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Elder Law Guy Newsletter – A Review of Important Elder Law

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Elder Law Guy Newsletter – A Review of Important Elder Law Stories From 2013Sent Thursday, February 6, 2014View as plaintext

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Volume 5, Issue 1

A Review of Important Elder Law Stories From 2013

As Happy New Year! 2013 was an important year for news that affected our senior, Veteran and disabled populations. Many stories affecting these groups made national headlines. This edition of the ElderCounselorTM will review some of the top stories that made headlines in 2013 and why they may continue to do so in 2014.

 

The DOMA Decision

One of the US Supreme Court’s highlighted decisions of the year was US v. Windsor[1].  This case stemmed from a widow from a same-sex marriage who was denied tax relief under the “Defense of Marriage Act (DOMA).”  The Supreme Court determined DOMA to be unconstitutional, ruling in favor of Edith Windsor and striking down the part of the law defining marriage as a union between a man and a woman.  The Court noted that the law deprived same sex couples of both rights and responsibilities.

 

The well-publicized ruling of this case impacted many federal laws which fell under the Act’s definition of marriage. The affected federal laws include benefits such as Medicaid, Social Security, housing, food, stamps, tax laws, federal employee benefits and Veteran’s benefits. The changes to these laws have already started to impact seniors throughout the country who are in same-sex marriages. Whether there is a change to the individual in a same sex marriage will depend on a few factors. One factor is based on the benefit in question and whether the state in which the individual resides recognizes same-sex marriage. Another factor is whether the couple was validly married in a state that recognized same-sex marriage at the time they got married.

 

For example, Medicaid will likely not recognize a marriage unless it is being administered in a state that recognizes an otherwise valid same-sex marriage. However, some states do provide hardship protections to a partner of a person in long term care. And, in some states that recognize civil unions or registered domestic partnerships, Medicaid may treat the couple as married. Each state continues to have authority as to whether or not to recognize marriage for same sex couples.

 

But, where the state recognizes a same-sex marriage, the impact in terms of Medicaid is great. In regards to Medicaid financial eligibility, the change means an increased allowance of assets from that of a single person (approximately $2,000) to those of a married couple (up to $117,920). The sword cuts both ways, though, as Medicaid will consider assets of both parties to the marriage and not just the applicant. Legal counsel can help assess the strategies available to potential Medicaid applicants and their spouses.

 

Affordable Care Act

We have all been inundated by information regarding the Affordable Care Act (ACA). Regardless of your feelings on the new law, your senior clients will likely be affected by its implementation.

 

More impactful to the senior population than the individual mandate, are the changes to Medicare, the prohibition against pre-existing conditions clauses, nursing home care changes, changes to community-based long term services and supports, and the funding of the ACA.

 

ACA and Medicare

The changes in Medicare include prescription drug coverage that will eventually reach 25% across the board for all prescription drugs. The increase in coverage will be felt by those who spend more than $2800 per year on prescription drugs. Where there was no coverage by Medicare when the prescription drug expense of an individual was between $2800 and $4550, there will eventually be coverage of 25% for all such expenses for those receiving Medicare.

 

Another Medicare change under the ACA is increased coverage of preventive care. These now-covered services include annual wellness visits, flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases.

 

Finally, the ACA’s changes to Medicare include a cut to Medicare Advantage Plans. The ACA restricts the options that can be provided by these plans. This may result in fewer choices to seniors and it makes uncertain the future of Medicare Advantage Plans..

 

ACA and the Prohibition Against Pre-Existing Conditions Clauses

The ACA’s prohibition against pre-existing conditions clauses received a great deal of attention in the news. This part of the law prohibits insurance companies from considering health when one applies for health care coverage. It also prohibits insurance companies from charging varying amounts to individuals based on heath, sex, age or other factors. The elderly will benefit from this portion of the law as the risk of insuring them will now be evenly distributed among the entire population, old and young alike.

 

ACA and Nursing Homes

Another major change affecting seniors under the ACA concerns nursing homes. The ACA requires the Center for Medicare and Medicaid Services to provide a consumer-friendly website, posting comprehensive information regarding nursing homes. This website is to provide data regarding the nursing home’s inspections, complaints and number of violations received. It will also identify the owner of the home and show expense reports comparing resident care costs versus administrative costs. In addition, the ACA will make it easier to file complaints against a nursing home.

 

In the event a nursing home decides to close its doors, the ACA has built in protections for residents of the home. The ACA mandates notice far enough in advance that all its residents can relocate. Further, it requires that the home ensure all residents have successfully relocated prior to closing.

 

There are other parts of the ACA that will potentially benefit those in need of nursing homes as well, including additional federal funding (at the option of the state) to help with background checks of staff.

 

ACA and Long Term Care Services and Supports

The ACA provides several options to states to expand home and community-based care under Medicaid. These options will fall largely to the states to exercise and implement.

 

Funding the ACA

The portions of funding the ACA that will be felt by our senior clientele include: the cuts to Medicare Advantage Plans[2]; a surcharge tax of 3.8% to unearned income[3]; an increase in the floor for medical expense deductions from 7.5% to 10% of AGI; and a .9% Medicare payroll tax on high income earners.[4]

 

Proposed VA Pension Changes

There have been two bills introduced this past year that would make changes to Veterans pension benefits. The house introduced H.R. 2189 and the Senate introduced S. 944. Both bills propose essentially the same changes. The bills, if passed, will affect wartime Veterans and surviving spouses of wartime Veterans who apply for pension benefits in a number of ways.

 

First, the proposed law would impose a penalty against the claimant who disposes of property for less than fair market value if that transfer reduces the amount of the claimant’s estate. There is currently no penalty if a pension applicant gives away assets and then applies for benefits.

 

Second, the bill imposes a 36-month look-back period for transfers made prior to the submission of an application. Under this portion of the law, the VA will review the applicant’s gifts and other transactions over the past 36 months to ensure no penalties described in the prior paragraph should apply.

 

Finally, the bill describes transfers to a trust, annuity or other financial instrument or investment as a transfer of an asset. There are exceptions, but the goal appears to be to discourage some Veterans pension planning strategies that currently exist and, according to bill proponents, are being misused.

 

There are other aspects of the proposed law that would further affect Veterans, and their spouses, applying for these benefits. However, the bottom line for our senior clientele is that new planning strategies may be required to assist them in obtaining these benefits. We will keep you posted on the progress of these bills. For more information about Veterans pension benefits, please contact our office.

 

Conclusion

Several big changes occurred in 2013 that will impact our senior clientele in the coming months and years. While some of the changes will have a positive impact on the senior and Veteran population, others will not. We can help guide your clients to needed legal resources and information. If you have a client, or know of someone who could benefit from our services, please contact us to see how we might be able to help.

 

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.

 

 

 

 

 

[1] US v. Windsor, 570 U.S. 12 (2013)

 

 

[2] The cuts to Medicare Advantage Plans are to be $145 billion over a ten (10) year period.

 

 

[3] This surcharge will be applied to unearned or investment income of singles with an annual income of over $200,000 and of couples with an annual income of over $250,000.

 

 

 

 

 

 

[4] High income earners are defined as taxpayers with over $200,000 in earned income for a single taxpayer and over $250,000 for families.

 

 

 

Greg McIntyre, Elder Law Attorney
Regards,
Greg McIntyre
Elder Law Attorney
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”


www.mcelderlaw.com
Phone: 704-259-7040
Fax: 866-908-1278
PO Box 165
Shelby, NC 28151-0165
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Money Isn’t Everything in Estate Planning

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Money Isn’t Everything in Estate Planning

Remember how Ebenezer Scrooge learned that money isn’t everything in Dicken’s classic The Christmas Carol? The same is true for estate planning. Creating your estate plan is selfless. Think of it as a way to protect and provide for your loved ones after you die; it’s not just about protecting your cold hard cash. With a good estate plan in place, you can help decrease your family’s stress and uncertainty when times are tough. In this fourth segment of The Legal Side of the Holidays, we’re covering the topic of estate planning and how it can be one of the best presents you’ll ever give to your family.

While estate planning may not be traditionally associated with the winter holidays, the end of the year is a good time to reflect on your situation and plan for the future. Estate planning is a good idea for families at all stages, and it’s particularly important at certain milestones like marriage, having kids, and reaching retirement age.  Basic estate planning documents like a Will, a Power of Attorney, and a Living Will allow you to clearly set out your wishes.  For families with children, appointing a guardian in case something happens to parents is paramount.  Without appointing guardians in advance, children could become wards of the state-a possibility no parent wants for their children.  A Will is a simple way to appoint a guardian so your kids will be taken care of in this worst case scenario.

Often, customized gifts are more meaningful to the giver and the receiver, and the same is true with estate plans. You can elect to have your assets go to your spouse, children or parents when you die, but this may not be the best option for everyone. You have the power to create a plan that fits your family’s particular dynamic, using any number of documents with customized provisions. For example, you may want to leave everything to your spouse and have him/her provide for your children and relatives, or you may want to set up individual provisions for your children. Keep in mind that a Will may not cover all your assets, so other documents like Trusts may be necessary; also different types of assets are treated differently under the law (like life insurance and retirement plans) so plan accordingly.

The most important tip to keep in mind is to make estate planning a priority for your family this season.  Once an estate plan is in place, you’ll have peace of mind for many holidays to come. To learn more about estate planning, create estate planning documents or set up a free planning session with the firm today.

Regards,
Greg McIntyre
Elder Law Attorney
Greg McIntyre, Elder Law Attorney
McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”
www.mcelderlaw.com
Phone: 704-259-7040
PO Box 165
Shelby, NC 28151-0165
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Elder Counselor Newsletter – The Affordable Care Act: How It Impacts Our Senior Population

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Elder Counselor Newsletter – The Affordable Care Act: How It Impacts Our Senior PopulationSent Monday, December 2, 2013View as plaintext

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The Affordable Care Act:  How It Impacts Our Senior Population

Since its passage in 2010, the Affordable Care Act has been the subject of many heated debates and a cause for some confusion among most of the population.  In order to assist you in serving your senior clientele, this issue of the ElderCounselor TM will attempt to shed some light on how the law affects the elderly.  No doubt, there will continue to be debates over healthcare reform.  Regardless, the law of the land is the ACA.  Its far-reaching changes have already begun and will continue in the years to come.  Here is how it impacts seniors.

 

Individual Mandate

Most of us have heard that under the ACA there is an individual mandate to obtain healthcare insurance. In the event that one fails to do so, a penalty will be imposed at $95 per adult ($47.50 per child) or 1% of the family income, whichever is greater, in 2014.  The penalty rises each year and in 2016 will reach $695 per adult ($347.50 per child) or 2.5% of the family income, whichever is greater.  However, for our senior clientele, this is not as big a threat since those over 65 are eligible for Medicare coverage. As long as they enroll in the coverage available, seniors 65 and over will not face the penalty.

 

Medicare Changes

Although there will be payment cuts to Medicare, there are key benefits that are absolutely protected under the ACA. Medicare Part A (hospitals, hospice care and some home health services) and Medicare Part B (medical insurance) are protected and may not be cut. The changes under the ACA, according to the National Council on Aging, give seniors even more Medicare benefits.[1]

 

Changes to Prescription Drug Coverage

The new healthcare law decreases the expenditure on prescription drugs for Medicare recipients. Prior to the law being enacted, Medicare recipients were subject to what has become commonly known as the “Donut Hole.” Simply put, the Medicare law previously required recipients to reach a $310 deductible prior to Medicare kicking in to assist. At that point, enrollees starting paying 25% of the drug cost until they reached a total expenditure of $2800. The drug expense from $2800 to $4550 was then paid 100% by the enrollee. Once drug expenses reached $4550 Medicare would kick in again and the enrollee would pay only a small percentage of the prescription at that point. The Affordable Care Act has enacted a provision that requires Medicare to pick up more of the tab and will close the “donut hole” by the year 2020. Eventually, Medicare recipients will pay 25% of all prescription drugs across the board. This is good news for seniors since the number of prescription drugs taken typically increases with age.

 

Preventive Care Expanded

Another benefit to seniors under the Affordable Care Act is an increase in preventive care coverage. The ACA requires that Medicare cover preventive care procedures and screenings in an effort to reduce possible necessary future treatment. Prior to the ACA, Medicare did not cover preventive services.  Such services include flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases. In addition, seniors are allowed an annual wellness visit. Previously, these services, whether recommended or not, were paid out of the patient’s own pocket. No doubt the senior population sees this change as a benefit.

 

Changes to Medicare Advantage Plans

When a senior enrolls in Medicare, he or she may choose the traditional Medicare coverage plan or may seek what is called a Medicare Advantage Plan. The Medicare Advantage Plans have their own terms of coverage. They usually cover services not traditionally covered by Medicare such as dental or vision, but may, at the same time, require co-pays or cost-sharing fees for services covered at no out-of-pocket expense under traditional Medicare.

 

The ACA prohibits Medicare Advantage Plans from charging higher cost-sharing fees for seniors receiving chemotherapy and dialysis. In addition, it limits the amount of expenditures of other than medical services for enrollees. In other words, the Medicare Advantage Plans are now limited as to the amount they may spend on administrative, marketing and other non-medical expenses. While certain additional covered services under these plans may be eliminated, certain required benefits are prohibited from being cut. Presently, 1 in 4 seniors is enrolled in a Medicare Advantage Plan.

 

The new healthcare law reduces payments to Medicare Advantage Plans by $145 billion over 10 years. Because of these cuts to the Medicare Advantage Plans, the future as to these plans is uncertain. As to whether this is a benefit to the senior depends on your point of view. At any rate, it changes the options currently available to seniors under Medicare Advantage Plans.

 

Non-Medicare Changes

In addition to Medicare changes that certainly affect seniors, there are other changes written into the law that should be noted as well. Most of these would be considered beneficial to seniors.

 

No pre-existing and conditions clauses

All health insurance carriers are prohibited from including pre-existing conditions clauses in their plans. This means that health cannot be a factor as when applying for health care coverage. Furthermore, insurance companies are prohibited from charging individuals varying amounts for coverage based on their health, sex, age or other commonly-considered factors. This appears to be good news for the ill, females and the elderly, which are the groups of people who traditionally have paid more for their coverage. Now the cost will be evenly distributed to all.

 

In addition to those factors that may not be taken into consideration upon applying for coverage, there is also the protection of consumers once they are enrolled in the plan. The healthcare law says that once enrolled in a plan, the insurance company may not dis-enroll a person for becoming ill.

 

Grants as Incentives to Hospitals

The ACA incentivizes hospitals to take extra care of seniors by providing grants to them for working with seniors who are at high risk for frequent hospital readmissions.

 

The Elder Justice Act

The Elder Justice Act is aimed at protecting seniors from crimes and abuse including physical and mental abuse and financial exploitation. This was enacted under the ACA.

 

Nursing Home Care Changes

There are several provisions under the ACA that concern nursing homes. For example, the ACA requires the Center for Medicare and Medicaid Services to provide a comprehensive website where consumers may find information regarding local nursing homes, including inspection and complaint reports.[2] From this, the consumer may find the number of violations and complaints a specific nursing home has received. In addition, the consumer will be able to find information about the nursing home such as the owner of the nursing home, how much the nursing home spends on resident care compared to administrative costs, the number of hours of nursing care received by residents and staff turnover rates.

 

In addition to being able to evaluate a nursing home more completely prior to choosing one, the law has made changes meant to make it easier to file complaints about the quality of care within the nursing home. It also prohibits retaliation for filing such a complaint. [3]

 

Further, in the event a nursing home decides to close its doors, the ACA imposes new, expanded notice requirements for its residences. Not only must the nursing home provide notice of a closure far enough in advance for its residence to relocate, but it must ensure that all residents have been successfully relocated prior to actual closure. [4]

 

Finally, the ACA provides all states with the option to enroll in federal grants to pay for criminal background checks on more staff working at the nursing home. This will ensure that not only are nurses and certified nursing assistants background checked, but that any staff coming into contact with patients may be subject to such a safety procedure as well. Again, this is an optional program left to the discrepancy of each state.

 

Community Based Long Term Services and Supports

The ACA aims to strengthen the emphasis on home and community-based care by giving states several options to expand such programs for Medicaid enrollees.

 

There are three voluntary provisions for the expansion of home and community-based services (HCBS) under Medicaid. First, a state may choose to offer a community first choice option to provide attendant care services and supports. Second, a state may amend its state plan to provide an optional HCBS benefit. And, finally, states may rebalance spending on long term services and supports to increase the proportion that is community-based. The first and third provisions offer states enhanced federal matching rates as an incentive. Although the new provisions are valuable, the law does not set minimum standards for access to HCBS, and the new financial incentives are limited especially for the many states facing serious budget problems. Wide variations in access to HCBS can be expected to continue, while HCBS will continue to compete for funding with mandated institutional services. [5]

 

How is the ACA Funded by Seniors

The benefits received under the ACA must be funded. Although too lengthy to detail in this writing, we will outline how our seniors will bear part of the burden of funding the law.

 

As already mentioned, there will be some cuts to the Medicare Advantage Plans that will support the funding of the ACA. This is in the form of $145 billion over a ten (10) year period. Those seniors enrolled in such plans will no doubt undergo adjustments as the changes are implemented.

 

In addition, the ACA will be funded with a surcharge tax of 3.8% to unearned or investment income of singles with an annual income over $200,000 and couples with an annual income over $250,000. Therefore, seniors who fall within this income bracket will be subject to the tax.

 

Another impact on seniors is the increase in the floor for medical expense deductions from 7.5% to 10% of Adjusted Gross Income. This change will impact taxes paid for 2013.

 

Finally, working seniors may be subject to the additional 0.9% Medicare payroll tax on high income earners (defined as taxpayers with over $200,000 in earned income, $250,000 for families). This additional tax applies to the excess over the stated limits. This change takes place in 2013.

 

Conclusion

Clearly there are many changes made by the Affordable Care Act that will affect seniors and their loved ones. It is important to have a general understanding of what seniors are facing in terms of their health care coverage. With seniors facing so many changes during a susceptible time in their lives, it is crucial that they be directed to resources that can assist them to make educated decisions about their health, their finances and their care options. Our firm is dedicated to helping seniors and their loved ones work through these issues and implement sound legal planning to address them. If we can help in any way, please don’t hesitate to contact our office.

 

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.

 

 

[1] http://www.ncoa.org/assets/files/pdf/130812-FAQs.pdf

 

 

 

[2]http://www.canhr.org/newsroom/newdev_archive/2013/ACA%20Nursing%20Home%20Report.pdf

 

 

[3] Id.

 

 

[4] http://www.healthindustrywashingtonwatch.com/2013/03/articles/regulatory-developments/hhs-developments/other-cms-developments/cms-finalizes-aca-nursing-facility-closure-notification-rules/

 

 

[5] http://www.ncbi.nlm.nih.gov/pubmed/22497357

 

 

 

Greg McIntyre, Elder Law Attorney
Regards,
Greg McIntyre
Elder Law Attorney
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”


www.mcelderlaw.com
Phone: 704-259-7040
Fax: 866-908-1278
PO Box 165
Shelby, NC 28151-0165
Get Our Mobile App
Listen to Elder Law Radio
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George Washington’s Will

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George Washington’s Will
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Being this is the week of Thanksgiving, , I thought I would tie something in with the founding of our nation. I did a little research and came across the Will of George Washington who also happens to be the first President who celebrated Thanksgiving. He wrote his will entirely himself and it is very detailed. It is a very interesting read from a historical perspective if not from an estate planning perspective. Here are two clauses you might enjoy reading:Opening Paragraph: “In the name of God amen I am George Washington of Mount Vernon, a citizen of the United States, and lately President of the same, do make ordain and declare this instrument, which is written with my own hand and every page thereof subscribed with my name, to be my last Will and Testament, revoking all others.”Arbitration Clause: “I hope and trust that no disputes will arise . . .  but if, contrary to expectation, the case should be otherwise . . . my will and direction expressly is, that all disputes (if unhappily any should arise) shall be decided by three impartial and intelligent men, known for the probity and good understanding; two to be chosen by the disputants–each having the choice of one–and the third by those two. Which three men thus chosen, shall, unfettered by law, or legal constructions, declare their sense of the Testator’s intention; and such decision is, to all intents and purposes to be as binding on the parties as if it had been given in the Supreme Court of the United States.”

While George may have gotten by with planning his own estate, the laws have taken many a twist and turn since then.  When engaging in any sort of estate planning to preserve the legacy for those for which you are thankful, consider giving us a call.

Greg McIntyre, Elder Law Attorney
Regards,
Greg McIntyre
Elder Law Attorney
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”


www.mcelderlaw.com
Phone: 704-259-7040
Fax: 866-908-1278
PO Box 165
Shelby, NC 28151-0165
Get Our Mobile App
Listen to Elder Law Radio
Follow:Follow Me On FacebookFollow Me On Twitter
Share: Facebook Twitter Google+ LinkedIn StumbleUpon

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