Archive for May, 2013

When Medicare Covers Nursing Home Care

Tuesday, May 28th, 2013

Many Americans of various income levels expect to make use of Medicare for health care costs after age 65. However, it is important to note that Medicare does not pay for care at a nursing facility except in certain circumstances.

First, let’s review what Medicare does cover. Medicare Part A covers care in a hospital and Part B covers outpatient services. For these benefits, there is a choice between traditional Medicare or a network plan, Medicare Part C or Medicare Advantage, in which the government pays for private coverage. Finally, Medicare Part D covers outpatient prescription medications.

So where does nursing home care fit in? Nursing home care is only covered for a limited time if it is necessary after a hospital stay. If a patient is hospitalized for three consecutive days or more and is then admitted to a nursing home within 30 days and a doctor certifies that the patient needs care that can only be provided on an inpatient basis at a nursing facility, then Medicare will cover a stay of up to 100 days. Only facilities approved by the Centers for Medicare and Medicaid Services (CMS) can be covered. If the stay lasts longer than 100 days, then patients are expected to pay for the care out-of-pocket until the point that they become eligible for Medicaid.

The rules above are confusing enough, but their interpretation can get even more complicated. Some families have been denied Medicare coverage for a nursing home stay because the hospital deemed their stay an “observation” rather than an “admission.” In other cases, because a hospital day is usually measured as midnight-to-midnight, patients may believe they have been in the hospital for three days, but find that the hospital measures their stay as less than three days.

To monitor Medicare charges, CMS employs private contractors who receive contingency fees based on the overcharges that they discover, so they are motivated to deny coverage whenever they can.

For a doctor to certify that treatment in a skilled nursing facility is required, the patient must need rehabilitation services for at least five days a week, or skilled services for seven days a week. Services such as, for instance, tube feedings would qualify for nursing home admission. Other services, such as rehabilitation services that could be given 3 or 4 times a week on an outpatient basis, would not be covered.

Even if Medicare covers a nursing home stay, there is only full coverage for the first 20 days. After that, a co-payment is required. These co-payments, and the cost of a nursing home after 100 days, may be covered by Medicare supplemental insurance, if the patient has such insurance and submits a claim.

Many middle-class families, facing the prospect of seeing an older loved one’s life savings consumed by nursing home costs, are turning to trust planning to protect their assets while still allowing them to be eligible for Medicaid. An elder law or estate planning attorney can create a trust for an older person to transfer assets, thus reducing the person’s wealth level enough to become eligible for Medicaid. Another strategy for dealing with nursing home and other long-term health care costs is long-term care insurance. With proper planning, families can manage the costs of a stay in a nursing home.

 

Planning for Boomers

Tuesday, May 21st, 2013

By Susan Yubas, Director of Business Development at The Bristal Assisted Living, Certified Senior Advisor, Founder of FYI Senior Living Solutions, Inc.

The other day I realized I am exactly two thirds of my mother’s age.  That hit me hard, as I began to think of life as being divided in thirds…and realized that if the first two thirds of my life went by in a blink, then I want this last third to go by very slowly.

The way we look at aging has changed drastically over the years.  People are doing great things in this stage of life, some with assistance, and rather than looking at help as taking away independence, they view accepting assistance as a means to reaching potential – to being everything they can be.  I recently listened to a talk given by the actress Jane Fonda on reaching what she calls life’s “third act.”  She realized that she could control a good part of this time of her life and decided that she was not going to live the old paradigm of aging (think of a bell curve where the start of the curve is birth, the peak is middle age and then it declines sharply to old age,) but rather to view aging as a staircase that you climb to make added years happier, more successful and more liberating.  Think of it – when you are an adolescent, you plan for college, then you plan for your work and your family years.  Why not view the “boomer years” as a time to plan for this next stage of your life and to use those years to make a difference.

Six years ago, a gerontologist at Cornell University started asking older people for their advice towards solving life’s major challenges. Called the Cornell Legacy Project, it asked seniors for their advice as to how to age fearlessly and well.

The researchers were surprised to find that those in the study held a generally positive view about old age. One response came from an 81-year old man: “Embrace it. You still enjoy life, and there’s still purpose in your life. A 94-year old woman suggested: “My advice about growing old? I’d tell them to find the magic.” Old age is very different from what seniors anticipated – and it exceeds their expectations. People felt freer to pursue interests and clearer about their life goals and how they wanted to spend their time. Many described their life after 70 as a quest or an adventure.

There was overall agreement on the importance of maintaining social connections finding meaningful ways to participate in activities in order to assure a positive and enjoyable old age. These relationships and productive roles can be difficult as life transitions such as retirement, widowhood, and health problems occur.  The seniors interviewed for this study suggested that starting around age 60, everyone needs to become aware of the possibility of becoming isolated and take steps to stay involved.

Many seniors also said that the lesson they had learned was to plan carefully for where you will live in old age. Based on their own experience and those of parents and friends, they agreed that younger people should begin to think about living arrangements when they are still active and healthy – both to increase their options for where they can live and also to reduce responsibility and anxiety on the part of their children.  The seniors noted that some people unnecessarily suffer with insecurity, isolation, and inconvenience because they stay in their homes rather than move to a more stimulating environment.

Travel.  Take a class.  Volunteer.  Mentor.  Aging can mean an extended active and productive life.  Most aging Americans do not think that when they retire they will no longer be productive.   Many of us believe old age begins after age 80.  We exercise regularly and eat a healthier diet so we feel years younger than we are.  We envision years and years of health and activity and being able to afford what we want.   We believe 60 is the new 40, and the older we get, the younger those older than us become.  In many cases, we will continue to learn, grow, and find new ways to be productive, creative and relevant.

We still need to think ahead.  Not all of us are really thinking about the time when we may become frail and many of us are very unprepared for that time in our lives.  We have begun to lose our parents and some friends.  Some of us have lost spouses. But we still do not put much thought into about what happens when we are no longer able to be as independent and active as we currently are, even if it is at age 90 plus.

Aging is more of an attitude than a number. This is a time to re-assess what you want from life and what makes you really happy. Know your capabilities and what makes life exciting for you.

Live for today, but remember to plan for tomorrow.

 

For more information, visit www.elderlawnewyork.com.

Considering Long-Term Care Insurance

Wednesday, May 15th, 2013

In planning for retirement, it is important to consider what would happen if you needed assistance with daily living over a long period of time. Most people in that situation would prefer to be able to stay in their own home with the assistance of a home health-care aide rather than move into a nursing home. But would you be able to afford it? In facing this question, many people are considering long-term care insurance.

People with lower incomes can rely on Medicaid for help with long-term care, and wealthy people will likely be able to afford the cost of care on their own, or pay high insurance premiums if they choose. It is people with middle incomes who must decide whether long-term care insurance makes sense for their situation, with money being the key factor. Long-term home health care is expensive, but so is long-term care insurance.

The American Association for Long-Term Care Insurance reports that an average 60-year-old couple purchasing a policy today would pay over $3,700 per year for benefits totaling $162,000 each, which would increase to $329,000 each by the time they reach the age of 85, due to inflation protections in the policy. That is up 10 percent from the premium price just one year ago. Policies without inflation protection are available for lower premiums, but the benefits available do not increase with time, so policy holders would likely still have to pay for some costs out of pocket.

Long-term care insurance can cover the cost of assistance with daily living at home or in a nursing home or assisted-living facility. The insurance can also give peace of mind to your children, who may be faced with how to make financial decisions in your best interest.

 

For more information about our elder law services, visit www.elderlawnewyork.com.

How Chained CPI Could Affect Social Security

Tuesday, May 14th, 2013

As part of negotiations aimed at reducing the deficit, Congress and the President have considered changes to the way the Consumer Price Index (CPI) is calculated. “Chained CPI,” as the proposed method of calculation is known, could have adverse affects on Social Security benefits, as cost of living adjustments are based on CPI.

Proponents of chained CPI say that the current method of calculating CPI overestimates the real effect of inflation. When prices go up on some items, consumers may choose to purchase something else instead, thus mitigating the effects of inflation. This “substitution bias” is addressed by chained CPI. This technical change would result in lower payments for Social Security beneficiaries.

The proposed change is popular among politicians seeking to reduce the deficit, as it is estimated that there could be a reduction of about $390 billion from the deficit over the first decade, with about one third of the savings resulting from lower Social Security benefits payments.

Of course, Social Security beneficiaries do not want lower payments, and advocates for seniors have pointed out that chained CPI is not appropriate for estimating the cost of living for older people, as many of their expenses, such as medication and health care, are fixed, and therefore not prone to substitution bias. Further, Social Security is financed separately from the rest of the budget, and does not contribute to deficits in other parts of the budget. The bottom line is that seniors who depend on a fixed income are least able to afford cutbacks.

For more information about our elder law services, visit www.elderlawnewyork.com.

New York Medicaid and Medicare Part D: Working Together

Wednesday, May 8th, 2013

The state of New York has several major public health insurance programs, including Medicaid, commonly known as “Regular Medicaid.”

While Regular Medicaid in New York offers extensive health care services including: dental care; diagnostic testing; home care; hospitalization; mental health support; out-patient care at hospitals and community clinics; and physical therapy, clients of Medicaid in New York must receive their prescription drugs via Medicare Part D.

Any individual currently receiving or about to begin receiving New York State Medicaid must join a Medicare prescription drug plan, or they will lose their Medicaid benefits. When an individual becomes eligible for both Medicare and Medicaid, he or she will automatically be assigned to a Medicare Prescription Drug Plan in order to not miss even one day of coverage. Though a prescription drug plan is mandatory, enrollment in Medicare Part D is not; enrollment in another plan which better meets prescription drug needs is allowed. Patients are able to switch to another plan at any time.

Typically, as part of Medicare Plan D, the patient must pay a nominal amount, like a copayment, for the medication. Individuals who have full coverage from Medicaid while living in a residential home, an adult living or assisted living facility will likely be required to pay a small medication copayment for each  medication. If an individual has full Medicaid coverage and resides in a nursing home, he or she will not be required to pay anything for covered prescription drugs.

Medicare’s State Pharmacy Assistance Program (SPAP) for prescription drug coverage is determined by each state.  New York State’s Medicare’s State Pharmacy Assistance Program may determine that a patient should receive additional coverage when they join the Medicare Prescription Drug Plan, or may require the patient to enroll in a separate state program for prescription payment assistance.

Clients of New York Regular Medicaid must receive health care services through their managed care plan. Regular Medicaid in New York is available to single adults, childless couples at lower income levels, caretaker adults, the elderly, the disabled, and children, subject to some restrictions. Regular Medicaid may also provide retroactive coverage.

 

For more information, visit www.elderlawnewyork.com.

An Extreme Case of Poor Estate Planning

Thursday, May 2nd, 2013

Last year, Roman Blum died at the age of 97, leaving an estate valued at nearly $40 million. He also died without a will. Blum made millions building hundreds of houses in the vicinity of Staten Island. He had no known living family members, and if none are found, then his estate will escheat to the state of New York, making it the largest unclaimed estate in the state’s history.

This is an extreme example of poor estate planning, in which a man very successful in business nonetheless neglects the relatively straightforward task of directing where his money should go upon his death. It is unfortunate that this person missed the opportunity to leave bequests to his friends or charitable organizations that he cared about.

Blum’s estate is being handled by a public administrator overseen by the Richmond County Surrogate’s Court.  The administrator is in the process of selling Blum’s property, paying his taxes and conducting an extensive search for any living relative. If that search fails, the money goes to the state government.

Although this case is unusual, many people do not properly prioritize estate planning and fail to take full advantage of the choices they have in deciding how they would like their assets distributed when they die.  In addition, proper estate planning can save your heirs money by structuring your estate in a way that is most advantageous in terms of taxes and probate costs.

 

For more information about our estate planning services, visit www.littmankrooks.com.