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.  Or contact Kristen Prull Moonan or Amy Stratton.

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.  Or contact Kristen Prull Moonan or Amy Stratton.

A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your “agent” or “attorney-in-fact”) if you become incapacitated. Without a power of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking the court to appoint a guardian or conservator, which is an expensive and time-consuming process.

There are many do-it-yourself power of attorney forms available; however, it is a good idea to have an attorney draft the form for you. There are many issues to consider and one size does not fit all.

The agent’s powers

The power of attorney document sets out the agent’s powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. They may also include the power to consent to medical treatment. Some powers will not be included unless they are specifically mentioned. This includes the power to make gifts and the power to designate beneficiaries of your insurance policies.

The power to make gifts of your money and property is a particularly important power. If you want to ensure your agent has the authority to do Medicaid planning on your behalf in the event you need to enter a nursing home, then the power of attorney must give the agent the power to modify trusts and make gifts. The wording in a power of attorney can be significant, so it is necessary to consult an attorney.

Springing or immediate

The power of attorney can take effect immediately or it can become effective only once you are disabled, called a “springing” power of attorney. While a springing power seems like a good idea, it can cause delays and extra expense because incapacity will need to be determined. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.

Joint agents

While it is possible to name more than one person as your agent, this can lead to confusion. If you do have more than one person named, you need to be clear whether both parties need to act together or whether they can each act independently. It might make more sense and be less confusing to name an alternative agent to act in case the first agent is unable to.

Appointing a guardian

Another use of a power of attorney can be to nominate a guardian in case guardianship proceedings become necessary. Including your preference for a guardian can allow you to have some say over who will be managing your affairs. Usually, the court decides who will be chosen as a guardian, but in most circumstances, the court will abide by your nomination in the durable power of attorney.

Executing the power of attorney

To be valid a power of attorney must be executed properly. Some states may require a signature, others may require the power of attorney to be notarized, and still others may require witnesses. It is important to consult with an estate planning attorney in your state to ensure your power of attorney is executed properly.

Accepting a power of attorney

Even if you do everything exactly right, some banks and other institutions are reluctant to accept a power of attorney. These institutions are afraid of a lawsuit if the power of attorney is no longer valid. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you may want to execute the forms offered by the institutions with which you have accounts. But be careful that you don’t sign a bank’s document that inadvertently restricts a power of attorney’s ability to deal with other assets, and you should check that any documents you sign with a bank match the original power of attorney.

To learn more, contact Kristen Prull Moonan or Amy Stratton.

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

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

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

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

For a New York Times column about a man with private insurance who didn’t realize he needed to sign up for Part B, click here.   Or contact Kristen Prull Moonan or Amy Stratton.

As the end of the year draws near, we wish all of our clients and professional colleagues the most wonderful of holiday seasons. We are thankful for your loyalty and support throughout the year and look forward to working with you in 2019.

Kristen and Amy

Thanks for the invitation to be part of the Launch Business Planning Forum at the Crowne Plaza on Tuesday, November 27th.

It was a pleasure to speak to (close to) 70 real estate agents  at the event spearheaded by Dean deTonnancourt of HomeSmart Professional Real Estate and sponsored in part by DeAngelis & McNamara, P.C.

Highlights of my presentation included the benefits of organizing a business entity, choosing the right type of entity and the best ways to maintain business protection.

Reach out to me if you want to learn more at astratton@mswri.com.

With the aging population becoming increasingly tech savvy, the Social Security Administration (SSA) has moved a lot of services online. From applying for Social Security benefits to replacing a card, the SSA has online tools to help.

To access most of the online services, you need to create a my Social Security account. This account allows you to receive personalized estimates of future benefits based on your real earnings, see your latest statement, and review your earnings history. You can also request a replacement Social Security card, check the status of an application, get direct deposit, or change your address. If you are a representative payee, you can use my Social Security to complete representative payee accounting reports. Even if you don’t get benefits, you can use the account to request a benefit verification letter.

In addition to my Social Security, other online services are available, including the following:

• Apply for retirement, Medicare, and disability benefits
• Apply for Supplemental Security Income in some circumstances
• Appeal a medical decision or a non-medical decision
• Find out what benefits you qualify for
• Estimate future benefits
• Find your full retirement age
• Block electronic access to your Social Security information

For a full run down of the online services available, click here. Or contact Kristen Prull Moonan or Amy Stratton here.

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

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

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

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

If you are considering installing a camera in a loved one’s nursing home room, you should contact your attorney to discuss the legal and practical implications. Reach out to Kristen Prull Moonan or Amy Stratton here.

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

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.

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.

Or contact Kristen Prull Moonan or Amy Stratton here.

You are turning 65 and enrolling in Medicare, but as a healthy senior do you really need to also sign up for Medicare’s supplemental coverage? Not signing up initially can be very costly down the road.

Medicare pays for only about half of all medical costs. To augment Medicare’s coverage, you can purchase a supplemental or “Medigap” insurance policy from a private insurer. There are 10 Medigap plans that each offers a different combination of benefits, allowing purchasers to choose the combination that is right for them. In addition, Medicare offers a federally subsidized prescription drug program, in which private health insurers provide limited insurance coverage of prescription drugs to elderly and disabled Medicare recipients.

Purchasing the supplemental coverage means paying more premiums. If you don’t go to the doctor very often or have any regular prescriptions, you may not want to sign up for the additional coverage. However, if you get sick, what Medicare doesn’t cover can be a lot more costly than the extra premiums. And buying coverage after you get sick can be difficult and expensive.

You cannot be denied a Medigap policy for pre-existing conditions if you apply within six months of enrolling in Medicare Part B. If you don’t buy a policy right away, the plan can use medical underwriting to decide whether to accept your application. The plan will look at your age, gender, and pre-existing conditions and can charge you higher premiums, restrict coverage, or even reject your application.

Beneficiaries who enroll in Medicare Advantage plans can’t also buy a Medigap policy. But if they chose Medicare Advantage as their first form of insurance and later decide to return to original Medicare, they must select a Medigap policy within the first year of their initial Medicare enrollment or risk being shut out of a policy.

Medicare beneficiaries are also subject to significant financial penalties for late enrollment in the Medicare drug benefit (Medicare Part D). For every month you delay enrollment past the Initial Enrollment Period, the Medicare Part D premium will increase at least 1 percent. For example, if the premium is $40 a month, and you delay enrollment for 15 months, your premium penalty would be $6 (1 percent x 15 x $40 = $6), meaning that you would pay $46 a month, not $40, for coverage that year and an extra $6 a month each succeeding year.

There are some exceptions built in to both Medigap and Medicare Part D if you did not enroll right away because you had other coverage. But if you choose not to enroll because you think you won’t need the plan, it is not easy to change your mind later on.

To learn more, contact Kristen Prull Moonan or Amy Stratton here.