You may recall the previous discussion here of Senate Bill 3270, introduced June 6, 2012. It's purpose was to impose a "look back" rule similar to Medicaid's "look back" rule. The rule provides for the imposition of a penalty. on those who give assets away  in order to be able to qualify for Medicaid.

SB 3270 didn't make it out of committee, but Senator Ron Wyden of Oregon recently introduced SB 748 in its place.  SB 748 appears to be identical to SB 3270.

Like SB 3270, SB 784 addresses several key points:

1. A look back period of 36 months, beginning the date of application;
2. A period of ineligibility for assets transferred prior to application, including transfers to trusts, annuities, or other financial products;
3. The period of ineligibility (not to exceed 36 months) will be calculated by taking the amount transferred and dividing it by the monthly pension amount the applicant would have received;
4. The ability to fully cure a gift; and
5. Hardship provisions for a veteran or surviving spouse.

As of today, Congressional news sources report that SB 748 has about a  46% chance of getting past the committee, and about a 10% chance of being enacted. 

If interested, you can follow this progress of this Bill at.http://www.govtrack.us/congress/bills/113/s748

A client recently called me because she was upset about the news story reporting the refusal of a nurse at a California independent living community to give CPR to a dying resident. The client was concerned because she had just helped
her parents move into an independent living community here in Georgia. She asked me whether the nurse was legally right to refuse to give the resident CPR and could this happen in Georgia? That particular story raised both legal and ethical questions and the client’s concern is certainly understandable. 
 
Starting with the issue of the facility type, the community in California where the incident occurred, Glenwood Gardens, is an “independent” living community. Such communities generally consist of traditional apartments with communal dining rooms and activity rooms. Residents receive housekeeping, laundry services, and transportation services. The apartments usually have emergency call buttons and the apartment building is secured at night. Typically, these communities do not have nurses or medical professionals on staff.  

In Georgia, as in most states,  “independent” living communities are not licensed and not subject to any of the licensing regulations that apply to “assisted living” facilities. Because they are not regulated, independent living communities can make their own policies regarding how their employees handle emergencies.
 
In the California story there is conflicting information about whether the employee was actually a licensed nurse. If she is, then her obligations may be different than if she is not. In addition, even if she is a licensed nurse, she may not be employed as a nurse by Glenwood Gardens. If she is not employed as a nurse, she may not be expected to provide medical care to residents. Since the California community is an “independent” living community, it would be unusual that the scope of her employment would include rendering emergency medical assistance. 

Georgia, like many states, does have a "Good Samaritan Law" (GA Code Ann. 51-1-29) to protect those who render emergency medical or nonmedical care at the scene of an emergency from civil liability resulting from any act or omission. The law, however, does not compel medical personnel to act in such situations. It simply provides encouragement to act. 

The California incident brings up many issues. Choosing the best senior living situation can be tricky. Understanding the different types of facilities, their licensing, and the services provided is essential to meeting the family's expectations. It is important to understand the facility's policies on emergency management. It’s also important to make sure your Advance Medical Directives are complete and available when needed. This will ensure, in most cases, that your loved ones desires are communicated to medical personnel, and that they take your preferred course of action regarding all forms of treatment. 

An Advance Medical Directive (also called a Health Care Power of Attorney) authorizes another person (called your "Health Care Agent"), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so. This document includes provisions that used allow you to indicate your wishes concerning the use of artificial or extraordinary
measures to prolong your life artificially in the event of a terminal illness or injury. You will also use this document to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements. 
 

I’ll be the first to applaud the monthly AARP Bulletin for the many relevant issues it brings to the attention of seniors. Agree or disagree with the political policy position the organization takes, sometimes I do and sometimes I don’t, the monthly Bulletin is generally packed with newsworthy elder care topics. Because the Bulletin is so widely read, I feel it important to comment on a Medicaid related item that appeared on p. 32 of the March Bulletin in the “Ask the Experts” section. The question and answer appeared as follows: 
             
QUESTION: My mother has spent all her savings and needs to get nursing home care through Medicaid. If she goes on Medicaid, could she lose her home?
              
ANSWER:   No. A primary residence does not count as an asset when gauging Medicaid eligibility. Each state sets its own rules on what you may keep and still qualify for Medicaid. But certain assets, including the primary residence, are exempt.
Also exempt: personal belongings, one motor vehicle, life insurance with a face value under $1,500, and some burial arrangements. 

I recognize that the AARP Q & A column is not intended to provide an all encompassing answer to a very complicated question. However,  my problem with this particular answer is that, where Medicaid is concerned,  “losing one’s home” and  ”being eligible for Medicaid” are different issues. The reader's question concerned the prospect of losing a home. The answer, by contrast, addressed the issue of Medicaid eligibility. The fact that an individual can be eligible for nursing home Medicaid while owning a personal residence is not dispositive as to whether the individual will or will not eventually “lose” the residence to Medicaid estate recovery. In that respect, the answer was somewhat misleading.
 
While it is true that signing over one’s residence to the government is not a condition to receiving nursing home Medicaid, many factors go into whether the Medicaid recipient will eventually “lose” the residence, including, but not limited to: the equity in the residence, how the residence is titled and how long it has been titled that way, how long the Medicaid recipient is absent from the residence, whether there is a chance the Medicaid recipient will ever return to the residence, what state the Medicaid recipient resides in, whether the residence is a probate or non probate asset and how aggressive the Medicaid recipient’s state is in pursuing estate recovery.
 
If your long term care plan involves the potential for Medicaid, its a good idea to consult with an elder law attorney to learn about asset limits and estate recovery in your particular state.

             The Federal Trade Commission (FTC) has recently been warning the public about a scheme related to the Affordable Care Act  (ACA) that seniors should be aware of.  Scammers are calling consumers and asking them to provide personal information in order to receive a (nonexistent) national medical card from the government. As you're all aware, providing personal information over the phone can have very serious and damaging consequences. We expect that these kinds of scams will be popping up even more frequently as the public starts to hear more about health care reform.

            If you receive any calls from someone attempting this, or any similar type of scam, please call the FTC at its toll free number 1-877-FTC-HELP  (1-877-382-4357) and let them know. Any information you can provide , such as the name, telephone number, or location of thecaller, can be very helpful.
 
           For more information on this and other topics of interest to seniors, visit the FTC’s website at www.ftc.gov


 

It’s that time of year again! Most of us are gathering tax documents together and looking for deductions! Here’s one you may not know about.  Did you know that if you met with an estate planning attorney within the past year,
your legal expenses may be tax deductible? 

Dating as far back as 1973, the United States Tax Court has consistently ruled that twenty percent (20%) of a non-itemized estate planning bill is deductible as tax advice under Section 212(3) of the Tax Code.

Individuals may deduct attorney’s fees to the extent they exceed 2% of  adjusted gross income and they are subject to a phase out when the adjusted gross income exceeds a certain amount.  In order to take advantage of the 2% rule, the individual should pay all deductible legal fees in one year.

Based on IRS Regulations and previous Revenue Ruling, attorney’s fees are deductible to the extent they are incurred: (1)
to produce income that is includable in the recipient’s gross income, (2) for the management, conservation, or maintenance of property held for the production of income;  (3) in connection with the determination, collection, or refund of any tax;
or(4) to the extent they are paid for tax planning advice.
 
Expenses, to be deductible under Section 212, must be “ordinary and necessary.” Thus, such expenses must be reasonable in amount and must bear a reasonable and proximate relation to one of the four purposes cited above. When deductible, attorney’s
fees are treated as “miscellaneous itemized deductions. 

I generally suggest that 20% of the total fees that you paid to us for estate planning services can appropriately be considered deductible tax advice. Be sure to tell your accountant if you did estate planning in 2012 and if you haven’t yet had the chance to meet with us, call and make an appointment for a free estate planning consultation.


 


 

Happy New Year! For our first post of 2013 we are sharing the federal government's recently announced Medicaid numbers effective for 2013. Please contact our office for further information, explanation or Medicaid planning.

MMMNA (minimum income Community Spouse is entitled to)
$1,891
(minimum)
$2,898 (maximum)

Income cap
$2,130

CSRA (minimum assets Community Spouse is entitled to)
$23,184 (minimum)
$115,920
(maximum)

Excess Shelter Amount (ESA)
$567

Home Equity
Exclusion
$536,000 (most states)
$802,000 (maximum, if state so
elects)

Effective 1/1/2013. (The lower MMMNA changes July 1 of each year.)

        This past June the U.S. Supreme Court gave the new Affordable Care Act (ACA) a mostly clean bill of health. The Court upheld the constitutionality of the law, keeping provisions already in effect and allowing other measures that will phase in according to a schedule.Where the expansion of Medicaid is concerned,the Court gave states the right to opt out without jeopardizing exisitimg Medicaid programs. So, where does Medicare stand at this point and why should seniors be thankful? Here are but a few reasons:

        First of all, your guaranteed benefits are safe and you can keep your own doctor.Many preventative screenings, including colonoscopies and mammograms are free.Prescription drugs will cost less as the "doughnut hole", the gap in Medicare Part D coverage shrinks until it is eliminated in 2020.

        Taken together, the various measures in the law will save the average Medicare beneficiary $4,181 over 10 years and a beneficiary with high drug costs will save about $16,000. The ACA has already saved Americnas $2.1 billion on health insurance premiums.

        The Social Security Administration (SSA) enacted a program called "Extra Help" for some Medicare beneficiaries. Depending on an individual or couples income level and assets, he/she/they could get extra help under Social Security. 

        The Sceretary of Health and Human Services (HHS) announced that $12.5 million in awards funded under the ACA and the Older Americans Act will be made to local Aging and Disability Resource Centers (ADRCs) to help older Americans stay independent and receive long term care services and supports in their own homes.

        Here at our firm, we are thankful for you, our clients and wish you a happy Thanksgiving!

Medicare coverage of short-term rehabilitation in a nursing home is about to undergo a major policy change, resulting in beneficiaries with chronic conditions such as Alzheimer’s disease, Parkinson’s disease, ALS (Lou Gehrig’s disease), diabetes,
multiple sclerosis, hypertension, arthritis, heart disease, and stroke no longer need to show ongoing improvement to maintain Medicare coverage.

For decades, when short-term rehabilitation patients in nursing homes failed to show improvement but still needed skilled nursing in the form of custodial care or therapy, Medicare would routinely terminate their Medicare coverage, forcing these patients prematurely into private pay or, if they could financially qualify, Medicaid. This need for ongoing “improvement” was a pervasive, though unwritten ”rule of thumb” followed by Medicare and by Medicare contractors when doing Medicare evaluations in nursing homes. However, nothing in the Medicare statute or its regulations has ever stated that “improvement” is required for continued skilled care. 

A class action lawsuit, Jimmo v. Sebelius, was  filed against the federal government in January 2011 in federal court. This case
aimed at ending the government’s use of the“improvement standard” . The case was settled and the settlement should result in Medicare no longer focusing on “the presence or absence of an individual’s potential for improvement.” Instead, Medicare must continue to provide short-term care whether or not the patient is improving, provided the patient needs skilled care.

However, Medicare coverage for nursing home care is still a very limited type of short-term benefit, as it only covers a maximum of 100 days per benefit period, and only if the patient requires skilled nursing care. However, under the new settlement, Medicare coverage should no longer be terminated just because the patient’s medical condition is no longer improving. On the contrary, coverage should remain available for services that are needed to maintain the person’s condition or to prevent further deterioration.

In summary, Medicare coverage in the past has often been erroneously denied for individuals with chronic conditions, for people who are not improving, or who are in need of services to maintain their condition. With this new government settlement, it should no longer be necessary for an individual’s underlying condition to be improving in order to continue to get Medicare coverage! I
continue to use the word should because the people who implement these policies may not conform to the new settlement as quickly as they should, so coverage appeals may be necessary in the short run until the local workers on the ground all get educated about this new shift in governmental policy. 

Luckily,the Medicare program has an appeal system to contest improper termination of coverage. Beneficiaries and their advocates should use this system to appealMedicare determinations that unfairly deny or limit coverage.

 For more information about this settlement, see: http://www.medicareadvocacy.org/hidden/highlight-improvment-standard


 

The costs for elder care are increasing as the number of aging adults requiring in-home care continues to rise. Many times, it is a family member who winds up providing in-home care; and, in some cases, this task is thrust upon the individual after an elderly parent or relative has an accident. An elder parent may fall and break a hip, which requires hospitalization and extended
care. Other times, warning signs of the necessity for impending care occur gradually with the elderly person forgetting names or getting lost in familiar areas. The family may determine that it is no longer safe for the elderly relative to live without proper supervision and care. Therefore, the family may decide to shoulder the burden of providing in-home care. Whatever the situation
or circumstance, elder care affects millions of Americans each year, and that number is predicted to steadily rise in the coming years.

When a son or daughter assumes the responsibility for the in-home care of an elderly parent, that adult child’s entire life is affected, and the person’s career is no exception. If an elderly parent has a serious healththat requires the caretaker to miss work sporadically or for extended periods of time, the Family Medical Leave Act (FMLA) may be able to provide some
relief. The FMLA allows employees who have an elderly parent with serious health problems to take unpaid leave, and offers job protection. The FMLA states that the health problem, either physical or mental, must require in-patient care in a
hospital, hospice or residential care facility, or continuing treatment by a health care provider. Under the FMLA, employees may take up to 12 weeks annually of unpaid leave to care for ailing family member, including elderly parents. While the FMLA does provide protections and financial security to employees, only 60% of private sector employees are covered by and eligible for FMLA leave benefits. All public sector employees are covered.

 As the population continues to age and more and more employees are faced with the duty of providing in-home care for an elderly parent, employees’ expectations and needs for elder care benefits are likely to increase. Companies can expect the costs related to elder care benefits to continue to increase for the next several years.


 

Immediate annuities can sometimes be useful for Medicaid planning. Purchasing an immediate annuity is a way for people with assets in excess of Medicaid’s limits to turn the assets into an income stream while avoiding a penalty for transferring the
assets. The Deficit Reduction Act of 2005 (DRA) changed the requirements for annuities. Under the DRA, an annuity must meet the following requirements in order to avoid a transfer, or gift, penalty:

The annuity must be irrevocable (meaning that it cannot be canceled). The annuity must be actuarially sound (which means the annuity cannot cover a term longer than the purchaser’s life expectancy and the payments expected during the annuitant’s life expectancy must at least equal the cost of the annuity)

The payments must begin immediately (you cannot have deferred payments or a balloon payment). Unless there is a spouse or a minor or disabled child, the state must be named as the remainder beneficiary (the person or entity that gets any leftover money) up to the amount of Medicaid provided

An annuity can be especially useful for married couples, one of whom needs Medicaid-covered long-term care. An immediate annuity allows the couple to turn their excess assets into income for the Medicaid recipient’s spouse. If a spouse purchases an annuity that meets the requirements under the DRA, he or she will receive the income from that annuity without having to contribute it to the Medicaid recipient’s long-term care. But, as a result of a 2006 amendment to the DRA, the spouse will have to name the state as the remainder beneficiary for costs incurred by the Medicaid recipient as well as herself if she ever receives Medicaid. However, such repayment would only occur if she were to die before the guaranteed payments under the annuity had expired.

Annuities generally are less useful as Medicaid planning devices for single individuals. For example, if a single individual purchases an annuity, the interest income from the annuity counts as income and will have to be paid to the nursing home.
Then, once the purchaser dies, any remaining money in the annuity will first go to the state to pay any unpaid nursing home bills. If there is any left over, it will go to beneficiaries named by the purchaser.