans. In addition, during the seven-week period you can return to traditional Medicare (Parts A and B) from a Medicare Advantage (Part C, managed care) plan, enroll in a Medicare Advantage plan, or change Advantage plans.

Beneficiaries can go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health plan coverage.

According to the New York Times, few Medicare beneficiaries take advantage of Open Enrollment, but of those who do, nearly half cut their premiums by at least 5 percent. Even beneficiaries who have been satisfied with their plans in 2020 should review their choices for 2021, as both premiums and plan coverage can fluctuate from year to year. Are the doctors you use still part of your Medicare Advantage plan’s provider network? Have any of the prescriptions you take been dropped from your prescription plan’s list of covered drugs (the “formulary”)? Could you save money with the same coverage by switching to a different plan?

For answers to questions like these, carefully look over the plan’s “Annual Notice of Change” letter to you. Prescription drug plans can change their premiums, deductibles, the list of drugs they cover, and their plan rules for covered drugs, exceptions, and appeals. Medicare Advantage plans can change their benefit packages, as well as their provider networks.

Remember that fraud perpetrators will inevitably use the Open Enrollment Period to try to gain access to individuals’ personal financial information. Medicare beneficiaries should never give their personal information out to anyone making unsolicited phone calls selling Medicare-related products or services or showing up on their doorstep uninvited. If you think you’ve been a victim of fraud or identity theft, contact Medicare.

Here are more resources for navigating the Open Enrollment Period:

  • Medicare Plan Finder, which helps you find a plan to match your needs: www.medicare.gov/find-a-plan
  • Medicare coverage options: https://www.medicare.gov/medicarecoverageoptions/
  • The 2020 Medicare & You handbook, which all Medicare beneficiaries should have received. The handbook can also be downloaded online at: medicare.gov/forms-help-resources/medicare-you-handbook/download-medicare-you-in-different-formats
  • The Medicare Rights Center: www.medicareinteractive.org
  • Your State Health Insurance Assistance Program, which offers independent counseling: https://www.shiptacenter.org

Can You Transfer Your Medicare and Medicaid Plans When You Move to Another State?

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If you plan to move states, can you take your Medicare or Medicaid plans with you? The answer depends on whether you have original Medicare, Medicare Advantage, or Medicaid.

Medicare
If you have original Medicare (Plans A and B), you can move anywhere in the country and you should still be covered. Medicare is a federal program, run by the federal government, so it doesn’t matter what state you are in as long as your provider accepts Medicare. Your Medigap plan should also continue to cover you in the new state, but your premiums may change when you move. The exception is if you move to Massachusetts, Minnesota, or Wisconsin because those states have their own specific Medigap plans.

Both Medicare Part D (prescription drug coverage) and Medicare Advantage plans have defined service areas, which may or may not cover more than one state. If you have Part D or Medicare Advantage, you will need to determine if your new address falls within the plan’s service area. When you move to a new service area, you have a special enrollment period in which to change plans outside of the annual open enrollment period (which runs October 15th through December 7th). If you tell your current plan before you move, your special enrollment period begins the month before you move and continues for two full months after you move. If you tell your plan after you move, your chance to switch plans begins the month you tell your plan, plus two more full months.

Medicaid
Medicaid is a joint federal and state program, with each state having its own eligibility rules. This means you cannot keep your Medicaid plan when you move to a new state. Medicaid eligibility depends on your income, your assets, and the level of care you need. If you have Medicaid and are planning to move, you should contact the Medicaid office in the state to which you are moving to find out the eligibility requirements in that state. Before you can apply for benefits in the new state, you need to cancel your benefits in the old state. You should file an application in the new state as soon as possible. Usually, if you qualify for benefits, the benefits will be retroactive up to three months before the date you applied. If you end up having to pay for any health care services out of pocket while you are waiting for your application to be approved, save the receipts since you may be able to get reimbursed.

Which Nursing Home Rating System Should You Trust?

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Choosing a nursing home for a loved one is a difficult decision and it can only be made more confusing by the various rating systems. A recent study found that using both Medicare’s Nursing Home Compare site and user reviews can help with the decision making.

The official Medicare website includes a nursing home rating system. Nursing Home Compare offers up to five-star ratings of nursing homes based on health inspections, staffing, and quality measures. However, Medicare’s rating system is far from perfect. The staff level and quality statistics ratings are based largely on self-reported data that the government does not verify. The ratings also do not take into account state fines and enforcement data or consumer complaints to state agencies. Nursing homes have learned how to game the system to improve their ratings.

While Nursing Home Compare doesn’t include consumer feedback, Yelp and other online platforms like Facebook, Google, and Caring.com allow users to review individual nursing homes. These user reviews are highly subjective, and it can be difficult to judge their legitimacy. These reviews are not usually taken seriously–for example, consumer guides to finding a nursing home do not usually suggest that consumers consult online reviews. (It should be noted, however, that Caring.com goes to great lengths to ensure the integrity of its reviews, including having senior care experts read every submission before publication.)

In order to better understand what consumers were saying about nursing homes online, researchers at the University of Southern California evaluated 264 Yelp reviews and grouped them into categories. The researchers found that consumers rate different aspects of nursing home care than does the official rating system. User reviews were more emotional and more likely to focus on staff attitudes and responsiveness rather than on the quality of health care.

The researchers concluded that user reviews can be used in conjunction with the Nursing Home Compare site to paint a fuller picture of life at the nursing home because they present complementary information. According to the study, online reviews shouldn’t be dismissed because they “directly capture the voices of residents and family members, precisely the kind of information [nursing homes] and their consumers need to hear and may want to act on, if resident-directed care is to be achieved.”

Yelp has gone a step further than other consumer review sites and has teamed up with the investigative news organization, ProPublica, to provide users with additional information. ProPublica’s Nursing Home Inspect site, allows users to compare nursing homes based on federal data. Yelp users viewing a nursing home review page see a ProPublica box that provides information on the nursing home’s deficiencies and fines.

Reverse Mortgages: A Way to Remain at Home Longer

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Under our “system” of paying for long-term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there’s little public assistance for home care. Most people want to stay at home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home.

If you own a home and are at least 62 years old, you may be able to quickly get money to pay for long-term care (or anything else) by taking out a reverse mortgage. Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan repayments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home, or for nursing home care later on. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out. (Warning: If both spouses are not on the reverse mortgage deed and the spouse who is on the deed dies first, the surviving spouse would be required to repay the mortgage loan in full or face eviction.)

In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. The lower the interest rate and the older the borrower, the more that can be borrowed. To find out how much you can get for your house, use a reverse mortgage loan calculator.

Homeowners can get the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower’s option, or in a series of regular payments, called a “reverse annuity mortgage.” The most popular choice is the line of credit because it allows a borrower to decide when he or she needs the money and how much. Moreover, no interest is charged on the untapped balance of the loan.

Although it is often assumed that an elderly person would want to use the funds from a reverse mortgage loan for health care, there are no restrictions–the funds can be used in any way. For instance, the loan could be used to pay back taxes, for house repairs, or to retrofit a home to make it handicapped-accessible.

Borrowers who take out a reverse mortgage still own their home. What is owed to the lender — and usually paid by the borrower’s estate — is the money ultimately received over the course of the loan, plus interest. In addition, the repayment amount cannot exceed the value of the borrower’s home at the time the loan is repaid. All borrowers must be at least 62 years of age to qualify for most reverse mortgages. In addition, a reverse mortgage cannot be taken out if there is prior debt against the home. Thus, either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt.

The most widely available reverse mortgage product — and the source of the largest cash advances — is the Home Equity Conversion Mortgage (HECM), the only reverse mortgage program insured by the Federal Housing Administration (FHA). However, the FHA sets a ceiling on the amount that can be borrowed against a single-family house, which is determined on a county-by-county basis. High-end borrowers must look to the proprietary reverse mortgage market, which imposes no loan limits. The national limit on the amount a homeowner can borrow is $765,600.

Reverse mortgages are not right for everyone. Consult with your attorney about whether a reverse mortgage fits into your long-term care planning.

How Will the Coronavirus Pandemic Affect Social Security?

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The coronavirus pandemic is having a profound effect on the current U.S. economy, and it may have a detrimental effect on Social Security’s long-term financial situation. High unemployment rates mean Social Security shortfalls could begin earlier than projected.

Social Security retirement benefits are financed primarily through dedicated payroll taxes paid by workers and their employers, with employees and employers splitting the tax equally. This money is put into a trust fund that is used to pay retiree benefits. The most recent report from the trustees of the Social Security trust fund is that the fund’s balance will reach zero in 2035. This is because more people are retiring than are working, so the program is paying out more in benefits than it is taking in. Additionally, seniors are living longer, so they receive benefits for a longer period of time. Once the fund runs out of money, it does not mean that benefits stop altogether. Instead, retirees’ benefits would be cut, unless Congress acts in the interim. According to the trustees’ projections, the fund’s income would be sufficient to pay retirees 77 percent of their total benefit.

With unemployment at record levels due to the pandemic, fewer employers and employees are paying payroll taxes into the trust fund. In addition, more workers may claim benefits early because they lost their jobs. President Trump issued an executive order deferring payroll taxes until the end of the year as a form of economic relief, which could negatively affect Social Security and Medicare funds.

Some experts believe that the pandemic could move up the depletion of the trust fund by two years, to 2033, if the COVID-19 economic collapse causes payroll taxes to drop by 20 percent for two years. Other experts argue that it could have a greater effect and deplete the fund by 2029. However, as the Social Security Administration Chief Actuary morbidly noted to Congress, this pandemic different from most recessions: the increased applications for benefits will be partially offset by increased deaths among seniors who were receiving benefits.

It remains to be seen exactly how much the pandemic affects the Social Security trust fund, but the experts agree that as soon as the pandemic ends, Congress should take steps to shore up the fund.

Nursing Homes Are Evicting Residents to Make Room for Coronavirus Patients

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Illegal evictions of Medicaid nursing home residents are nothing new, but the coronavirus pandemic is exacerbating the problem, according to an investigation by the New York Times.

Some states have asked nursing homes to accept coronavirus patients in order to ease the burden on hospitals. Even as the virus has devastated nursing homes, some have been welcoming these patients, who earn facilities far more than do Medicaid patients. To make room for these more lucrative coronavirus patients, the Times found that thousands of Medicaid recipients have been “dumped” by nursing homes. Many of the residents were sent to homeless shelters.

Nursing homes make far more money from short-term Medicare residents than from Medicaid residents, especially since the federal Centers for Medicare and Medicaid Services changed the reimbursement formula last fall. Now, writes the Times, a nursing home can get at least $600 more a day from a Covid-19 patient than from other, longer-term residents. In other cases, it wasn’t about the money but simply pressure from states to accept Covid patients.

According to federal law, a nursing home can discharge a resident only if the resident’s health has improved, the facility cannot meet the resident’s needs, the health and safety of other residents is endangered, the resident has not paid after receiving notice, or the facility stops operating. 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. 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.

According to the New York Times, nursing homes have been discharging residents without proper notice or planning. Because long-term care ombudsmen have not been allowed into nursing homes, there has been less oversight of the process. Old and disabled residents have been sent to homeless shelters, rundown motels, and other unsafe facilities. The Times heard from 26 ombudsmen, from 18 states, who reported a total of more than 6,400 discharges during the pandemic, but this is likely an undercount. In New Mexico, all the residents of one nursing home were evicted to make room for coronavirus patients.

If you or a loved one are facing eviction, you have the right to fight the discharge. Contact your attorney to find out the steps to take.

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