Florida Estate Planning, Probate and Asset Protection

The Fiscal Cliff: A Slippery Slope for Your Health

If President Barack Obama and Congress cannot reach an agreement on the fiscal cliff, economic experts agree it would be devastating ... The part of the government that handles health-related programs -- Medicare, medical research, food safety inspectors -- all would be automatically cut starting January 2 if there is no agreement on the Budget Control Act.

The fiscal cliff not only affects your financial health, but it can also affect your physical health. Changes to Medicare and other health-related programs can impact these aspects of your wellbeing tremendously if decisions are not made in Congress soon.

This issue was recently taken up in a CNN article titled, “10 ways falling off the fiscal cliff could hurt your health.”

According to the Congressional Budget Office, if the fiscal cliff is not avoided, the scheduled reduction in Medicare’s payment rates for physicians will lower Medicare spending by $11 billion. This overall spending reduction results in a 2% cut in existing Medicare budgets. Consequently, these reductions will mean a decrease of available Medicare funds to help pay for essential healthcare needs.

In many instances, Medicare funds are used to pay for vital services like nursing home and hospice care, which are crucial to the wellbeing of our elderly population. Reduced Medicare funds mean reduced payments to health care providers which, in turn, may cause hospitals and care providers to stop accepting Medicare patients.

In preparation for the impending fiscal cliff, a consultation with an experienced elder law attorney can ensure that your access to healthcare is protected.

Reference: CNN (November 30, 2012) “10 ways falling off the fiscal cliff could hurt your health”

Congressional Budget Office (May 30, 2012) “Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013”

How to Choose Your Medicare Part D Plan

When comparing drug plans, don’t choose a plan just based on the monthly premium. Low-premium plans often have higher prescription co-payments and could end up being more expensive. Look at the “estimated annual drug costs” which is how much you can expect to pay for the entire year in total out-of-pocket costs, including; premiums, deductibles and co-pays.

An important deadline is approaching – enrollment for Medicare Part D plans is underway and there are only a couple weeks left to pick the plan that suits you. Your selection needs to be made by December 7^th. Just make sure you choose wisely as there are big changes happening to many popular plans.

Here is a sobering statistic pulled by a posting over at the New Old Age blog on the New York Times: “only 5.2 percent of Medicare Part D beneficiaries manage to choose the most economical plan” (see “Part D, Part 2”). And why would that be? The market shifts greatly from year to year and providers frequently hide the gritty details with broad promises, but it’s those very details that determine your day-to-day life and much of your finances.

For a short list of things to watch for and a broader view on comparing plans it may be helpful to review another article, “Avoid A Costly Medicare Part D Mistake Right Now” through Forbes.

The big things to watch?

1. Increased monthly premium.
2. Increased deductible amount.
3. Changes in what drugs the plans cover and how well they cover them.
4. Changes in the medications you take.
5. Your plan may no longer be offered. In this case if you do nothing you will be enrolled in another plan that may not be the best suited for you.

As you ponder over which plan is best for your needs, remember that enrollment ends December 7^th.

References: Forbes (November 8, 2012) “Avoid A Costly Medicare Part D Mistake Right Now”

The New York Times – The New Old Age Blog (November 1, 2012) “Part D, Part 2”

Long-Term Care Insurance Comes Of Age

With long-term care insurance policies, the costs of assisted living facilities, in-home care and private nursing homes are covered. And, in many cases, these policies offer inflation protection, too. But since not many eligible consumers are signing up for policies, the companies that offer them are trying to make them more palatable.

It is an unfortunate fact that healthcare costs are steadily rising and will only continue to rise in the foreseeable future. Accordingly, healthcare inflation must be considered when planning to protect your health, your family, and your financial well-being. One of the greatest threats is long-term care, especially as we age. For many, long-term care insurance is the best protection against long-term care poverty. Thankfully, as reported in a recent Reuters article, the long-term care insurance market is growing to accommodate the growing need and several new options are becoming available.

Granted, we don’t like thinking about growing old and frail, perhaps with dementia or Alzheimer’s to boot. It is easy to procrastinate. Besides, who wants to pay policy premiums. As a result, people who will need long-term care insurance protection later, unfortunately have not purchased policy protection now.

According to Matthew Sharpe of Genworth, “Long-term care is definitely under-penetrated, there’s no doubt about it. About 4 percent of the population that is eligible actually has a policy.” Because of this, Genworth and other companies are developing newer and easier tools for consumers to use, and that just might translate into newer and better policies for you to consider.

Whether any policy option is the right option for you depends on your unique circumstances. As pointed out in the original article, the strongest reason to secure a policy may be the possibility of dementia or Alzheimer’s. While there are many ideas presented in the Reuters article for your consideration, nothing can replace the advice and counsel of an experienced long-term care insurance agent to help you navigate your options.

Reference: Reuters (August 16, 2011) “Long-Term Care Insurance Gets a Makeover”

 

ELDER LAW / LONG TERM CARE

 From SmartMoney (May 28, 2011) “Driving a Bargain for Long-Term Care”

 “When you buy a car or a house, you expect to haggle for the best price. It turns out that you can do the same thing when you shop for long-term care.”

 

There are some things you just don’t haggle about but, perhaps contrary to what you would guess, it turns out that long-term care isn’t one of those things. Long-term care is expensive, to say the least, but as explained in a recent article in SmartMoney, there are some expenses that may be negotiable.

Nursing homes usually will not negotiate fees, but you may be able to negotiate with assisted-living facilities and home health care agencies.

Start by arming yourself with information. You can look up local costs at Genworth.com/costofcare on a map prepared by Genworth Financial, one of the country’s largest long-term care insurers. This can help you compare costs for various types of care in your area. MetLife offers another source of area-specific information at MatureMarketInstitute.com (click on “Research” then “2010 Market Survey of Long-Term Care Costs.”)

Other resources include “Medicare and Home Health Care” which describes the home health benefits that Medicare covers (available at Medicare.gov) and the United Hospital fund’s “Next Step in Care” website for family caregivers.

Other bargaining strategies to keep in mind:

• As if there is a waiting list at the facility. If not, you may have more room to negotiate.
• While nursing homes generally do not discount rates, you may be able to negotiate for extra amenities.
• If a home-care agency has rates at the higher end of your local market, you may be able to get a lower rate if you let them know you are interviewing several agencies and taking cost into consideration.
• If you hire a home-care agency for a significant number of weekday hours, that agency may be willing to discount any extra fees they charge for weekend work.

You can learn more long-term care options on the Long-Term Care Practice Center at our website. While you’re there, be sure to subscribe to our free monthly e-newsletter.

Link: http://www.smartmoney.com/article/SB10001424052702303654804576343331172222232.html?mod=SM_plan_ls4e&link=SM_plan_ls4e

 

 

 

 

 

ELDER LAW / MEDICARE

  From The Kaiser Health News (April 13, 2011) “Document: Obama’s Proposal on Deficit Reduction – Health Care Section”

 

President Barack Obama proposes holding Medicare cost growth down by
strengthening the Independent Payment Advisory Board and making
Medicaid more flexible without using block grants.

 

If you (like most of us) were counting on Medicare to provide for your health care needs in retirement, it seems you may be standing on shaky ground. Medicare’s sustainability has been questioned for some time, and as the country turns toward the business of debt reduction Medicare cuts seem inevitable. The future of Medicare and Medicaid, as well as the source, quality, and type of care that seniors receive is in the hands of politicians now, so you may want to keep a weather eye on Capitol Hill.

I’ve previously directed your attention to the House Republican plan for debt reduction as championed by House Budget Committee Chairman Paul Ryan and how it could mean increased costs and fewer benefits for Medicare seniors.

Now President Obama has entered the fray with what may become the benchmark centrist or Democratic position. President Obama issued his position last week in a speech that can be read here in its entirety, but The Kaiser Health News has also done their part to pare down the position just to where it is relevant to healthcare and Medicare.

The President’s plan also calls for heavy savings and spending cuts, saving $480 billion by 2023 and at least an additional $1 trillion over the subsequent decade. While calling for these cuts, the President’s plan retains the ultimate goal of supporting Medicare and Medicaid. The substance of the proposal is to add onto the Affordable Care Act of 2010 with further reform designed to reduce waste, increase accountability, promote efficiency and improve quality of care, “without shifting the cost of care to our seniors or people with disabilities.”

The biggest reform and substantive change is strengthening of the Independent Payment Advisory Board (IPAB) created by the Affordable Care Act. The purpose of the IPAB is to analyze, track, and cut down on excessive costs by informing Congress and recommending action best suited to serve beneficiaries.

In this, the difference between the likely Democrat Position and the likely Republican position (neither party has allied itself to Obama or Ryan just yet) couldn’t be greater. Ryan’s plan relies on vouchers and privatization, whereas President Obama’s relies on cost control and third-party oversight.

Current estimates seem to indicate that Medicare beneficiaries will fare better under President Obama’s plan, but nothing is set in stone yet and there are more issues afoot (like ideology and debt-economics.) Politics is a tricky storm to weather, but if you still have to plan for your retirement, you are well-advised to pay attention to the goings-on on Capitol Hill … and perhaps renew that gym membership. Perhaps the best plan is try to stay healthy for as long as possible!

 

Link: http://www.kaiserhealthnews.org/Stories/2011/April/13/President-Obama-Deficit-Reduction-Proposals-Fact-Sheet.aspx

                                                                                                

ELDER LAW / MEDICARE & RETIREMENT

 

From SmartMoney (April 6, 2011) “More Costs, Fewer Benefits Likely for Medicare Seniors”

 

"The House Republican plan for overhauling Medicare would fundamentally change how the federal government pays for health care, starting a decade from now, likely resulting in higher out-of-pocket costs and greater limits to coverage for many Americans."

 

If you were born after 1956, listen up: Medicare may not be there for you when you retire. Now, this is not just some statistical research mumbo-jumbo. No, The Wall Street Journal last week reported in their SmartMoney section that House Budget Committee Chairman Paul Ryan’s solution to stem rising Medicare costs is to end the current Medicare program for people born in 1957 and after. Starting in 2022, when those American begin turning 65, they would no longer get their medical bills paid directly by the government.

According to the Centers for Medicare and Medicaid Services, Medicare spent an average of $11,743 on beneficiaries in 2009, an amount Ryan calls “unsustainable.” Ryan’s plan essentially aims to lower that average to $8,000 a year. Under his plan, that figure is the entitlement guaranteed to an individual – although more may be guaranteed in the case of old age or special infirmity – but rather than using that money to directly pay the medical bills of beneficiaries it will go to an insurance company through which the individual actually receives the benefits. In other words, Medicare would become more like aid to an individual in the form of assistance in guaranteeing insurance, but the actual mode of insurance will be privatized.

Reaching 65 and enrolling in Medicare before 2022 can grandfather you into the old system, as the plan now stands, but whether you’re affected or not the change could become vital to your plans and well-being.

What does that mean in real terms? It could mean that seniors and the disabled will have access to plans that can be tailored to fit them more precisely, and the healthier individuals could see reduced costs. Unfortunately, as the Congressional Budget Office has admitted, under Mr. Ryan’s proposal "most elderly people would pay more for their health care than they would pay under the current Medicare system." It could be quite unfortunate news to seniors already feeling the sting of rising costs.

Even though the plan is far from law and only just entering what is sure to be an extended political firefight, it ought to be food for thought. Politics is guiding the fight, but the question for you is, “how are you going to plan?”

Link: http://www.smartmoney.com/personal-finance/health-care/medicare-plan-is-likely-to-raise-costs-cut-benefits-for-many-seniors-1302095877133/

 

 

SMALL BUSINESS / 1099 REPORTING

 From Gaebler.com (April 5, 2011) “Senate Approves Repeal of 1099 Filing Provision”

 

"The controversial 1099 filing provision for small businesses was voted
down by the Senate."

 

If you’re a small business owner, you’ll be pleased to know that the Senate recently repealed the onerous 1099 filing provision created by the healthcare overhaul. As Gaebler reports and Robb Mandelbaum of The New York Times discusses, the Senate has passed a measure to repeal the expanded 1099 report provisions and President Obama has expressed that he would welcome the repeal.

The burden of such expanded provisions is something that many small businesses have dreaded, requiring companies to file a 1099 form for each vendor with whom they spend more than $600 in goods or services over the tax year. Of course, since this includes any possible expense from copy paper to coffee it easily adds up to too much paperwork and too much time spent away from productive activities (like running the business.)

There’s little doubt about the fact that larger scale politics is playing a hand in the matter. Many are touting the repeal as the first skirmish and Republican victory in the assault on President Obama’s landmark legislation, perhaps good news for those not in favor of that law, while many view it as necessary revision.

The Obama Administration itself issued its own statement after the Senate vote, saying, "Small businesses are the engine of our economy and eliminating the 1099 reporting requirement is the right thing to do. As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families."

 

Link: http://www.gaebler.com/News/Small-Business-Finance/Senate-approves-repeal-of-1099-filing-provision-800478358.htm

 

ELDER LAW / LONG-TERM CARE INSURANCE

 From The Wall Street Journal (Jan 22, 2011) “The Latest Long-Term-Care Snafu”

 "Approximately eight million Americans own long-term care (nursing home) insurance, purchased to help cover the escalating costs of long-term nursing care – whether in-home care, assisted living, or nursing home care. These long-term types of nursing care usually are not covered by Medicare or Medicaid."

According to a recent article in The Wall Street Journal (The Latest Long-Term Care Snafu), however, some families are encountering claims-denials that can prevent or delay the collection of benefits.

If you have purchased a long-term care insurance policy, there are steps you can take to help avoid this problem. Most importantly, be sure to re-read your policy’s fine print before hiring a caregiver or entering a facility. In some cases, it also may make sense to get an agent or geriatric-care manager to help in preparing your claims.

Be particularly vigilant if the policy was purchased before 1997. Older policies often include requirements such as a three-day hospital stay before they will pay for nursing home care. These types of stipulations can exclude many people for receiving care, especially those who are physically healthy, but still require care, such as Alzheimer’s patients.

Federal law requires tax-qualified long-term care contracts issued since 1997 to pay benefits under two conditions: when policyholders are unable to perform two out of six basic “activities of daily living,” such as dressing or bathing, or when they have a cognitive impairment requiring “substantial supervision.” For virtually all policies sold today, a health-care professional, such as a doctor or nurse, must certify that the disability is expected to last at least 90 days.

To learn more, be sure to visit the Long Term Care Practice Center on our website.  If you are currently evaluating a long-term care insurance policy and would like an objective evaluation of your policy terms, please call our office for a consultation. Or us the handy request form on our website and someone from our office will call you.

 

 

SMALL BUSINESS / TAX PLANNING

     From Business News Daily (12/29/2010), “11 Issues Small Business Will Be Forced to Grapple With In 2011”

     "The start of the new year ushers in a series of new regulatory, compliance, and legislative changes that could potentially affect your small business."

If you’re a small business owner, you already know that you’re facing a host tax changes, new regulations and compliances issues. Business News Daily recently ran a brief checklist hitting highlights. If you’re not set to deal with each of these, consider sitting down with your accountant or business advisor to implement some plans now.

• Tax changes – Consult your tax and payroll advisors to ensure compliance with all the new tax changes, including the partial payroll tax holiday.
• Health care reform – If you purchase health insurance for your employees, you may qualify for a business tax credit. Also note that health plans that were in place on March 23, 2010 are “grandfathered” and do not have to add many of the new protections required by health care reform. If you make significant changes to those plans, however, you may lose your “grandfathered” status.
•  FSA plans – If you offer (or participate in) a Flexible Spending Account plan, note one big change: effective January 1, 2011, over-the-counter medicines and drugs other than insulin will no longer be eligible for reimbursement without a prescription.
•  Unemployment Insurance rates/changes – Because of high unemployment rates, many employers will see a trend toward higher employer UI contribution rates higher.
• IRS enforcement - To help collect more tax revenue in this era of budget deficits, the IRS is ramping up its enforcement efforts in several areas. In 2010, the IRS kicked off an employment-tax audit program that will carry into 2011. These audits are focusing on employee misclassification, executive compensation, fringe benefits, and adherence to general employment tax filing requirements. Further, the IRS is accelerating efforts to increase tax compliance among employees who collect 

 

ELDER LAW / MEDICARE

 From The Associated Press (Dec 31, 2010) “What You Pay for Medicare Won’t Cover Your Costs”

 "Medicare covers 46 millions seniors and disabled people now. When the last of the boomers reaches age 65 in about 20 years, Medicare will be covering more than 80 million people. At the same time, the ratio of workers paying taxes to support the program will have plunged from 3.5 for each person receiving benefits currently, to 2.3."

 

If you (like me) were hoping Medicare would cover your health care costs in retirement, you might find a recent study cause to lower your expectations. Newly updated financial analysis by the Urban Institute shows that retirement of the baby boomers, the first of whom become eligible for Medicare in 2011, threatens to push the program over the edge.

Most of us expect full coverage throughout our retirement, based on all those years of Medicare taxes we paid. Yet, the Urban Institute study shows that the amount of money we put into Medicare doesn’t come close to covering the full value of the medical care we can expect to receive as retirees.

The estimate is that we can expect to incur medical fees totaling as much as three times the amount we put in over our lifetime:

Consider an average-wage, two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services — from prescriptions to hospital care — worth $355,000, or about three times what they put in.

The numbers certainly put solvency concerns to the fore when thinking about Medicare and its future …  and makes those New Year’s Resolutions to lose weight and get fit, stop smoking, get more rest, or take up an exercise program all the more important!