Category Archives: Estate Planning

Costs of New Long-Term Care Insurance Policies Vary Considerably

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We’ve all heard the advice “It pays to shop around,” but this has never been more true than with the current market for long-term care insurance.

Accordiing to the the latest industry figures, the spread between the lowest and highest cost for virtually identical coverage was as high as 243 percent.  “This is the largest spread I can recall in recent years,” said Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI), an industry group that issues an annual Long Term Care Insurance Price Index. “It’s rare to see one policy costing more than twice another policy when both are large insurers but each company gets to set their own pricing and each has their own target market.”

Slome was referencing the results of AALTCI’s 2019 price index, which found that a married couple who are both 55 years old would pay an average of $3,050 a year combined for a total of $386,500 each of long-term care insurance coverage when they reach age 85. But the percentage difference between the lowest-priced and highest-priced policies for such a couple is 243 percent, meaning that a consumer could wind up paying more than triple what they might have paid for similar coverage.  Slome told ElderLawAnswers that the quoted premiums ranged from $2,898 to $9,932.

The price differences between policies for single people were lower but still significant, according to the index.  A single 55-year-old man can expect to pay an average of $2,050 a year (up from $1,870 in 2018) for $164,000 worth of coverage. But there is a 123 percent difference between the lowest-priced and highest-priced policies.  The same policy for a single woman averages $2,700 a year, down from $2,965 in 2018, although again the spread between the least and most expensive policies tops 100 percent.

For the first time, the index suggests ways for couples to save on their premium by electing less coverage or a “shared care” option.  Couples purchase 65 percent of policies, according to the AALTCI.  But clearly one of the best ways to save is to review the offerings of a number of different insurance companies.  “We really recommend the importance of talking to a specialist who is ‘appointed’ with multiple insurers,” Slome said.

For the association’s 2019 index showing average prices for common scenarios, go here: http://www.aaltci.org/news/wp-content/uploads/2019/01/2019-Price-Index-LTC.pdf

For more about long-term care insurance. click here.

Last Year for Couples to Use ‘Claim Now, Claim More’ Later Social Security Strategy

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This is the last year that spouses who are turning full retirement age can choose whether to take spousal benefits or to take benefits on their own record. The strategy, used by some couples to maximize their benefits, will not be available to people turning full retirement age after 2019.

The claiming strategy — sometimes known as “Claim Now, Claim More Later” — allows a higher-earning spouse to claim a spousal benefit at full retirement age by filing a restricted application for benefits. While receiving the spousal benefit, the higher-earning spouse’s regular retirement benefit continues to increase. Then at 70, the higher-earning spouse can claim the maximum amount of his or her retirement benefit and stop receiving the spousal benefit. To use this strategy, the lower-earning spouse must also be claiming benefits. Workers cannot claim spousal benefits unless their spouses are also claiming benefits.

A 2015 budget law began phasing out the strategy. If you were 62 or older by the end of 2015, you are still able to choose which benefit you want at your full retirement age. However, when workers who were not 62 by the end of 2015 apply for spousal benefits, Social Security will assume it is also an application for benefits on the worker’s record. The worker is eligible for the higher benefit, but he or she can’t choose to take just the spousal benefits and allow his or her own benefits to keep increasing until age 70.

The budget law’s phase-out of the claiming strategy does not apply to survivor’s benefits and benefits on an ex-spouses record. Surviving spouses will still be able to choose to take survivor’s benefits first and then switch to retirement benefits later if the retirement benefit is larger.  Ex-spouses who are divorced for two or more years can also file a restricted application for spousal benefits and wait to claim on their own record.

For more information on Social Security benefits, click here.

Guns and Dementia: Dealing With A Loved One’s Firearms

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Having a loved one with dementia can be scary, but if you add in a firearm, it can also get dangerous.  To prevent harm to both the individual with dementia and others, it is important to plan ahead for how to deal with any weapons. 

Research shows that 45 percent of all adults aged 65 years or older either own a gun or live in a household with someone who does. For someone with dementia, the risk for suicide increases, and firearms are the most common method of suicide among people with dementia. In addition, a person with dementia who has a gun may put family members or caregivers at risk if the person gets confused about their identities or the possibility of intruders. A 2018 Kaiser Health News investigation that looked at news reports, court records, hospital data and public death records since 2012 and found more than 100 cases in which people with dementia used guns to kill or injure themselves or others. 

The best thing to do is talk about the guns before they become an issue. When someone is first diagnosed with dementia, there should be a conversation about gun ownership similar to the conversation many health professionals have about driving and dementia. Framing the issue as a discussion about safety may help make it easier for the person with dementia to acknowledge a potential problem. A conversation about guns can also be part of a larger long-term care planning discussion with an elder law attorney, who can help families write up a gun agreement that sets forth who will determine when it is time to take the guns away and where the guns should go. Even if the gun owner doesn’t remember the agreement when the time comes to put it to use, having a plan in place can be helpful. 

What to do with the guns themselves is a difficult question. One option is to lock the weapon or weapons in a safe and store the ammunition separately. Having the guns remain in the house–even if they are locked away–can be risky. Another option is to remove the weapons from the house altogether. However, in some states, there are strict rules about transferring gun ownership, so it isn’t always easy to simply give the guns away. Families should talk to an attorney and familiarize themselves with state and federal gun laws before giving away guns. 

For more information about dementia and guns, click here and here

Understanding Medicare’s Hospice Benefit

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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.

Feds Release 2019 Guidelines Used to Protect the Spouses of Medicaid Applicants

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The Centers for Medicare & Medicaid Services (CMS) has released the 2019 federal guidelines for how much money the spouses of institutionalized Medicaid recipients may keep, as well as related Medicaid figures.

In 2019, the spouse of a Medicaid recipient living in a nursing home (called the “community spouse”) may keep as much as $126,420 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2019 will be $25,284.

Meanwhile, the maximum monthly maintenance needs allowance for 2019 will be $3,160.50. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse’s income. The minimum monthly maintenance needs allowance for the lower 48 states remains $2,057.50 ($2,572.50 for Alaska and $2,366.25 for Hawaii) until July 1, 2019.

In determining how much income a particular community spouse is allowed to retain, states must abide by this upper and lower range. Bear in mind that these figures apply only if the community spouse needs to take income from the institutionalized spouse. According to Medicaid law, the community spouse may keep all her own income, even if it exceeds the maximum monthly maintenance needs allowance.

The new spousal impoverishment numbers (except for the minimum monthly maintenance needs allowance) take effect on January 1, 2019.

For a more complete explanation of the community spouse resource allowance and the monthly maintenance needs allowance, click here.

Home Equity Limits:

In 2019, a Medicaid applicant’s principal residence will not be counted as an asset by Medicaid unless the applicant’s equity interest in the home is less than $585,000, with the states having the option of raising this limit to $878,000.

For more on Medicaid’s home equity limit, click here.

Income Cap:

In order to qualify for Medicaid, a nursing home resident’s income must not be above a certain level. Most states allow individuals to spend down their excess income on their care until they reach the state’s income standard. But other states impose an “income cap,” which means no spend-down is allowed.

In 2019, the income cap in these states will be $2,313 a month.  For more on the income cap, click here.

The Best and Worst States for Protection Against Elder Abuse

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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.

For information on a new federal law designed to help prevent elder abuse, click here.

Charitable Giving Options Under the New Tax Law

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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.

For more information on how to maximize your charitable giving under the new tax law, click here.

Have Private Insurance and Are Turning 65? You Need Sign Up for Medicare Part B

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If you are paying for your own insurance, you may think you do not need to sign up for Medicare when you turn 65. However, not signing up for Medicare Part B right away can cost you down the road.

You can first sign up for Medicare during your Initial Enrollment Period, which is the seven-month period that includes the three months before the month you become eligible (usually age 65), the month you are eligible and three months after the month you become eligible. If you do not sign up for Part B right away, you will be subject to a penalty. Your Medicare Part B premium may go up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it. In addition, you will have to wait for the general enrollment period to enroll. The general enrollment period usually runs between January 1 and March 31 of each year.

There are exceptions to the penalty if you have insurance through an employer or through your spouse’s employer, but there is no exception for private insurance. The health insurance must be from an employer where you or your spouse actively works, and even then, if the employer has fewer than 20 employees, you will likely have to sign up for Part B.

If you don’t have an employer or union group health insurance plan, or that plan is secondary to Medicare, it is extremely important to sign up for Medicare Part B during your initial enrollment period. Note that COBRA coverage does not count as a health insurance plan for Medicare purposes. Neither does retiree coverage or VA benefits.

For a New York Times column about a man with private insurance who didn’t realize he needed to sign up for Part B, click here.

For more information about Medicare and turning 65, click here.

Can You Put a Surveillance Camera in a Nursing Home Room?

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Technological advances have made it easier to stay connected with loved ones all the time. This has included the ability to install cameras in a loved one’s nursing home room. These so-called “granny cams” have legal and privacy implications.

The benefit of putting a surveillance camera in a nursing home is the ability to monitor your family member’s care. Families that suspect abuse or neglect can keep on eye caregivers. Being able to observe care from afar can give family members peace of mind that their loved one is being well taken care of. It can also serve as evidence if abuse is found. Even if there is no abuse, cameras can be helpful to observe if caregivers are using improper techniques that may injure a resident.

On the other hand, cameras raise privacy concerns for both residents (including roommates) and caregivers. Residents may not want to be monitored while they are in a vulnerable state, such as changing or bathing. If the recording device picks up audio, then even the resident’s conversations may no longer be private.

All this aside, do nursing homes have to permit families to install cameras?  This varies depending on the facility. Some nursing homes may have language in their admission contracts banning cameras or imposing specific requirements for their use. However, concerns over elder abuse have led some states to pass laws allowing cameras in nursing homes. At least six states — Illinois, Louisiana, New Mexico, Oklahoma, Texas, and Washington — have passed laws permitting families to install a camera in a nursing home if the resident and the resident’s roommate have agreed. Utah permits cameras in assisted living facilities. New Jersey does not have a law specifically permitting cameras, but it has a program that loans surveillance cameras to families who suspect abuse. In other states, the law surrounding camera use is more vague.

If you are considering installing a camera in a loved one’s nursing home room, you should contact an elder law attorney to discuss the legal and practical implications.

For a fact sheet about nursing home surveillance from The National Consumer Voice for Quality Long-Term Care, click here.  And keep in mind the Consumer Voice’s advice that cameras are “no substitute for personal involvement and monitoring.”

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

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

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

IRFs and Medicare

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

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

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

SNFs and Medicare

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

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

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

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