Fong Law Group

Congress Fixes Some, But Not All, Medicare Enrollment Problems

Tucked in the federal spending bill that passed at the end of December 2020 are some changes aimed at simplifying Medicare enrollment and addressing coverage gaps. But Congress chose not to deal with the biggest problem.

Currently, Medicare enrollment begins three months before the month of your 65th birthday and continues for three months after your birthday month (for a total of seven months). Medicare Part A has no premiums, but if you do not enroll in Medicare Part B or Medicare Part D (prescription drug coverage) during the initial enrollment period, you will face penalties (with exceptions; read on). For example, your Medicare Part B premium may go up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it.  (You can delay signing up for Part B and Part D without penalty for a number of reasons, including if you have valid coverage through an employer with 20 or more employees that you still work for, or, in the case of Part D, you have private insurance that is at least as good as Medicare’s. Check with your employer or insurer to find out whether you can safely delay enrolling.) 

In addition, if you fail to enroll during the seven-month initial enrollment period, you will have to wait for the general enrollment period, which usually runs between January 1 and March 31 of each year. If you enroll during the general enrollment period, your coverage does not start until July 1. This means that you may have to wait up to seven months before you can get Medicare coverage. And, to make matters even more confusing, the general enrollment period for Part B is different from the enrollment period for Part D and Medicare Advantage plans. 

Congress has now taken a stab at ending these coverage gaps and clearing up some of the confusion. Under the new law, starting in 2023, whether you enroll during your initial enrollment period or you enroll during the general enrollment period, Medicare coverage will begin the month after enrollment. The law also allows Medicare to make exceptions for people who delay enrollment because of an “exceptional circumstance,” such as a natural disaster. Finally, the new law directs the federal government to align the Medicare Part B, Medicare Advantage, Medicare Part D enrollment periods by 2023.

While these changes will help eliminate coverage gaps, there are still problems. As tax and retirement policy expert Howard Gleckman points out, Medicare beneficiaries often miss the initial enrollment period because they are not aware of it. An earlier version of the law would have required the Social Security Administration to send notifications to individuals who are turning 65 to alert them of their eligibility for Medicare, but that provision was dropped from the final version.

What is Long-Term Care and Who Provides It?

Long-term care is the care you need if you can’t perform daily activities on your own for an extended period of time. There are a number of different ways that long-term care can be provided. 

Most long-term care involves assisting with basic personal needs rather than providing medical care. You are usually determined to need long-term care if you need help with two or more “activities of daily living” (such as bathing, dressing, eating, and going to the bathroom). Family members usually provide long-term care to start, but as an illness escalates paid care may become necessary. 

The following are the types of long-term care:

• Home care from family member. The most basic form of long-term care is when a family member becomes the caregiver. It can involve simple tasks like buying groceries or more complicated ones like bathing and dressing. Sometimes family members can be paid for their work.
• Home care aide. Home care aides provide companionship and socialization and assist with meal preparation, housecleaning, laundry, shopping, and errands. They are also called homemaker or chore aides.
• Home health care aide. Health care aides provide personal care (bathing, grooming, etc.), assist with range-of-motion exercises, provide some medically-related care (empty colostomy bags, dress dry wounds, check blood pressure, etc.), and provide assistance with housekeeping and errands. They are often referred to as personal care assistants
• Adult day care. Adult day care allows family members to get a respite from caregiving. In general, there are three types of centers: those that focus on social interaction, those that focus on health care, and special Alzheimer's care centers.  
• Assisted living facility. Assisted living facilities are a housing option for people who can still live independently but who need some assistance. Depending on the facility, that assistance may include help with meal preparation, housekeeping, medication management, bathing, dressing, transportation and some nursing care. Residents usually live on their own, in small apartments. Despite the emphasis on independence, supportive services are available 24 hours a day in order to provide different levels of help with activities of daily living. The level of medical supervision depends on the facility.
• Nursing home. Nursing homes are the highest level of long-term care. They provide 24-hour care to residents. Staff provide help with daily activities such as feeding, dressing, and bathing along with medical care and physical, occupational, and speech therapy.

Costs for care can vary widely, from a few hundred dollars a week to pay for coverage when family members are at work to $300,000 or more a year for around-the-clock home care or care in the most expensive nursing homes, perhaps with private aides hired on the side. 

Long-term care costs, whether at home, in assisted living or in a nursing home, are paid primarily from three sources: out-of-pocket, Medicaid, and long-term care insurance. Medicare, the health insurance for people over age 65, only pays for up to 100 days of skilled nursing facility care following a hospitalization, and only for so long as the patient is deemed to need skilled care. It will also pay for skilled care at home -- in theory indefinitely, but this may take some advocacy.

The Top Eight Mistakes People Make With Medicaid

Medicaid planning can be a difficult and confusing process. The following are some common mistakes people make when planning to apply for Medicaid.

• Thinking it's too late to plan. It's almost never too late to take planning steps, even after a senior has moved to a nursing home.
• Giving away assets too early. First, it's your money (or your house, or both). Make sure you take care of yourself first. Don't put your security at risk by putting it in the hands of your children. Precipitous transfers can cause difficult tax and Medicaid problems as well.
• Ignoring important safe harbors created by Congress. Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to disabled children, caretaker children, certain siblings and into a trust for anyone who is disabled and under age 65; a transfer to a 'pay-back' trust if under age 65; and a transfer to a pooled disability trust at any age.
• Failing to take advantage of protections for the spouse of a nursing home resident. These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances petitioning for an increased income allowance or refusing to cooperate with the nursing home spouse's Medicaid application. 
• Applying for Medicaid too early. This can result in a longer ineligibility period in some instances.
• Applying for Medicaid too late. This can mean the loss of many months of eligibility.
• Not understanding how Medicaid affects your home. Nursing home residents do not automatically have to sell their homes in order to qualify for Medicaid, but that doesn't mean the house is completely protected. The state will likely put a lien on the house while the resident is living and attempt to recover the property after the resident has passed away.  
• Not getting expert help. This is a complicated field that most people deal with only once in their lives. Tens of thousands of dollars are at stake. It's penny wise and pound foolish not to consult with an attorney who knows how to guide clients through the process.

The Myth of Prop 19

Annual Long-Term Care Survey Finds Steep Rise in Assisted Living Facility Costs Amid Pandemic

All long-term care costs rose sharply in 2020, but assisted living facility costs increased the most, according to Genworth’s latest annual Cost of Care Survey. The across-the-board rises were due in part to increased costs brought on by the coronavirus pandemic. 

In the past year, assisted living facility rates grew 6.15 percent for a median cost of $51,600 per year or $4,300 per month. Genworth also reports that the median annual cost of home health aides rose 4.35 percent to $54,912, while the median cost of a private nursing home room rose 3.57 percent to $105,850 and the median cost of a semi-private room in a nursing home is now $93,075, up 3.24 percent from 2019. The national median annual rate for the services of a homemaker also climbed 4.44 percent to $53,768. 

In response to this year’s price increases, Genworth conducted a follow-up study to understand how COVID-19 is impacting the cost of care. Genworth found that labor shortages, personal protective equipment costs, regulatory changes, employee recruitment and retention, wage pressure, and supply and demand were contributing to rate rises.

The only care setting where costs did not increase was adult day care, which provides support services in a protective setting during part of the day. Costs for adult day care actually fell from $75 to $74 a day, a 1.33 percent decrease, perhaps because many adult day care sites have been forced to close due to the pandemic. 

Alaska continues to be the costliest state for nursing home care by far, with the median annual cost of a private nursing home room totaling $436,540. Missouri was the most affordable state, with a median annual cost of a private room of $68,985.

The 2020 Survey, conducted by CareScout for the seventeenth straight year, was based on responses from 14,326 nursing homes, assisted living facilities, adult day health facilities and home care providers. Survey respondents were contacted by phone during July and August 2020.

As the survey indicates, long-term care is growing ever more expensive. Contact your attorney to learn how you can protect some or all of your family's assets from being swallowed up by these rising costs. 

For more on Genworth’s 2020 Cost of Care Survey, including costs for your state, click here.

19號提案的迷思 (國語)

What Is Critical Illness Insurance and Is It Worth Buying?

Many employers offer critical illness insurance as part of their benefit package. What is this insurance and is it worth purchasing? Before paying for a plan, you should read the fine print and consider alternatives. 

While a regular health insurance plan usually offers comprehensive coverage for all types of illnesses, many plans have high deductibles and copays that require policyholders to pay a lot of money out of pocket. Critical illness insurance allows you to buy insurance to cover that gap if you have a serious health diagnosis, such as cancer or a heart attack. Critical illness insurance can also cover non-medical expenses, such as mortgage or child-care bills. 

Premiums for critical illness insurance policies are relatively low, which makes the coverage appealing. The policies usually pay out in a lump sum, with the amount depending on the policy purchased. There are different types of critical illness insurance policies: some cover only one illness, like cancer, while others offer coverage of a number of different illnesses. The more coverage offered, the higher the premiums. 

Before purchasing one of these policies, however, you need to consider the downsides. Reading the fine print on the policy is very important because the policy will only cover certain illnesses, and actual coverage may depend on the severity of those illnesses. For example, even though the policy says it covers cancer, it may only cover aggressive cancer and not a more slow-moving cancer. In addition, critical illness insurance doesn’t offer the same protections that regular health insurance offers under the Affordable Care Act, so you can be denied coverage if you have a pre-existing condition. Critical illness insurance premiums also tend to rise as you get older, and you could be denied coverage once you reach a certain age. 

Instead of critical illness insurance, you can consider alternatives. First. you should look at your health insurance to see exactly what it will cover. In addition, a health savings plan in which you contribute pre-tax dollars can be a good way to cover unexpected medical expenses. Disability insurance can also offer protection for lost salary due to illness. 

For more information about critical illness insurance, click here.

19 提案的迷思 (廣東)

Who Should Purchase Long-Term Care Insurance?

Buying long-term care insurance is one way to protect against the high cost of long-term care. However, this type of insurance may not be for everyone, so consider all your options.

Long-term care – care in a nursing home or at home -- may be paid for in four main ways: 

• Out-of-pocket. If you have sufficient resources, you can pay for your long-term care needs with money you have saved. 
• Medicare. Medicare covers short-term nursing home stays after an illness or injury that requires hospitalization. Medicare covers up to 100 days of "skilled nursing care" per illness. 
• Medicaid. If you have limited resources, Medicaid will pay for nursing home care. In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in "countable" assets (it may be higher in some states). 
• Long-term care insurance. With long-term care insurance, you pay monthly premiums to buy a policy that pays your long-term care costs if you are admitted to a nursing home or need home care (depending on the policy). 

Determining whether you need long-term care insurance depends, in part, on your financial situation. The cost of a long-term care insurance policy varies considerably, depending on your age when you purchase the policy, the benefit period, and the level of benefits, among other things, but the premiums can be expensive. Therefore, if you have the resources to self-insure your long-term care and still have money left over, you likely don’t need to buy a long-term care policy. On the other hand, if you cannot afford to pay monthly long-term care premiums, you will likely be able to qualify for Medicaid. 

Another factor to consider is your family’s health history. Most nursing home stays are short-term and paid for by Medicare. A common reason for needing extended long-term care is dementia. If you know you have a family history of Alzheimer’s disease, for example, it may make more sense to buy insurance. 

Of course, we never really know what the future may bring. Long-term care insurance is like any insurance policy: we don’t know if we will ever need it. In general, long-term care insurance is something to consider if:

• you have the resources to pay the premiums, even in retirement,
• you want to preserve your estate for your heirs, and
• you don’t have enough money to self-insure.

The Attorney's Role in Medicaid Planning

Do you need an attorney for even "simple" Medicaid planning? This depends on your situation, but in most cases, the prudent answer would be "yes."

The social worker at your mother's nursing home assigned to assist in preparing a Medicaid application for your mother knows a lot about the program, but maybe not the particular rule that applies in your case or the newest changes in the law. In addition, by the time you're applying for Medicaid, you may have missed out on significant planning opportunities.

The best bet is to consult with a qualified professional who can advise you on the entire situation. At the very least, the price of the consultation should purchase some peace of mind. And what you learn can mean significant financial savings or better care for you or your loved one. This may involve the use of trusts, transfers of assets, purchase of annuities or increased income and resource allowances for the healthy spouse.

If you are going to consult with a qualified professional, the sooner the better. If you wait, it may be too late to take some steps available to preserve your assets.