Long-Term Care Insurer Cannot Be Sued for Elder Financial Abuse

Long-term care insurance policyholders suing Bankers Life and Casualty Company were dealt a blow by the Oregon Supreme Court when it ruled that the state's elder financial abuse statute does not apply to their case.

Residents of Oregon who bought long-term care insurance policies from Bankers Life and Casualty Company sued the insurer five years ago in federal court. The policyholders claimed that the company violated Oregon's elder financial abuse law by purposely delaying and denying insurance claims. The policyholders alleged that, among other things, the company didn't answer phone calls, lost documents, wrongly denied claims, and paid less than policyholders were entitled to.

The lead plaintiff, 87-year-old Lorraine Bates, moved into an adult foster home in 2009 but Bankers refused to pay her claim, saying the facility didn't meet its policy requirements. Another plaintiff, Eileen Burk, purchased a long-term health-care policy from Bankers.  After she moved into an assisted living facility, her son had trouble filing a claim with the insurance company because the company refused to assist him.

After the federal district court dismissed the lawsuit, the policyholders appealed to the U.S. Court of Appeals for the Ninth Circuit.  Because the legal question centered on the state’s elder financial abuse law, the appeals court asked the Oregon Supreme Court to determine whether the policyholders could sue the insurer under state law for wrongful withholding of money. The financial abuse law prohibits an entity or person that is holding or controlling an elderly person's money from withholding that money if the money was acquired from the elderly person. The policyholders argued that the insurance company acquired money in the form of premiums from the insurance company and then refused to return it in the form of benefits.

The Oregon Supreme Court determined that the elder financial abuse statute does not apply to an insurance company that delayed the processing of claims and refused to pay benefits. The court rules that the law applies only when one person or entity holds the money that still “belongs to” the elderly person. According to the court, the money the policyholders paid to Bankers became Bankers' money and no longer belonged to the policyholders.

To read the Oregon court’s decision, go here: http://www.publications.ojd.state.or.us/docs/S064742.pdf.

Report Finds Lack of Government Oversight of Assisted Living Facilities

The government is spending billions to fund assisted living services through Medicaid, but government oversight and regulation of assisted living facilities is lacking, according to a new government report.

Medicaid funds long-term care services for low-income individuals. It is primarily used for nursing home care, but 48 states have opted to give assisted living residents the ability to receive Medicaid benefits, mostly through “waiver” programs that promote home health care. More than 330,000 people in assisted living are receiving more than $10 billion in Medicaid benefits to pay for those services. Because the number of individuals receiving long-term care services from Medicaid in assisted living facilities is only expected to grow, the Government Accountability Office (GAO) surveyed state Medicaid agencies and interviewed officials for a report on federal oversight of these facilities.

The GAO found that there are both gaps in state reporting of cases of harm to assisted living residents — such as abuse, neglect and exploitation — and a lack of guidance from the federal government on what needs to be reported. States are required to monitor “critical” incidents that may harm a beneficiary’s health or welfare, but they have leeway in determining what they consider a critical incident. While all the states considered physical assault, emotional abuse, and sexual assault to be critical incidents, three states don’t monitor unexpected or unexplained deaths and seven states don’t monitor the threat of suicide. In addition, more than half of the 48 states couldn't tell the GAO the number or nature of critical incidents at assisted living facilities.

“Medicaid beneficiaries receiving assisted living services include older adults and individuals with physical, developmental, or intellectual disabilities, some of whom can be particularly vulnerable to abuse, neglect, and exploitation,” the report notes.

The GAO report recommends that the federal government clarify state requirements for reporting program deficiencies and require annual reporting of critical incidents. According to the report, states need clear guidance on what incidents should be reported and the government needs to ensure that the states provide that information on time.

To read the GAO report, click here.

To read a New York Times article about the report, click here.

 

 

A Guidebook to Planning for Old Age

Joy Loverde. Who Will Take Care of Me When I’m Old? Plan Now to Safeguard Your Health and Happiness in Old Age. New York, NY: Da Capo Press, 2017. 313 pages. Click here to order book via IndieBound.org

Millions of Americans are facing old age essentially alone.  One in three baby boomers is single or no longer part of a couple due to divorce or death.  Others may be in a relationship where chronic illness has struck both partners simultaneously. Children may live too far away or lack the resources to offer a parent meaningful help. 

But there is no reason why circumstances like these should bar anyone from a quality old age.  It just takes planning, which is where this empowering book comes in. Full of helpful checklists and worksheets, Who Will Take Care of Me When I’m Old? is an essential guide to preparing for and navigating the inevitable losses that aging entails – the loss of functioning, the loss of loved ones and friends, and the loss of income.

Joy Loverde, a consultant and speaker on aging issues and the author of The Complete Eldercare Planner, has written a self-help book that offers both emotional and practical advice.  The first chapters address overcoming the psychological barriers to planning.  After all, the prospect of growing old and needing care is something most people would prefer not to think about, much less plan for.  One early section suggests ways to avoid self-sabotaging thoughts.  Other section headings include “Lessen the Grip of Guilt” and “Motivate Yourself.”

The book then turns to the planning work at hand.  An early chapter deals with how to stay afloat financially.  Near the top of the list are getting one’s legal affairs in order, including consulting with an elder law attorney.  Loverde suggests ways to create an income stream in retirement and lists scores of job possibilities.  She even has recommendations for lowering grocery bills. 

Succeeding chapters present ideas and resources for successfully aging in place alone, exploring housing options both in the U.S. and abroad, coping with widowhood, “foraging for a family,” staying connected with those you know and making new friends, and evaluating medical providers.  One chapter is devoted to considerations in adopting a pet.

The final chapters deal with strategies for coping when old age becomes seriously challenging.  Loverde covers “the game changer” of chronic illness, including how to effectively advocate for yourself or find a professional to advocate for you.   A chapter titled “‘Just Shoot Me’ Is Not a Plan” maps strategies for ensuring quality care at the end of life.  There is even a list of resources for those considering “suicide tourism.”

Throughout the book, Loverde provides names of helpful organizations, and one fun feature is that each chapter ends with one recommended book, YouTube video, movie, song and TED Talk on that chapter’s topic.  Near the end Loverde includes a multi-page goldmine of useful websites (ElderLawAnswers among them).

This is not the kind of book anyone looks forward to reading, but it is a book that is essential reading for anyone who wants to start laying the groundwork now for the best possible old age. 

To read more about Who Will Take Care of Me When I’m Old?, click here.

 

 

 

 

Estate Planning and Retirement Considerations for Late-in-Life Parents

Older parents are becoming more common, driven in part by changing cultural mores and advances in infertility treatment. Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at age 50. But later-in-life parents have some special estate planning and retirement considerations.

The first consideration is to make sure you have an estate plan and that the estate plan is up to date. One of the most important functions of an estate plan is to name a guardian for your children in your will, and this goes double for a parent having children late in life. If you don't name someone to act as guardian, the court will choose the guardian. Because the court doesn't know your kids like you do, the person they choose may not be ideal.

In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is the product of a second marriage, a trust may be particularly important. A trust can give your spouse rights, but allow someone else — the trustee — the power to manage the property and protect it for the next generation. If you have older children, a trust could, for example, provide for a younger child's college education and then divide the remaining amount among all the children.

Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.

When to take Social Security is another consideration. Children can receive benefits on a parent’s work record if the parent is receiving benefits too. To be eligible, the child must be under age 18, under age 19 but still in elementary school or high school, or over age 18 but have become mentally or physically disabled prior to age 22. Children generally receive an amount equal to one-half of the parent's primary insurance amount (PIA), up to a “family maximum” benefit. You will need to calculate whether the child's benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.

To make a plan for late-in-life parenthood, contact your attorney.

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.