Understanding Medicare’s Hospice Benefit

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

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

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.

IRS Issues Long-Term Care Premium Deductibility Limits for 2019

The Internal Revenue Service (IRS) is increasing the amount taxpayers can deduct from their 2019 income as a result of buying long-term care insurance.

Premiums for “qualified” long-term care insurance policies (see explanation below) are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 7.5 percent of the insured’s adjusted gross income.  (The 7.5 percent threshold is for the 2017 and 2018 tax years.  It is scheduled to revert to 10 percent in 2019.)

These premiums — what the policyholder pays the insurance company to keep the policy in force — are deductible for the taxpayer, his or her spouse and other dependents. (If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed a certain percentage of your income.)

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2019. Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year

Maximum deduction for year

40 or less

$420

More than 40 but not more than 50

$790

More than 50 but not more than 60

$1,580

More than 60 but not more than 70

$4,220

More than 70

$5,270

Another change announced by the IRS involves benefits from per diem or indemnity policies, which pay a predetermined amount each day.  These benefits are not included in income except amounts that exceed the beneficiary’s total qualified long-term care expenses or $370 per day, whichever is greater.

For these and other inflation adjustments from the IRS, click here.

What Is a “Qualified” Policy?

To be “qualified,” policies issued on or after January 1, 1997, must adhere to certain requirements, among them that the policy must offer the consumer the options of “inflation” and “nonforfeiture” protection, although the consumer can choose not to purchase these features. Policies purchased before January 1, 1997, will be grandfathered and treated as “qualified” as long as they have been approved by the insurance commissioner of the state in which they are sold. For more on the “qualified” definition, click here.

For First Time, Median Cost of Private Nursing Home Room Hits Six Figures in Annual Survey

The median cost of a private nursing home room in the United States increased to $100,375 a year in 2018, up 3 percent from 2017, according to Genworth’s Cost of Care survey, which the insurer conducts annually

At the same time, Genworth reports that the median cost of a semi-private room in a nursing home is $89,297, up 4 percent from 2017. While significant, the rise in prices is not quite as steep as the 5.5 percent and 4.4 percent gains, respectively, in 2017.

But the median cost of assisted living facilities jumped 6.7 percent, to $4,000 a month. The national median rate for the services of a home health aide is $22 an hour, and the cost of adult day care, which provides support services in a protective setting during part of the day, rose from $70 to $72 a day.

Alaska continues to be the costliest state for nursing home care by far, with the median annual cost of a private nursing home room totaling $330,873. Oklahoma again was found to be the most affordable state, with a median annual cost of a private room of $63,510.

The 2018 survey, conducted by CareScout for the fifteenth straight year, was based on responses from more than 15,500 nursing homes, assisted living facilities, adult day health facilities and home care providers.  Survey respondents were contacted by phone during May and June 2018.

As the survey indicates, nursing home care is growing ever more expensive. Contact your elder law attorney to learn how you can protect some or all of your family’s assets.

For more on Genworth’s 2018 Cost of Care Survey, including costs for your state, click here.

Conservator Owed Duty to Nursing Home to Timely Apply for Medicaid

Reversing a lower court, a Connecticut appeals court holds that a nursing home resident’s conservator owed a duty of care to the nursing home to timely apply for Medicaid on behalf of the resident. Bloomfield Health Care Center of Connecticut, LLC v. Doyon (Conn. App. Ct., No. AC 40281, Oct. 9, 2018).

A nursing home petitioned the court to appoint a conservator for one of its residents, Samuel Johnson, to assist him with his Medicaid application. The court appointed Jason Doyon as conservator in April 2014. Mr. Doyon waited nine months to file a Medicaid application on Mr. Johnson’s behalf. The state denied Mr. Johnson’s first Medicaid application due to lack of information. Mr. Doyon filed a second application, which the state approved, but Mr. Johnson did not receive any Medicaid benefits before May 2015.

The nursing home sued Mr. Doyon for negligence in failing to apply for and obtain Medicaid benefits on behalf of Mr. Johnson in a timely manner. Mr. Doyon asked for summary judgment, arguing that he did not owe a duty of care to the nursing home. The trial court granted Mr. Doyon summary judgment, and the nursing home appealed.

The Connecticut Court of Appeals reverses, holding that Mr. Doyon owed the nursing home a duty of care. The court rules that it was “readily foreseeable that, if [Mr. Doyon] failed to timely obtain Medicaid benefits for [Mr.] Johnson, the [nursing home] would suffer harm as a result because it would not be reimbursed for the cost of [Mr.] Johnson’s care.” The court also concludes that “the benefits of encouraging conservators to carry out their duties with care and preventing financial harm outweigh any corresponding minimal increase in litigation.”

For the full text of this decision, go to: https://www.jud.ct.gov//external/supapp/Cases/AROap/AP185/185AP462.pdf

More States Asking to Eliminate Retroactive Medicaid Benefits

Arizona and Florida are the latest states to request a waiver from the requirement that states provide three months of retroactive Medicaid coverage to eligible Medicaid recipients.

Medicaid law allows a Medicaid applicant to be eligible for benefits for up to three months before the month of the application if the applicant met eligibility requirements at the earlier time. This helps people who are unexpectedly admitted to a nursing home and can’t file — or are unaware that they should file — a Medicaid application right away. Preparing an application for Medicaid nursing home coverage may take many weeks; the retroactive coverage gives families a window of opportunity to apply and get coverage dating back to when their loved one first entered the nursing home.  “Retroactive coverage is one of the long-standing safeguards built into the program for low-income Medicaid beneficiaries and their healthcare providers,” says the Kaiser Family Foundation.

Now Arizona and Florida are joining a growing list of states that are asking the federal Centers for Medicare and Medicaid Services (CMS) to eliminate the retroactive benefits. CMS has already approved similar requests by Iowa, Kentucky, Indiana, and New Hampshire to waive retroactive coverage. A lawsuit is challenging Kentucky’s waiver, which also imposes work requirements for Medicaid recipients.

Advocates argue that if Medicaid applicants cannot get coverage before the month of application, they may be saddled with uncovered medical bills or fail to receive needed health care because they cannot afford it. According to Justice in Aging, which filed a brief in the Kentucky lawsuit, Medicaid applicants often do not file an application right away because of the complexity of the Medicaid application process or a false belief that Medicare would cover nursing home care.

For more information about the implications of the elimination of retroactive benefits, click here.

If you need to file a Medicaid application, contact your attorney.

When Can an Adult Child Be Liable for a Parent’s Nursing Home Bill?

Although a nursing home cannot require a child to be personally liable for their parent’s nursing home bill, there are circumstances in which children can end up having to pay. This is a major reason why it is important to read any admission agreements carefully before signing.

Federal regulations prevent a nursing home from requiring a third party to be personally liable as a condition of admission. However, children of nursing home residents often sign the nursing home admission agreement as the “responsible party.” This is a confusing term and it isn’t always clear from the contract what it means.

Typically, the responsible party is agreeing to do everything in his or her power to make sure that the resident pays the nursing home from the resident’s funds. If the resident runs out of funds, the responsible party may be required to apply for Medicaid on the resident’s behalf. If the responsible party doesn’t follow through on applying for Medicaid or provide the state with all the information needed to determine Medicaid eligibility, the nursing home may sue the responsible party for breach of contract. In addition, if a responsible party misuses a resident’s funds instead of paying the resident’s bill, the nursing home may also sue the responsible party. In both these circumstances, the responsible party may end up having to pay the nursing home out of his or her own funds.

In a case in New York, a son signed an admission agreement for his mother as the responsible party. After the mother died, the nursing home sued the son for breach of contract, arguing that he failed to apply for Medicaid or use his mother’s money to pay the nursing home and that he fraudulently transferred her money to himself. The court ruled that the son could be liable for breach of contract even though the admission agreement did not require the son to use his own funds to pay the nursing home. (Jewish Home Lifecare v. Ast, N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17,2015).

Although it is against the law to require a child to sign an admission agreement as the person who guarantees payment, it is important to read the contract carefully because some nursing homes still have language in their contracts that violates the regulations. If possible, consult with your attorney before signing an admission agreement.

Another way children may be liable for a nursing home bill is through filial responsibility laws. These laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. Filial responsibility laws have been rarely enforced, but as it has become more difficult to qualify for Medicaid, states are more likely to use them. Pennsylvania is one state that has used filial responsibility laws aggressively.

It’s Important to Shop Around for Your Medigap Policy

Medigap premiums can vary widely depending on the insurance company, according to a new study, so be sure to shop around before choosing a policy.

When you first become eligible for Medicare, you may purchase a Medigap policy from a private insurer to supplement Medicare’s coverage and plug some or virtually all of Medicare’s coverage gaps. You can currently choose one of 10 Medigap plans that are identified by letters A, B, C, D, F, G, K, L, M, and N. Each plan package offers a different combination of benefits, allowing purchasers to choose the combination that is right for them. Federal law requires that insurers must offer the same benefits for each lettered plan, so each plan C offered by one insurer must cover the same benefits as plan C offered by another insurer.

When choosing a plan, you need to take into account the different benefits each plan offers as well as the price for each plan. To make things more difficult, the premiums for a particular plan can vary widely, according to an analysis by Weiss Ratings, Inc., consumer-oriented company that assesses insurance companies’ financial stability, and recently reported by the Center for Retirement Research at Boston College.

Weiss Ratings compared Medigap premiums in each zip code nationwide and found huge disparities. For example, a 65-year-old man who lives in Hartford, Connecticut, can buy a Plan F policy for anywhere between $2,900 and $7,400 annually. A 65-year-old woman in Houston can pay $5,300 a year for Medigap’s Plan C policy from one insurance company or she can buy exactly the same policy from another insurer for $1,700 a year.

When looking for a Medigap policy, make sure to get quotes from several insurance companies to find the best price. In addition, if you are going through a broker, check with two or more brokers because each broker might not represent every insurer. It can be hard work to shop around, but the price savings can be worth it.