Tag Archives: elder law

New Rule May Make It Harder for Medicare Beneficiaries to Receive Home Care

Posted on by

It may become harder for Medicare beneficiaries to find home health care due to a new rule from the Centers for Medicare and Medicaid Services (CMS). Although the rule changes the way home health care providers are reimbursed, it could affect patient care as well.

Starting in January 2020, Medicare will reimburse home health agencies at a lower rate when they care for patients who have not been admitted to a hospital first. CMS estimates that it will pay home health agencies approximately 19 percent more for a patient who hires the home health agency directly after leaving a hospital than a patient who was never in the hospital or was only an outpatient.  (The Center for Medicare Advocacy calculates that the disparity could be as high as 25 percent.)

In part due to pressure from Medicare to reduce costly inpatient stays, hospitals often do not admit patients, but rather place them on observation status to determine whether they should be admitted. These patients, if not admitted to the hospital for at least three nights, are not eligible for Medicare reimbursement of a limited amount of skilled nursing care and typically head home instead to continue care with Medicare’s home health care benefit.

But a home health agency that cares for a patient who was in the hospital under observation will be reimbursed as if the patient had been an outpatient. This lower reimbursement rate means that home health agencies may be reluctant to provide care for patients who were under observation status or who haven’t been in a hospital at all.

If you are hospitalized, it is important to learn whether you are admitted or under observation. Hospitals are required to provide notice to patients if they are under observation for more than 24 hours.

For more information about the new rule from the Center for Medicare Advocacy, click here.

Should You Sell Your Life Insurance Policy?

Posted on by

Older Americans with a life insurance policy that they no longer need have the option to sell the policy to investors. These transactions, called “life settlements,” can bring in needed cash, but are they a good idea?

If your children are grown and your mortgage paid off, you may decide that there is no longer a reason to be paying premiums every month for a life insurance policy, or you may reach a time when you can no longer afford to keep up with the premiums. If this happens, you may be tempted to let the policy lapse and get nothing from it or to surrender the policy for its cash value, which usually is a fraction of its death benefit. Another option is a life settlement. This allows you to sell your policy to an investor for an amount that is greater than the cash value, but less than the death benefit. The buyer pays all future premiums and receives the death benefit when you die.

Life settlements offer seniors a way to get cash to supplement retirement income and help pay for living expenses, health care, or other needed items. They can be a good alternative to surrendering a policy or letting it lapse. But as with any financial transaction, you need to exercise caution.

The amount you receive from a life settlement depends on your age, your health, and the terms and conditions of the policy. It is hard to determine if you are getting a fair price for the policy because there are no standard guidelines for life settlements. Before selling you should shop around to several life settlement companies. You should also note that the amount you receive will be reduced by transaction fees, which can eat up a good chunk of the proceeds of the sale. In addition, you may have to pay taxes on the lump sum you receive. Finally, the beneficiaries of your policy may not be pleased with the sale, which is why some life settlement companies require beneficiaries to sign off on the transaction.

Before choosing a life settlement, you should consider other options. If you need cash right away, you can borrow against your policy. If the premiums are too much, you may be able to stop premiums and receive a smaller death benefit. In some cases of terminal illness, you can receive an accelerated death benefit (this allows you to receive a portion of your death benefit while you are still alive). If you don’t need the cash but no longer want the policy, another possibility is to donate the policy to charity and get a tax write-off.

To find out the right solution for you, talk to your elder law attorney or a financial advisor.

For more information from the Financial Industry Regulatory Authority on the pros and cons of life settlements and questions to ask to protect yourself in a sale, click here.

Maximizing Social Security Survivor’s Benefits

Posted on by

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 by

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.

Protecting Your House After You Move Into a Nursing Home

Posted on by

While you generally do not have to sell your home in order to qualify for Medicaid coverage of nursing home care, it is possible the state can file a claim against your house after you die, so you may want to take steps to protect your house.

If you get help from Medicaid to pay for the nursing home, the state must attempt to recoup from your estate whatever benefits it paid for your care. This is called “estate recovery,” and given the rules for Medicaid eligibility, the only property of substantial value that a Medicaid recipient is likely to own at death is his or her home. If possible, you should consult with your attorney before entering a nursing home, or as soon as possible afterwards, in order to discuss ways to protect your home.

The home is not counted as an asset for Medicaid eligibility purposes if the equity is less than $585,000 (in 2019) ($878,000 in some states). In all states, you may keep your house with no equity limit if your spouse or another dependent relative lives there.

Transferring a Home
In most states, transferring your house to your children (or someone else) may lead to a Medicaid penalty period, which would make you ineligible for Medicaid for a period of time. There are circumstances in which it is legal to transfer a house, however, so consult an attorney before making any transfers. You may freely transfer your home to the following individuals without incurring a transfer penalty:

  • Your spouse
  • A child who is under age 21 or who is blind or disabled
  • Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
  • A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home
  • A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

While you can sell your house for fair market value, it may make you ineligible for Medicaid and you may have to apply the proceeds of the sale to your nursing home bills.

Lien on Home
Except in certain circumstances, Medicaid may put a lien on your house for the amount of money spent on your care. If the property is sold while you are still living, you would have to satisfy the lien by paying back the state. The exceptions to this rule are cases where a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there.

Estate Recovery
If your spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house, lives in the house, the state cannot file a claim against the house for reimbursement of Medicaid nursing home expenses. However, once your spouse or dependent relative dies or moves out, the state can try to collect.

But there are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if you and your spouse owned the home as tenants by the entireties or if the house is in your spouse’s name and you have relinquished your interest. If the house is in an irrevocable trust, the state cannot recover from it.

In addition, some children or relatives may be able to protect a nursing home resident’s house if they qualify for an undue hardship waiver. For example, if your daughter took care of you before you entered the nursing home and has no other permanent residence, she may be able to avoid a claim against your house after you die. Consult with an attorney to find out if the undue hardship waiver may be applicable.

Getting Paid as a Family Caregiver Through Medicaid

Posted on by

Caring for an ailing family member is difficult work, but it doesn’t necessarily have to be unpaid work. There are programs available that allow Medicaid recipients to hire family members as caregivers.

All 50 states have programs that provide pay to family caregivers. The programs vary by state, but are generally available to Medicaid recipients, although there are also some non-Medicaid-related programs.

Medicaid’s program began as “cash and counseling,” but is now often called “self-directed,” “consumer-directed,” or “participant-directed” care. The first step is to apply for Medicaid through a home-based Medicaid program. Medicaid is available only to low-income seniors, and each state has different eligibility requirements. Medicaid application approval can take months, and there also may be a waiting list to receive benefits under the program.

The state Medicaid agency usually conducts an assessment to determine the recipient’s care needs—e.g., how much help the Medicaid recipient needs with activities of daily living such as bathing, dressing, eating, and moving. Once the assessment is complete, the state draws up a budget, and the recipient can use the allotted funds to pay for goods or services related to care, including paying a caregiver. Each state offers different benefits coverage.

Recipients can choose to pay a family member as a caregiver, but states vary on which family members are allowed. For example, most states prevent caregivers from hiring a spouse, and some states do not allow recipients to hire a caregiver who lives with them. Most programs allow ex-spouses, in-laws, children, and grandchildren to serve as paid caregivers, but states typically require that family caregivers be paid less than the market rate in order to prevent fraud.

In addition to Medicaid programs, some states have non-Medicaid programs that also allow for self-directed care. These programs may have different eligibility requirements than Medicaid and are different in each state. Family caregivers can also be paid using a “caregiver contract,” increasingly used as part of Medicaid planning.

In some states, veterans who need long-term care also have the option to pay family caregivers. In 37 states, veterans who receive the standard medical benefits package from the Veterans Administration and require nursing home-level care may apply for Veteran-Directed Care. The program provides veterans with a flexible budget for at-home services that can be managed by the veteran or the family caregiver. In addition, if a veteran or surviving spouse of a veteran qualifies for Aid & Attendance benefits, they can receive a supplement to their pension to help pay for a caregiver, who can be a family member.

All of these programs vary by state. Contact your attorney to find out what is available in your state.

For more information about these programs and other ways to be paid as a family caregiver, click here and here.

Understanding Medicare’s Hospice Benefit

Posted on by

Medicare’s hospice benefit covers any care that is reasonable and necessary for easing the course of a terminal illness. It is one of Medicare’s most comprehensive benefits and can be extremely helpful to both the terminally ill individual and his or her family, but it is little understood and underutilized. Understanding what is offered ahead of time may help Medicare beneficiaries and their families make the difficult decision to choose hospice if the time comes.

The focus of hospice is palliative care, which means helping people who are terminally ill and their families maintain their quality of life. Palliative care addresses physical, intellectual, emotional, social, and spiritual needs while also supporting the terminally ill individual’s independence, access to information, and ability to make choices about health care.

To qualify for Medicare’s hospice benefit, a beneficiary must be entitled to Medicare Part A, and a doctor must certify that the beneficiary has a life expectancy of six months or less. If the beneficiary lives longer than six months, the doctor can continue to certify the patient for hospice care indefinitely. The beneficiary must also agree to give up any treatment to cure his or her illness and elect to receive only palliative care. This can seem overwhelming, but beneficiaries can also change their minds at any time. It’s possible to revoke the benefit and reelect it later, and to do this as often as needed.

Medicare will cover any care that is reasonable and necessary for easing the course of a terminal illness. Hospice nurses and doctors are on-call 24 hours a day, 7 days a week, to give beneficiaries support and care when needed. Services are usually provided in the home. The Medicare hospice benefit provides for:

  • Physician and nurse practitioner services
  • Nursing care
  • Medical appliances and supplies
  • Drugs for symptom management and pain relief
  • Short-term inpatient and respite care
  • Homemaker and home health aide services
  • Counseling
  • Social work service
  • Spiritual care
  • Volunteer participation
  • Bereavement services

Services are considered appropriate if they are aimed at improving the beneficiary’s life and making him or her more comfortable.

Because the beneficiary is electing palliative care over treatment, there are things the hospice benefit will not cover:

  • Treatment to cure the beneficiary’s illness.
  • Prescription drugs other than for symptom control or pain relief.
  • Care from a provider that wasn’t set up by the hospice team, although the beneficiary can choose to have his or her regular doctor be the attending medical professional.
  • Room and board. If the beneficiary is in a nursing home, hospice will not pay for room and board costs. However, if the hospice team determines that the beneficiary needs short-term inpatient care or respite care services, Medicare will cover a stay in a facility.
  • Care from a hospital, either inpatient or outpatient, or ambulance transportation unless it arranged by the hospice team. The beneficiary can use regular Medicare to pay for any treatment not related to the beneficiary’s terminal illness.

To download Medicare’s booklet on the hospice benefit, click here.

The Best and Worst States for Protection Against Elder Abuse

Posted on by

The older the population gets, the greater the potential for elder abuse. States have laws in place designed to combat elder abuse, but some states are doing a better job than others. The consumer finance website WalletHub researched the protections in place in all 50 states and the District of Columbia to determine which states have the best protections against elder abuse.

The prevalence of elder abuse is hard to calculate because the crime is underreported, but according to the National Council on Aging, approximately 1 in 10 Americans age 60 or older have experienced some form of elder abuse. In 2011, a MetLife study estimated that older Americans are losing $2.9 billion annually to elder financial abuse.

To determine its rankings, WalletHub compared the 50 states and the District of Columbia across three key areas:
•    Prevalence of elder abuse in the state
•    Resources spent on preventing elder abuse and offering legal assistance
•    Protection against elder abuse through laws, the availability of eldercare organizations and services, the quality of nursing homes and assisted living facilities, and other factors

The survey found that Massachusetts, Wisconsin, and Nevada had the best protections overall while New Jersey, Wyoming, and South Carolina had the worst. Massachusetts, Wisconsin, and Nevada, along with Rhode Island and Arizona, all ranked high in total expenditures on elder abuse prevention. However, the states with the lowest rates of elder abuse, neglect, and exploitation complaints were Louisiana, New York, New Hampshire, Pennsylvania, and Michigan.

WalletHub consulted with a panel of experts in social work, psychology, law, and gerontology on how to best protect seniors from abuse. Recommendations included incentivizing banks to report suspicious activity, requiring credit checks and background checks on caregivers, and providing more support to seniors to help them remain independent and be on the lookout for people trying to harm them.

To see how your state compares in the WalletHub survey, click here.

Why Not Just Use an Off-the-Shelf Power of Attorney Form?

Posted on by

A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your “agent” or “attorney-in-fact”) if you become incapacitated. Without a power of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking the court to appoint a guardian or conservator, which is an expensive and time-consuming process.

There are many do-it-yourself power of attorney forms available; however, it is a good idea to have an attorney draft the form for you. There are many issues to consider and one size does not fit all.

The agent’s powers

The power of attorney document sets out the agent’s powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. They may also include the power to consent to medical treatment. Some powers will not be included unless they are specifically mentioned. This includes the power to make gifts and the power to designate beneficiaries of your insurance policies.

The power to make gifts of your money and property is a particularly important power. If you want to ensure your agent has the authority to do Medicaid planning on your behalf in the event you need to enter a nursing home, then the power of attorney must give the agent the power to modify trusts and make gifts. The wording in a power of attorney can be significant, so it is necessary to consult an attorney.

Springing or immediate

The power of attorney can take effect immediately or it can become effective only once you are disabled, called a “springing” power of attorney. While a springing power seems like a good idea, it can cause delays and extra expense because incapacity will need to be determined. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.

Joint agents

While it is possible to name more than one person as your agent, this can lead to confusion. If you do have more than one person named, you need to be clear whether both parties need to act together or whether they can each act independently. It might make more sense and be less confusing to name an alternative agent to act in case the first agent is unable to.

Appointing a guardian

Another use of a power of attorney can be to nominate a guardian in case guardianship proceedings become necessary. Including your preference for a guardian can allow you to have some say over who will be managing your affairs. Usually, the court decides who will be chosen as a guardian, but in most circumstances, the court will abide by your nomination in the durable power of attorney.

Executing the power of attorney

To be valid a power of attorney must be executed properly. Some states may require a signature, others may require the power of attorney to be notarized, and still others may require witnesses. It is important to consult with an estate planning attorney in your state to ensure your power of attorney is executed properly.

Accepting a power of attorney

Even if you do everything exactly right, some banks and other institutions are reluctant to accept a power of attorney. These institutions are afraid of a lawsuit if the power of attorney is no longer valid. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you may want to execute the forms offered by the institutions with which you have accounts. But be careful that you don’t sign a bank’s document that inadvertently restricts a power of attorney’s ability to deal with other assets, and you should check that any documents you sign with a bank match the original power of attorney.

Charitable Giving Options Under the New Tax Law

Posted on by

The new tax law makes it harder to claim a tax deduction for charitable contributions. While charitable giving should not be only about getting a tax break, if you want to reap a tax benefit from your contributions, there are a couple of options.

The Tax Cut and Jobs Act, enacted in December 2017, nearly doubled the standard deduction to $12,000 for individuals and $24,000 for couples. This means that if your charitable contributions along with any other itemized deductions are less than $12,000 a year, the standard deduction will lower your tax bill more than itemizing your deductions. For most people, the standard deduction will be the better option.

If you still want to maximize the tax benefits of charitable giving and you have the financial means, one option is to double your charitable donations in one year and then skip the donation the following year. For example, instead of giving $10,000 a year to charity, you could give $20,000 every other year and itemize your deductions in that year.

Another way to concentrate charitable giving is to establish a donor-advised fund (DAF) through a public charity. A DAF allows you to contribute several years’ worth of charitable donations to the fund and receive the tax benefit immediately. The money is placed in an account where it can be invested and grow tax-free. You can then make donations to charities from the account at any time, in addition to adding to the account. As with any investment, you need to do research before establishing a DAF. Make sure you understand the fees involved and whether there are any limits on the charitable contributions you can make. You should consult with your financial advisor before taking any steps.

If you are taking required minimum distributions from an IRA, another option is to donate those distributions directly to charity through a qualified charitable donation. The distributions won’t be included in your gross income, which means lower taxes overall. The donation must be made directly from the IRA to the charity and different IRAs have different rules about how to make the distributions.