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your Medicare Advantage Plan, it can be difficult to know, because the "current" list of participating doctors may be  out-of-date or incomplete.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 subsequently find you don't have access to the doctors on the list, 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 will also allow the federal government to better monitor whether an insurer has a sufficient number of active providers to properly service 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 not technically 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 that many brokers may recommend the choices that offer them the bigger commissions -  not the ones that provide you with better 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, the time retirement fund holders are most likely to get bad financial advice is when they roll 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. 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 on this issue 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 was getting an overhaul. The system assigns a facility an overall rating of 1 to 5, where 5 is the best possible score. The system had long been criticized for relying too heavily on self-reported data, resulting in overinflated positive scores. The newly introduced 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, a significant percentage of facilities have seen their scores fall under tougher reporting requirements. 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, 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.  

Mar 10, 2015

Reverse mortgages tougher to qualify for beginning April 27, 2015

Starting April 27, 2015, it will be more difficult to qualify for a federally insured reverse mortgage (HECM, the Home Equity Conversion Mortgage). Every prospective borrower will be subject to a financial assessment test to determine if he/she has sufficient ability to pay the real estate taxes and insurance on their homes. The applicant's credit history, debt structure, Social Security and other sources of income will be examined. Previously, only the value of the home, the current interest rate, and the age of the borrower were considered. You must be 62 or older to be eligible for a HECM.

Borrowers who do not pass the financial assessment will be denied the loan, or in some cases, could be allowed to set aside a portion of the loan proceeds to cover taxes and insurance. The set-aside may be fully funded and based on the life expectancy of the youngest borrower, or partially funded. In either case, the set-aside percentage is expected to be steep, in some circumstances so much so as to make the loan impractical. Click here to learn more about set-asides. (Note the article states March 2 as the effective date of the new rule, but that is incorrect: it is April 27.)

The new rule is the federal government's response to the sharp increase in the default rate in recent years. In some cases, elderly borrowers who have been unable to pay property taxes and insurance have actually been foreclosed on and evicted from their homes.

While a reverse mortgage can be a valuable lifeline for older people in need of cash, they have also been plagued with problems over the years, leading the government to put in place increasingly strict rules. Last year, for example, the rules changed in order to prevent the non-borrowing spouse from being evicted when the borrower spouse passed away.

Anyone who is considering a reverse mortgage should also be aware that securing a reverse mortgage can impact one's eligibility for means-tested programs such as SSI or Medicaid. Always check with a Certified Elder Law Attorney before taking any steps.
Read more about reverse mortgages at the HUD website.

Mar 5, 2015

Once united, family of ailing Glen Campbell now at odds over his care, finances

Kasey Kasem. Robin Williams. Now, it's Glen Campbell's family mixing it up over who controls his money and his health care. 
This is not a gossip column, but let's face it, these high-profile, public cases are highly instructive. They remind us that fostering family harmony must be the priority as you plan for your life, for possible incapacity, for death. Getting it right can be challenging, particularly when there is money at stake, and children from multiple marriages.

In 2013 I reported that the Rhinestone Cowboy, diagnosed in 2011 with Alzheimer's Disease, was wrapping up his "goodbye" musical tour. When Campbell appeared before a special Senate hearing to advocate for Alzheimer's research funds, it  looked like everyone in his family was united regarding the 78-year-old singer's treatment. That's quite an accomplishment, given the nature of the family: Married four times, Campbell has one child from his first marriage, three from the second; one from the third; and his youngest three are from his marriage to his fourth and current wife, Kim.

But now, that family unity seems to be cracking. The Associated Press reports that in January two of his children, Debby Campbell-Cloyd and Travis Campbell (half-siblings and the stepchildren of the singer's current wife) filed a petition in Tennessee asking the court to appoint a guardian to take over their father's care and finances. They allege that current wife Kim is mismanaging his money, preventing several of his children from visiting him at the long-term facility he now resides in, not visiting with regularity herself, and not providing him necessary toiletries and clothing. They also object to Kim's allowing him to be interviewed and filmed at the facility, which they find inappropriate based on his frail condition. 

Campbell would surely be appalled if he knew what was happening among his loved ones. It is of course impossible to exert total control over how our families behave when we are disabled or pass away, but a good estate plan can go a long way to preserving family harmony, just as a bad one can divide. A qualified estate planning attorney is your and your family's best resource!

Mar 2, 2015

Estate Planning for Childless Couples: Matters of Life, and Death

Search the web for "estate planning" and you'll find a vast number of articles directed at married couples who have children. But what if you are  married and do not have kids? You might think that not having "lineal heirs" would would simplify the estate planning process, but that's not necessarily so. 

Whether or not they have children, spouses usually appoint each other as health care agent and power of attorney. But in the absence of adult children, who will serve as backups? Even if your spouse is alive, incapacity may prevent him/her from being able to make your financial and health care decisions, so backups are always necessary in order to protect yourself from becoming the subject of a court guardianship. Who should you name as backups if you have no children? A trusted niece, nephew, cousin or family friend are possibilities. If this is not an option, a lawyer, CPA, a clergy person, or even a geriatric care manager, as long as the person understand the job duties and is willing to act.

Just because there are no children in the picture doesn't mean you don't care where your assets end up after you're gone. To make sure they go where you wish, you need a suitable estate plan. For example, my married clients without children often want to name a niece, nephew, sister or brother from their own side of the family as beneficiary(ies). That makes an estate plan a must, because if you pass away intestate, under Florida law your spouse gets all your probatable assets - and if your spouse dies intestate, his side of the family takes all.   

Contact our qualified Florida estate planning attorneys to set up your estate plan. Everyone needs one!

Feb 24, 2015

Management of Bobbi Kristina Brown's affairs - in life and death - turns on whether she was legally married

Another day, another high-profile estate dispute. Another demonstration of why good planning is necessary to protect families from falling into disarray following the disability or death of a loved one. 

This time, the sad incident centers on Bobbi Kristina Brown, the only child of rapper Bobby Brown and his late wife, singer Whitney Houston. Brown was found unconscious January 31 in the bathtub of her Atlanta home. The 21-year-old has been hospitalized since then. Her ventilator was removed last week and she remains unconscious, in a medically induced coma. Her recovery is uncertain. 

At the time she was found, Bobbi Kristina was romantically involved with Nick Gordon, the man her mother took into her home and raised throughout his teens, but never officially adopted. In fact, in January, Bobbi Kristina announced that she and Gordon had been married. Brown's father denies they were legally wed, though. If he is right and they were not married, in the apparent absence of any written advance directives from Kristina, that leaves her father, her closest living relative, in charge of decisions about her medical treatment and continuing life support. He and Gordon have not been on good terms and to date he has not permitted Gordon to visit his daughter in the hospital. No marriage also means that if she passes away, her father is on track to inherit the $20 million his daughter is to inherit from her late mother. For his part, Gordon has accused Brown of managing the entire sad affair so he can get his hands on his daughter's fortune.

Stay tuned. There will surely be much, much more, and it does not look like it will be pleasant.

Most of us come from homes and families far less complicated, and far less wealthy, than Brown's. Even so, even the strongest of relationships can be tested when there is competition for an inheritance or differing opinions about who makes the decisions for an incapacitated loved one. Learn more about making plans to avoid these disputes in your own family with advance directives, and Florida estate planning.

Feb 19, 2015

Personal service contracts needed for paid family caregivers so that Medicaid eligibility not jeopardized

A recent article in US News and World Report, Five Ways to Ease the Financial Strain of Caregiving, notes that 43 million Americans provide some form of caregiving  to a person over age 50. The challenges that accompany caregiving are not limited to the emotional and physical; they are often financial, too.  For example, a child may be forced to trim work hours to attend to a parent, or leave the workforce entirely. The reduced income can impact a caregiver's immediate finances, as well as his/her ability to save for retirement. 

It is no surprise, then, that increasing numbers of parents are actually paying their adult children for help. Payment can help cushion a child's financial losses. However, in order to avoid jeopardizing the parent's future eligibility for Medicaid benefits for long-term care, payments must be well documented through a formal personal services agreement. A personal services contract must be structured carefully, conform to Florida Medicaid law, and have complete integrity. The caregiver must actually furnish the specified number of hours and scope of help as required by the contract. The caregiver must declare the income on his income tax return. Self-employment tax must also be paid. 

The recent case of Widley David v. Louisiana Department of Health and Hospitals is instructive. Widley David was unmarried and had no children. He entered a nursing home in 2008. For the following three years his nephew and his nephew's wife provided him with substantial assistance, driving him to doctor's appointments, visiting daily, paying his bills, and purchasing food, clothing and other items for him. The assistance was so extensive that the nephew quit his job to better attend to his uncle's needs. To compensate him, Mr. David wrote six checks to his nephew over the three-year period, for a total of $49,100.  However, no formal personal services agreement was ever established.

When Mr. Widley applied for Medicaid benefits in 2010, Medicaid deemed the payments to the nephew to be gifts, i.e., transfers for less than fair market value. The case went to court and eventually, Medicaid prevailed. A penalty period of fourteen months was imposed on Mr. Widley, during which time he was ineligible for benefits.

Would-be caregivers should also consider how their own Social Security benefits may be impacted if they receive payment for their assistance. For instance, I was consulted last year by a 51-year-old woman and her elderly father, who asked me about drawing up a personal services contract. They were surprised when I advised them that her Social Security Disability income would be lost if her father paid her. More recently, I spoke with a 62-year-old woman who was contemplating retiring from her job to care full-time for her frail mother. She thought it would be the perfect answer for both of them - until I pointed out that for  every two dollars over $15,720 (the 2015 cap) she would earn from caring for her mother, she would lose $1 in Social Security income. (If you have attained full retirement age, there is no limit on your earnings, however.)
Paying a relative for caregiving can ease the financial burden on the caregiver as well as provide the best possible care for a loved one. However, these arrangements always require careful planning and a thorough consideration of all the ramifications. Contact our law office for assistance

Feb 12, 2015

Do you need to give your doctors your Social Security number?

Anthem, the nation's second largest health insurance company, was recently hacked. Cyber-thiefs got away with millions of Social Security numbers, employment information and other personal data. Anthem is the umbrella for insurers including Blue Cross/Blue Shield, Amerigroup and Healthlink. 

Every day, with every new corporate data breach, there is more reason to be genuinely concerned about the integrity of our personal data. Most troubling of all is the theft of Social Security numbers, for they are truly the "key to the kingdom" for anyone who wants to steal your identity.

How ironic, then, that doctors' offices and other health care providers still routinely ask patients to supply their Social Security numbers. HIPAA (the Health Information Portability and Accountability Act) sets forth protocols that providers must follow to protect patient privacy, and most offices adhere zealously to those rules. In fact, I always include a HIPAA waiver in certain documents because without it, an individual's authorized agents can hit a brick wall if they need to get the client's medical information from health care providers.

Why then do so many doctors and other providers still ask for your Social Security number? According to a recent article in Consumer Reports, there's no logical reason. Consumers advises that you don't give it out. If your health care provider pressures you to do so, politely inform the office that you will do so only if there is a compelling legal reason it is needed.

Of course, if you are a Medicare recipient, you don't have that option, since your Medicare number IS your Social Security number. Your health insurer, too, has a right to the number, since it must be reported to the federal government in order to combat fraud and duplicate payments.

Let's hope that as the months and years roll on, security controls start keeping pace with our ever-expanding technologies. Until then, you cannot be too careful. 
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