Fong Law Group

Plan Ahead Before Seeking Nursing Home Care: Avoid Unnecessary Debt for You and Your Family

Many senior citizens may need the services of a nursing home or at-home care at some point in their life. You might assume that government assistance or health insurance will step in and cover the cost if you cannot afford these services. Unfortunately, neither health insurance nor Medicare covers long-term care. Because obtaining long-term care insurance can be very expensive, Medicaid could become your only option.

Medicaid coverage is not a given, however. If you have assets or recently transferred assets, Medicaid may determine you do not qualify for coverage until a certain amount of time has passed. If this happens, you and their family can face significant medical bills. If you cannot pay, nursing homes may take you to court to get reimbursed.

What steps can you take to avoid this? First, before applying for Medicaid, get a better understanding of the timelines in your state – known as lookback periods – that can affect your eligibility. Then you can engage in proper Medicaid or asset protection planning in advance of these timeframes. A good age to begin planning is around age 65, although everyone’s situation is different.

Individual states run Medicaid programs, and every state has different rules regarding Medicaid eligibility. These programs were designed as a payor of last resort — in other words, to qualify, you must meet strict requirements. There are two primary types of Medicaid benefits: home care and skilled nursing home care.

Lookback Periods

You must submit an application to your local Medicaid office to qualify for these benefits. As part of this process, the state will look at any money or property you may have transferred within a certain lookback period. In New York, for example, this period of time will soon be 30 months for home care and 60 months for skilled nursing care.

These lookback periods can have serious consequences. If you have not engaged in appropriate asset protection planning, you may not be able to qualify for home care or nursing home care for many months. The result is that many elderly individuals must then spend down their savings and liquidate their assets to pay privately for their home care before Medicaid starts covering anything. If a person no longer has resources and is subject to a disqualification penalty period, family members may have to step in and bear these costs on their own.

So, what can you do? The answer is to start planning as soon as is practical.

Options to Explore

Speaking with an elder law attorney can help you and your loved ones explore options available to avoid you or them being personally responsible for the costs of your care.

• Medicaid Asset Protection Trust — One common approach is placing assets in a Medicaid Asset Protection Trust. You may be able to use this to shelter various assets such as stock accounts, savings, a home with unprotected equity, and much more.
• Pooled Income Trust — Another option you may explore is contributing income that exceeds Medicaid allowances to a Pooled Income Trust. This can allow you to qualify for Medicaid while diverting excess income to a trust that pays qualified expenses on your behalf. This will enable you to benefit from the income and not spend it on things Medicaid could have otherwise covered.
• Spousal Refusal — Your spouse may also have options that can help you qualify for Medicaid. One such option includes exercising a right of spousal refusal — a process available in some states by which the income and assets of your spouse can be removed from consideration in your Medicaid eligibility analysis.

Finally, an attorney can help you understand if certain transfers are permissible under Medicaid rules without triggering a penalty period.

Without proper planning, individuals with assets and income exceeding specific state-set thresholds would have to spend this income and their assets on their care or exempt items before they can receive Medicaid benefits. For assistance in planning, consult with your attorney.

When Is a Nursing Home Eviction Legal, and What Can I Do?

Nursing home evictions, or involuntary discharges or transfers, disrupt the lives of residents, leading to homelessness, separation from familial support systems, and loss of care. As federal law covers all federally funded nursing home residents, nursing home evictions are legal only in particular instances, such as:

• The nursing home can no longer provide for a resident's needs.
• The resident does not pay for care after "reasonable and appropriate notice," which varies by state.
• The resident no longer needs care.
• The resident jeopardizes the health or safety of other residents.
• The nursing home closes.

Causes of illegal nursing home evictions

Financial motives are a significant cause of illegal nursing home evictions. When residents can no longer pay for nursing home care, some nursing homes evict residents without providing sufficient notice and time to apply for Medicaid.

Additionally, some nursing homes discharge residents early to avoid financial risks. For instance, some nursing homes remove residents transitioning from higher-paying Medicare to lower-paying Medicaid.

Other nursing homes discharge residents prematurely, suspecting residents will not pay for their stays. Medicare covers the initial 20 days of care. After 20 days, residents are responsible for copayments. A 2019 study in the Journal of the American Medical Association Internal Medicine found that nursing homes more often discharged Medicare recipients on the final day of full coverage than before or after, suggesting that some nursing homes prioritize financial considerations over resident care.

"Hospital dumping," where individuals returning from hospitalizations may find their beds taken, is another illegal practice, according to the American Council on Aging. State laws require that nursing homes hold beds open for hospitalized residents for one to two weeks. Residents receiving Medicaid are also entitled to available Medicaid-certified beds.

Other nursing homes may attempt to remove residents they perceive as disruptive or challenging, such as individuals with dementia. These facilities claim that they cannot meet the resident’s needs as a pretense for evicting them. Yet once nursing homes open their doors to residents, they have already determined they can meet residents' needs. According to the Centers for Medicaid and Medicare Services, discharging residents because nursing homes cannot provide for their needs should not be a common practice.

Dynamics between residents and nursing homes

Residents facing involuntary discharges or transfers from nursing homes may be hesitant to speak up and may not know their rights under federal law. They may feel pressure to accept discharges, even when they are not ready to go home.

If you or your loved one are facing a nursing home eviction, keep the following in mind:

• Nursing homes must provide 30-day notices of discharges. Residents do not need to depart immediately.
• In addition, residents have the right to appeal a release. They may remain in the nursing home during the appeal process unless doing so would endanger the health and safety of themselves or others.
• Nursing homes claiming to be unable to provide for a resident's needs must document why they can no longer assist the resident. Similarly, nursing homes must tell residents their reasons for discharging residents and provide these reasons in writing. Residents may request explanations of their discharges.
• A long-term care ombudsman is an official who advocates for people in nursing homes. You may contact your ombudsman through the Department of Aging in your state for assistance with nursing home evictions.  
• The national nonprofit Justice in Aging provides a useful resource on resolving common problems with nursing homes.
• For further insight and support, be sure to consult your attorney as well.

How to Get Into a Nursing Home as a Medicaid Recipient

While Medicaid helps pay for nursing home care, being admitted to a nursing home as a Medicaid recipient is not always easy. There are several ways to navigate the process, depending on your situation. 

With the median cost of a nursing home room being more than $250 a day, most families need help paying for long-term care. Medicaid is the primary method of covering the costs for nursing home care in the United States, but in order to qualify for Medicaid, an applicant must have limited income and assets. 

Generally, nursing homes will only accept patients who can pay for their care, while Medicaid will not pay for nursing home care unless an applicant is already living in a nursing home. This creates a predicament: How to get a loved one into a nursing home in order to receive Medicaid? The following are some of the methods you can use to find a nursing home that will accept your loved one:

• Private Pay. The easiest way to get into a nursing home is to be able to pay for care while the resident’s assets are spent down in order to qualify for Medicaid. Residents who can pay privately for a few months can file a Medicaid application once they are in the nursing home and start receiving benefits when the resident’s funds are below their state’s threshold for “countable assets.” Make sure the nursing home accepts Medicaid patients — and get the timing right so that the resident doesn’t run out of funds before the Medicaid application is approved. 

If the resident lacks the funds to pay for his or her own care, the resident’s family could pay. However, this is risky. The family will not be reimbursed if the resident eventually qualifies for Medicaid. It may be possible for the family to lend the money to the nursing home under a written agreement stating that the funds will be returned when the resident qualifies for Medicaid. 

• Medicare. Medicare provides nursing home coverage for up to 100 days of “skilled nursing care” per illness. The patient must enter the nursing home no more than 30 days after a hospital stay that had lasted for at least three days (not counting the day of discharge). The care provided in the nursing home also must be for the same condition that caused the hospitalization (or a condition medically related to it). In addition, the patient must receive a "skilled" level of care in the nursing facility that cannot be provided at home or on an outpatient basis. And finally, Medicare covers care only for people who are likely to recover from their conditions. If a loved one meets these conditions, it is possible for them to enter a nursing home and immediately apply for Medicaid while Medicare pays in the meantime. 
   
• Medicaid Pending. There are some nursing homes that will accept a resident who has applied for Medicaid and is awaiting a response. Unfortunately, there are only a few nursing homes that accept Medicaid pending residents without some type of payment guarantee in the event the application is denied. The nursing homes that accept Medicaid pending residents tend to be those with lower ratings for nursing home quality.  

When moving into a nursing home, be careful about signing a nursing home admission agreement. Nursing homes may try to get families to agree to pay their loved one’s bills if a Medicaid application is denied. Read any agreement thoroughly and have it reviewed by your attorney. 

Navigating the Medicaid process is complicated. If possible, consult with an attorney before entering a nursing home and applying for Medicaid.

Medicare Advantage Plans Often Wrongly Deny Necessary Care, Study Finds

In an alarming number of instances, private Medicare Advantage plans are denying coverage for medical services that would be covered under original Medicare, according to a federal investigation.  These denials are likely preventing or delaying medically necessary care for tens of thousands of Medicare Advantage beneficiaries each year.

The investigation by the Department of Health and Human Services’ Office of Inspector General found that 13 percent of Medicare Advantage plan denials should have been covered under Medicare.  The findings were based on a review by doctors and coding experts of service denials by 15 of the largest Medicare Advantage plans during the first week of June 2019.   Extrapolating from their findings, investigators estimate that nearly 85,000 beneficiary requests for medical care -- everything from MRIs to skilled nursing facility care -- could have been wrongly denied in 2019.

In an even higher proportion of cases, plans are incorrectly refusing to pay claims. Nearly one-fifth of claims that Medicare Advantage plans initially declined to pay were for services that met Medicare coverage and plan billing rules.  This translates to an estimated 1.5 million refused payments for all of 2019, delaying or blocking payments for services that providers had already delivered.

Hidden Barriers to Care

Some 26 million Medicare beneficiaries were in Medicare Advantage plans as of 2021, more than double the figure a decade ago.  The Congressional Budget Office projects that by 2030 more than half of Medicare beneficiaries will be in a private Medicare plan. Unlike original Medicare, where the federal government is the insurer, Medicare Advantage plans are run by private insurance companies. The government pays the plans a fixed monthly fee to provide services to each Medicare beneficiary under their care. The less money the plans spend on patient care, the more they and their investors make. In this way, plans have an incentive to keep costs down.

For many beneficiaries, Medicare Advantage plans’ most disagreeable cost-cutting strategy is “preauthorization” -- the common requirement that doctors and other medical providers obtain the plan's approval before a beneficiary can receive certain medical services. If the plan administrators disagree that a procedure is medically necessary, the plan may refuse to pay for it.

Medicare Advantage plans often look attractive because they offer the same basic coverage as original Medicare at a seemingly lower cost, plus some additional benefits and services like vision and dental care that traditional Medicare doesn't offer. (One reason Medicare Advantage plans can offer such enhanced services is because the federal government gives them additional payments compared to original Medicare.) The inspector general’s report highlights one of Medicare Advantage’s downsides.

“Beneficiaries enrolled in Medicare Advantage may not be aware that there may be greater barriers to accessing certain types of health care services in Medicare Advantage than in original Medicare,” the report states.

One example highlighted in the report tells of a Medicare Advantage plan that refused to approve a follow-up MRI to find out whether an adrenal lesion was malignant because the lesion was allegedly too small. In fact, Medicare’s rules do not restrict the use of follow-up MRIs based on the size of a lesion. (The plan reversed its initial denial on appeal.)

Denial Appeals Can Work

The report identified two common causes of service denials. First, even though Medicare Advantage plans’ clinical criteria cannot be “more restrictive” than Medicare’s coverage rules, plans often used tighter clinical criteria, such as requiring an x-ray before approving more advanced imaging. Second, plans often claimed that the request for services lacked sufficient documentation, even though investigators who reviewed the denied claims found that the existing medical records were sufficient to support the request.

When a Medicare Advantage plan denies a preauthorization or payment request, the beneficiary can file an appeal with the plan.  The inspector general found that when a beneficiary or provider appealed or disputed the denial of a service that met Medicare’s coverage rules, plans sometimes reversed the denial.  And in certain cases, Medicare Advantage plans corrected their own errors.

The inspector general’s report offers several recommendations for the Centers for Medicare and Medicare Services, which oversees Medicare Advantage plans, including better auditing of plans.   

To read the inspector general’s report, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care,” click here.  

Medicare Enrollment Period Extended for Those Who’ve Been Getting a Busy Signal

Medicare is part of the Social Security Administration (SSA), so if you need to enroll in Medicare, that’s whom you contact. But in recent months, phone lines at the SSA were experiencing major technical issues, preventing some individuals from being able to reach the SSA via telephone in a timely manner. These issues affected the SSA’s national 800 number as well as its field office general inquiry phone lines. At the same time, because of the pandemic, SSA offices had not been permitting in-person appointments until early April.

Certain beneficiaries — particularly those without Internet access — were therefore unable to reach the SSA before the end of Medicare’s annual general enrollment period, which typically closes March 31.

As a result, the Centers for Medicare and Medicaid Services (CMS) has announced it will provide what is known as equitable relief to anyone who, due to these challenges, was unable to submit their Medicare enrollment or disenrollment requests after January 1, 2022. These individuals will now have extra time — through Friday, December 30, 2022 — to submit Medicare Part A or Part B enrollment or disenrollment requests without penalty. This relief from penalties also applies to the 2022 Initial Enrollment Period and Special Enrollment Periods.

Individuals who were eligible to be on Medicare and incurred medical care costs during this time period can request retroactive Medicare coverage going back to January 1, 2022. Note, however, that premiums must be paid as a lump sum or else can be deducted from any Social Security benefits the individual currently receives.

Contact the SSA’s national 800 number at 1-800-772-1213 for more information, or find an SSA office near you via the SSA’s online office locator.

Medicare Now Covers the Cost of COVID At-Home Tests

If you have Medicare, you can now receive up to eight free rapid at-home Covid-19 tests a month at participating pharmacies. 

The free tests are available without a prescription to all Medicare beneficiaries with Part B, including those enrolled in a Medicare Advantage plan. If you only have Medicare Part A, Medicare won’t cover the cost. 

To get the tests, you can visit one of the pharmacies participating in the program.  (For a partial list of participating pharmacies, click here.) You do not have to be a current customer of the pharmacy in order to receive the tests, and Medicare Advantage plan enrollees may use an out-of-network pharmacy. You should bring your red, white, and blue Medicare card (even if you have a Medicare Advantage or Medicare Part D plan), but the pharmacy may be able to get the information it needs to bill Medicare without the card. 

Unlike with private insurance, there is no upfront cost for the tests. As long as you do not order more than eight tests in a calendar month, you will not pay anything. Note that tests are often packaged with two in each box, so eight tests may not mean eight boxes. If you pay for a test yourself, Medicare will not reimburse you. Medicare enrollees who order tests from covidtests.gov do not need to count those tests against Medicare's eight-test-per-month limit.

When the Biden administration originally announced it was requiring private insurers to reimburse the cost of up to eight rapid at-home Covid tests a month purchased at retail stores and pharmacies, this news left out the nation’s 62 million Medicare beneficiaries – seniors and people with disabilities who are at the highest risk of death from Covid-19. If paid for out-of-pocket, tests typically cost more than $20 for a package of two, which can discourage many Americans from getting tested. 

The problem in the case of tests for Medicare beneficiaries was that the federal program’s rules did not permit coverage of over-the-counter tests. Amid pressure from Congress and advocacy groups, officials scrambled to find a regulatory workaround.  

For more information about the free COVID tests from the Centers for Medicare & Medicaid Services, click here.

Claiming Social Security Benefits at Age 70

If you are about to turn 70, congratulations on reaching a big milestone.  And if you also have delayed claiming Social Security retirement benefits up till now, you are joining a select group -- only 6.5 percent of Social Security recipients put off collecting their benefits until they reach three score and ten, the age at which they can collect the maximum benefit. If you are about to join this elite group of septuagenarian claimers, it’s important to know when and how to claim.

The decision of how long to wait to claim Social Security benefits depends on a number of factors, including other income sources in retirement and projected longevity.  But Social Security experts advise waiting as long as possible to start collecting benefits, up to age 70.  This is because if you delay taking retirement beyond your full retirement age (66 for those born from 1943 to 1954), you amass “delayed retirement credits” that increase your benefit by 8 percent for every year that you wait, over and above annual inflation adjustments.  Your checks will be about 76 percent more than had you claimed at age 62, the earliest you can file. It’s tough to find a better and more reliable investment than that. (However, keep in mind that if you are collecting benefits based on the work record of a current or ex-spouse, there is no point in waiting until 70 -- you won't accrue delayed retirement credits beyond your full retirement age.)

Don’t Wait Any Longer

Delayed retirement credits stop at age 70, so there is no advantage to putting off starting benefits any longer.  Not only won’t your credits increase by claiming after age 70, but if you wait longer than half a year, you’ll start losing monthly benefits you would have otherwise received.  The Social Security Administration (SSA) will pay you retroactively for benefits accrued up to six months after your 70th birthday, but that’s it.  If you wait any longer, benefits you would have received are permanently forfeited.

The next thing to know is that the SSA won’t automatically start sending you checks once you turn 70. You need to apply for benefits. You can do this starting four months before the date that you want your benefits to begin.  To get the maximum amount, you’ll want the benefits to start the month you turn 70.  There is, however, one scenario where benefits will automatically kick in at 70: those who took benefits after reaching their full retirement age and then suspended their benefits to earn delayed credits until age 70.  For them, the SSA should automatically restart benefits at 70.

You can apply online -- click here.  If you can’t submit your application online, you can call 1-800-772-1213 (TTY 1-800-325-0778). In normal times, another alternative is to visit your local Social Security office, but during the pandemic visits are by appointment only and only for a limited number of reasons. However, SSA offices should be reopening soon; check the SSA’s Coronavirus Disease page for updates. The SSA will want certain information and documents when you apply. For a checklist of what may be required, click here.

When will you get your first check?  The SSA issues checks a month behind, so your benefits should start arriving the month after the month you turned 70.  For example, if you were born July 17, you should ask that your benefits start in July and your first check will come in August.  However, those born on the first day of the month get a small bonus: the SSA treats them as if they were born the previous month and starts paying benefits in their birth month.  So, for example, if you were born July 1, you’d request benefits to start in June and the payments would begin in July.

What If You’re Still Working?

Working past age 70 (or any time past your full retirement age, in fact) won’t affect your benefits.  And while you won’t increase your monthly benefit by waiting past age 70 to claim, you could boost it by working in addition to collecting Social Security. This is because the SSA recalculates your benefits each December based on your 35 highest-earning years of work. If your earnings plus your Social Security benefits allow you to replace a lower-earning year, your overall benefit could increase in the annual calculation. But Social Security benefits are taxable, so if you’re earning more money your tax rate may be higher.

In most cases, your Medicare premiums will be deducted from your Social Security check. If you happen to be retiring at age 70 and you’ve been paying Medicare’s high-earner surcharges, keep in mind that you can reverse these surcharges if your income drops far enough. The Social Security Administration uses income reported two years ago to determine a beneficiary's premiums. If your income decreases significantly due to certain circumstances, including retirement, you can request that the SSA recalculate your benefits and your premium surcharges could be eliminated or reduced. 

For an article in The New York Times on determining the optimal time to claim Social Security benefits and ways to maximize benefits, click here.

For the SSA's Retirement Benefits page, click here.

Biden Proposes Major Nursing Home Reforms, Most Extensive "In Decades"

The Biden administration has announced far-reaching nursing home reforms, targeting staffing and accountability at facilities with deficient care. Advocates are calling the proposals, which include the first-ever federal minimum staffing levels, the most significant reforms in decades. 

Nursing homes have been plagued by chronic understaffing and high turnover rates for years, a problem only exacerbated by the COVID-19 pandemic. Studies have revealed that nursing home staffing levels are often inadequate and inaccurately reported and recent research found that increasing staffing by just 20 minutes a day led to fewer COVID cases and deaths. Meanwhile, there is evidence that most nursing homes have inadequate infection control measures in place. 

Currently there are no minimum staffing levels for nurse's aides, who provide most of the day-to-day care. Instead, nursing homes are required "to provide sufficient staff and services to attain or maintain the highest possible level of physical, mental, and psychosocial well-being of each resident."

Recognizing these issues, President Biden announced new measures aimed at improving the safety and quality of care in nursing homes. The Biden administration’s proposals include taking the following actions: 

• The Centers for Medicare and Medicaid Services (CMS), which regulates nursing homes, will study the level and type of staffing needed to ensure safe and quality care and propose minimum staffing levels within a year. 
• CMS will explore ways to phase out multi-occupancy rooms and promote single-occupancy rooms. 
• The administration will call on Congress to provide $500 million for health and safety inspections, a 25 percent increase. 
• CMS will increase enforcement actions against poor-performing facilities. After reversing a Trump era change that imposed a one-time fine for nursing home deficiencies, CMS will explore making per-day penalties the default penalty. 
• In an effort to increase transparency of nursing home ownership, CMS will create a database to track nursing home owners and operators across states. In addition, the government will investigate the role private equity firms play in buying and selling nursing homes. 

The Consumer Voice,  an advocacy group for long-term care issues, calls the proposals the “most significant reforms in nursing homes in decades.” Terry Fulmer,  president of the nonprofit John A. Hartford Foundation, which works to improve long-term care, calls the plan “a major step forward for quality and safety in our nation’s nursing homes.” 

CMS had previously announced that it will add data on staff turnover rates and weekend staffing levels to its Care Compare website, giving consumers another tool when choosing a nursing home. 

To read the announcement from the administration, click here.

For more information about the reforms from Kaiser Health News, click here.

Court Rules Medicare Beneficiaries Can Appeal Switch to Hospital Observation Status

A federal court has ruled that hospitalized Medicare beneficiaries who were switched from inpatient to observation status can appeal the decision, making it easier for them to receive coverage for subsequent nursing home care. The ruling appears to bring to an end more than a decade of litigation on behalf of Medicare recipients.

Medicare covers nursing home stays entirely for the first 20 days, but only if the patient was first admitted to a hospital as an inpatient for at least three days. In part due to pressure from Medicare to reduce costly inpatient stays, hospitals often do not admit patients but rather place them on observation to determine whether they should be admitted. Even if a hospital originally admits a patient, a hospital review board can switch the patient from inpatient to observation status, before or after the patient’s stay. If the patient does not have a full three days as an inpatient, Medicare will not cover a subsequent nursing home stay – potentially costing the Medicare recipient thousands of dollars. 

There are other consequences to being considered under observation. Instead of billing you under Medicare Part A, which covers inpatient services, the hospital will bill you under Medicare Part B. This means that you will owe a co-payment for every service offered. Your total co-payment could be much larger than the one-time deductible you have to pay under Part A.

In 2011, a group of Medicare beneficiaries sued the federal government in a class action lawsuit, arguing that they should have the right to appeal when their status is switched from inpatient to observation status. After the case wended its way through the courts for 11 years, in January the U.S. Court of Appeals for the Second Circuit affirmed a lower court’s ruling in favor of the beneficiaries, noting that Medicare allows appeals of other decisions. According to the court, “the decision to reclassify a hospital patient from an inpatient to one receiving observation services may have significant and detrimental impacts on plaintiffs’ financial, psychological, and physical well-being.” The court ordered Medicare to set up a process to appeal for coverage as hospital inpatients and to notify people of their appeal rights. The class was represented by advocacy groups the Center for Medicare Advocacy and Justice in Aging and the law firm Wilson, Sonsini, Goodrich, and Rosati.  

Observation status has been controversial for years. Originally, hospitals didn’t have to give patients notice that they were in observation status rather than inpatients. That changed in 2017, when a federal law required hospitals to notify patients who are under observation for more than 24 hours of their outpatient status within 36 hours, or upon discharge if that occurs sooner. 

What Patients Can Do Now

If you are in the hospital and told you that you are under observation status, you can ask the hospital doctor to be admitted as an inpatient. You should also contact your primary care physician to ask if he or she can call the hospital and explain the medical reasons that you need to be admitted.

If you are kept in observation status and transferred to a nursing home and denied coverage by Medicare, you can appeal. In order to appeal, you must wait for your Medicare Summary Notice (MSN) to arrive. Copy the notice and highlight the disputed charges. The notice should provide information on where to send the notice to request an appeal. You can appeal both the hospital's denials of hospital admission as well as subsequent nursing home charges. The appeal process can be very complicated and you may need the help of an attorney to navigate it. For more information about the Medicare appeals process, click here.

For more analysis of the decision by Kaiser Health News, click here.

Things to Remember at Tax Time

Tax day, which is Tuesday, April 19 in 2022, is approaching and it is time to begin crossing T's and dotting I's in preparation for paying taxes. As tax time draws near, you want to make sure you file all the proper forms and take all deductions you're entitled to.

Following are some things to keep in mind as you prepare your tax form.

• Gifts. Did you give away any money this year? The gift tax can be very confusing. If you gave away more than $15,000 in 2021, you will have to file a Form 709, the gift tax return. This does not necessarily mean you will owe taxes on the money, however. 
• Medical Expenses. Many types of medical expenses are tax deductible, from hospital stays to hearing aids. To claim the deduction, your medical expenses have to be more than 7.5 percent of your adjusted gross income. This includes all out-of-pocket costs for prescriptions (including deductibles and co-pays) and Medicare Part B and Part C and Part D premiums. (Medicare Part B premiums are usually deducted out of your Social Security benefits, so be sure to check your 1099 for the amount.) You can only deduct medical expenses you paid during the year, regardless of when the services were provided, and medical expenses are not deductible if they are reimbursable by insurance.  
• Parental Deduction. If you are caring for your mother or father, you may be able to claim your parent as a dependent on your income taxes. This would allow you to claim the $500 tax credit for any non-child depedents. 
• Long-Term Care Insurance Premiums. Premiums for "qualified" long-term care policies are treated as an unreimbursed medical expense. Long-term care insurance premiums are deductible for the taxpayer, his or her spouse and other dependents. 
• Social Security Benefits. Although Social Security benefits are generally not taxable, people with substantial income in addition to their Social Security may pay taxes on their benefits. If you file a federal tax return as an individual and your "combined income," including one half of your Social Security benefits and nontaxable interest income is between $25,000 and $34,000, 50 percent of your Social Security benefits will be considered taxable. If your combined income is above $34,000, 85 percent of your Social Security benefits is subject to income tax. 
• Home Sale Exclusion. Married couples can exclude from income up to $500,000 in profit on the sale of a home ($250,000 for single individuals). If a surviving spouse sells the home, he or she can still claim the exclusion as long as the house was sold no more than two years after the spouse's death. 
• Elderly or Disabled Tax Credit. Some low-income elderly or disabled individuals are entitled to a special tax credit. To be eligible, you must meet income limits. For more information, click here.
• Earned Income Tax Credit. Previously primarily available to people with young children, for 2021 working seniors without dependents may qualify for this important credit.  For more, click here.  
• Tax Refunds. Getting a federal tax refund should not affect your Medicaid or Social Security benefits. For a year after recieving a tax refund from the federal government, the refund will not be considered income or resources for SSI or Medicaid purposes. You can also transfer the refund within a year without incurring a penalty. 

The IRS's Tax Counseling for the Elderly (TCE) Program offers free tax help to taxpayers who are 60 and older. For more information, click here. The IRS also publishes a Tax Guide For Seniors.