Apr 23, 2015

Meeting many wonderful caregivers today at the Fearless Caregiver Conference

Today I had the privilege of serving as a guest panelist at the Fearless Caregiver Conference in West Palm Beach. The conference was attended by hundreds of people who are caring for loved ones and are seeking advice, support and practical information. I met many wonderful people, all of whom are facing challenges as caregivers. I was able to answer questions not only about legal matters, but also other family issues my clients encounter, such as how to sensitively deal with a parent who should no longer be driving; facilitating a family intervention when a parent who needs more at-home help is refusing it; soliciting cooperation from difficult siblings, etc. Today's Caregiver magazine sponsored the annual event and publisher Gary Barg moderated the panel.

Here I am answering a question along with my co-panelists.

Apr 20, 2015

Part B Deductible Coverage to end as part of new "doc fix" legislation

The so-called Medicare "doc fix" (officially the Medicare Access and CHIP Reauthorization Act of 2015) was signed into law by President Obama on April 16. A rare instance of congressional bipartisanship, it replaces the 1997 law that caps Medicare payments to physicians. Each year since 1997, that law has sent Congress scrambling to prevent doctors' reimbursements from being slashed. Under the new law, payments to participating doctors will increase by .5% each year, through 2019. 

The projected cost over the next 10 years is $200 billion. Not surprisingly, some of that cost - about $70 billion - will come from seniors' pockets: If you sign up for Medicare starting in 2020, you will no longer be able to get a Medigap policy offering coverage of the Medicare Part B deductible (the current deductible is $147). Those who are currently covered by Medigap policies, and new enrollees up to 2020, will not be affected. Proponents of the legislation argue that this provision will save the government money by providing seniors with a financial incentive to seek outpatient care only when it is truly medically necessary. Critics claim that seniors will put off getting needed care, costing Medicare more money in the long run.

Additionally, the law requires wealthier seniors to pay higher premiums for Part B coverage. Starting in 2018, if you have a modified adjusted gross income between  $133,000 and $160,000 you will be required to pay 65% of Part B premiums (current payment is 50%). If your income is between $160,000 and $214,000, you will pay 80% of the Part B premium (current payment is 65%).

Read more about the law and how it will affect Medicare beneficiaries here and here.

Apr 16, 2015

Urgent Update: Florida Supreme Court final opinion criminalizes Medicaid planning by non-lawyers

Thinking about getting Medicaid planning advice from someone other than an attorney? Thinking of referring someone to a non-attorney? 

Better think again. Besides getting bad advice, you also may be aiding and abetting a crime.

As I reported several weeks ago, the Florida Supreme Court on January 15 issued an advisory opinion aimed at protecting the public from non-lawyers who represent that they can do Florida Medicaid planning. The court's opinion is a response to Florida cases in which non-lawyers (1) failed to help clients achieve eligibility; (2) exposed clients to charges of fraud; and/or (3) failed to inform clients of the negative tax consequences that would result from such plans. You can read the court's opinion here.

The advisory opinion became final on April 10. "The opinion has full force and effect of an order of the court" and deems any of the following actions by a non-lawyer to constitute the unlicensed practice of law: 

  • Giving legal advice regarding the implementation of Florida law to obtain Medicaid benefits.
  • Drafting personal services contracts.
  • Preparing and executing qualified income trusts.
The unlicensed practice of law is a felony punishable by five years in prison. Moreover, anyone who retains, or refers to, a non-lawyer for these activities may be considered to be aiding and abetting a crime, and therefore subject to criminal penalties himself/herself. 

Merely assisting someone with the Medicaid application is not a criminal act. The felony is defined as a non-lawyer giving planning advice leading up to the actual application.

What if a non-lawyer offering Medicaid planning services claims to have a working relationship with a licensed attorney who will handle the clients' legal issues and paperwork? It doesn't matter, the Florida Supreme Court concludes. Unless the client himself/herself hires and retains the attorney, that arrangement is still the unlicensed practice of law. The court's opinion on this point dovetails with my own years of experience in the legal trenches: Of all the people who have come to me for help following botched Medicaid planning by a non-lawyer, not one has met with the purported affiliated attorney, let alone had an in-depth conversation with him/her.

Hiring a non-lawyer to handle Medicaid planning, while perhaps less expensive at the front end, can be a costly mistake. Now, it may also be considered a criminal activity.  It is always prudent to seek advice from a Florida Bar Certified Elder Law Specialist. Contact our office for assistance.

Apr 13, 2015

Medicaid could be the answer for your family as median nursing home bill rises to $91,250 (and even higher in South Florida)

One year in a long-term nursing facility now costs as much as three years of private college tuition. Frightening equation, isn't it? This is the staggering statistic revealed in Genworth Financial's  just-released 2015 survey of long-term care costs.

According to the survey, the median annual cost for a private room in a long-term care facility is now $91,250. But wait - that's the national median. In our area of Florida, the price tag is higher still: $106,580 in the West Palm Beach/Ft. Lauderdale/Miami area, and $99,463 in St. Lucie. The price has risen 4% annually for the last five years and there is every reason to expect costs to remain on an upward trajectory.

Obviously, this situation is jeopardizing the hard-earned savings of millions of middle class families. If an incapacitated person is married, the spouse naturally will worry what he/she is going to be left to live on.

Most Americans who have not faced this situation are oblivious to the unimaginably high cost. They also believe, incorrectly, that Medicare will pick up the tab. That is not so: Medicare pays only for limited skilled nursing care, if it follows a hospital stay. It's only when a family member needs long-term care and a family finds itself facing financial ruin that they discover the bleak realities.

If you are a typical middle class person and do not have long-term care insurance, there may be another option, though: Medicaid (not Medicare). A combination federal-state program, Medicaid will pick up the cost of custodial nursing care once an otherwise qualified applicant has spent down his/her assets to $2,000. However, there are perfectly legal methods, done with full disclosure, that may hasten a person's Medicaid eligibility and may allow a family to retain a significant portion of assets. It's essential to consult with a certified elder law attorney for guidance, however. After all, the Medicaid office is not going to tell you about these methods any more than the I.R.S. is going to tell you about tax-reducing strategies. You need an expert!

Many people plan in advance so that they are Medicaid-eligible in the future, should they ever wish to apply for benefits. But even if your loved one is already in a nursing home or on the verge of entering one, it's not too late to take steps. Consult with The Karp Law Firm's Certified Elder Law Attorneys for expert guidance. Here are some helpful links:

Read about planning in advance for Medicaid benefits with a Medicaid Asset Protection Trust.

Read the Genworth Florida survey here. 

Read the Genworth report (inluding other state statistics) here.

Apr 9, 2015

Karp Law Firm co-sponsors Area Agency on Aging Prime Time Awards Breakfast

The Karp Law Firm is a sponsor of the Area Agency on Aging's 24th Annual Prime Time Awards Breakfast on May 21. The event will honor the outstanding contributions of senior volunteers in Palm Beach, Martin, St. Lucie, Indian River and Okeechobee counties.

Do you want to nominate a senior volunteer who has made an outstanding contribution to our community? Nominations must be received no later than April 23. Your nominee must be age 55 or older; a current volunteer; and reside in Palm Beach, Martin, St. Lucie, Indian River or Okeechobee county. There are a variety of categories in which you may submit a name. You can find the nomination form here.

Apr 8, 2015

Don't be insulted, mom and dad: The kids may not want your "stuff"

Our firm's attorneys are always encouraging clients to get organized and clear the clutter from their homes. Clutter is perilous for seniors; as we get older, a fall is more likely to be life-threatening or cause permanent disability. (See my prior blog post about actress Ann Davis.) Why put more things in your way?

Getting organized and getting rid of excess belongings is also a great kindness to your family. Eventually someone is going to have to go through your paperwork and your belongings. If it's not easy for you to deal with your own stuff now, why would someone else find it any easier in the future?

A recent article in the Washington Post reminded me of another reason not to over-save. It's a reason I've heard increasingly from my clients' families over the years, and even seen playing out in my own: If you think your kids want you stuff, think again: They probably don't! 

I know, it hurts, but think about it: Baby Boomers and the Greatest Generation were raised with stuff you can feel, touch, put in a closet. They had scrapbooks, shoeboxes of photos, books, heavy furniture. They needed mugs and dishes because they made coffee and prepared dinner at home. They didn't stop at Starbucks or McDonald's in the morning or pick up dinner on the way home. 

On the other hand, the Millennials, born between 1980 and 2000, have grown up in the digital age. They have lots of stuff, too - but it's virtual stuff, stored on computers and phones, not in shoeboxes or closets. The younger generation also tends to live in smaller spaces than their parents and grandparents. Even if they wanted to inherit certain items, where in the world would they put it? The Washington Post article quotes Stephanie Kenyan, a Maryland appraiser, who sums it up nicely: “Hardly a day goes by that we don’t get calls from people who want to sell a big dining room set or bedroom suite because nobody in the family wants it. Millennials don’t want brown furniture, rocking chairs or silver-plated tea sets. Millennials don’t polish silver.”

I confess, it's a struggle to live up to my own advice. As you might imagine, my paperwork is superbly well organized. As to everything else, well, the results are mixed. During a recent remodel, my wife and I gave away boxes and boxes of things - it has been a liberating experience. But we're holding on to a lot, too, but trying to be very selective. It's a challenge!

You can read the Washington Post article here.

Mar 22, 2015

Medicare Advantage plans: Is the doctor in? Or out?

Is the doctor in? Is the doctor out? When it comes to your Medicare Advantage Plan, it can be difficult to know for certain, because the "current" list of participating doctors may be out-of-date or incomplete. Doctors listed as being in a plan may have dropped the program, or relocated. Even providers who technically remain in the plan may not be accepting new patients, leaving you little choice among doctors.

If you sign up for a Medicare Advantage plan and find out subsequently that the doctors you thought were available are not, there's nothing you can do. You're stuck for the full year. Fortunately, that's going to change. Starting in 2016, the Centers for Medicare and Medicaid Services will require Medicare Advantage plans to contact their providers every three months and to update their online directories accordingly, in "real time." This will give consumers better data about the plans they are considering joining. It also will allow the federal government to better monitor whether an insurer has sufficient numbers of active providers to properly service its subscribers.

About 16 million Americans are currently enrolled in Medicare Advantage plans.

Mar 17, 2015

Retirement funds: proposed rule would hold all financial advisors to higher standard

Saving for retirement is an enormous challenge. So is making your savings last through retirement. We need all the help we can get - and we need our financial advisors in our corner. But, as a recent White House report points out, and you may have discovered yourself, that is not always how things turn out.

Typically, brokers who offer advice on 401K, 403B, or IRA investments earn their money from commissions or from other fees when they sell mutual funds. However, brokers are technically not fiduciaries - in other words, they are not legally bound to do what's in your absolute best interest, even above their own. They are required only to guide you to "suitable" investments, where suitability is based on your risk tolerance and age.

Given an array of suitable investments, it is not surprising then that some brokers may recommend the choices that offer them the bigger commissions -  not the ones that provide you with bigger returns. The White House's Council of Economic Advisors estimates that conflicts of interest of this nature can shave 1% annually off of returns, with potential cumulative losses to American retirees of up to $17 billion annually. Says Labor Secretary Tom Perez: "The corrosive power of fine print, hidden fees and conflicted advice can eat away like a chronic illness at people's hard-earned retirement savings." According to an article in last month's Bloomberg news, retirement fund holders are most likely to get bad financial advice when they are rolling over an employer-sponsored 401K plan to an IRA.

In the past, all of was of little concern to workers, most of whom had company pensions managed by someone else. Today, most people are in charge of their own retirement dollars. Americans are currently estimated to have over $11 trillion in these self-directed retirement vehicles.

Fortunately, help may be on the way. President Obama recently asked the Department of Labor to establish new rules that would compel brokers to act in the best interest of their clients when dealing with retirement accounts, just as professional money managers must. They would, in other words, be considered fiduciaries, required to put your best interests above their own. The new rules would prevent brokers and financial advisers from rolling over retirement accounts unnecessarily, or putting clients' savings into investments with high fees and low returns if better options exist.

The Department of Labor is expected to submit a draft rule to the Office of Management and Budget, after which the public will be invited to comment on the proposal. But obviously, nothing is going to change overnight. So keep reading the fine print when making a decision about where to invest your retirement funds.

Read the White House Council of Economic Advisors full report  here.

Sign the AARP letter in support of the proposal ("Stop Wall Street from Draining Americans' Retirement Savings") here.

Stay abreast of the news on this topic by subscribing to this blog using the "Follow by Email" link top right, and/or subscribing to our monthly e-newsletter.

Mar 16, 2015

New nursing home rating system in effect; ratings drop

In my October 2014 post I told you that the federal government's Five Star Rating system for nursing home quality would be overhauled. The system assigns a facility an overall rating of 1 to 5, where 5 is the best possible score. The system has long had its critics, who claim it relied too heavily on self-reported data, resulting in overinflated positive scores. The newly introduced rating system incorporates additional, more objective measures, such as the incidence of bedsores and usage of anti-psychotic drugs.

The revised ratings were published in late February. As expected, under the new reporting criteria, a significant percentage of facilities have seen their scores fall. According to USA Today, 61% of facilities received lower ratings than they received the prior year.  However, Florida ranks sixth in the nation for nursing home quality overall. Sharing the top ten honors are Rhode Island (#1), New Hampshire (#2), Maine (#3), Vermont (#4), Delaware (#5), Hawaii (#7), Arizona (#8), Utah (#9) and North Dakota (#10). To see how the rank of each of Florida's nursing homes changed from the year before to now, click here.

Greater scrutiny and more objective ratings should spur meaningful improvement going forward, allowing families to find the best possible care for incapacitated loved ones. You can check out the new ratings for nursing homes in Florida and nationwide with the Nursing Home Compare tool.

Read our Annual Estate Planning/Elder Law Newsletter

Planning Points, The Karp Law Firm's annual newsletter, is now viewable online.  

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