Fong Law Group

Make Sure You Are Counted in the 2020 Census

The 2020 census is starting soon, and seniors need to be counted. This may be more of a challenge this year because for the first time, the census will be completed largely online.

The U.S Constitution mandates that the federal government conduct a census every 10 years. Information from the census is used to determine how many representatives each state sends to Congress as well as where hundreds of billions of dollars from federal programs, such as Medicare, Medicaid, nutrition assistance and supportive housing, is allocated. In addition, communities rely on census data to apportion services like new roads, schools, libraries and emergency services.  Think of it as America’s 10-year checkup.

While the census is being conducted largely online, you do not need to fill out the form online if you don’t want to. Beginning in March 2020, the census will mail out postcards to each household, giving instructions on how to respond. You will have the option of responding online, by mail, or via the phone. If you don’t respond, a census worker will visit your home to collect the data. 

If someone visits your home to collect information for the 2020 Census, check to make sure that they have a valid ID badge, with their photograph, a U.S. Department of Commerce watermark, and an expiration date. Census workers will not ask for donations or for your Social Security or bank account information. 

For more information about the 2020 census, click here.

How Secure Is Social Security?

For years people have been worried about Social Security’s future, but what is the actual outlook? According to the federal government, unless Congress acts to intervene, Social Security shortfalls are expected beginning in 2035.   

Social Security retirement benefits are financed primarily through dedicated payroll taxes paid by workers and their employers, with employees and employers splitting the tax equally. Employers pay 6.2 percent of an employee's income into the Social Security system, and the employee kicks in the same. Self-employed individuals pay the entire 12.4 percent Social Security payroll tax. This money is put into a trust fund that is used to pay retiree benefits. 

The trustees of the Social Security trust fund have reported that if Congress doesn’t take action, the fund’s balance will reach zero in 2035. This is because more people are retiring than are working, so the program is paying out more in benefits than it is taking in. Additionally, seniors are living longer, so they receive benefits for a longer period of time. 

Once the fund runs out of money, it does not mean that benefits stop altogether. Instead, retirees’ benefits would be cut. According to the trustees’ projections, the fund’s income would be sufficient to pay retirees 77 percent of their total benefit. 

Congress can act to shore up Social Security before this happens. Some ideas include eliminating the cap on benefits. Right now, workers only pay Social Security tax on the first $137,700 of income (in 2020). That amount can be increased, so that higher-earning workers pay more in taxes. The Social Security tax or the retirement age could also be increased.

Social Security is immensely popular and lawmakers are unlikely to allow steep benefit cuts to take place. The last time the program was in financial trouble and received a major overhaul was in 1983, when President Ronald Reagan and congressional Democrats struck a deal to increase taxes and gradually raise the retirement age from 65 to 67.

For more information about a the potential Social Security shortfall, click here and here.

The Trump Administration Allows States to Choose Medicaid Block Grants

The Trump administration has unveiled a plan to allow states the option to cap Medicaid spending using block grants. While this change does not directly affect nursing home residents on Medicaid and is billed as a way to improve state flexibility in running Medicaid programs, it could result in significant service cuts. 

Medicaid is a joint federal-state program that functions as an open-ended entitlement program, meaning it does not include any pre-set funding limits. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state's Medicaid costs. The state picks up the rest of the tab.

Announced on January 30, 2020, the Centers for Medicare and Medicaid Services (CMS) plan, dubbed "Healthy Adult Opportunity," would allow states to apply for block grant funding instead of receiving unlimited matching funds. States that choose to enter such an arrangement would receive a pre-set amount of money in exchange for increased flexibility in how they administer their programs. 

The new funding option applies mainly to healthy adults under 65 who are covered under Medicaid expansion. People needing long-term care and individuals who are 65 and over would not be included in a potential state block-grant project along with children and individuals with disabilities. States also cannot block grant services that are required under the Medicaid statute, such as emergency and hospital services. 

While long-term care beneficiaries may not be directly affected by this new funding structure, there could be an increase in costs to other Medicaid beneficiaries. States that choose block grant funding can increase prescription drug costs or change which prescription drugs are covered. Medicaid traditionally covers all federal-approved drugs, but the new plan allows states to cover just one drug per class. States can also increase co-pays or cut non-emergency services. If enrollment in Medicaid dramatically increases due to a health crisis or a recession, states that received a pre-set amount of funding may not have enough money to cover everyone, resulting in additional cuts to services. 

Opponents of the block grant concept contend it is illegal because only Congress can make such program changes, and litigation against the proposal is almost certain. In addition, it is unlikely that a state could get a waiver before 2021, when there may be a new federal administration.

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

How Does Medicaid Treat Income?

The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. The deductions include a $60-a-month personal needs allowance (this amount may be somewhat higher or lower in your state), a deduction for any uncovered medical costs (including medical insurance premiums), and, in the case of a married applicant, an allowance for the spouse who continues to live at home if he or she needs income support. A deduction may also be allowed for a dependent child living at home.

In determining how a Medicaid applicant's income affects his or her eligibility for nursing home coverage, most states use what is known as the "medically needy" or "spend-down" approach.  These states allow the applicant to spend down their income on their care until they reach the state's income standard for eligibility, at which point Medicaid will begin covering their care.  In this way, those with incomes that exceed Medicaid's thresholds can still qualify if they have high medical expenses, assuming they meet Medicaid's other requirements.

But some states set a hard limit on the income permissible to qualify for Medicaid -- no spend-down is allowed.  In these states, known as "income cap" states, eligibility for Medicaid benefits is barred if the nursing home resident's income exceeds $2,349 a month (for 2020), unless the excess income above this amount is paid into a "(d)(4)(B)" or "Miller" trust. If you live in an income cap state, contact your attorney to set up a trust. The income cap states as of this writing are: Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Nevada, New Mexico, New Jersey, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, and Wyoming.

For Medicaid applicants who are married, the income of the healthy spouse living in the community (the “community spouse”) is not counted in determining the Medicaid applicant's eligibility. Only income in the applicant's name is counted in determining his or her eligibility. Thus, even if the community spouse is still working and earning, say, $5,000 a month, he or she will not have to contribute to the cost of caring for his or her spouse in a nursing home if the spouse is covered by Medicaid.

Caregivers Are Getting Younger, Making Planning for Long-Term Care Even More Important

As baby boomers age, more and more millennials are becoming caregivers. Many are taking on this role while just getting started in their own lives, leading to difficult decisions about priorities. Proper planning can help them navigate this terrain. 

The term “sandwich generation” was coined to refer to baby boomers who were taking care of their parents while also having young children of their own. Now millennials are moving into the sandwich generation at a younger age than their parents did. According to a study by the AARP, one in four family caregivers is part of the millennial generation (generally defined as being born between 1980 and 1996). And a study by Genworth found that the average age of caregivers in 2018 was 47, down from 53 in 2010. Gretchen Alkema, vice president of policy and communications at the SCAN Foundation, told the New York Times that the rise in younger caregivers may be because baby boomers had kids later in life than their predecessors and many are divorced, so they do not have a spouse to provide care. 

Younger caregivers have different challenges than older caregivers. They may have younger kids to manage and careers that are just beginning, rather than established. In addition, more millennial men are caregivers compared to previous generations. The AARP study found that millennials spend an average of 21 hours a week on caregiving, and one in four spend more than 20 hours per week. More than half (53 percent) also hold a full-time job in addition to their caregiving duties and 31 percent work part time. Younger caregivers are also less likely to discuss their caregiving duties with their employer than previous generations.

Managing caregiving duties, family, and employment is stressful. Having plans in place can help alleviate some of the stress, and the earlier you plan ahead the better. The following are resources you can use to put together a long-term care plan: 

• Long-term care insurance can help lessen some of the costs of caregiving if it is purchased early enough. 
• A geriatric care manager can help determine what care is needed and where to find resources. 
• An elder law attorney can draft essential documents like a power of attorney and a health care proxy, as well as advise you on available benefits, such as Medicare, Medicaid, or Veteran’s Administration benefits. 
• Adult day care can give caregivers a much-needed break. 

Having resources in place will help, but you also need to be mindful of when you need help. Recognize when you are being stretched too thin and consider your priorities. If possible, talk to your employer about flexible hours. Consult with other family members and do not be afraid to delegate tasks. Take care of yourself by eating well, exercising, and finding time to relax. For some tips on handling the caregiver/life balance, click here.

For an article on the unique caregiving challenges facing the women of Generation X, click here.

Medicare Now Covers Outpatient Treatment for Opioid Addiction

Recognizing the huge problems caused by opioid addiction in the United States, Medicare is adding a new outpatient opioid treatment benefit, paying for methadone and related treatment in certain facilities. 

Under a new rule taking effect in January 2020, Medicare will now provide payment to opioid treatment programs (OTPs), also known as methadone clinics, as part of Medicare Part B. OTPs are the only locations where people addicted to opioids can receive methadone as part of their treatment. 

Under the new OTP benefit, Medicare covers:

• U.S. Food and Drug Administration (FDA)-approved opioid treatment medications (such as methadone)
• Dispensing and administration of the treatment medications (if applicable)
• Substance use counseling
• Individual and group therapy
• Toxicology testing
• Intake activities
• Periodic assessments

For beneficiaries who are eligible for both Medicare and Medicaid, Medicaid paid for methadone treatment. Now, once the OTP is enrolled in Medicare, Medicare will become the primary payer for these beneficiaries. Medicaid should continue to cover the service during the transition. Medicare Advantage plans should also allow coverage of OTPs that are not in their network while they assist beneficiaries in transitioning to an in-network OTP. 

For a fact sheet from Justice in Aging, click here.

Medicaid Protections for the Healthy Spouse

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.

The so-called "spousal protections" work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of "institutionalization," the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the "snapshot" date because Medicaid is taking a picture of the couple's assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $128,640 (in 2020). Called the "community spouse resource allowance," this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $25,728 (in 2020).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple's assets have been reduced to a combined figure of $52,000 -- $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $128,640 (in 2020), regardless of whether or not this represents half the couple's assets. For example, if the couple had $100,000 in countable assets on the "snapshot" date, the community spouse could keep the entire amount, instead of being limited to half.

The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple's income is in the name of the institutionalized spouse and the community spouse's income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $2,113.75 to a high of $3,216 a month (in 2020). If the community spouse's own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse's income.

Example: Joe Smith and his wife Sally Brown have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith's name and $700 is in Ms. Brown's name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Ms. Brown's MMMNA is $2,200 (based on her housing costs). Since Ms. Brown's own income is only $700 a month, the Medicaid agency allocates $1,500 of Mr. Smith's income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $140 a month ($1,700 - $1,500 - $60 = $140).

In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support.

Contact your attorney to find out what you can do to make sure your spouse has enough income to live on. 

Free Tax Preparation Help Is Available to Seniors

Seniors and retirees should know that they may be able to use online tax preparation software free of charge. Most low- and middle-income Americans qualify for the free help, but do not take advantage of it. And all seniors are eligible for free counseling assistance from the IRS.

The tax preparation software industry has had a decades-long deal with the Internal Revenue Service (IRS) to make free versions of its software available to low- and middle-income individuals. However, a report by ProPublica in April 2019 revealed that the software companies were making it difficult for customers to find the free tax filing software, including going so far as to hide it from a Google search. According to the IRS’s Taxpayer Advocate Service, around 70 percent of taxpayers qualified for free filing, but only 1.6 percent used the free software in 2018. The IRS has now amended its agreement with the software industry to bar the companies from hiding the free products. 

The IRS Free File website links to the available free products. Each company sets its own eligibility standards based on income, age, and state residency. As long as your adjusted gross income was $69,000 or less, you will find at least one free product to use. There are also two products that are in Spanish.

If you would rather not prepare your own tax return, seniors can use the IRS’s Tax Counseling for the Elderly (TCE) program. The TCE program is available to taxpayers who are 60 years old or older and specializes in answering questions about pensions and retirement plans. 

Will Restrictive Immigration Policies Cause a Shortage of Caregivers for the Elderly?

As the population ages, the need for caregivers is growing, but more restrictive immigration policities such as those being promoted by the Trump administration could have a negative impact on a caregiving industry that is already facing workforce shortages. 

The Supreme Court is currently considering the administration's decision to end the program that protected young undocumented immigrants from deportation, known as Deferred Action for Childhood Arrivals, or DACA. Among other policies, the administration has also ended Temporary Protected Status -- a program that gives immigrants who can't return to their home countries due to violence or natural disaster permission to work and live in the United States -- for several groups, including immigrants from Haiti, El Salvador, and Nicaragua.  In addition, another effort is to shift from "chain migration," where people enter the country based on family ties, to immigration based on skills, which are presumably not caregiving skills but more high-tech abilities.

While there is no data on specifically how many of the affected people work as caregivers, about one in four health care workers is an immigrant, according to the Paraprofessional Healthcare Institute (PHI), a nonprofit organization that studies the home care industry. That includes immigrants working as home health aides, personal care aides, and nursing assistants in home and community-based settings, nursing care facilities, assisted living facilities, group homes, intermediate care facilities, and hospitals. In addition, PHI found that immigrants constitute 31 percent of the home care workforce.

Meanwhile, the U.S. is already facing a growing shortfall of home health workers as 10,000 baby boomers turn 65 each day.  The Bureau of Labor Statistics estimates that there will be more than one million new caregiver positions created by 2028, a 36 percent increase. Caregiving jobs require hard work for low pay, so finding workers to take those jobs is difficult. Turnover is already high in the industry, and health care employers complain about the lack of available workers. Losing a large portion of the workforce will only make it harder to fill the positions. Experts also worry that a shortage of home-care workers will lead to more seniors being institutionalized. 

To read more about how immigration policies are affecting the caregiving industry, click here and here.

Movement Grows to Add Dental Coverage to Medicare

Medicare does not offer much in the way of dental benefits. To get dental coverage, you need to purchase separate and often costly dental insurance or sign up for a Medicare Advantage plan that includes dental care. Advocates for Medicare beneficiaries are arguing for a change. 

Common dental procedures or supplies, such as cleanings, fillings, tooth extractions, dentures, dental plates, or other devices are currently not covered. Medicare Part A, the insurance for inpatient hospitalizations, will cover certain emergency or necessary dental procedures that are received in the hospital. For example, if you are hospitalized after an accident and require jaw reconstruction, Medicare Part A will pay for the dental work required as part of that procedure. In addition, Medicare Part A specifically covers oral examinations for patients who are in the hospital to receive a comprehensive workup for a kidney transplant or heart valve replacement.

Many Medicare Advantage plans offer dental coverage, but Medicare Advantage plans vary widely in what is covered and how much it costs. In addition, because Medicare Advantage is managed care, only certain providers are covered under each plan, and beneficiaries may need prior approval before receiving care. 

According to the Kaiser Family Foundation, most Medicare beneficiaries do not have dental coverage and go without care even though studies show there is a link between good oral health and good overall health. To take just one example, many infections can enter the body due to ongoing inflammation in the mouth and lead to more inflammation in other parts of the body like the heart. Kaiser also found that among Medicare beneficiaries who used dental services, the average annual out-of-pocket spending on dental care was $922.

The lack of coverage for oral health has prompted some groups to advocate for improving dental coverage for Medicare beneficiaries. Justice in Aging, a legal advocacy group fighting senior poverty, argues that adding oral health coverage to Medicare Part B would be the simplest and most cost-effective way to give all seniors dental benefits. The U.S. House of Representatives has passed a bill that would do just that, but it is unlikely to be taken up by the current Senate. Another possibility would be to add a separate optional dental benefit under Medicare, like the prescription drug benefit. 

For more information about the different options for improving dental coverage, click here.