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Getting Paid to Take Care of a Sick Family Member

Caring for a sick family member is difficult work, but it doesn’t necessarily have to be unpaid work. There are programs available that allow Medicaid recipients to hire family members as caregivers.

All 50 states have programs that provide pay to family caregivers. The programs vary by state, but are generally available to Medicaid recipients, although there are also some non-Medicaid-related programs.

Medicaid’s program began as “cash and counseling,” but is now often called “self-directed,” “consumer-directed,” or “participant-directed” care. The first step is to apply for Medicaid through a home-based Medicaid program. Medicaid is available only to low-income seniors, and each state has different eligibility requirements. Medicaid application approval can take months, and there also may be a waiting list to receive benefits under the program.

The state Medicaid agency usually conducts an assessment to determine the recipient’s care needs—e.g., how much help the Medicaid recipient needs with activities of daily living such as bathing, dressing, eating, and moving. Once the assessment is complete, the state draws up a budget, and the recipient can use the allotted funds to pay for goods or services related to care, including paying a caregiver. Each state offers different benefits coverage.

Recipients can choose to pay a family member as a caregiver, but states vary on which family members are allowed.

For example, most states prevent caregivers from hiring a spouse, and some states do not allow recipients to hire a caregiver who lives with them. Most programs allow ex-spouses, in-laws, children, and grandchildren to serve as paid caregivers, but states typically require that family caregivers be paid less than the market rate in order to prevent fraud.

In addition to Medicaid programs, some states have non-Medicaid programs that also allow for self-directed care. These programs may have different eligibility requirements than Medicaid and are different in each state. Family caregivers can also be paid using a “caregiver contract,” increasingly used as part of Medicaid planning.

In some states, veterans who need long-term care also have the option to pay family caregivers. In 37 states, veterans who receive the standard medical benefits package from the Veterans Administration and require nursing home-level care may apply for Veteran-Directed Care. The program provides veterans with a flexible budget for at-home services that can be managed by the veteran or the family caregiver. In addition, if a veteran or surviving spouse of a veteran qualifies for Aid & Attendance benefits, they can receive a supplement to their pension to help pay for a caregiver, who can be a family member. All of these programs vary by state.

This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents. She helps you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, which will help you get more financially organized than ever before and help you make the best choices for the people you love. Call us today to schedule a Planning Session. Mention this article and learn how to get this valuable session for free.

Report Ranks States on Nursing Home Quality and Shows Families’ Conflicted Views

A new report that combines nursing home quality data with a survey of family members ranks the best and worst states for care and paints a picture of how Americans view nursing homes.

The website Care.com analyzed Medicare’s nursing home ratings to identify the states with the best and worst overall nursing home quality ratings. Using Medicare’s five-star nursing home rating system, Care.com found that Hawaii nursing homes had the highest overall average ratings (3.93), followed by the District of Columbia (3.89), Florida (3.75), and New Jersey (3.75).  The state with the lowest average rating was Texas (2.68), followed by Oklahoma (2.76), Louisiana (2.80), and Kentucky (2.98).

Care.com also surveyed 978 people who have family members in a nursing home to determine their impressions about nursing homes. The surveyors found that the family members visited their loved ones in a nursing home an average six times a month, and more than half of those surveyed felt that they did not visit enough. Those who thought they visited enough visited an average of nine times a month. In addition, a little over half felt somewhat to extremely guilty about their loved one being in a nursing home, while slightly less than one-quarter (23 percent) did not feel guilty at all.

If the tables were turned, nearly half of the respondents said they would not want their families to send them to a nursing home.

While the survey indicates that the decision to admit a loved one to a nursing home was difficult, a majority (71.3 percent) of respondents felt satisfied with the care their loved ones were receiving. Only 18.1 percent said they were dissatisfied and about 10 percent were neutral. A little over half said that they would like to provide care at home if they could. The most common special request made on behalf of a loved one in a nursing home is for special food. Other common requests include extra attention and environmental accommodations (e.g., room temperature). Read the entire report here.

Are you worried about being able to afford quality long-term care? We can help you incorporate a variety of planning strategies to maximize your quality of life and help protect what you’ve worked so hard for.

This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents. She helps you make informed and empowered decisions about your life and death, for yourself and the people you love. That’s why we offer a Planning Session, to help you get more financially organized than ever and help you make the best choices for the people you love. Call us today to schedule a Planning Session. Mention this article to learn how to get this $500 session for free!

New Year’s Resolution: Tackle that estate plan!

It’s that time of year when many of us are working on our New Year’s resolutions. Whether it’s to eat healthier, get organized or finally clean out the garage, many of our resolutions center around some type of self-improvement. Doesn’t it feel great when you’ve finished that dreaded item on your to do list?

For many folks, estate planning is at the BOTTOM of the to do list. Studies have shown that over 50% of Americans don’t have a Will. Yet 100% of folks would benefit from some type of estate planning!  With an updated, effective estate plan, you can guard against unnecessary heartache, financial hardship and family drama. For example, if your health deteriorates to the point where you’re dying and you can’t communicate your wishes, without any advance medical directives in place, your loved ones have the emotional burden of trying to figure out what medical care you do or don’t want. Moreover, who’s going to be in charge of the decisions? And without an updated Will, can you be sure that your property goes to the right people?

I understand that for many of us, estate planning is uncomfortable, emotional and overwhelming. Who wants to spend time thinking about leaving their loved ones behind? I guide my clients through the process, one step at a time. Let’s tackle this resolution together. Then you can get back to your other resolutions, like cleaning out that garage.

How to Appeal a Medicare Prescription Drug Denial

If your Medicare drug plan denies coverage for a drug you need, you don’t have to simply accept it. There are several steps you can take to fight the decision.

The insurers offering Medicare drug plans choose the medicines — both brand-name and generic — that they will include in a plan’s “formulary,” the roster of drugs the plan covers and will pay for that changes year-to-year. If a drug you need is not in the plan’s formulary or has been dropped from the formulary, the plan can deny coverage. Plans may also charge more for a drug than you think you should have to pay or deny you coverage for a drug in the formulary because it doesn’t believe you need the drug. If any of these things happens, you can appeal the decision.

File An Exception Request

Before you can start the formal appeals process, you need to file an exception request with your plan. The plan should provide instructions on how to request an exception. The plan must respond within 72 hours or 24 hours if your doctor explains that waiting 72 hours would be detrimental to your health.

5 Steps Appeals Process

If your exception is denied, the plan should send you a written denial-of-coverage notice and a five-step appeals process can begin.

  1. The first step in appealing a coverage determination is to go back to the insurer and ask for a redetermination, following the instructions provided by your plan. You should submit a statement from your doctor or prescriber that explains why you need the drug you are requesting, along with any medical records to support your argument. If your doctor informs the plan that you need an expedited decision due to your health, the plan must notify you within 72 hours. For a standard redetermination, the plan must notify you within seven days.
  2. If you disagree with the drug plan’s decision, you have the right to reconsideration by an independent board. To request reconsideration, follow the instructions in the written redetermination notice you receive from the insurer. You have 60 days from the redetermination notice to request reconsideration. An independent review entity (IRE) will review the case and issue a decision either within 72 hours or seven days. If you receive a negative decision, you can keep appealing.
  3. The third level of appeal is to request a hearing with an administrative law judge (ALJ), which allows you to present your case either over the phone or in person. To request a hearing, the amount in controversy must be at least $160 (in 2018). The amount in controversy is calculated by subtracting any amount already covered under Part D, and any deductible, co-payments, and coinsurance amounts applicable to the Part D drug at issue, from the projected value of the drug benefits in dispute. Your request for a hearing must be sent in writing to the Office of Medicare Hearings and Appeals (OMHA). The ALJ is supposed to issue an expedited decision within 10 days or a standard decision within 90 days.
  4. If the ALJ does not rule in your favor, the next step is a review by the Medicare Appeals Council. The appeal form must be filed within 60 days after the ALJ’s decision. You will need a statement explaining why you disagree with the ALJ’s decision. The appeals council will issue an expedited decision in 10 days or a standard decision within 90 days.
  5. The final step is review by a federal district court. To be able to request review, the amount in controversy must be $1,600 (in 2018). Follow the directions in the letter from the appeals council and file the request in writing within 60 calendar days.This article is service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents, she guides her clients so that they can make the best decisions for themselves and their families. Contact Myrna at (813) 514-2946 to schedule your elder law consultation today.

Case Study: Two Brothers Fighting Over Long-Term Care

A recent New Jersey appeals court case shows how important it is for families to come up with a long-term care plan before an emergency strikes. The case involves two brothers who got into a fight over whether to place their mother in a nursing home – a dispute that resulted in one brother filing a restraining order against the other.

Brother vs. Brother

R.G. was the primary caregiver for his parents and their agent under powers of attorney. After R.G.’s mother fell ill, R.G. wanted to place his mother in a nursing home. R.G.’s brother objected to this plan, but R.G. went ahead and had his mother admitted to a nursing home without his brother’s consent. R.G.’s brother sent angry and threatening texts and emails to R.G. as well as emails expressing his desire to find a way to care for their parents in their home. Eventually the men got into a physical altercation in which R.G.’s brother shoved R.G.

R.G. went to court to get a restraining order against his brother under the state’s Prevention of Domestic Violence Act. The trial judge ruled that R.G. had been harassed and assaulted and issued the restraining order. R.G.’s brother appealed, arguing that R.G. did not meet the definition of a victim of domestic violence.

What is Domestic Violence?

In R.G. v. R.G. (N.J. Super. Ct., App. Div., No. A-0945-15T3, March 14, 2017), a New Jersey appeals court reversed the trial court, ruling that R.G.’s brother’s actions did not amount to domestic violence. According to the court, there was insufficient evidence that R.G.’s brother purposely acted to harass R.G., ruling that “a mere expression of anger between persons in a requisite relationship is not an act of harassment.”

Keep This From Happening in Your Family

If the brothers had sat down with their parents before they needed care to explore options and determine their parents’ wishes, this drawn-out and costly dispute might have been totally avoided. Putting a long-term care plan into place can help avoid family conflicts like this one.

To start planning for long-term care, talk to us to help you design the best plan for you.

 

Using Your IRA to Buy Long Term Care Insurance

Long-term care insurance (LTCi) is an important element of good retirement planning. That is because it offers financial protection against unexpected illness or disability that would otherwise eat into savings. But many LTCi plans are too expensive for most retirees or people nearing retirement age, and the costs just seem to be going up.

At the same time, the cost of medical care and assistance over a long period is even higher, and an unexpected illness could wipe out everything you’ve saved. You may not have enough after-tax dollars to pay for LTCi, but you can protect your retirement income by using money from your IRA to fund coverage.

Is It Possible to Avoid Taxes and Early Withdrawal Penalties?

Typically, withdrawals or non-qualified investments (including insurance purchases) made with IRA funds before the age of 59½ are subject to taxes and penalties. Certain allowances are made if you use IRA savings to pay for medical expenses that exceed 10 percent of your adjusted gross income, or if you’re unemployed and using these funds to buy medical insurance.

Although these exemptions don’t apply if you’re buying LTCi directly with your IRA savings, there are some indirect options available that allow you to avoid taxes and penalties. Here are two: fund a 20-pay life insurance plan or a qualified Health Savings Account (HSA) with part of the money saved in a traditional IRA.  Both options can be done penalty-free before age 59 ½

Option 1: Convert Your IRA into LTC Insurance with a Tax-Qualified Annuity

If you invest in a tax-qualified annuity that makes internal distributions to an insurance carrier, you can indirectly pay for long-term care coverage using IRA money without additional tax penalties. Here’s how the process works:

  • Step 1: Apply for 20-pay life insurance with LTC features

Apply for a 20-pay life insurance plan with an LTC rider, which can accelerate the death benefit to pay for long-term care.  This policy will be funded with tax-qualified annuities that make annual distributions to the insurance policy over a 20-year period. After you apply, complete the underwriting process, and receive approval, you will be given a quote for the annual premiums required for this plan. The premiums may be higher than those for term insurance, but limited-pay plans offer lifetime security.

  • Step 2: Apply for IRA-based annuity plans to fund the policy

The second step is to determine the up-front cost of an IRA-based annuity where the annual dollar amount of income is the same as the insurance premiums, over a period of 20 years. Apply for this annuity type and include instructions for the company to directly credit your 20-pay life insurance plan with the annual gains from the annuity.

  • Step 3: Use a direct transfer of IRA funds for annuity premiums

Directly transfer funds from your IRA to purchase your 20-year annuity. By paying an equal dollar amount directly into your life insurance policy, this annuity will fund your insurance coverage and keep it active for 20 years, after which the LTCi policy is paid in full.

You will receive IRS tax form 1099-R from the annuity company every year on the amount of taxable IRA money moved into the life insurance policy. While you still pay income tax on this amount, the payout and benefits from the policy will be tax-free for you and your beneficiaries. After you’ve made premium payments over a 20-year period, the death benefits will apply for your entire lifetime.

Option 2: Move IRA Funds into an HSA with LTC Benefits

You’re allowed to make a one-time tax-free transfer of IRA funds into a qualified HSA, which provides tax-advantaged savings for health care expenses in the future. Check if your HSA includes an option for long-term care, and consider this method only if you meet the eligibility rules.

The maximum transfer allowed is the same as the HSA contribution limit, which in 2017 is $3,400 for single people and $6,750 for families, with an additional $1,000 in catch-up contributions for those aged 55 and up. Remember, this limit will decrease based on how much you move from your IRA. You may also be liable for taxes and penalties if you’re no longer eligible for the HSA within 13 months from December 1st of the transfer year.

The amount saved by these strategies will vary depending on the individual’s or family’s needs, the amount transferred and the expense of the annuity applied for. But they are worth the trouble, in most cases; anytime you can use tax deferred dollars, it is a good thing.

If you want to be financially comfortable, safe and happy after you retire, it may be time to take another look at your IRA savings and investment portfolio. A self directed IRA might be your best option, since you retain full control over investments. Consult a professional advisor if you want to learn more about how it works.

 

Be On the Look Out for New Medicare Cards

The federal government is issuing new Medicare cards to all Medicare beneficiaries. To prevent fraud and fight identity theft, the new cards will no longer have beneficiaries’ Social Security numbers on them.

The Centers for Medicare and Medicaid Services (CMS) is replacing each beneficiary’s Social Security number with a unique identification number, called a Medicare Beneficiary Identifier (MBI). Each MBI will consist of a combination of 11 randomly generated numbers and upper case letters. The characters are “non-intelligent,” which means they don’t have any hidden or special meaning. The MBI is confidential like the Social Security number and should be kept similarly private.

The CMS will begin mailing the cards in April 2018 in phases based on the state the beneficiary lives in. The new cards should be completely distributed by April 2019. If your mailing address is not up to date, call 800-772-1213, visit www.ssa.gov, or go to a local Social Security office to update it.

The changeover is attracting scammers who are using the introduction of the new cards as a fresh opportunity to separate Medicare beneficiaries from their money. According to Kaiser Health News, the scams to look out for include phone calls with callers:

  • claiming to be from Medicare looking for your direct deposit number and using the new cards as an excuse,
  • asking for your Social Security number to verify information,
  • claiming Medicare recipients need to pay money to receive a temporary card, or
  • threatening to cancel your insurance if you don’t give out your card number.

There is no cost for the new cards. It is important to know that Medicare will never call, email or visit you unless you ask them to, nor will they ask you for money or for your Medicare number. If you receive any calls that seem suspicious, don’t give out any personal information and hang up. You should call 1-800-MEDICARE to report the activity or you can contact your local Senior Medicare Patrol (SMP). To contact your SMP, call 877-808-2468 or visit www.smpresource.org.

For more information about the new cards, click here and here.

For more information about Medicare, click here.

Medicare’s Treatment of the Two Main Hospital Stay Options

Hospital patients who need additional care after being discharged from the hospital are usually sent to either an inpatient rehabilitation facility (IRF) or a skilled nursing facility (SNF). Although these facilities may look similar from the outside, Medicare offers very different coverage for each. While you may not have complete say in where you go after a hospital stay, understanding the difference between the two facilities can help you advocate for what you need and know what to expect with regard to Medicare coverage.

Inpatient Rehabilitation Facility vs. Skilled Nursing Facility

An IRF can be either part of a hospital or a stand-alone facility that offers intensive physical and occupational therapy under the supervision of a doctor and nurses. IRFs offer a minimum of three hours a day of rehabilitation therapy. But a SNF provides full-time nursing care. Patients also receive physical and occupational therapy, but the care is generally less intensive and specialized than in an IRF.

IRFs and Medicare

Medicare Part A covers a stay in an IRF in the same way it covers hospital stays. Medicare pays for 90 days of hospital care per “spell of illness,” plus an additional lifetime reserve of 60 days. A single “spell of illness” begins when the patient is admitted to a hospital or other covered facility, and ends when the patient has gone 60 days without being readmitted to a hospital or other facility. There is no limit on the number of spells of illness. However, the patient must satisfy a deductible before Medicare begins paying for treatment. This deductible, which changes annually, is $1,364 in 2019.

After the deductible is satisfied, Medicare will pay for virtually all hospital charges during the first 60 days of a recipient’s hospital stay. If the hospital stay extends beyond 60 days, the Medicare beneficiary begins shouldering more of the cost of his or her care. From day 61 through day 90, the patient pays a coinsurance of $341 a day in 2019. Beyond the 90th day, the patient begins to tap into his or her 60-day lifetime reserve. During hospital stays covered by these reserve days, beneficiaries must pay a coinsurance of $682 per day in 2019.

To qualify for care in an IRF, you must need 24-hour access to a doctor and a nurse with experience in rehabilitation. You must also be able to handle three hours of therapy a day (although there can be exceptions).

SNFs and Medicare

Medicare’s coverage of skilled nursing care is more limited. Medicare Part A covers up to 100 days of “skilled nursing” care per spell of illness. Beginning on day 21 of the nursing home stay, there is a copayment equal to one-eighth of the initial hospital deductible ($170.50 a day in 2019).

But the conditions for obtaining Medicare coverage of a nursing home stay are quite stringent. Here are the main requirements:

  • The Medicare recipient must enter the nursing home no more than 30 days after a hospital stay (meaning admission as an inpatient; “observation status” does not count) that itself lasted for at least three days (not counting the day of discharge).
  • The care provided in the nursing home must be for the same condition that caused the hospitalization (or a condition medically related to it).
  • The patient must receive a “skilled” level of care in the nursing facility that cannot be provided at home or on an outpatient basis. In order to be considered “skilled,” nursing care must be ordered by a physician and delivered by, or under the supervision of, a professional such as a physical therapist, registered nurse or licensed practical nurse. Moreover, such care must be delivered on a daily basis. (Few nursing home residents receive this level of care.)A new spell of illness can begin if the patient has not received skilled care, either in an SNF or in a hospital, for a period of 60 consecutive days. The patient can remain in the SNF and still qualify as long as he or she does not receive a skilled level of care during that 60 days.

Keep in mind that some or all of Medicare’s deductibles and co-payments for both IRF and SNF care may be covered by Medicare supplemental insurance, also called Medigap coverage.

 

Incapacity Planning: What if you’re alive, but can’t manage your own finances or healthcare?

Let’s talk about Incapacity.

 

Having a solid estate plan is about more than just what happens to your stuff after you pass away. A solid estate plan includes strategies to manage your affairs if you become incapacitated during your life and can’t make decisions for yourself. Learn about why you need an incapacity plan and how you can empower your loved ones to make financial and healthcare decisions for you – and saving everyone time, money and unnecessary drama.

What happens without an incapacity plan?


Without a comprehensive incapacity plan, your family will need to go to court and ask a judge, who doesn’t know you or your family, to appoint a guardian or conservator to take control of your assets and healthcare decisions. Once appointed, this guardian or conservator will make all personal and medical decisions on your behalf and will continue to be court-supervised until you regain capacity or pass away. Until you regain capacity or die, you and your loved ones could face an expensive and time-consuming guardianship or conservatorship process. This gets worse if your loved ones can’t agree on who should take charge or on what decisions to make.

Finances during incapacity


If you are incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Who is going to be able to pay your bills, manage investments, run your business or file tax returns?

Healthcare during incapacity


If you become legally incapacitated, you won’t be able to make healthcare decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis and end up in court fighting over what medical treatment you should, or should not, receive. Do you remember the Terry Schiavo case? Her family was involved in a 15-year legal battle over her guardianship, healthcare and end-of-life issues!

These are 5 essential tools you can put in place before you become incapacitated:

  1. Durable Power of Attorney:

This legal document gives your agent the authority over your finances and property, such as paying bills, filing tax returns, selling real               estate, dealing with insurance and other financial matters that are described in the document. In Florida, the durable power of attorney           goes into effect as soon as it is signed. This is a powerful document and if it is in the wrong hands, it could be misused. You should seek           the advice of an attorney on the proper use and scope of this document.

  1. Living Will and Appointment of Healthcare Surrogate:

    This legal document shares your wishes regarding end of life care if you become incapacitated. It also allows gives your agent the authority to make healthcare decisions if you become incapacitated.

  2. HIPAA authorization:

    This legal document gives your doctor authority to disclose medical information to an agent selected by you. This is important because health privacy laws may make it very difficult for your agents or family to learn about your condition without this release.

  3. Designation Naming Pre-Need Guardian:

    This legal document allows you to name someone in advance to act as your Florida Guardian if you become incapacitated and if a judge decides that you need a guardianship. The document also allows you to say who you do not want to be your guardian.

  4. Revocable Living Trust:

    This legal document has three parties to it: the person who creates the trust (you might see this written as “trustmaker,” “grantor,” or “settlor” — they all mean the same thing); the person who legally owns and manages the assets transferred into the trust (the “trustee”); and the person who benefits from the assets transferred into the trust (the “beneficiary”). Typically, you will be the trustmaker, the trustee, and the beneficiary of your own revocable living trust. But if you ever become incapacitated, your designated successor trustee will step in to manage the trust assets for your benefit. Since the trust controls how your property is used, you can specify how your assets are to be used if you become incapacitated (for example, you can authorize the trustee to continue to make gifts or pay tuition for your grandchildren).

Is your incapacity plan up to date?


Once you get all of these legal documents for your incapacity plan in place, don’t just stick them in a drawer and forget about them. (In fact, many banks prefer that you update your power of attorney every three to five of years, to keep the document from going “stale.”) You need to review and update your incapacity plan periodically and when certain life events occur, like moving to a new state or losing a spouse. If you keep your incapacity plan up to date and make the documents available to your trusted helpers, you can save time, money and unnecessary drama. Do you want to learn more about how attorney Myrna Serrano Setty can help you protect yourself and your loved ones? Contact her law firm today at (813) 514-2946.