Home Health Care Patients With Chronic Conditions Are Having Trouble Getting Medicare

Medicare is supposed to provide up to 35 hours a week of home care to those who qualify, but many Medicare patients with chronic conditions are being wrongly denied such care, according to Kaiser Health News. For a variety of reasons, many home health care agencies are simply telling patients they are not covered.

Medicare is mandated to cover home health benefits indefinitely. In addition, Medicare is required to cover skilled nursing and home care even if a patient has a chronic condition. Unfortunately, many home health providers are not aware of the law and tell home health care patients that they must show improvement in order to receive benefits.

According to a Kaiser Health News article, confusion over whether or not improvement is required (it is not) is one part of the problem. Another issue is that home health care workers are afraid they will not get paid if they take on long-term care patients. In an effort to crack down on fraud, Medicare is more likely to audit providers who provide long-term care. This encourages providers to favor patients who need short-term care.

In addition, Medicare’s Home Health Compare ratings website may be having a negative effect on home health care agencies' willingness to provide for long-term care patients. One measure of care qualification is whether a patient is improving. Because patients with chronic conditions don't necessarily improve, they could lower an agency's rating. Also, under a rule that just went into effect, home health care agencies cannot dismiss a patient without a doctor's note. This may make agencies even more reluctant to take on long-term care patients.

If you are wrongly denied Medicare home health benefits, you can appeal, although you may have to be persistent to get coverage. The Center for Medicare Advocacy has a self-help packet for navigating appeals.

 

Costs of Some New Long-Term Care Insurance Policies Going Down in 2018

While long-term care insurance costs are up in general, some policies are going down in 2018, according to the 2018 Long Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance (AALTCI), an industry group.

A married couple who are both 60 years old would pay an average of $3,490 a year combined for a total of $333,000 of long-term care insurance coverage when they reach age 85. This is down from 2017, when the association reported that a couple could expect to pay $3,790 for the same level of coverage. Jesse Slome, the AALTCI’s director, cites two reasons for the change: “There are fewer insurers offering traditional long-term care insurance policies currently and some of the higher priced insurers sell so few policies that we excluded them from this year’s study as they really were not representative of the market conditions.”

Rates for single men and women have gone up in 2018, however. A single 55-year-old man can expect to pay an average of $1,870 a year for $164,000 worth of coverage, up from $1,665 in 2017. The same policy for a single woman averages $2,965 a year, up from $2,600 in 2017. Overall, women still pay more than men.

One thing that remains the same year to year is the importance of shopping around. The survey shows that costs for virtually identical policy coverage vary significantly from one insurer to the next.

This year’s index compares policies sold in Illinois and was conducted in January 2018.

For the association's 2018 index showing average prices for common scenarios, go here: http://www.aaltci.org/news/wp-content/uploads/2018/01/2018-Price-Index-LTC.pdf

 

What Happens When a Nursing Home Closes?

A nursing home closure can be traumatic for residents who are forced to move. While there may not be much that can be done to prevent a closure, residents do have some rights.

Moving into a nursing home can be a stressful experience on its own. If that nursing home closes, residents can experience symptoms that include depression, agitation, and withdrawn behavior, according to The Consumer Voice, a long-term care consumer advocacy group. Nursing homes may close voluntarily because the owners decide to close up shop or involuntarily if the state or federal government shutters the facility for care or safety issues.

When a nursing home is closing, it must provide notice to the state and any residents at least 60 days before the closure. The notice must include the following:

  • The date of the closure and the reason for closing
  • Information on the plan to relocate the resident, including assurances that the nursing home will transfer residents to the most appropriate facility in terms of quality, services, and location, taking into consideration the needs, choice, and best interests of each resident
  • Information about the resident's appeal rights
  • The name and address of the state's long-term care ombudsman

In addition, the nursing home must provide information to the receiving facility, including the following:

  • Contact information for the doctor responsible for the resident
  • The resident's representative's information
  • Information about any advance directives
  • Any special instructions or precautions for ongoing care and any care plan goals

Once a nursing home announces it is closing, it cannot admit any new patients. The nursing home must also provide orientation to residents to ensure a safe and orderly transfer.

For more information from The Consumer Voice on what is required when a nursing home closes, click here.  For the results of a study on reducing the negative impact of nursing home closures, click here.

 

How Will the New Tax Law Affect You?

While most of the new tax law – the Tax Cuts and Jobs Act – has to do with reducing the corporate tax rate from 35 percent to 21 percent, some provisions relate to individual taxpayers. Before we get into the details, be aware that almost everything listed below sunsets after 2025, with the tax structure reverting to its current form in 2026 unless Congress acts between now and then. The corporate tax rate cut, however, does not sunset. Here are the highlights for our readership:

  • Estate Taxes.If you weren't worried about federal estate taxes before, you really don't need to worry now. With the federal exemption already scheduled to increase in 2018 to $5.6 million for individuals and $11.2 million for couples, the Republicans in Congress and President Trump have now nearly doubled this to $11.18 million (estimate) and $22.36 million (estimate), respectively, indexed for inflation. The tax rate for those few estates subject to taxation remains at 40 percent.

  • Tax Rates. These are slightly reduced and the brackets adjusted, with the top bracket dropping from 39.6 percent to 37 percent.

  • Standard Deduction and Personal Exemption. The standard deduction increases to $12,000 for individuals, $18,000 for heads of household and $24,000 for joint filers, all adjusted for inflation. Personal exemptions largely disappear.

  • State and Local Tax Deduction. Now referred to as “SALT,” this is now subject to a cap of $10,000,

  • Home Mortgage Interest Deduction. The limit on deducting interest on up to $1 million of mortgage interest stays in effect for existing mortgages. New mortgages taken on after December 15, 2017, are subject to a $750,000 limit. The deduction for interest on home equity loans disappears.

  • Medical Expense Deduction. After much outcry in response to the House version of the tax bill, which would have eliminated the medical expense deduction, it survived. And, in fact, it was enhanced by permitting medical expenses in excess of 7.5 percent of adjusted gross income to be deducted in 2017 and 2018, after which it reverts to the 10 percent under existing law.

  • 529 Plans. These accounts permitting tax-free accumulation of capital gains and dividends to pay college expenses can now be used for private school tuition of up to $10,000 a year.

Depending on your income and the amount of state and local taxes you have been paying, you may get a small tax cut. The bigger question is how the projected reduction in tax revenues of $1.5 trillion over the next 10 years will be paid for. This amount may simply be added to the deficit, or it may be used as a justification for “entitlement reform,” i.e., cutting Medicare, Medicaid or Social Security. It may also squeeze out other spending, such as investment in infrastructure.

AARP Sues California Nursing Home Over Resident Dumping

The legal wing of the AARP is suing a California nursing home that refused to readmit a resident whom the nursing home had sent to the hospital. The nursing home's actions are part of growing trend of resident dumping, according to the AARP.

Gloria Single and her husband were both residents of the same nursing home. When Ms. Single, who has Alzheimer's disease, became aggressive, the nursing home sent her to the hospital for a psychological evaluation. The hospital immediately determined that nothing was wrong with Ms. Single, but the nursing home refused to readmit her.

The law treats refusing to readmit a patient after a hospital stay as an involuntary transfer that a resident may appeal. Therefore, Ms. Single asked for a hearing with the California Department of Health Care Services (DHCS), the state agency in charge of monitoring nursing homes. The DHCS ruled in her favor and ordered the nursing home to readmit her, but the nursing home refused to act on the order. As a result, Ms. Single was stuck in the hospital for three months until she was eventually placed in a different facility where she remains separated from her husband.

According to the lawsuit filed by the AARP, the nursing home felt free to disobey the DHCS's order because the state refuses to enforce readmission orders. NPR found that the state fined only 7 percent of nursing homes that were found to have illegally evicted residents and that if the nursing home was fined, the fines were relatively low. The AARP is seeking an injunction to require the nursing home to readmit Ms. Single and to stop dumping residents.

“The problem is that no state agency will take responsibility for enforcing these orders,” said Kelly Bagby of AARP Foundation Litigation in a press release about the lawsuit. “Resident dumping is a growing trend and serious danger to seniors in California. Until the State does something, our only recourse is going to be filing suits like this. Three years ago the federal government told California that it had to enforce these orders, and it has done nothing. The time has come for the State to protect its elderly citizens and stop this abusive practice.”

Two Popular Medigap Plans Are Ending. Should You Enroll While You Can?

If you will soon turn 65 and be applying for Medicare, you should carefully consider which Medigap policy to enroll in because two of the most popular plans will be ending soon. In 2020, Medicare beneficiaries will no longer be able to enroll in Plans F and C.

Between copayments, deductibles, and coverage exclusions, Medicare does not cover all medical expenses. Offered by private insurers, Medigap (or “supplemental”) plans are designed to supplement and fill in the “gaps” in Medicare coverage. There are 10 Medigap plans currently being sold, identified by letters. Each plan package offers a different combination of benefits, allowing purchasers to choose the combination that is right for them.

Plans F and C are popular Medigap plans in part because they both offer coverage of the Medicare Part B deductible. Enrollees in Plans F and C do not have to pay the deductible. Plan F, the most comprehensive Medigap plan currently available, also pays for all doctor, test, and hospital fees. Plan C is similar, but it does not cover the excess fees that doctors charge over Medicare’s limits. According to the Kaiser Family Foundation, 53 percent of Medigap enrollees have either plan F or plan C.

As a result of legislation passed by Congress in 2015starting in 2020 Medigap insurers will no longer be allowed to offer plans that cover the Medicare Part B deductible – in other words, Plans F and C. (“Critics argue that Plan F makes it too easy for people to go to the doctor without thinking twice about the cost,” observed the Chicago Tribune.) However, people currently enrolled in Plans F and C, as well as those who buy policies before 2020, may keep their F and C coverage for the rest of their lives.

Although his appears to offer an incentive to “lock in” these two comprehensive plans while you still can, before enrolling in Plans F or C new Medicare beneficiaries should consider the risk. While the plans are comprehensive, without new enrollees after 2020 experts warn that premiums may go up. As the enrollees in Plans F and C age and get sicker, the companies offering Plans F and C may experience more costs that won't be offset by new younger, healthier enrollees. An alternative is Plan G, another comprehensive plan that does not cover the Part B deductible. But some experts believe that premiums will rise for this plan, too, as more beneficiaries in poor health enroll in it.

The choice of Medigap plan is important because once you choose one, it is difficult to switch. Medigap plans cannot consider pre-existing conditions when you enroll during the open enrollment period, which is a six-month period that begins on the first day of the month in which you are 65 or older and enrolled in Medicare Part B. But if you don't enroll during the open enrollment period, there is no guarantee that the insurance company won't charge you more for a pre-existing condition.

Before choosing a Medigap plan, you should weigh your need for comprehensive coverage with the risk of higher premiums. With the imminent phase-out of Plans F and C, it’s a tough choice and there are no easy answers. For more information from the Chicago Tribune about what the elimination of plans F and C means for consumers, click here.

Medicare Launches Hospice Compare Website

Patients looking for hospice care can now get help from Medicare’s website. The agency’s new Hospice Compare site allows patients to evaluate hospice providers according to several criteria. The site is a good start, but there is room for improvement, experts say.

Medicare's comprehensive hospice benefit covers any care that is reasonable and necessary for easing the course of a terminal illness. Medicare launched the hospice compare website to improve transparency and help families find the right hospice provider.

The website provides information on how hospices deal with treatment preferences, address a patient's beliefs and values, screen and assess for pain and shortness of breath, treat shortness of breath, and give a bowel regimen for patients treated with opioids. Patients can compare up to three hospices at a time.

Next year, the site plans to add more information, including allowing families to rate hospices as well as adding data on the number of staff visits a patient received in the final week before death.

Kaiser Health News reports that while the website is helpful to families looking for information about hospice care, experts believe it is of limited use right now. According to Dr. Joanne Lynn of the Altarum Institute, a nonprofit health systems research and consulting organization, patients looking for hospice care need different information, including the hospice staff's average caseload, the percentage of patients discharged alive, and the share of the hospice's resources devoted to at-home care versus nursing home care.

In addition to the uncertainty of the ratings, the website also has been experiencing a problem with its search function. When patients search for a provider by location, they may get agencies that do not serve their zip code. While the problem is being fixed, patients should call to confirm that hospice providers service their area.   

A robust hospice rating system is badly needed, according to a Kaiser Health News investigation. A review of 20,000 government inspection records found that hospice providers often missed visits and neglected patients who were dying at home. Families or caregivers have filed more than 3,200 complaints with state officials in the past five years.

To begin comparing hospice providers, click here

You Can Give Away More Tax Free in 2018

After staying the same for five years, the amount you can give away to any one individual in a particular year without reporting the gift will increase in 2018. 

The annual gift tax exclusion for 2018 is rising from $14,000 to $15,000. This means that any person who gives away $15,000 or less to any one individual (anyone other than their spouse) does not have to report the gift or gifts to the IRS.

If you give away more than $15,000, you do not necessary have to pay taxes, but you will have to file a gift tax return (Form 709). The IRS allows individuals to give away a total of $5.6 million and couples $11.2 million (in 2018) during their lifetimes before a gift tax is owed. This $5.6 million exclusion means that even if you have to file a gift tax return (Form 709) because you gave away more than $15,000 to any one person in a particular year, you will owe taxes only if you have given away more than a total of $5.6 million (or $11.2 million) in the past. As a result, the filing of a gift tax return is merely a formality for nearly everyone.

The gift tax also applies to property other than money, such as stock. If you give away property that is worth more than $15,000 you have to report that on your gift return.

Note that gifts to a spouse are usually not subject to any federal gift taxes as long as the spouse is a U.S. citizen. If your spouse is not a U.S. citizen, you can give only $152,000 without reporting the gift (in 2018). Anything over that amount has to be reported on the gift tax return. Also, you do not need to report tax deductible gifts made to charities on a gift tax return unless you retain some interest in the gifted property.

With the increase in the gift tax, the amount you can give to an ABLE account is also increasing to $15,000. ABLE accounts allow people with disabilities and their families to save up to $100,000 in accounts for disability related expenses without jeopardizing their eligibility for Medicaid, Supplemental Security Income (SSI), and other government benefits.

 

 

Medicare's Part B Premium Will Be Unchanged in 2018, But Many Will Pay More. Got That?

The announcement of the 2018 Medicare premium is good news for some beneficiaries and bad news for many others.  The good news is that the standard monthly Part B premium, which about 30 percent of Medicare beneficiaries pay, will again be $134 next year, unchanged from 2017. 

But most Medicare recipients pay a lower premium because they have been protected from any increase in premiums when Social Security benefits remain stagnant, as has been the case for the last several years.  This year, that premium has averaged $109 a month, but due to the 2 percent Social Security increase for 2018, the premiums of these formerly protected beneficiaries could rise significantly.

An estimated 42 percent of these beneficiaries will pay the full monthly premium of $134 due to the increase in their Social Security benefit. The rest will pay less than $134 because the increase in their Social Security benefit will not be large enough to cover the full Part B premium increase.  The average premium for these beneficiaries will jump from $109 to $130 a month, according to the Centers for Medicare and Medicaid Services (CMS).

So, in other words, Medicare beneficiaries who have been protected from a premium increase in past years will see their premiums go up, while those who have been unprotected in recent years will pay the same.  Beneficiaries who have been unprotected from premium rises in the past few years include those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who receive both Medicare and Medicaid benefits. Philip Moeller, author of Get What’s Yours for Medicare, offers a handy way to figure out what your Part B change will be: “Subtract your current Part B premium from $134. Then multiply your current monthly Social Security benefit by 2 percent. Your 2018 Part B premium change should be the smaller of these two numbers.”

The Part B deductible will remain at $183 in 2018, although the Part A deductible will go up by $24, to $1,340.  For beneficiaries receiving skilled care in a nursing home, Medicare's coinsurance for days 21-100 will inch up from $164.50 to $167.50. Medicare coverage ends after day 100. 

Here are all the new Medicare payment figures:

  • Part B premium for protected beneficiaries: Average of $130/month
  • Part B premium for those not protected: $134 (unchanged)
  • Part B deductible: $183 (unchanged)
  • Part A deductible: $1,340 (was $1,316)
  • Co-payment for hospital stay days 61-90: $335/day (was $329)
  • Co-payment for hospital stay days 91 and beyond: $670/day (was $658)
  • Skilled nursing facility co-payment, days 21-100: $167.50/day (was $164)

So-called “Medigap” policies can cover some of these costs.

Premiums for higher-income beneficiaries will remain the same in 2018 as they were in 2017:

  • Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $187.50 (unchanged).
  • Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $267.90 (unchanged).
  • Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $348.30 (unchanged).
  • Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $428.60 (unchanged).

Rates differ for beneficiaries who are married but file a separate tax return from their spouse.  Those with incomes greater than $85,000 will pay a monthly premium of $428.60.

The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premiums. So the income reported on a beneficiary's 2016 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2018. Income is calculated by taking a beneficiary's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary's MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium.  You can also request to reverse a surcharge if your income changes.

Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. CMS estimates that the Medicare Advantage average monthly premium will decrease by $1.91 (about 6 percent) in 2018, from an average of $31.91 in 2017 to $30 in 2018.

For Medicare’s press release announcing the new premium and deductible amounts, click here.

For Medicare's “Medicare costs at a glance,” click here.

 

Three Reasons Why Giving Your House to Your Children Isn't the Best Way to Protect It From Medicaid

You may be afraid of losing your home if you have to enter a nursing home and apply for Medicaid. While this fear is well-founded, transferring the home to your children is usually not the best way to protect it.

Although you generally do not have to sell your home in order to qualify for Medicaid coverage of nursing home care, the state could file a claim against the house after you die. If you get help from Medicaid to pay for the nursing home, the state must attempt to recoup from your estate whatever benefits it paid for your care. This is called “estate recovery.” If you want to protect your home from this recovery, you may be tempted to give it to your children. Here are three reasons not to:

1. Medicaid ineligibility. Transferring your house to your children (or someone else) may make you ineligible for Medicaid for a period of time. The state Medicaid agency looks at any transfers made within five years of the Medicaid application. If you made a transfer for less than market value within that time period, the state will impose a penalty period during which you will not be eligible for benefits. Depending on the house’s value, the period of Medicaid ineligibility could stretch on for years, and it would not start until the Medicaid applicant is almost completely out of money.

There are circumstances under which you can transfer a home without penalty, however, so consult a qualified elder law attorney before making any transfers. You may freely transfer your home to the following individuals without incurring a transfer penalty:

  • Your spouse
  • A child who is under age 21 or who is blind or disabled
  • Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
  • A sibling who has lived in the home during the year preceding the applicant's institutionalization and who already holds an equity interest in the home
  • A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

2. Loss of control. By transferring your house to your children, you will no longer own the house, which means you will not have control of it. Your children can do what they want with it. In addition, if your children are sued or get divorced, the house will be vulnerable to their creditors.

3. Adverse tax consequences. Inherited property receives a “step up” in basis when you die, which means the basis is the current value of the property. However, when you give property to a child, the tax basis for the property is the same price that you purchased the property for. If your child sells the house after you die, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price. The only way to avoid some or all of the tax is for the child to live in the house for at least two years before selling it. In that case, the child can exclude up to $250,000 ($500,000 for a couple) of capital gains from taxes.

There are other ways to protect a house from Medicaid estate recovery, including putting the home in a trust. To find out the best option in your circumstances, consult with your elder law attorney.