Fong Law Group

Medicaid Applicants: Protecting Your Healthy Spouse in 2025

For millions of seniors nationwide, Medicaid provides a safety net for people who find themselves requiring long-term care. Most Americans aged 65 and older – roughly 70 percent – will need these kinds of services in their later years, according to research. Meanwhile, the cost of long-term care has been rising with every passing year. In 2023, the national median cost for a semi-private room in a nursing home reached nearly $9,000 a month.

Medicaid Coverage

Run jointly by the federal and state governments, Medicaid – which sometimes goes by other names, depending on your state – provides health insurance to low-income populations. If you need to seek Medicaid coverage for long-term care, you may be aware that you must meet strict income and resources limits to qualify. In most states, you cannot have more than $2,000 in “countable” assets to your name to receive these benefits.

So, what happens if you are married? Does your healthy spouse have no choice but to live in poverty? Fortunately, no – states permit the healthy spouses of Medicaid applicants to retain a certain amount in resources to protect them from becoming impoverished.

Community Spouse Resource Allowance for 2025

Each year, the Centers for Medicare & Medicaid Services (CMS) issues updated Community Spouse Resource Allowance (CSRA) figures. These CMS guidelines outline how much of the couple’s assets the healthy spouse can keep while their Medicaid spouse gets the long-term care support they need. Generally, the CSRA increases each year.

Starting January 1, 2025, a spouse who lives at home while their partner receives Medicaid long-term care benefits can retain up to $157,920 in assets (an increase from $154,140 in 2024). Some states apply a maximum CSRA as well as a minimum CSRA. Under federal law, the minimum CSRA in 2025 will be $31,584. State Medicaid programs can then set their own limits within these federal guidelines.

Monthly Maintenance Needs Allowance for 2025

If you receive long-term care benefits through Medicaid while your healthy spouse continues residing at home, you may feel better knowing that your partner can also keep a minimum amount of income each month. The federal government calls this their monthly maintenance needs allowance (MMNA). In 2025, the maximum MMNA will be $3,948 (an increase from $3,853.50 in 2024).

Work With an Elder Law Attorney

The rules for Medicaid can quickly become complex and often vary widely by state. To ensure that you are pursuing the best coverage options for your situation, speak with a qualified elder law attorney in your area.

Medicare Open Enrollment - and New Benefits - Are on the Way

Medicare open enrollment is on the horizon. Now is the time to start thinking about any changes you may want to make to your Medicare coverage. Thanks to the Inflation Reduction Act, some significant changes have come along for Medicare, and more will take effect in the near future.

Medicare Open Enrollment

Medicare open enrollment happens once each year. In 2024, the open enrollment period is between October 15 and December 7. Any changes to your Medicare plans will take effect on January 1, 2025. During the open enrollment period, you can:

• Join or drop a Medicare Advantage Plan, switch between Medicare Advantage Plans, or add or drop Medicare prescription coverage.
• Switch from Original Medicare to a Medicare Advantage Plan or vice versa.
• Join or drop a Medicare prescription drug plan, or switch to a different drug plan if you are enrolled in Original Medicare.

If you are already in a Medicare Advantage Plan, you will also have an open enrollment period between January 1 and March 31 of 2025, during which you can:

• switch to another Medicare Advantage Plan (with or without drug coverage);
• drop your Medicare Advantage Plan and return to Original Medicare; or
• join a separate Medicare drug plan.

Learn more about Medicare enrollment periods and how to join the various plans.

Lower Drug Prices for Medicare Members

One of the most significant changes Medicare beneficiaries will see in the coming years is the lowering of prescription drug prices. Under the Inflation Reduction Act (IRA), the federal government was granted the authority to negotiate the prices of certain high-cost medications covered under Medicare. This historic move is designed to reduce out-of-pocket expenses for beneficiaries and lower costs for the Medicare system.

In 2026, the first round of negotiated prices will take effect, affecting the cost of 10 widely used prescription drugs. These drugs were chosen because of their high cost, they are each available only from single sources, and there are no generic or biosimilar competitors.

The following chart outlines the initial 10 drugs that will be affected by the lower negotiated prices. The prices in the chart are rounded and represent estimates of the Wholesale Acquisition Costs (WACs) based on a 30-day supply in calendar year 2022.

The manufacturers of the drugs are participating in the Negotiation Program voluntarily. The below information is subject to change. Learn more on the Centers for Medicare & Medicaid Services (CMS) website.

Negotiated Prices for 10 Medicare Drugs (going into effect in 2026)

Drug Name	Commonly Treated Condition	List Price for 30-Day Supply in 2023	Discount of Negotiated Price From 2023 List Price	Agreed-to Negotiated Price for 30-Day Supply for 2026
Januvia	Diabetes	$527	79%	$113
Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, NovoLog PenFill	Diabetes	$495	76%	$119
Farxiga	Diabetes, Heart failure, Chronic kidney disease	$556	68%	$178.50
Enbrel	Rheumatoid arthritis, Psoriasis, Psoriatic arthritis	$7,106	67%	$2,355
Jardiance	Diabetes, Heart Failure, Chronic kidney disease	$573	66%	$197
Stelara	Psoriasis, Psoriatic arthritis, Crohn’s disease, Ulcerative colitis	$13,836	66%	$4,695
Xarelto	Prevention and treatment of blood clots, Reduction of risk for patients with coronary or peripheral artery disease	$517	62%	$197
Eliquis	Prevention and treatment of blood clots	$521	56%	$231
Entresto	Heart failure	$628	53%	$295
Imbruvia	Blood cancers	$14,934	38%	$9,319

If you take any of these 10 drugs, you will want to monitor developments closely. Keep in mind the lower prices will not take effect until 2026. Planning ahead can help you anticipate future savings and make informed decisions during the 2025 open enrollment period.

In addition to the 10 drugs listed above, the CMS will pick 15 more drugs by February 1, 2025, that are covered under Medicare Part D to negotiate lower prices for starting in 2027. For 2028, CMS will negotiate lower prices for 15 more drugs that are covered by Medicare Part B and Part D. Up to 20 more Part B and Part D drugs will be chosen for lower negotiated prices each year after 2028.

Americans Are Still Paying More for Medications

Even with these discounts, Americans are still paying more for brand-name prescription medications than people in most other countries. According to The Commonwealth Fund, Americans’ per capita spending on pharmaceuticals is nearly three times the average of citizens of other Organisation for Economic Co-operation and Development (OECD) nations.

A 2022 study published by JAMA found that about a fifth of U.S. adults over the age of 65 were trying to reduce their prescription drug costs by skipping or delaying filling their prescriptions, reducing or skipping doses, or using another person’s medication. Some survey respondents said they had to forgo basic needs or start accruing debt so they could afford their medications. Such desperate measures can have serious consequences for people with chronic health conditions.

More Changes Coming to Medicare

The IRA offers additional changes that will help Medicare beneficiaries on other fronts as well.

• Medicare beneficiaries will have a yearly cap on how much they will have to spend on out-of-pocket prescription drugs covered by Medicare. The cap for 2025 is to be set at $2,000.
• Insulin costs are capped at $35 per month per covered prescription for those who are enrolled in Medicare Part D. This cap may not apply to all insulin products. Check with your care provider to determine whether this applies to you.
• Recommended vaccines will be available at no cost to people who have Medicare prescription drug coverage.
• The Medicare Part D low-income subsidy program (LIS), also known as Extra Help, has been expanded to 150 percent of the federal poverty level (FPL). If your annual income is 150 percent of the FPL, then you may qualify for the Extra Help program.
• Companies that raise the prices of certain drugs faster than the rate of inflation must pay a rebate to Medicare.

Learn More About Medicare and Late-Life Planning

As is typical of health insurance and health care, Medicare and its related plans have nuances. Speak with a health care professional or your elder law attorney. They can discuss your specific situation and potential options with you.

What You Should Know About the Medicare Tax

You may have seen the Medicare tax listed on your paycheck stubs or on your income tax return filings and wondered what it is. To learn more about what it is and what it pays for, continue reading.

What Is Medicare Tax?

Medicare is a federal public benefits program providing medical benefits to individuals over 65 and younger people with certain disabilities.

Medicare tax is an essential component of the United States tax system. As part of the Federal Insurance Contributions Act (FICA), this tax plays a crucial role in maintaining the solvency and functionality of the Medicare program.

The tax was established in 1965 as part of the broader Medicare program created under the Social Security Act. Its primary purpose is to fund Medicare Part A, which covers hospital insurance. This coverage includes inpatient hospital care, skilled nursing facility care, hospice care, and some home health care services.

Other parts of Medicare, such as Part B (medical insurance) and Part D (prescription drug coverage) are funded through premiums paid by beneficiaries and general revenue. Part A, meanwhile, gets its funding primarily through payroll taxes.

How Medicare Tax is Calculated

Medicare tax is calculated as a percentage of an employee's wages. As of 2024, the Medicare tax rate is 1.45 percent for both employees and employers, making the total rate 2.9 percent for most workers. This means that an employee pays 1.45 percent of their wages to the Medicare program. The employer then matches this amount.

However, an additional Medicare tax applies for high-income earners. Under the Affordable Care Act (ACA), individuals with wages exceeding certain thresholds pay an extra 0.9 percent Medicare tax. The thresholds are as follows:

• $200,000 for single filers
• $250,000 for married couples filing jointly
• $125,000 for married individuals filing separately

This additional tax is only imposed on the employee's portion of the Medicare tax and not on the employer's portion.

Who Pays Medicare Tax?

Medicare tax is mandatory for nearly all workers and employers in the United States. This includes:

• Employees: Most workers have Medicare tax withheld from their paychecks automatically. This includes part-time, full-time, and temporary workers.
• Employers: Employers must match the Medicare tax contributions of their employees.
• Self-employed individuals: Self-employed individuals must pay both the employer and employee portions of Medicare tax, totaling 2.9 percent of their net earnings. For high-income self-employed earners, the additional 0.9 percent tax also applies.

Certain groups are exempt from paying this tax, such as some religious groups and foreign workers who are not considered residents for tax purposes. Additionally, specific types of employment may be exempt from Medicare tax under certain conditions.

Broader Implications of Medicare Tax

For employees, Medicare tax is a non-negotiable deduction from their gross income. This is one of the factors that contributes to the difference between gross and net pay. With the additional 0.9 percent tax for high earners, these workers also face a slightly higher overall tax burden.

For employers, Medicare tax represents a direct cost of hiring workers. In addition to wages, employers must account for the 1.45 percent Medicare tax contribution per employee. This adds to the overall cost of employment. In turn, this can influence hiring decisions, wage levels, and the ability to offer benefits.

Self-employed individuals bear a unique burden in covering both the employee and employer portions of the Medicare tax. This can represent a significant expense, particularly for high earners who also face the additional 0.9 percent tax. To mitigate this, self-employed individuals can deduct the employer-equivalent portion of their Medicare tax when calculating their adjusted gross income.

Medicare tax helps ensure a steady stream of funding for Medicare Part A, keeping the program stable and predictable. However, the tax can also influence labor market dynamics. For instance, higher payroll taxes can be a disincentive for hiring, particularly for small businesses and start-ups with tighter budgets.

Conversely, the benefits Medicare provides can have positive economic effects. In addition to improving public health, Medicare can reduce health care-related financial distress among seniors.

Medicare tax is a subject of ongoing policy debate. Proposals to modify Medicare tax rates or thresholds are common, particularly in discussions about health care funding and tax reform. Advocates for increasing the tax often argue that higher rates are necessary to address the long-term financial challenges facing the Medicare program, especially as the population ages and health care costs rise. Opponents, however, caution that higher payroll taxes could negatively affect economic growth and job creation.

Future Outlook

The future of Medicare tax ties closely to broader discussions about health care reform and the fiscal sustainability of the Medicare program. As the U.S. population ages, the number of Medicare beneficiaries is expected to increase significantly, putting additional strain on the system. Ensuring that Medicare remains adequately funded without placing undue burden on workers and employers is a complex challenge that lawmakers will continue to face.

Potential reforms may include adjustments to the tax rate, changes to the income thresholds for the additional Medicare tax, or broader restructuring of how Medicare is funded. Public opinion and political considerations will play critical roles in shaping these decisions.

More Information

Medicare tax is a vital part of the United States’ approach to funding health care for millions of Americans. Understanding it more fully helps clarify why this tax is essential not only for current Medicare recipients, but also for the future stability of the Medicare program. As the nation grapples with the challenges of an aging population and rising health care costs, the role of this tax in funding sustainable, accessible health care will remain a pivotal issue in public policy and economic discourse.

Contact your elder law attorney today to talk further about Medicare, Medicaid, and other ways to pay for health care. They can walk you through the options that may be available to you and help you understand the benefits and costs of different approaches.

Proposed Medicare Bill to Help Seniors With Medical Costs

In the ever-evolving landscape of health care, one critical challenge has been ensuring that Medicare recipients receive the coverage they need without undue financial burdens. A new legislative effort aims to address a particularly perplexing issue: the distinction between hospital observation status and inpatient status, and its effects on Medicare coverage.

Understanding Observation Status

Observation status is a classification hospitals use to determine the billing for Medicare patients. When a patient is under observation, the hospital technically considers them outpatients. (This is the case even though the patient may stay overnight or for several days in a hospital bed and receive similar care to that of an inpatient.) An inpatient is someone who has been formally admitted to the hospital.

Characteristics of Observation Status

• Temporary and Evaluative: Observation status is generally intended for patients who need short-term monitoring or further testing to determine if they should be admitted as an inpatient or if they can be discharged.
• Billing Implications: Since observation status is classified as outpatient care, patients may face higher out-of-pocket costs compared to inpatient stays, especially if they need to transition to a skilled nursing facility for further care.
• Clinical and Financial Effects: Observation status can affect clinical decisions and financial burdens for patients, as it often leads to confusion and unexpected expenses due to its distinction from inpatient care.

Challenges With Observation Status

The main challenge with observation status lies in its effect on Medicare coverage. Under current Medicare rules, time spent under observation does not count toward the three-day inpatient stay requirement for skilled nursing facility (SNF) coverage. This can lead to significant out-of-pocket costs for patients who need skilled nursing care after leaving the hospital but who did not meet the inpatient criteria.

“When seniors require hospitalization, their focus should be on their health and getting well, not on how they were admitted,” Sen. Susan Collins (R-ME), a co-sponsor of the bill, said in a news release. “Yet currently, many older Americans face severe financial consequences due to the distinction between an observation stay and inpatient admittance.”

Medicare’s Three-Day Stay Rule

Medicare’s three-day stay rule is a policy that requires a patient to have a minimum of a three-day inpatient hospital stay to qualify for Medicare Part A coverage of SNF care. This rule has significant implications for patients and their access to necessary post-acute care services.

Details of the Three-Day Stay Rule

• Inpatient Requirement: To be eligible for coverage of SNF care under Medicare Part A, you must have been an inpatient for at least three consecutive days.
• Exclusion of Observation Days: Days spent under observation status, even if in the hospital, do not count toward this three-day requirement. This can potentially disqualify patients from SNF coverage despite having spent time in the hospital.
• Financial Consequences: Patients who do not meet the three-day inpatient requirement may face substantial costs for SNF care. This can be financially burdensome and limit access to necessary rehabilitative services.

The Effect on Patients

The three-day stay rule can create a significant barrier for patients who require SNF care after a hospital stay. Many patients who have been under observation status might not meet the inpatient criteria. As a result, they may fail to qualify for Medicare coverage of subsequent skilled nursing care. This often leads to out-of-pocket expenses that can be challenging for many, particularly older adults on fixed incomes.

The Improving Access to Medicare Coverage Act

The Improving Access to Medicare Coverage Act is a bipartisan legislative proposal introduced to amend a critical shortcoming in Medicare coverage related to hospital stays. The primary goal of the bill is to ensure that time spent under observation status in a hospital counts toward the necessary days for Medicare coverage of subsequent SNF care.

Key Provisions

• Observation Status Inclusion: The Act proposes that observation status counts toward the three-day hospital stay requirement for Medicare coverage of SNF care.

• Patient Protection: By addressing the observation status issue, the Act aims to protect patients from unexpected high costs associated with not meeting the inpatient requirement for Medicare Part A coverage of SNF care.

• Improved Coverage and Access: The Act seeks to ensure that Medicare recipients have better access to necessary post-acute care services without the financial strain caused by the current policy limitations.

The introduction of this Act highlights the need for a more equitable system that recognizes the reality of hospital care, where observation status can often involve the same level of care and duration as inpatient status.

How the Act Addresses the Issues

The Improving Access to Medicare Coverage Act aims to rectify the disparities caused by the current policy by including observation status in the calculation of the three-day hospital stay. This change is intended to:

• Enhance Equity: By counting observation days toward the three-day requirement, the bill would provide a more equitable system that acknowledges the reality of patient care needs.

• Reduce Financial Burden: The Act would alleviate the unexpected costs associated with the current exclusion of observation status, making post-acute care more affordable for Medicare beneficiaries.
• Improve Access to Care: Ensuring that more patients qualify for Medicare-covered SNF care would improve access to necessary rehabilitative services, promoting better health outcomes and quality of life for older adults.

“This bipartisan bill would deem time spent in observation status as inpatient care for the purpose of the Medicare three-day prior hospital stay requirement for skilled nursing care, which will help insulate older Americans from undue out-of-pocket costs and ensure that they get the care that they need,” said Sen. Collins.

The Improving Access to Medicare Coverage Act represents a significant step toward addressing the complexities and inequities of Medicare coverage related to hospital stays. By including observation status in the calculation of the three-day inpatient requirement, the Act seeks to ensure that patients receive the care they need without facing unnecessary financial burdens. This legislative effort underscores the importance of continually assessing and updating health care policies to meet the needs of the population and to provide fair, comprehensive access to essential health services.

Learn More About Medicare

You can learn more about Medicare benefits and your rights by contacting your elder law attorney today. They can discuss your specific situation and your options with you.

Getting Help When Providing Care at Home for Aging Parents

As they grow older, your parents may prefer to continue living in their home rather than moving to a long-term care facility. They are not alone in this; more than three-quarters of adults over the age of 50 say they would prefer to age in place. If your parent can safely live at home on their own with your support, you may wish to seek some form of outside help. Fortunately, you have a number of options to explore.

Home Care Services for Seniors

Public as well as private agencies offer a variety of home care services for older adults. These may include the following:

• Home health care, either part-time or 24 hours a day
• Personal care and homemaking services, such as shopping, cooking, and cleaning
• Services delivered to the home, such as meal programs, transportation, and home repair
• Money management
• Respite care service programs that provide unpaid family caretakers with a periodic break

Other Community and In-Home Support Options

The Program for All-Inclusive Care of the Elderly (PACE) is another initiative locally available to qualifying individuals. PACE provides services through adult health centers in different communities, with additional in-home support available.

More than 2,000 adult day care centers nationwide also offer such services as physical therapy and social support.

Medicare and Medicaid Home Health Care

Home care can cost far less than nursing home care. A growing number of states are therefore striving to provide services to older adults who wish to remain in their homes. Medicare and Medicaid are two programs that provide some coverage of the medical portion of home health care.

Coverage can often prove inadequate, however. Medicare will cover home health care services if you qualify. Meanwhile, Medicaid home care services vary widely from state to state.

If you have an older loved one who wants to age in place, you may need to combine Medicare or Medicaid with other resources.

Of the thousands of private home care agencies operating nationwide, about half are Medicare or Medicaid certified agencies. If Medicare or Medicaid cover the services these agencies provide, these programs will reimburse for these services. Such certification also means that the agency has met certain minimum federal standards regarding patient care and finances.

Private accrediting organizations can also certify home care agencies. The two major accrediting groups for home care agencies are the Community Health Accreditation Partner and the National Association for Home Care & Hospice.

Non-medical services are available to help older people remain independent as well. The Older Americans Act funds more than 10,000 senior centers and gives grants to states and Area Agencies on Aging to provide services for aging adults. Such services include Meals-on-Wheels, transportation, respite care, housekeeping and personal care, money management, and shopping. Services are usually free, but you may face waiting lists or staffing shortages, depending on where you live.

To find an Area Agency on Aging program near you, visit the Eldercare Locator or call 1-800-677-1116. In many cases, these agencies may offer case management and coordination services as well.

Support Though a Geriatric Care Manager

The profession of private geriatric care managers has evolved to help coordinate services for seniors. Geriatric care managers usually have a background in social work, nursing, or psychology. They offer expertise in helping older people and their families arrange for various kinds of long-term health care. They also help evaluate an older person’s needs, review available options, and monitor the older person’s care.

To find a geriatric care manager in your area, visit the website of Aging Life Care Association.

Additional Resources

As you navigate the options for home health care, reach out to your attorney. They can assist in long-term care planning, navigating Medicare and Medicaid, and finding ways to help cover the costs.

For further information on home care options, be sure to check out the following resources:

Websites

• AARP: Needs Assessment Checklists
• Family Caregiver Alliance: Hiring In-Home Help
• Caring Connections: Caring for Someone

Pay Monthly for Medicare Part D Prescriptions Come 2025

What Is Medicare Part D?

Adults who are age 65 and older can enroll in Medicare, a federal health insurance program. If you have signed up for Medicare Part A, Part B, or both, you can also sign up for Part D.

Available through private insurers, Medicare Part D remains optional and covers certain categories of prescription medications. When choosing a Part D plan, review the specific drugs that each plan covers. You may already rely on a particular prescription medication or medications. Take the time to determine whether it appears on the list of drugs covered by any plans you are considering.

To get a better understanding of the wealth of options available for Medicare coverage, be sure to visit the Medicare website.

What Is the Medicare Prescription Payment Plan?

In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced that a new Medicare Prescription Payment Plan will start in 2025. Under this plan, all Medicare prescription drug plans, including Medicare Advantage plans, will now offer enrollees the option to spread out their prescription drug out-of-pocket costs over 12 months.

How Will It Work?

You may have high prescription costs; about one-third of seniors today in fact have trouble affording their medications. Meanwhile, about one in five say they have chosen to skip dosages from time to time to make their high-cost prescriptions last longer.

If you normally pay at the pharmacy at the time you pick up your prescription, you will have another option under the new plan. Come 2025, you can opt to be billed for and pay these costs (capped at a certain amount) over time through your insurer. This is meant to make prescription drugs more accessible and manageable for those who need them most. It will not, however, change the prescription costs.

Starting in 2025, Part D enrollees may opt into the program by contacting their Part D sponsor and completing the Medicare Prescription Payment Plan election process. This is true regardless of whether you have a traditional or Medicare Advantage plan.

What Happens Next?

After enrolling in the plan, your sponsor will notify any pharmacy that fills a prescription of your status, and you will not pay anything at the register. Instead, you will be billed the cost in monthly installments by your plan sponsor.

If you do not pay the billed amount, your participation in the program may be terminated. However, you cannot be terminated from the Part D plan for failing to pay for your prescriptions. In addition, CMS guidance states the sponsor must do the following:

• issue notices for missed payments,
• give a grace period of at least two months for failure to pay the billed amount, and
• create a reinstatement process to allow those enrolled to get back into the program if they can show good cause for failing to make payments.

The Plan May Not Be Right For You

If affording your medication is a hardship and spreading out payments over 12 months would not provide enough reprieve, a more appropriate option may be one of the four Medicare Savings Programs or the Medicare Part D Low Income Subsidy known as Extra Help. Not everyone is eligible for these programs, however, and you must apply for these options.

While the Medicare Prescription Payment Plan may be good news for many, it may not be right for everyone, such as those with low out-of-pocket prescription costs. It is expected that feedback from the public and other interested parties will add some further changes to the proposed Medicare Prescription Payment Plan to help as many people as possible.

Additional Resources

To learn more about Medicare, including your payment options, be sure to consult with your elder law attorney.

Medicare Benefits 2024: 5 Positive Changes for Seniors

More than 65 million seniors across the country benefit from Medicare, a government health insurance program.

When Does Medicare Start?

At age 65, you become eligible for Medicare if you are a U.S. citizen. You do not have to wait until you retire to apply for the program.

You can enroll in Medicare beginning three months prior to your 65th birthday. You can also do so during the month of your 65th birthday or during the three months that follow. 

Can I Get Medicare at Age 62?

Certain individuals may be able to secure Medicare coverage earlier than age 65. For instance, if you have end-stage renal disease, ALS, or a disability, it’s possible you could qualify.

What Are the Different Parts of Medicare?

Medicare's four main parts cover different aspects of health care:

• Part A covers institutional care in hospitals and skilled nursing facilities. Part B pays for doctor visits and preventative care. This includes routine lab tests and certain outpatient treatments. Parts A and B serve as the so-called "traditional" parts of Medicare.
• You can choose to enroll in the alternative to traditional Medicare, Medicare Part C, or Medicare Advantage. Part C plans bundle Parts A and B (and sometimes Part D) with other benefits, such as dental or vision care.
• Medicare Part D coverage, which is often optional, covers many of your prescription medications.

Medicare Updates for 2024

Although 2024 Medicare premiums are seeing an increase, there are nevertheless a few bright spots.

Starting on January 1, 2024, Medicare enrollees may be pleased to hear about several positive changes taking place. These include the following five updates:

1. Medicare’s mental health coverage is expanding.

• If you need a licensed mental health provider, you will be more likely to able to find a professional near you who accepts Medicare. About 400,000 more of these providers added nationwide by Medicare will include marriage and family therapists as well as mental health counselors.

• Medicare can now help if you require treatment for alcohol abuse or substance use disorder. Older Americans are currently suffering from a substance abuse epidemic. In 2022, roughly 4 million seniors aged 65 and older were living with an addiction. Covered treatments will now include such services as psychotherapy, prescription drugs, and screenings.

• Medicare will now cover up to 19 hours per week for intensive outpatient mental health care for qualifying patients. This includes enrollees who are struggling with serious mental health illnesses or substance abuse.

2. Up to 3 million more people could qualify for extra help paying their Medicare Part D premiums.

As of the start of 2024, the Medicare Extra Help Program will strive to boost its number of enrollees through various outreach efforts. Extra Help assists low-income seniors and people with disabilities. However, many who are eligible do not currently participate in the program, sometimes because they remain unaware of its existence.

In addition, another 300,000 individuals who already are part of the program will see their benefits expand further. They'll see their out-of-pocket costs for their prescription medications drop by an average of $300 a year. These enrollees also will not have to pay a premium or deductible.

3. If your specialty medications are particularly pricey, you will see considerable savings in 2024.

Many people rely on certain expensive medications to treat such serious health conditions as cancer. Even with Medicare Part D, they may have no choice but to pay tens of thousands of dollars out of pocket each year for them.

If your prescription drugs covered by Medicare cost you more than $8,000 out of pocket, you will not be responsible for any other co-pays or coinsurance for the remainder of the calendar year. This is because Medicare Part D enrollees, as of 2024, will no longer have to pay a 5 percent co-pay for catastrophic coverage.

Note that if you rely solely on brand-name prescription medications, you will end up spending roughly $3,300 out of pocket to avoid the 5 percent co-pay. (Even better, come 2025, Part D enrollees will not pay more than $2,000 out of pocket for their prescription drugs in any given year.)

4. You’ll pay no more than $35 a month for insulin supplies covered by Medicare Part D.

As part of the Inflation Reduction Act, price cuts on insulin became effective on January 1, 2024. Medicare Part D plans therefore cannot charge enrollees more than $35 per month for insulin included in their plan. Part D deductibles for insulin supplies will no longer apply, either.

The cost of this medication has tripled over the past decade or so. Even for people who require insulin daily, many are still unable to afford it. In 2022, more than a million individuals with diabetes chose to ration their insulin supply because of the cost, according to one report.

5. If you suffer from chronic pain, Medicare will now cover your monthly services.

For the first time, people receiving Medicare who have persistent or recurring pain lasting longer than three months now can have such services has medication management and pain assessment covered by their plan. (You will still need to pay for your Medicare Part B deductible and coinsurance.)

Work With Your Attorney

If you need assistance navigating Medicare, reach out to your elder law attorney today. They can help you understand how to apply for or qualify for Medicare benefits.

Getting Social Security Checks While Living Overseas

Many retirees look forward to traveling in their retirement. More and more are actually retiring overseas, in part as a way to stretch savings. But what happens to retirees' federal benefits while they are out of the country?

The short answer is that although Social Security benefits are available to retirees in other countries, Medicare is not. In this installment we look at Social Security. 

Medicare vs. Social Security Benefits When Living Abroad

Unlike with Medicare, retirees who decide to move to another country can still receive their Social Security benefits. Once a retiree has been outside the country for 30 days in a row, they are considered outside the U.S., and the rules for collecting benefits apply.

The Social Security Administration (SSA) will send checks to anyone living abroad who is eligible for benefits. However, the SSA is not allowed to send checks to several countries. Retirees who move to Cuba or North Korea cannot receive any checks while they are in either country, but they can get any withheld checks if they go to a country where paychecks can be sent.

In addition, the SSA generally does not send Social Security checks to Cambodia, Vietnam, or areas that were in the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania, and Russia). However, retirees may be able to apply for an exception. In such cases, retirees may have to agree to certain conditions, such as appearing in person at the U.S. embassy each month, to receive benefits.

Retirees who are U.S. citizens can continue receiving benefits for as long as they live outside the United States. However, citizens of other countries who receive Social Security may have some restrictions on how long they can receive benefits while outside the U.S.

The rules are quite complicated. The Social Security publication Your Payments While You Are Outside the United States explains in detail what restrictions citizens of individual countries face. The SSA also offers a payment screening tool that tells beneficiaries whether they'll be entitled to benefits if they remain outside the country for more than six months.

Retirees may have their checks directly deposited into a bank account in the United States, and direct deposit is available in some other countries as well. Using direct deposit avoids check-cashing and currency-conversion fees.

In countries with a large number of U.S. retirees, American embassies and consulates have individuals who are trained to provide Social Security services, including taking applications.

The countries are: Argentina, Australia, Austria, Belgium, Chile, Costa Rica, Croatia, Denmark, the Dominican Republic, Finland, France, Germany, Greece, Hong Kong, Ireland, Iceland, Israel, Italy, Jamaica, Korea, Japan, Mexico, the Netherlands, New Zealand, Norway, the Philippines, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, the United Kingdom, and Yemen. Individuals in other countries need to contact the SSA in writing or by phone. For a list of phone numbers, visit the SSA's webpage.

Social Security Taxes

The taxes on overseas Social Security benefits are the same as taxes on benefits for retirees living in the United States. Retirees who file individual tax returns and earn between $25,000 and $34,000 may have to pay taxes on up to 50 percent of benefits. Retirees with income over $34,000 may have to pay taxes on 85 percent of benefits.

Retirees filing jointly with a combined income of between $32,000 and $44,000 may have to pay taxes on 50 percent of their benefits. Joint filers with a combined income of more than $44,000 may have to pay taxes on 85 percent of their benefits. Combined income is the retiree's adjusted gross income plus nontaxable interest plus one-half of the retiree's Social Security benefits.

In addition to U.S. taxes, some foreign countries may tax benefits as well. To find out whether a country imposes taxes on Social Security benefits, contact the country's embassy in the United States.

The SSA provides information and resources on its International Programs webpage for retirees who are moving outside of the U.S.

What About Supplemental Security Income?

The rules for receiving Social Security overseas do not apply to Supplemental Security Income (SSI) benefits. Most recipients of SSI are not entitled to benefits outside the U.S. SSI benefits will stop if a recipient is outside the U.S. for more than 30 days, and benefits won't start up again until the recipient is back in the country for at least 30 days. However, there are exceptions for dependent children of military personnel and students studying abroad.

2024 Standard Protections for Spouses of Medicaid Applicants

Each fall, the Centers for Medicare & Medicaid Services (CMS) renews the federal guidelines that seek to protect individuals whose spouses are applying for or receiving Medicaid long-term care benefits.

These protections, known as the Spousal Impoverishment Standards, help to support the financial well-being of seniors who continue residing at home while their spouse on Medicaid lives in a long-term care facility, such as a nursing home.

Qualifying for Medicaid Long-Term Care Benefits

Long-term care is prohibitively expensive for many, so a large share of adults aged 65 and older rely on Medicaid to help cover the costs.

To qualify for Medicaid long-term care benefits, however, one must generally have very limited resources. In most states, the asset limit is set at $2,000. (Certain assets, such as personal belongings and the applicant’s primary residence, do not count toward this limit.) The applicant’s income typically goes to the nursing home as well, with some exceptions.

So, what happens if a person who qualifies for Medicaid long-term care is married? How can their healthy spouse afford to remain on their own at home? This is where the Spousal Impoverishment guidelines help.

2024 Spousal Impoverishment Figures

Note that most of the latest figures, outlined below, are effective January 1, 2024.

Community Spouse Resource Allowance (CSRA)

A spouse who continues living at home while their partner receives long-term care coverage through Medicaid can keep up to $154,140 in assets starting in 2024.

The healthy spouse, or so-called “community spouse” then has a minimum amount of assets to live on without rendering their Medicaid spouse ineligible for benefits. This special protection is known as the Community Spouse Resource Allowance (CSRA). The maximum CSRA generally rises each year; in 2023, it was $148,630.

Meanwhile, according to federal law, no state can set the minimum CSRA below $30,828 as of 2024.

Monthly Maintenance Needs Allowance (MMNA)

In addition to CSRA, the federal government offers another level of protection for the community spouse: the Monthly Maintenance Needs Allowance (MMNA).

The MMNA ensures that the healthy spouse who continues to live in the couple’s home maintains a certain amount of monthly income while their partner receives their Medicaid long-term care coverage. (Learn more about the ins and outs of MMNA.)

In 2024, the maximum MMNA will be $3,853.50 (up from $3,715.50 in 2023). Again, this is the most in monthly income that the community spouse can keep while their spouse lives in a long-term care institution. If the healthy spouse does not make enough income to live on, this allowance comes from the income of the spouse on Medicaid.

Note that the minimum MMNA for 2024 can vary depending on your state. Alaska and Hawaii typically have slightly higher minimums. The federal government updates the minimum MMNA each July.

A Note on Income Cap States

Certain states have in place a Medicaid income cap. If you reside in one of these income cap states, you will not qualify for Medicaid if your income equals more than $2,829 (in 2024) – unless you have a certain type of trust in place. This trust, known to many as a Miller Trust, must hold any income you receive that is above that cap.

As of 2023, the 23 income cap states were Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Iowa, Kentucky, Louisiana, Mississippi, Nevada, New Mexico, New Jersey, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, and Wyoming.

Home Equity Limits

As mentioned above, Medicaid does not consider the primary home of an applicant as a countable asset, unless the applicant’s equity interest in their home is above a certain amount.

Your home equity equals your home’s value minus the sum of any loans you owe on the home. In 2024, the home equity limit is set to $713,000. (Some states choose to raise this limit to $1,071,000.)

Work With Your Elder Law Attorney

Planning for Medicaid and navigating the Medicaid application process can be daunting. For expert assistance, consult your attorney today.

Access the 2024 Spousal Impoverishment Rules via the Medicaid website.

PACE Program Helps Seniors Remain at Home

Most seniors want to stay at home as long as they can instead of moving into a nursing home. The little-known Program for All-Inclusive Care of the Elderly (PACE) provides care and services to some nursing home-eligible seniors and disabled individuals, enabling them to remain in their home far longer than they might otherwise be able to do.

Program History

PACE’s inception dates to the 1970s when the federal and state governments were developing community-based services for some of their most in-need constituents. As part of this effort, states explored fee-based services for the elderly and disability communities. PACE was among the programs developed during this time.

Today’s PACE model comprises managed care services serving a population of very frail community-dwelling elderly or disabled individuals. These people are usually dually eligible for Medicare and Medicaid and also qualify for nursing home placement.

Participants receive core services not in nursing homes, but in their home or an adult day health center.

What Is PACE?

PACE provides pre-paid, comprehensive health care designed to enhance quality of life and autonomy for frail older adults, enabling them to live in their homes as long as possible while preserving their existing family structure.

To be eligible, participants must:

• be at least 55 years old
• qualify for Medicare or Medicaid (or both)
• live safely in a PACE service area
• meet their state’s criteria to qualify as a nursing home care candidate

Participants must meet any additional program-specific conditions imposed by their local PACE program.

If a senior joins PACE, the program becomes the sole provider of Medicaid and Medicare services. The enrollee must agree to forgo their usual sources of care and receive all their services through PACE. For example, participants may not also enroll in any other Medicare Advantage, Medicare prescription drug, or Medicaid prepayment plan, or optional benefit. This includes a 1915c Home and Community Based Services waiver or the Medicare hospice benefit.

PACE provides a team of doctors, nurses, social workers, personal care attendants, and dietitians to assist each senior. Participants can also receive therapeutic, ancillary, and social support services.

All care is centralized in an adult health center and supplemented by in-home and referral services. Other covered services include adult day care, dentistry, and prescription drugs.

Enrollees get Medicare Part D-covered drugs and all other necessary medications through the program. They don’t need to join a separate Medicare Part D prescription drug plan; doing so disenrolls them from PACE.

In addition, PACE provides transportation to the health center or to doctor’s appointments at other locations. It also provides meals and social activities along with other non-medical care.

For example, PACE in New York City will fix an air conditioner during a heat wave. It can also provide food during a snowstorm. The focus is on preventative care and avoiding hospitalization.

Once a person enrolls in PACE, it becomes their sole source of services. Participants can, however, leave the program at any time.

Enrollees must recertify annually, which varies across states. A state may waive recertification requirements if it determines there is no reasonable expectation of improvement in a person’s condition because of the severity of their condition or functional impairment.

Program Costs

PACE is paid for by Medicare and Medicaid benefits and private pay in some instances. Whether enrollees pay a premium depends on their financial situation. If a senior meets Medicaid’s income and resource limits, they’ll generally have a small payment, or their entire premium will be covered.

At enrollment, PACE verifies whether an individual is dually eligible for Medicare and Medicaid and whether they have Medicare Part A and/or Part B. Unless a person is dually eligible, and to the extent they would normally be required to pay, they will need to continue to pay their Medicare Part A, Part B, and/or Part D premiums. PACE then determines the amounts payable by the person, which likely won’t change over the course of their program participation.

PACE’s Success

Research shows that PACE reduces hospitalizations, emergency room visits, and nursing home stays. Some states have documented that participants receive better preventive care, with higher rates of community residence and caregiver satisfaction.

Currently, 155 PACE centers operate in 32 states. These numbers will likely increase as federal incentives for the program improve. Congress and the Centers for Medicare & Medicaid services are also exploring ways to improve PACE.

Find a program near you today.