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Advantage Plan, it can be difficult to know for certain, because the "current" list of participating doctors may be out-of-date or incomplete.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.

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.

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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.  

Click here.

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, so much so that in many cases the loan will be 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. Some elderly borrowers who have been unable to pay property taxes and insurance have actually been foreclosed on and evicted from their homes.

These tougher eligibility requirement are just the latest in a series of new rules that have been instituted to address a variety of problems plaguing the reverse mortgage market over the years. 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.

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 getting along and 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.

Now, Cambell's 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 Cambell's 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 with the necessary toiletries and clothing. They also object to Kim's allowing her husband to be interviewed and filmed at the facility, saying it is 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 bringing our loved ones together...just as a bad one can divide them. A qualified estate planning attorney is your and your family's best resource!

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!