October Is National Estate Planning Awareness Month

October 1st, 2018

Estate planning is a crucial life management and wealth preservation activity for adults of all ages and all income levels.

Across the United States, October is National Estate Planning Awareness Month, an educational campaign intended to focus attention on the importance of having a plan to care for family members and manage accumulated wealth in old age and following death.

Just 4 in 10 adults in the United States have a will or trust. Estate planning is crucial for people of any age or income status. Parents with young children need to have a plan in place — at a minimum, a designated guardian and instructions conveyed in a trust — in the event of an unexpected death or disability.

senior couple planningFor everyone else, estate plans should be created to address tax avoidance issues, property management, asset protection, wealth distribution and health care decisions in the event of cognitive decline or disability prior to death.

Without a will or trust in place, important decisions about the care of young children and distribution of property at death will be made by a judge, often following a contested and expensive legal proceeding.

Estate Planning Awareness Month is a great time for everyone to take stock of their estate plans and financial health. If there is already an estate plan in place, now might be a good time to review it. If there is none in place now is the time get started:

  1. Define goals. Decide how any family responsibilities and property will be managed in the event of disability or death.
  2. Gather and organize data. Take inventory of all assets and title held to them. Identify any beneficiaries.
  3. Implement an estate plan. Develop a strategy — ideally with the assistance of a financial or estate planning professional — for managing and distributing the estate. Consider drafting the following documents: designation of guardian, will, trust, power of attorney and health care directives.
  4. Monitor and make changes if necessary. Life circumstances change, so do tax and probate laws. Mark the calendar to review estate plans annually.

For a detailed explanation of the measures necessary to create a sound estate plan, consult the comprehensive estate planning resources available at the Littman Krooks website.

National Estate Planning Awareness Month is a nationwide public education campaign first launched in 2008. With sound estate planning, individuals and their families can maintain financial security during their lifetimes and ensure the efficient, intended transfer of assets following death.

 

Learn more about elder lawestate planning and special needs planning at littmankrooks.com,  elderlawnewyork.com  & specialneedsnewyork.com. Have questions about this article? Contact us.


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Seniors Face Significant Health Risks in Summer Heat

August 15th, 2018

Last month New York City experienced it’s first heat-related death of 2018 when a 71-year-old man died of hypothermia while sitting in a parked car in Queens. In Woodland, Calif., a 63-year-old postal worker died in her delivery truck on an afternoon when the outside temperature reached 115 degrees. And in Tipton, Pa., a 64-year-old woman succumbed to heat stroke after gardening for several hours outside her home.

If current weather trends continue, 2018 will be the fourth hottest year on record, according to the National Oceanic and Atmospheric Administration.

Warm temperatures in the summer months create health risks for everyone, but particularly for seniors. The U.S. National Institute on Aging recently warned that older individuals are at “significant increased risk of heat-related illnesses” during the summer months.

So far this year over 70 people have died in Canada as a result high heat levels this summer. According to a recent report on Canada’s heat wave from National Public Radio, Canada’s elderly population was most at risk of heat-related death. The majority of people who died, NPR reported, were “elderly men and women living alone in apartments with no air conditioning, and many had chronic health conditions.”

Here are several measures seniors can take to guard their health during the summer heat.

  • Schedule outside activities such as gardening or exercise during the cooler times of the day.
  • Seek out cool locales. When outside, stay in the shade. Seniors whose homes lack air conditioning should head for air-conditioned spaces such as shopping malls, libraries, movie theaters or community centers.
  • Consider a cool shower or bath for temporary relief from the heat.
  • Drink plenty of liquids but avoid caffeine and alcohol, both of which are diuretics that can cause dehydration.
  • Wear loose fitting, lightweight clothing. When outside, wear a hat or use an umbrella to ward off the sun.
  • Pay attention to the body’s warning signs. Dizziness, nausea, headache, or breathing problems are reasons to immediately seek medical attention.

Relatives of older individuals should be sure to check on them regularly during the warm summer months. Normally benign errors in judgment such as forgetting to turn on an air conditioner or staying too long in the afternoon sun could have catastrophic consequences when the temperatures are high.

How much water should people drink to protect against dehydration in the summer? There is no universally accepted answer to that question. However, the Mayo Clinic recommends roughly one gallon of water daily during normal conditions for an average male, slightly less for females.

 

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It’s Time to Protect Your Family and Your Future: April is National Financial Literacy Month

April 3rd, 2018

Estate planning is a financial process that can protect you and your family, and is a very important component of your overall financial planning. April is National Financial Literacy Month to put your estate planning house in order. If you don’t have an up-to-date estate plan and you happen to get hurt or sick and cannot manage your financial affairs, the courts will have to appoint someone to manage them for you. The person they appoint might not be the one you would want to perform those tasks.

Without an estate plan when you pass away, your affairs will be settled by default through a complex legal system called “probate.” The handling of your financial affairs can turn into a costly and frustrating ordeal for your family and heirs.

The crafting of a good estate plan starts with planning, followed by the proper drafting and signing of appropriate legal documents such as wills, trusts, buy-sell agreements, durable powers of attorney for asset management, and an advanced health-care directive or health-care power of attorney. Having these documents in place saves you and your family a lot of money and time at a very difficult and emotional time.

Your estate planning should also address the coordination of the way you hold title to your various assets, your beneficiary selections, and the possible transfer of certain assets while you are alive.

Regardless of the extent of your net worth, estate planning is important for everyone. Complex strategies may be used by wealthy people to reduce death taxes and costs. Others may only require a simple will and/or trust to pass on property to their heirs and provide for minor children.

Even if a simple will is all you require, an estate plan is an essential part of your financial planning. Everybody will need it someday. The time to address or update your estate plan is now.

CHECKLIST — SIX STEPS TOWARD SUCCESSFUL ESTATE PLANNING

1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?

Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.

Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.

If you have children who are minors, the appointment of a guardian is probably the most important decision you’ll make. With the court’s approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who’ll care for your children the way you would want.

You may want to consider listing multiple executors, trustees and guardians to serve together in handling the details of your estate. This can provide a check-and-balance system for the appointees and help them avoid oversights or misappropriations. Consider appointing family members, friends, professionals, advisers and/or trust companies for this position.

There is some risk here: If these people disagree and have problems, they can each be represented in court by counsel paid for by your estate, so be very careful in making your selections.

Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse’s death.

To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.

Is estate privacy an issue for you? Do you want your estate to be public record upon your death? Do you have any special gifts you want made to charity? Do you want an elderly parent or friend to be financially cared for? All of these circumstances should be noted in your plan.

2. GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:

  • Review and update your financial position.
  • Review how you hold title to your assets. Is it consistent with your estate plan?
  • Review your beneficiary selections. Are they aligned with your estate plans?

Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.

3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.

Try sketching a picture or flow chart of your existing estate plan. Review your appointees:

  • Executor
  • Guardian of the Person/of the Property
  • Trustee
  • Power of Attorney – Property Management
  • Advanced Health-Care Directive or Health-Care Power of Attorney

 

Check with your financial advisors for updated information.

4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.

5. IMPLEMENT YOUR PLAN: Do what needs to be done — i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.

6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.

These materials are provided as a public service by The NAEPC Education Foundation for “free-use” on websites, newspapers, newsletters, magazines, and other media broadcasts during the months of April and October as it relates to National Financial Literacy Month and National Estate Planning Awareness Week. For additional information or materials contact us at The NAEPC Education Foundation.

To assist with your estate planning, visit our website at www.elderlawnewyork.com.

How to find resources for seniors in New York City

February 5th, 2018

New York City’s senior population is growing quickly. There are now more than 1.4 million New Yorkers over the age of 60, and that number is expected to rise to more than 1.8 million by 2030. At that time, there will be more older adults than school children in New York City, and seniors will account for one out of every five residents. There is a vast array of community resources available to help seniors with their daily needs, but they can be difficult to locate. New York City’s Department of Aging has an online tool that can help.

Littman Krooks elder law attorneysThe Department of Aging’s Find Help tool is designed to help seniors and their family members easily find the resources they need in their area. You can search by zip code or borough, and search for the type of services you are looking for, which may include abuse prevention, caregiver resources, case management, health promotion services, home care, home delivered meals, legal services, naturally occurring retirement communities, senior centers, social adult day care and day services, transportation and geriatric mental health.

Searching by location and type of services gives you a list of providers, and by clicking on an individual result, you will be given detailed information about the service provider, including the address, phone number, hours of operation and services offered.

 

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Ride-Sharing for Seniors May Help with Senior Transportation Crisis

December 6th, 2017

Seniors face a crisis in transportation. Older individuals may have physical or mental impairments that make driving difficult, and public transportation may be unavailable or too difficult to navigate. Subsidized para-transit is available in many communities, but the process of scheduling a ride can be complicated. A lack of transportation can be a serious health hazard, as it can cause seniors to miss medical appointments and prevent them from engaging with a social support network, which helps maintain mental health.

Today there are new transportation options such as the ride-hailing services Uber and Lyft, which can be faster and less expensive than taxis. These options have been embraced quickly by much of the population, but seniors may be less familiar with them. A smartphone is essential to using the new services, and older individuals may not have smartphones or may not be as comfortable using them. Among Americans over the age of 65, only 42 percent own a smartphone, while 77 percent of the general population owns one. In addition, someone with a physical disability may require a vehicle that can accommodate an assistive device such as a walker or wheelchair, and the new services may not be set up to handle such requests.

Companies and governments recognize that there is a gap in transportation services for seniors, and they are making improvements. Lyft built a new platform called Concierge that allows operators to request rides for others. On the Jitterbug phone marketed to older people, users can press zero to have an operator order a Lyft. A startup called GoGoGrandparent offers a hotline that seniors can call to hail a ride. Uber launched an UberAssist option for riders who need help getting in and out of vehicles. Washington, D.C. launched a service called Abilities-Ride, which subsidizes taxi rides for people with disabilities. The Massachusetts Bay Transportation Authority in Boston subsidizes Uber and Lyft rides for people who do not need the full services of para-transit. The AARP Foundation has begun a pilot program with Lyft and other partners to give free rides to people who may be in danger of missing medical appointments. With the rapid development of technology and the large market that seniors represent, transportation options are likely to expand.

 

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National Hospice and Palliative Care Month

November 9th, 2017

By Lou Giampa, President, Right at Home Westchester

If you were a European warrior or religious pilgrim on the way to Jerusalem during the Middle Ages, chances are you lodged at a “hospes house” on the arduous journey. The holy orders of knights such as the Hospitallers and Templars ran these travel lodges named after the Latin word that means both “guest” and “host.” Over time, hospes houses expanded to offer care for the sick and dying. Derived from “hospes,” our modern-day word “hospice” is known as a place for the dying or the practice of end-of-life care. Littman Krooks Elder Law

Part of hospice services may include palliative care, the medical specialty of alleviating pain and improving the quality of life of the seriously ill. Hospice care begins after health treatment for an illness has stopped and the patient is considered terminal. Palliative care can begin as soon as a patient is diagnosed with a serious illness and can continue while the individual pursues a cure. November is National Hospice and Palliative Care Month to help raise awareness of the skilled, compassionate care that both disciplines offer. The campaign’s 2017 theme is “It’s About How You Live.”

How Does Hospice and Palliative Care Work?

Hospice providers alone care for more than 1.6 million Americans and their families annually. While hospice does involve caring for the terminally ill, hospice care is more than seeing someone through their final days. An integrated team of healthcare professionals and trained volunteers work together to manage pain, control symptoms, and bolster emotional and spiritual needs. Hospice teams ensure patients and their loved ones find support, respect and dignity along the difficult path of a life-limiting illness.

Interdisciplinary palliative care teams are typically comprised of doctors, nurses, social workers, chaplains, and physical and occupational therapists who assist with the pain of cancer, kidney failure, chronic obstructive pulmonary disease, congestive heart failure and other chronic diseases or disorders.

“Hospice and palliative care are a vital means of comfort and support but are not synonymous,” said Lou Giampa, President of Right at Home Westchester. “Palliative care offers a holistic approach to helping reduce the suffering of anyone with a serious, chronic or life-threatening illness, not just those who are dying. As death draws near, palliative care often segues into hospice.”

Hospice serves those with a terminal diagnosis in their homes or at freestanding hospice centers, nursing homes, in-patient care facilities and hospitals. Hospice teams primarily serve in a patient’s home because most end-of-life individuals prefer to pass in their own home surroundings. Hospice care is available to any patient of any age, race, religion or illness. The National Hospice and Palliative Care Organization notes that hospice services “focus on caring, not curing” and “hospice is not ‘giving up,’ nor is it a form of euthanasia or physician-assisted suicide.” Instead, hospice care helps patients and their families embrace life as fully as possible. In some cases, hospice patients rally to make a full recovery.

Who Qualifies for Hospice and Palliative Care?

Most Medicaid, Medicare and private health insurance plans cover palliative and hospice services. Hospice care covered by Medicare requires that a person receive a prognosis of living six months or less, but there is not a six-month limit on hospice care services. A patient with a doctor’s certification of terminal illness may receive hospice support for as long as necessary.

Any person with a serious illness can benefit from palliative support, which emphasizes the quality of life for the whole person including one’s relationships. Palliative care may include educating family members and caregivers on the patient’s illness, treatment plans and medications. Palliative services ease the symptoms or side effects of an illness including:

  • Pain
  • Sleep difficulty
  • Nausea
  • Shortness of breath
  • Lack of appetite
  • Fear and anxiety
  • Depression and hopelessness

“The majority of U.S. medical schools now offer hospice and palliative care programs and are instructing medical students in these specialized branches of pain management and end-of-life care,” explained Giampa. “It is important to work alongside a care client to develop and tailor a care plan and strategy that meets their own goals, values and needs. Our Right at Home caregivers support a range of hospice and palliative services for everyday needs, such as personal care, meal preparation and light housekeeping. Hospice and palliative medicine means skilled, compassionate teams working together for the good of the care client and the family.”

For more information about person-centered care or cognitive support, visit the local Right at Home office at www.westchesterseniorcare.com.

 

Learn more about elder lawestate planning and special needs planning at littmankrooks.com,  elderlawnewyork.com  & specialneedsnewyork.com. Have questions about this article? Contact us.


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National Financial Literacy Month: Six Steps Toward Successful Estate Planning

October 10th, 2017

In support of National Financial Literacy Month (April) and National Estate Planning Awareness Week (3rd week in October), the following estate planning article contains a very important message:

Estate planning is a financial process that can protect you and your family and is a very important component of your overall financial planning. Now is the perfect time to put your estate planning house in order. If you don’t have an up-to-date estate plan and you happen to get hurt or sick and cannot manage your financial affairs, the courts will have to appoint someone to manage them for you. The person they appoint might not be the one you would want to perform those tasks.

Without an estate plan, when you pass away, your affairs will be settled by default through a complex legal system called “probate.” The handling of your financial affairs can turn into a costly and frustrating ordeal for your family and heirs.

The crafting of a good estate plan starts with planning, followed by the proper drafting and signing of appropriate legal documents such as wills, trusts, buy-sell agreements, durable powers of attorney for asset management, and an advanced health-care directive or health-care power of attorney. Having these documents in place saves you and your family a lot of money and time at a very difficult and emotional time.

Your estate planning should also address the coordination of the way you hold title to your various assets, your beneficiary selections, and the possible transfer of certain assets while you are alive.

Regardless of the extent of your net worth, estate planning is important for everyone. Complex strategies may be used by wealthy people to reduce death taxes and costs. Others may only require a simple will and/or trust to pass on property to their heirs and provide for minor children.

Even if a simple will is all you require, an estate plan is an essential part of your financial planning. Everybody will need it someday. The time to address or update your estate plan is now. See the checklist provided below to help update your estate plan:

CHECKLIST — SIX STEPS TOWARD SUCCESSFUL ESTATE PLANNING

1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?

  • Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.
  • Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.
  • If you have children who are minors, the appointment of a guardian is probably the most important decision you’ll make. With the court’s approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who’ll care for your children the way you would want.
  • You may want to consider listing multiple executors, trustees and guardians to serve together in handling the details of your estate. This can provide a check-and-balance system for the appointees and help them avoid oversights or misappropriations. Consider appointing family members, friends, professionals, advisers and/or trust companies for this position.
  • There is some risk here: If these people disagree and have problems, they can each be represented in court by counsel paid for by your estate, so be very careful in making your selections.
  • Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse’s death.
  • To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.
  • Is estate privacy an issue for you? Do you want your estate to be public record upon your death? Do you have any special gifts you want made to charity? Do you want an elderly parent or friend to be financially cared for? All of these circumstances should be noted in your plan.
  • GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:
  • Review and update your financial position.
  • Review how you hold title to your assets. Is it consistent with your estate plan?
  • Review your beneficiary selections. Are they aligned with your estate plans?
  • Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.

3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.

  • Try sketching a picture or flow chart of your existing estate plan. Review your appointees:
  • Executor
  • Guardian of the Person/of the Property
  • Trustee
  • Power of Attorney – Property Management
  • Advance Health-Care Directive or Health-Care Power of Attorney

4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.

5. IMPLEMENT YOUR PLAN: Do what needs to be done — i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.

6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.

 

Learn more about National Financial Literacy Month by clicking here. For more information on estate and financial planning content contact v.sabuco@TheFinancialAwarenessFoundation.org.

 

 

 

Millennials and Estate Planning: You are Not Too Young for That!

August 25th, 2017

By Alexis Gruttadauria, Esq., Littman Krooks LLP

For many millennials, estate planning is not a topic that has even crossed their mind, let alone been made a priority. With more immediate concerns such as graduation from school, the start of a career, perhaps looking forward to buying a home and starting a family, the thought of planning for death or incapacity is a non-starter for many. Although people often think of estate planning as a task for later in life, there are aspects of estate planning that prove beneficial regardless of age or perceived net worth. Estate planning can include both planning for during life (“Advance Directives”) and for after death (“Testamentary Planning”), both of which are important for any person.

Advance directives, such as a Health Care Proxy and Power of Attorney will benefit any adult, as accidents and emergencies cannot be predicted, and do not discriminate by age. By having a Health Care Proxy in place, a person can dictate who will make decisions on their behalf in the event they can no longer make them on their own. In addition, a thoughtfully drafted living will can assist the appointed agent in making the choices that a person would want made, including what kind of end-of-life care they would want to be given or withheld. Another document that becomes tremendously important in the event of incapacity is a durable power of attorney, which allows the appointed agent to manage the principal’s finances.

As for Testamentary Planning documents, although many people believe that they do not have sufficient assets to warrant the creation of a Last Will and Testament of Trust, there are many aspects of such documents that are important for people of all socioeconomic situations. For young adults who are not yet married, consideration should be made for aging parents who may be on government benefits like Medicaid now or in the future. Without proper planning any amount of money received as the beneficiary of an estate can jeopardize an aging parent’s government benefits. Additionally, as greater numbers of millennials begin starting their own families, a Will or Trust is essential, not only to ensure that assets are distributed according to their wishes at death, but also to nominate a guardian for your minor children in case of your death.

Even at the exciting a fast pace beginning of life, it is never too early to make plan for the unimaginable and for the benefit of your loved ones.

 

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Advocates Say Proposed Cuts to Medicaid Will Harm Seniors and People with Disabilities

July 11th, 2017

Health care legislation currently being considered by Congress includes steep cuts to the Medicaid program, which advocates for seniors and people with disabilities say will cause tremendous harm.

The U.S. House of Representatives passed its version of the legislation, the American Health Care Act, on May 4, 2017. The U.S. Senate is now considering its amended version, which is called the Better Care Reconciliation Act (BCRA). The bill is a move by Republican lawmakers to repeal major parts of the Affordable Care Act, passed under President Obama.

The nonpartisan Congressional Budget Office said that under the BCRA, the number of uninsured people would increase by 15 million next year, and by 22 million by 2026.

Critics have numerous objections to the bill, but advocates for seniors and people with disabilities have focused on the harm they say will be caused by cuts to Medicaid, the joint federal and state program that insures nearly one in five Americans.

The Affordable Care Act expanded eligibility for Medicaid, though states could opt out. The BCRA would phase out that expansion by 2024, and would make further cuts as well, by permanently restructuring the program. Medicaid is a partnership between the federal government and the states, and the new legislation would cap the amount contributed by the federal budget, leaving states to make up the difference or cut benefits.

Medicaid is the nation’s largest government health care program, covering more people than Medicare. Medicaid covers 64 percent of all nursing home residents, 60 percent of all children with disabilities, 30 percent of all adults with disabilities, 76 percent of poor children and 49 percent of all births.

Some nursing home residents could be forced out by the cuts. Under federal law, state Medicaid programs must cover nursing home care, but the Center for Medicare Advocacy predicted that under the budgetary pressures that would be imposed under the BCRA, states would have to limit how much they pay, or restrict eligibility. The AARP said that under the new legislation, older adults could also be charged up to five times more for health insurance than younger people. Under the Affordable Care Act, rates are capped at three times more.

People with disabilities say that cuts to Medicaid would be devastating, likely resulting in reduced access to home and community-based services that allow many to live independently rather than in institutions.

The BCRA is opposed by the Arc, the AARP, the American Hospital Association, the American Medical Association and the American Cancer Society’s action network.

Concerned citizens can contact their representatives in Congress by calling the U.S. Capitol switchboard at 202-224-3121.

 

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Understanding What Medicare Covers and What is Owed Out of Pocket

June 19th, 2017

By Elizabeth Valentin, Esq., Littman Krooks LLP

Healthcare can be a large financial expense, and one that can be difficult to plan for.  Anyone who relies on Medicare should be aware of what is covered and what is not.  While Medicare is extensive in coverage, it does not cover everything and is not free.  There are premiums, deductibles, co-payments and prescription drug costs, and they can be significant.

Premiums

Medicare provides health insurance for Americans aged 65 or older who have worked and paid into the system through payroll tax.  It also provides health insurance to younger individuals with a disability status as determined by the Social Security Administration, as well as people with certain terminal illnesses. Part A, covers hospital and hospice services, and is free for those who have worked and paid the appropriate tax for at least ten years.  Otherwise, there is a monthly premium of up to $413.  Part B, covers outpatient medical services, and has a monthly premium of $134; however, those who receive Social Security benefits may pay less, approximately $109 per month.  Higher income earners may pay more.  Part C, also known as Medicare Advantage, is an alternative to Part A and Part B.  Its premiums vary depending on the specific plan chosen.

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Deductibles and Coinsurance

Part A has a deductible of $1,316 for each benefit period.  After the deductible is met, the coinsurance or copayment is $0 for the first 60 days of each benefit period, then $329 per day for days 61 through 90, and then $658 per each “lifetime reserve day” starting with day 91 for each benefit period (up to 60 days over the person’s lifetime).  You are responsible for all costs beyond the lifetime reserve days.

The Part B deductible is $183 per year.  Generally, after meeting the deductible, you are responsible for 20% of the Medicare-approved amount for most doctor services, medical equipment, and outpatient therapy.

If you have Medicare Advantage instead of Parts A and B, the deductibles and copayments will depend on the specific plan you are participating in.

The deductibles for the Part D prescription drug plan may vary, but cannot exceed $400 in 2017.  Beyond that, you pay a certain percentage for the drugs according to the plan until the total costs reach the annual limit, $3,700 in the 2017.  This is the beginning of the coverage gap known as the “donut hole.”  While in the donut hole, you may have to pay 40% of the name brand drug costs and 51% for generic drugs until the costs reach the second limit of $4,950 (in 2017), at which point catastrophic coverage begins.

Out of Pocket Expenses

In addition to paying for premiums, deductibles and coinsurance/copayments, you may have out-of-pocket costs for any treatment that is not covered by Medicare, such as eye exams, dental care, hearing aids, cosmetic surgery, non-traditional treatments such as acupuncture, and long-term care costs.  Also, if you visit a healthcare provider that does not accept the Medicare assignment of costs as full payment, you will pay higher out-of-pocket costs. Certain newly developed drugs and/or equipment may also not be covered by Medicare.  You may wish to consider a Medicare supplement or Medigap plan to cover these out-of-pocket costs to limit your possible exposure.

What Medicare Does Not Cover

It is important to note that in addition to not covering vision, dental care, and hearing aids, Medicare does not cover most long-term care costs, such as the care provided in nursing homes or the continued receipt of home care services.  Paying for long-term care is generally not part of the Medicare equation.  As such, families that are not able to self-fund such care should consider long-term care insurance or speak with an elder law attorney to discuss Medicaid planning.

 

Learn more about elder lawestate planning and special needs planning at http://www.elderlawnewyork.com  www.littmankrooks.com. Have questions about this article? Contact us.


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