While it may be true that the Supreme Court is often tasked with the daunting assignment of deciding the most controversial and divisive of issues, last Tuesday’s unanimous ruling was a little different.

Most who are familiar with the facts of Henderson v. Shinseki would probably agree that the decision “felt right;” especially to the elder law attorneys and senior-serving professionals who help U.S. Veterans on a daily basis.

The Court reversed a decision by the U.S. Court of Appeals that ruled Veterans Court judges could not extend the deadline to appeal, even when a Veteran’s mental illness procured the delay.

Justice Samuel Alito explained the Courts’ rationale in reversing the decision of the Court of Appeals;

The (Dep’t of Veterans Affairs) is charged with the responsibility of assisting veterans in developing evidence that supports their claims, and in evaluating that evidence, the VA must give the veteran the benefit of any doubt. … Rigid jurisdictional treatment of the 120-day period for filing a notice of appeal in the Veterans Court would clash sharply with this scheme.

For an interesting look at how the case developed in the headlines over the course of the past several months, read the first Washington Post article I referenced late last year, Court hears appeal from veteran who missed deadline, here.  Then, read Supreme Court eases benefit deadline for vets, the recent article from USA Today, available here.  The latter link also includes a photo of the late Mr. Henderson.

Last year I called attention to Henderson on my National Elder Law News Blog, in the article, Veteran Misses Filing Deadline Due to Mental Illness: Fair? a case about a Veteran with Schizophrenia, whose illness prevented him from meeting a deadline imposed by the government.

Mr. Henderson’s lawyer argued in front of the Court that his client’s disability – which developed as a result of years in the service – prevented him (Mr. Henderson) from meeting a deadline to appeal the government’s denial of his request for home care by the Veteran’s Administration.  The argument was that it would be an injustice to strictly enforce the deadline against Mr. Henderson.

Veterans’ disability compensation is paid to Veterans who are injured as a result of their service to the country.  If denied a request for benefits, there are 120 days to file a notice of intent to appeal.  Mr. Henderson was denied home care by the Veteran’s Administration, after which he filed his notice of appeal 15 days late.

The case really boiled down to inquiries of fairness and Congressional intent.  Henderson argued that Congress intended for Veterans to be treated fairly, and that the 120-day time limit was meant to be flexible; a permeable deadline, should the interests of justice require an extension.

The loser in this case (The Secretary of Veterans Affairs) argued that the time period was meant to be strictly applied and that any change to the deadline must come from Congress itself and not from the discretion of the bench (a judge).

Various veterans groups followed this case from its inception.  With the traumatic stress and psychological scars evident in many soldiers who have returned from the wars in Iraq and Afghanistan, groups like the National Organization of Veterans’ Advocates, the National Veterans Foundation, and Paralyzed Veterans of America are undoubtedly happy with how Henderson turned out.

For information on Aid & Attendance benefits, you can check out our Firm’s links to frequently asked questions below:

What Is the Amount of the Aid and Attendance Benefit?

Who Is Eligible for the Aid and Attendance Pension Benefit?

Is Aid and Attendance Only for Low Income Veterans?

How is the Aid and Attendance Benefit Calculated?

Filing a Claim

The Asset Test

Image Credits: Photograph uploaded by FreeDigitalPhotos.net Admin

Struggling to make sense of the status of health care reform in America? Don’t worry; neither can Congress, the White House, nor the Courts say with certainty whether The Patient Protection and Affordable Care Act (the Act) will ultimately be considered successful legislation, whether it will be repealed, or if certain contested provisions are constitutional. The goal of this article is one of education and not political persuasion.

Last year, I discussed how the health reforms will help Medicare recipients and early retirees in my article entitled, Health Reform: Changes in Store for the Elderly.  This year, I want to briefly reiterate the most important 2011 changes.  As you may know, the sweeping health reform law passed last year is designed for long-term implementation.

Two Important 2011 Reforms for Seniors

There are two monumental changes worth mentioning briefly.  First, preventive services (including annual physicals and cancer screenings) will now be free for most beneficiaries, including people who enrolled in private plans as of last September.

Second, a 50% discount on brand-name medicines will be available for people in the Medicare Part D “donut hole.” Seniors on the Medicare Part D drug plan subject to the donut hole pay out-of-pocket when their annual drug costs are between $2,840 and $4,550.

Illustrating the likely unpopularity of health reform repeal, US News quoted Kenneth Thrope, Head of the Department of Health Policy and Management at Emory University:

“If you do repeal the law, you’ll have to start charging people for preventive benefits.  You’ll have to increase what seniors pay for prescription drugs . . . . [n]either one of those would be very popular.”

My goal is not to convince my readers to support or oppose the Act, nor is my goal to explain it: consisting of over 1,000 pages of law and policy reform, it is becoming increasingly clear that top lawmakers do not even fully understand or agree on the law.  Instead, I seek to enlighten my readers on the law’s current status.  Paradoxically, the same principle that ensures Democracy in America is the source of the maddening confusion, delay, and uncertainty: “the Separation of Powers.”

If you are interested in a summary of the Act, you can view the bill on OpenCongress here.  For information on related legislation that will modernize America’s health system, you may want to read my recent article on the HI-TECH Act, How New Health Information Technology Will Save Money and Lives.

For those who may feel lost, allow me to quickly bring you up to speed

Obama signed the Act in March of 2010

The Act was introduced September 17, 2009, passed both the House and Senate by late December, 2009, and was later signed into law by the President on March 23, 2010.  Republicans vow to repeal the law, while Democrats dismiss repeal of reform as an impossibility.  One thing is certain; this is a major piece of legislation that implicates millions of lives and billions of dollars.

Virginia Attorney General Ken Cuccinilli and 13 other states sued the federal government shortly after the law took effect. Presently, more than 20 states have filed suit against the federal government over the legislation. Virginia Governor Bob McDonnell said the new laws would have “a significant and unavoidable impact on the bottom line of [Virginia’s] state budget,” reported Richmond Times-Dispatch.  The Virginia Interfaith Center for Public Policy has voiced its opposition to Cuccinelli and McDonnell’s challenge, proclaiming, “[T]he political actions of Attorney General Ken Cuccinelli may simply allow health-insurance industry abuse of small business, seniors and children to continue.”

Sources of Confusion

Opposition from state Governors and their Attorney Generals is a major source of the public confusion.  The New York Times criticized such efforts and said these state suits “create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.” The media’s undivided attention to the individual mandate provision has been broad, as opposed to the seemingly jaded level of concentration allocated to the other stories related to the law.  For example, beginning September 23, 2010, a key provision took effect prohibiting insurance companies from denying coverage to children based on health status.  But America is divided, as evidenced by a recently introduced state law in California: According to NewAmericaMedia.org, the backlash from insurance companies started in California when large insurers announced that they would no longer offer “child-only” policies.  Only after a law was introduced that would penalize these insurers for such behavior by banning them from the individual market for five years did the insurers reconsider their policy.  This is but one example of how important news stories are being overshadowed by the “individual mandate” debate.

What Role does Virginia Play in Shaping America’s Health Care Reform Debate?

Fast-forward to the present day, and Republicans in the House vow to repeal the law, while Democrats insist it isn’t possible (because they control the Senate).  On the other hand, there is speculation that it would be possible for the House to “de-fund” the legislation because they control the “purse strings.”  It is no wonder that the American public is confused.  Meanwhile, states are challenging provisions of the law in Federal Courts, and there is likely a Supreme Court case in the making, because Federal Courts can’t seem to agree on the constitutionality of a key provision – the “Individual Mandate.”

The "Individual Mandate" of the Act has been challenged in Federal District Courts

Henry Hudson, a federal judge for the United States District Court for the Eastern District of Virginia, recently found, this key provision of the Act to be unconstitutional.  Hudson did not undermine the Act and even refused to suspend its implementation pending appeal … he referred to Congress’s enactment as laudable but disagreed that the Commerce Clause granted the powers contained in the Act.  The New York Times provides the full opinion here.  Judge Hudson is the third federal district court judge to decide one of these cases on the merits; more than 20 other judges have cases pending which seek to challenge the law.

Demonstrating the “tit-for-tat” nature of the debate, the Obama administration responded just one day after the Virginia decision in an op-ed piece posted on the Washington Post website.  U.S. Attorney General Eric Holder along with Health and Human Services Secretary Kathleen Sebelius are of the belief that Americans who are presently insured are paying too much for their insurance, because of an inequitable burden placed upon them by those who don’t have health insurance. “Every insured family pays an average of $1,000 more a year in premiums to cover the care of those who have no insurance,” they said, reported CNN.

Though analysts agree that there may be a Supreme Court case in the making, it will most likely take some time before winding its way up to our nation’s highest court.  Illinois State University Political Science Professor Bob Bradley commented on the aftermath of the Virginia case, stating, “The Supreme Court [is] not going to hear this for awhile…what they’re going to do is let this play through all the other federal district court challenges.” Lawyers involved say it could take two years for the Supreme Court to hear the case.

“The problem is that if [state challenges succeed], they’ll all be left high and dry with half-baked reform plans that won’t work.”  Bnet offered this interesting take on the irony of state-developed reform plans, which would provide more state-autonomy but could do so at the expense of federal grant money.

An American tragedy has delayed the Republican effort to repeal.

Because of the recent shooting of Rep. Gabrielle Giffords (D-Ariz) that left six dead, the vote to repeal the Act has been postponed.  Scheduled to take place this week, the vote was delayed by House majority Leader Eric Cantor (R-Va.), along with the rest of the legislative agenda.

Major Groups that Support and Oppose Health Reform.

Of the groups that  support the Act, OpenCongress lists health professionals, consumer groups, elder groups, the U.S. military, and various trade unions.  The opposition is composed of groups such as accident and health insurance companies, construction companies, security brokers, investment companies, and milk and dairy producers.

To conclude this article, I would like to reiterate that you should not feel bad if you are still confused about the status of the U.S. health reform law. Every day, the mainstream media plasters headlines across its networks and they can be very misleading.  Some headlines I have seen could lead a casual reader to assume the Act never became law.  Still others may perhaps lead one to think the Act is doomed.  Whether you support health reform or not, and no matter what your political philosophy may be, something everyone can agree on is that patience is needed as Congress, the White House, and the Courts sort it out.  Here is the bottom line: the Affordable Care Act is currently law.  Any potential attempt at repeal or prospective landmark Supreme Court case is pure speculation at this point.

Image Credits:

Image: renjith krishnan / FreeDigitalPhotos.net

Image: renjith krishnan / FreeDigitalPhotos.net

Image: Hubpages.com/hub/inauguration-day-clip-art

Evan Farr, CELA

As the recent WikiLeaks disclosures continue to make headlines across the globe, I can not help but reflect upon what this means for healthcare privacy.

Why are these classified documents so “sensitive” in nature, that the White House believes their dissemination will risk the cause of human rights? There are at least two obvious reasons: First, the disclosures are embarrassing from a public relations standpoint, because they chronicle communications which were meant to remain confidential indefinitely. Second, some of the disclosures are substantively sensitive from a national defense perspective.

The White House is pulling no punches when it comes to how it feels about the organization, and made the following statement earlier this week regarding the disclosure of the diplomatic cables:

“By releasing stolen and classified documents, WikiLeaks has put at risk not only the cause of human rights, but also the lives and work of the individuals. We condemn in strongest terms, the unauthorized disclosure of classified documents and sensitive national security information.”

In light of the WikiLeaks disclosures, Dr. Westby G. Fisher, Clinical Associate Professor of Medicine at University of Chicago, summed up his concerns about healthcare privacy earlier this week: “While a single individual’s private healthcare information may not carry the gravitas of wartime communiqués, each of us deals with famous patients who might not want their diagnosis, HIV status, or drinking history spread far and wide.” Dr. Fisher makes a valid point, but I am not so quick to panic. While I think the privacy concerns extend beyond “famous patients,” I have faith that the HI-TECH Act will promote safeguards to effectively protect healthcare data. You can read my recent article on Electronic Health Records and the HI-TECH Act here. As I will explain later in this article, the Pentagon’s data-sharing network was grossly flawed and too easily accessible. It is my hope that the “takeaway” from this entire WikiLeaks issue will be a lesson learned by our Nation’s IT professionals. In other words, this “fiasco” will hopefully lead to an increased focus on Healthcare information technology and security in the future.

With roughly 250,000 documents released by WikiLeaks and with the aid of some popular media outlets, the ramifications of the diplomatic cables will be far-reaching. My initial thoughts were mixed:  perhaps this latest WikiLeaks embarrassment will sound the alarm bells for governments and private industries to protect sensitive information more closely; perhaps it will lead to the development of more sophisticated information technology tools and training methodologies. On the other hand, it is impossible to ignore the obvious – that the United States government failed to prevent a massive theft of classified data. As a result, the logical question raised is “how we can expect, in the future, government agencies (federal, state, or local), or even private industries, to keep sensitive data confidential?”

In my recent article on the importance of Electronic and Personal Health records, I discussed why the electronic storage of medical information is beneficial to patients, and how the use of smart health information technology can save money and lives. There is no denying that we are living in the “information age,” and to resist this transition would be counterintuitive and counterproductive. But, we also are living in the post-9/11 era. Thus, we must strike a balance between our privacy rights & expectations, and our safety.

Many Americans are wondering how hundreds of thousands of classified documents could be released in such a fashion. The answer seems to be that the security measures in place were rooted in good faith, albeit somewhat reckless in hindsight. Following 9/11, the government sought to implement a more free-flowing data network so that federal agencies could exchange information more quickly.  Analysts quoted by VOA News say, “the WikiLeaks disclosures can be traced in part to changes instituted in the aftermath of September 11, 2001 …The 9/11 Commission sharply criticized intelligence agencies for failing to share critical information with each other that, when combined, might have revealed and perhaps thwarted the plot.” As a result, the Pentagon created a network called the Secret Internet Protocol Router Network (SIPRNet). Although the network limited information to persons with a security clearance from either the State or Defense agencies, the threshold was too low. According to officials, a 23 year-old Army Private First Class (PFC) downloaded the documents and later transferred them to WikiLeaks. The rank of PFC is the third lowest in the Army; thus, the “Wikileaks fiasco” may be an example of the balance between privacy and safety having been too far skewed towards notions of the latter.

Below is a chart that represents the sources of the leaked cables. As you can see, they all came from U.S. agencies and Embassies.

Origin of Cables by Percentage

With almost every media outlet reporting on the recent WikiLeaks disclosures, it is my hope that, after all is said and done, America will emerge with a new-found appreciation for data security. In light of the WikiLeaks disclosures, it is vital that our federal and state governments institute laws, security measures, and protocols that will ensure that private medical records are kept out of the hands of thieves, extortionists, organized criminal enterprises, and non-government political groups. Most of us would have probably thought that a 23 year-old private first class officer would not have access to the documents released this week. Perhaps it is time to start asking questions, the goal being to learn from this unfortunate situation and hence pay more attention to safeguarding our data in this “post-9/11, information age.”

Evan Farr, CELA

Why is it that our most sensitive, personal data is often in an unorganized state of disarray? Most of us probably could more quickly pull a given DVD or book from our collections than proffer to a doctor a condition or illness we may have suffered 1, 2, 5,  or 10 years ago!

The electronic consolidation of health information is finally coming to fruition, as States, entities, and individuals are being presented with incentives (including common-sense!) to upgrade health information exchange technology. Absent privacy concerns, the benefits patients will receive are astonishing. Money will be saved, as will be lives. For example, we can eliminate duplicative and/or unnecessary tests. They will be a burden of the past. Doctors will be enabled to more accurately diagnose and treat patients.

I want to distinguish between two common terms that are sometimes incorrectly used interchangeably. An Electronic Health Record (EHR) is maintained by a person’s provider, whereas a Personal Health Record (PHR) is a consolidated electronic record of information, derived from numerous sources, and controlled by the individual. Both are essential to the dignity of healthcare in the wireless age moving forward.

EHR’s are useful; they document medical progress, treatment, and records rendered by a given provider. If you would like more information on EHR’s, Centers for Medicare & Medicaid Services provides an informative online overview here.

According to the Center for Medicare and Medicaid Services, approved hospitals and healthcare professionals will begin receiving incentives (payments) if they implement a “meaningful use of certified EHR technology.” This phrase is the standard established by the “HITECH” Act (the Health Information Technology for Economic and Clinical Health Act).  The Incentives Program begins in January 2011 and is scheduled to run for 10 years. The proposed timeline, in my opinion, correctly includes a generous “buffer” period (when incentives will no longer be provided) for the Medicare and Medicaid programs to initialize IT overhauls. This period of time should be more than enough for entities that lag behind the trends; once the efficiency of EHR technology is realized and in full-swing, I find it hard to believe that any state or eligible and able organization would forego the receipt of incentive payments to utilize technology they would otherwise need to implement to stay competitive and viable.

As I alluded to earlier, privacy concerns are real. In fact, medical conditions and diseases have historically been treated as among the most confidential of all personal information. I am happy to see that CMS has worked alongside the Office of the National Coordinator for Health Information Technology, with the purpose of instilling standards and criteria for EHR technology. In addition, CMS is working with the Office for Civil Rights to focus on privacy-related concerns. As the year draws to a close, I will update my blog with developments within the realm of EHR’s and privacy. For now, I will refer you to The Office of the National Coordinator for Health Information Technology Privacy and Security Page.

It appears that 2011 will be a year of important decision-making at the State level. I will continue to update my blog with developments and my thoughts. I would like to shift to another concept – the PHR – which I mentioned earlier.

I want to touch on three aspects of PHR’s that I believe are important – Control, Security, and Consolidation.

As I noted above when distinguishing EHR’s from PHR’s, a PHR is within (almost) complete control of the individual. This feature alone is what I believe will bring the American public on board to the entire electronic health information idea. I use the word “almost,” because sometimes a health plan provider will automatically create and maintain PHR’s, while others require the individual actually enter the information manually. Whatever the case may be, “Notices of Privacy Practices” generally require disclosure of the measures in place to keep the information safe and secure.  Moreover, companies have correctly realized that PHR’s should be readily accessible by allowing for unique user ID and password protection.

Consolidation is the key. It’s the key to saving money and saving lives, as my title indicates. The information consolidated by a PHR can vary, but may include important data such as emergency contacts, medication dosage and history, previous surgeries, allergies, hereditary conditions, and more. For information on selecting a PHR, visit Medicare online.

We have come a long way. I am happy to live in a proactive country with a government that insists on promoting advances that can save lives. We have the legislation (The HITECH Act), but now we need the participation. States and Medical providers will ultimately decide whether to take advantage of the incentives to put health technology in place.

At the Farr Firm, we have always taken your health and privacy concerns seriously. For many years, we have used the most advanced measures available to ensure that our clients (and their healthcare providers) have private access to their healthcare records.  For instance, for over a decade we have offered to register the Advance Medical Directives (AMDs) of our clients (and more recently, the Child Protection Plans (CPPs) of our clients), with an electronic registry, at no cost to our clients, to make these documents available in an emergency or simply for convenience.  DocuBank is the registry we currently use – an organization that has been trusted for many years with electronic storage of medical records. These records can be retrieved online by hospitals. The benefit of registering PHR’s in the context of an AMD or CPP is enormous. AMD’s are critical in emergency situations. According to their site, “a study in the Journal of the American Medical Association, living wills are not accessible in 74% of cases when needed in hospitals.”  Although this study was performed in 1998, I don’t think we have advanced tremendously since then. With the HITECH Act, I do think that America is finally on the cusp of revolutionizing healthcare information technology.

Whether you have a young family, or a family with seniors who are contemplating long-term care options, we can provide the solutions that you may be looking for. Achieving long term peace of mind is an invaluable asset that we are honored to assist you with.  Please do not hesitate to call us at 1-800-399-FARR to schedule a free, initial consultation.

As Halloween approaches this year, I can’t help but draw an analogy between the nights I spent meandering my neighborhood as a kid looking for handouts, and our current economic times.  I recall my grade-school friends and I operating our minds at their collective capacities, as we planned the best streets to target and the best routes to take to get from house to house most efficiently. Some of the parents surpassed expectations and gave out the good stuff — like king size candy bars! Others doled out the less-desirable treats, such as candy corns, smarties, or the dreaded raisins.  Some neighbors, when they were gone for the evening, left out giant bowls of candy for us trick-or-treaters to help ourselves.  Other neighbors were always gone, and their houses completely dark.  But fortunately for us candy-loving kids, most or our neighbors participated in the fun of Halloween. In fact, many of our neighbors offered a variety of different candy to choose from each year.  We never knew how much candy we’d wind up with at the end of the night, or how much of the “good stuff” we’d have in our bag.

Similar to the unpredictability of household Halloween generosity encountered by children, the Federal Government is providing the public with what can appropriately be called a “mixed bag” of economic solutions. It might just depend on what house, or rather, what state you live in.

Social Security and Supplemental Security Income recipients will not receive an increase in 2011 because there has been no increase in the federal Consumer Price Index.  Read the Social Security News Release Here (released October 15, 2010).

Though the federal Social Security Administration is not able to provide an increase for its beneficiaries because of long-standing federal law that ties Social Security and Supplemental Security to the Consumer Price Index, other federal agencies, and some state agencies, are doing what they can to help alleviate the financial struggles of the elderly and disabled.

One prime example:  the federal Administration on Aging and the Centers for Medicare and Medicaid Services (both part of the U.S. Dept. of Health and Human Services) recently awarded more than $2 million in grant funding to the Virginia Department for the Aging and the Virginia Department of Medical Assistance Services, the latter being the Virginia agency that runs our state’s Medicaid system.   Read the Commonwealth of Virginia Press Release Here (released October 6, 2010).

This grant funding to Virginia’s Medicaid system comes with high hopes and great expectations. The over $2 million in funding will be used to bolster services for two key underprivileged groups – the elderly and the disabled – by alleviating burdens in the following areas:

•    Prescription drug coverage
•    Long-term care services
•    Transition support from nursing homes to community based services
•    In-home support services for sufferers of Alzheimer’s disease

In providing these much-needed funds to Virginia for the improvement of Virginia’s Medicaid program and the development of additional services for the elderly and the disabled, the Federal Government has demonstrated its continuing commitment to improving and strengthening the Medicaid system throughout the United States.  As Senator Rockefeller wrote in 2005, on the 40th anniversary of the Medicaid program,  ”taking care of our most vulnerable people is a moral obligation . . . our representative democracy has a responsibility to do for the future what we have repeatedly done in the past: protect, preserve, and strengthen Medicaid.”

Medicaid is what pays for the vast majority of nursing home care in the United States. With both the Federal Governemtn and the Virginia State Goverment now strenghtening the Medicaid program, smart long-term care planning (i.e., Medicaid Asset Protection Planning) has never been as important as it is now. According to the Virginia Department for the Aging, the population of elderly adults in Virginia will double in less than 20 years — to the point where one in five residents of Virginia is expected to be aged 65 or older.

A statistic I cited in a previous article demonstrates the importance of Medicaid Asset Protection Planning — about 70% of Americans who live to age 65 will wind up needing long-term care at some point in their lives.  For the more than 40% who will require long-term placement in a nursing home, the cost of such care will be financially devastating without a smart Medicaid Asset Protection Plan focused on structuring assets in a way that protects those assets while allowing earlier Medicaid eligibility.

For most seniors over age 65, Medicaid is the equivalent of government-subsidized long-term care insurance, just as Medicare is governement-subsidized health insurance.  But remember — the fact that Medicaid is “government-subsidized” does not mean that it’s a “handout.” On the contrary, it’s your tax dollars that fund the Medicaid program, just as it’s your tax dollars that fund Medicare.  It’s also important to note that the Federal Government and Virginia State Government both encourage Americans to engage in smart Medicaid Asset Protection Planning — for example:  there are laws that protect spouses of nursing home residents; there are laws that encourage Americans to engage in Medicaid Asset Protection by purchasing Long-Term Care Insurance “Partnership” policies; there are laws that allow the exemption of certain types of assets when applying for Medicaid; there are laws that permit individuals to qualify for Medicaid even after transferring assets to a spouse, or to a disabled family member, or to a caregiver child.  To smartly plan and protect assets while accelerating qualification for Medicaid is no different than planning ahead to maximize your income tax deductions in order to minimize your income taxes.   It is no different than taking advantage of tax-free municipal bonds.  It is no different than planning your estate to avoid estate taxes (which, incidentally, a lot more people are going to be doing again next year when the Federal Estate Tax returns with a vengeance – with an Exemption Equivalent Amount of only $1 million – but that’s for another article . . . ).

At a time when much federal spending leads to controversy, Medicaid is an example of the government legitimately promoting the best interests of society.  Similar to how my mom always made sure I ate a well-balanced dinner before embarking upon my annual October 31st sugar binge, our Federal Government and State Government are truly looking after the citizens of America (even in these gloomy economic times) by directing funds to programs that benefit and protect our most fragile citizens — the elderly and disabled.

The Farr Law Firm specializes in Family Protection Planning (i.e., Estate Planning, Incapacity Planning, and Medicaid Asset Protection Planning), and we are here to help you.  If you have not yet done your Family Protection Planning, I encourage you to call us to take advantage of a free consultation to determine the planning solution that’s best for you and your family.

After a year of legislative wrangling and premature forecasts of death, historic legislation overhauling the nation’s health insurance system passed the Congress and has been signed into law by President Obama.  Among some of the highlights, this legislation contains:  

• The nation’s first publicly funded national long-term care insurance program, the Community Living Assistance Services and Supports (CLASS) Act;  
• A number of provisions aimed at ending Medicaid’s “institutional bias,” which forces elderly and disabled individuals in many states to move to nursing homes;
• Provisions that will help protect nursing home residents and other long-term care recipients from abuses, and give families of nursing home residents more information about the facilities their loved ones are living in or considering moving to. 

Community Living Assistance Services and Supports (CLASS) Act

The reasons for the CLASS Act, according to the U.S. Senate, are as follows:

• Long-term supports and services are not affordable or accessible for millions of Americans.
• An estimated 65 percent of those who are 65 today will spend some time at home in need of long-term care services, at an average cost of $18,000 per year.
• Five million people under age 65 living in the community have long-term care needs and over 70,000 workers with severe disabilities need daily assistance to maintain their jobs and their independence.
• One and a half million Americans are currently in nursing homes today. Roughly 9 million elderly Americans will need help with activities of daily living (ADLs) during the current year, and by 2030 that number will increase to 14 million.
• Many people who need long term services and supports rely on unpaid family and friends to provide that care, but ultimately are forced to impoverish themselves to qualify for Medicaid, which remains the primary payer for these services.

How the CLASS Act Works

• The CLASS Act will provide a lifetime cash benefit that offers people with disabilities some protection against the costs of paying for long term services and supports, and helps them remain in their homes and communities.
• CLASS is a voluntary, self-funded, insurance program with enrollment for people who are currently employed. Affordable premiums will be paid through payroll deductions if an individual’s employer decides to participate in the program. Participation by workers is entirely voluntary.
• Self-employed people or those whose employers do not offer the benefit will also be able to join the CLASS program through a government payment mechanism.
• Individuals qualify to receive benefits when they need help with certain activities of daily living, have paid premiums for five years, and have worked at least three of those five years.
• Once qualified, beneficiaries will receive a lifetime cash benefit based on the degree of impairment, which is expected to average roughly $75 per day.
• These benefits are intended to help maintain independence at home or in the community, and can be used to offset the costs of assistive living and nursing home care.

While helpful for some seniors, this benefit is fairly minimal for those of us living in the Northern Virgina area, as $75 per day won’t go very far.  In the Northern Virgina area, the average cost for home health ranges from around $18 – $22 per hour; for Assisted Living facilities from around $3,500 per month to $7,000 per month; and for Nursing Homes from around $6,000 per month to $10,000 per month.

Help for Medicare Recipients and Early Retirees

Of great interest to many seniors, the new health care law will eventually close the Medicare Part D coverage gap known as the “doughnut hole.” As most seniors know, the Medicare Part D prescription drug program covers medications up to $2,830 a year (in 2010), and then stops until the beneficiary’s out-of-pocket spending reaches $4,550 in the year, when coverage begins again. Many seniors fall into this “doughnut hole” around Labor Day, at which point they have to pay for the medications out of pocket through the end of the year.

The new law starts the process of closing the gap by providing a $250 rebate to Medicare beneficiaries who fall into the doughnut hole in 2010. Then, beginning in 2011 there will be a 50 percent discount on prescription drugs in the gap, and the gap will be closed completely by 2020, with beneficiaries covering only 25 percent of the cost of drugs up until they have spend so much on prescriptions that Medicare’s catastrophic coverage kicks in, at which point copayments drop to 5 percent.

Starting January 1, 2011, Medicare will provide free preventive care: no co-payments and no deductibles for preventive services such as glaucoma screening and diabetes self-management. Also, the legislation increases reimbursements to doctors who provide primary care, increasing access to these services for people with Medicare.

The law provides help for early retirees by creating a temporary re-insurance program that will help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55-64. Scheduled to run from June 21, 2010 through January 1, 2014, the reinsurance program will pay 80 percent of eligible claim expenses incurred between $15,000 and $90,000.

The law calls for an increased Medicare premium for those individuals earning more than $200,000 a year and married couples whose income exceeds $250,000. The law also applies the Medicare payroll tax to net investment income for couples earning more than $250,000 a year or individuals earning more than $200,000 a year.

Most of the cost savings in the law are in the Medicare program, which has made many seniors fearful that their benefits will be cut. The cost-saving measures do not affect the basic Medicare benefits to which all enrollees are entitled, but they may affect those enrolled in private Medicare Advantage plans. Medicare has been paying insurers who offer these plans more than it spends on average for Medicare beneficiaries. The original idea of Medicare Advantage was to save money by paying them less, the idea being that private insurers could be more efficient than the federal government. The opposite turned out to be the case.

Health care reform will pay the private insurers less, meaning that some will choose not to continue their plans and others will curtail extra benefits they offer enrollees, such as reimbursement for gym membership or free eyeglasses. But the cuts will be gradual, with the largest not beginning until 2015. The law also offers bonuses to efficiently run Advantage plans.

Another provision in the law will cut Medicare payment to nursing homes by about $15 billion over the next decade. Although Medicare does not pay for long-term care in nursing homes, Medicare does, in certain limited situations, pay for short-term rehabilitation in nursing homes, and Medicare’s payment to nursing homes for such short-term rehabilitation has been significantly higher what Medicaid pays to nursing homes.

Beware of Scammers

The new law has also created opportunities for scam artists, some of whom are peddling bogus policies through 1-800 numbers and by going door to door, claiming there’s a limited open-enrollment period to buy health insurance, warns secretary of Health and Human Services Kathleen Sebelius. For more on the fraud alert, click here.  

For the full text of the Reconciliation Act of 2010, click here. 

More links:

Health Reform Implementation Timeline

Health Insurance Reform: A Guide for Seniors

Consumers Guide to Health Reform

Democratic Policy Committee Summary & Analysis of the two enactments

The Patient Protection and Affordable Care Act, Section by Section Analysis

Summary of The Health Care and Education Reconciliation Act

Social Security Disability (SSD) benefits are paid to individuals who, after having worked for many years, develop a disabling condition, prior to their normal retirement age, that is so severe that they are no longer able to work. Applicants for Social Security disability benefits often have to wait months, and sometimes years, for approval from the government, even if they are clearly eligible for benefits. However, in certain circumstances the Social Security Administration (SSA) will fast-track a disability benefits application through a process known as Compassionate Allowances, usually because the applicant is suffering from a severe disability that may be life-threatening.  If an applicant is suffering from any of the conditions on the Compassionate Allowances list, his application is fast-tracked because it is presumed that he is a person with disabilities. This speeds up the application process and assists people suffering from serious conditions by awarding benefits quickly, when they are most needed.

When a person with disabilities submits an application for benefits, the SSA normally passes the application through a rigorous five-step process to ensure that the applicant truly needs assistance. The SSA first checks to see if the applicant is working, and then assesses whether the applicant is suffering from a “severe” medical condition. In the third step of the process, the SSA compares the beneficiary’s condition to a list of impairments that normally qualify a person for benefits without further assessment. When a person’s condition matches a condition on the list of impairments, the SSA presumes that the applicant has a disability and typically awards benefits without proceeding through the final two steps.

Unfortunately, most applicants typically have to wait for a long time before arriving at this third step in the evaluation process. Compassionate Allowances speed this process up by defining certain specific conditions that “obviously meet disability standards.” Prior to this month, the SSA included 50 medical conditions on the list of conditions that qualified for a Compassionate Allowance.  As of March 1, 2010, the SSA has now added an additional 38 conditions to the Compassionate Allowances list, greatly expanding the number of people who are eligible for the Compassionate Allowances program.

Although most of the conditions on the revised list are rare, of tremendous importance for the aging population is the fact that the SSA has now included Early-Onset Alzheimer’s Disease, Mixed Dementia, and Primary Progressive Aphasia among the new fast-track conditions, meaning that people who are diagnosed with any of these conditions can now receive disability benefits very quickly. In addition to a monthly disability payment, qualification for SSDI also allows earlier entry to Medicare health insurance benefits for those under age 65.  And for those under age 65 whose conditions are so severe that they must be placed in a nursing home, a disability determination from SSA also speeds up the Medicaid application process.

Please follow the links below to learn more about the Compassionate Allowance program:

Initial List of Compassionate Allowance Conditions

38 New Compassionate Allowance Conditions

Additional information about how compassionate allowances are processed

Statements from Family Members and Individuals with Early-Onset Alzheimer’s Disease

Lots of clients have been asking my opinion on Obama’s new health care reform plan.

I’m not at all a political pundit, and I have not read the entire Bill, but
I have seen and heard what appears to be a great deal of misinformation out there in the popular press. Here’s a slightly left-of-center article explaining the current status of the Bill and summarizing and rebutting some of the seemingly more outrageous claims that are out there:

MAKING LAW REALLY IS LIKE MAKING SAUSAGE!

Lots of clients have also been asking me whether Obama’s health care reform plan will affect Medicaid. Medicaid is the federal program that pays for approximately 70% of people residing in nursing homes.
It is my understanding that the current Bill does not change the Medicaid long-term care program at all. Long-term care is essentially “custodial care” — it does not fall under the umbrella of health care or under Obama’s new health care reform.

So for now, Medicaid is alive and well. If you have a family member who is in a nursing home or who you think might need to enter a nursing home in the near future, please contact us, as there are dozens of Medicaid Asset Protection strategies that we can use to help clients protect assets and get better long-term care in the process.

In Part 1 of this series I outlined the necessity to create a good Long Term Care Plan and in Part 2 I discussed the three most essential documents found in that plan.

The first essential document is a General Power of Attorney (POA) containing Asset Protection Powers. This document authorizes your “Agent” to act on your behalf and to sign your name to legal and financial documents. The Asset Protection powers contained therein enable your agent to do Medicaid Asset Protection if you have not already begun this process. The second essential document is an Advance Medical Directive (AMD) containing a Long-Term Care Directive. This document authorizes your “Medical Agent” to make decisions with respect to your medical care. Both the POA and AMD authorize your agents to intervene in the event that you are physically or mentally unable to do so. The third essential document is an Advance Care Plan that identifies and details your specific needs, desires and habits for your future caregiver so that you will receive long-term care uniquely tailored to you.

As explained in Part 2, a good Long-Term Care Plan will also typically a Living Trust – either a Revocable Living Trust (RLT) or an Irrevocable Income-Only Trust (IOT). If you become incapacitated, an RLT can provide management of your assets by your trustee similar to a POA. However, as was noted, an RLT does not protect your assets from the expenses of long-term care. An IOT, which will be discussed in detail in Part 4, is a tool that protects you not only from probate, as an RLT does, but also from the expenses of long-term care.

Part 3 will now discuss using long-term care insurance as part of a Long-Term Care Plan.

Virginia’s Qualified State Long-Term Care Insurance Partnership
Virginia’s Long-Term Care Insurance Partnership Program, which became effective on September 1, 2007, allows consumers to obtain Long-Term Care Insurance as part of a Long-Term Care Plan andas part of a Medicaid Asset Protection Plan. This program allows individuals obtaining Partnership-qualified policies to protect assets that otherwise might have to be paid to a nursing home prior to obtaining eligibility for Medicaid benefits. A Partnership-qualified policy enables policyholders to protect one dollar of personal assets for every dollar the policy pays out in benefits.

One of the main purposes of this Long-Term Care Insurance Partnership Program is to offer government-endorsed “Medicaid Asset Protection” to consumers who buy long-term care insurance, enabling these consumers to protect an additional dollar amount of personal assets while still remaining eligible to apply for Medicaid coverage of long-term care. The amount protected with a Partnership-qualified policy will be equal to the sum of all benefits paid under the Partnership-qualified policy when the applicant seeks to qualify for Medicaid. The total amount of assets that a policyholder may protect as a result of a Partnership-qualified policy is above and beyond the basic allowances that a client and a client’s spouse may keep under the basic rules of the Medicaid program.

Benefits of Partnership LTC Insurance
Long-term care insurance was, and is (especially in light of Virginia’s Long-Term Care Insurance Partnership Program), one of the best ways to provide for you future long-term care needs. With the baby boomers facing projected federal deficits, reductions in Medicaid spending, as well as rapidly rising health care costs, it is clear that alternative methods of financing long-term care support are critical. Long-term care insurance is preferred not just by consumers, but by the Commonwealth of Virginia and by the Federal Government because it is often the only option that can help keep clients out of the nursing home — by paying for home care. We’ve had many clients over the years who were forced to spend their final days in a facility simply because they ran out of money to pay for home health aides.

Elder Law Considerations
When shopping for a long-term care insurance policy, it is crucial to consider carefully the entire financial situation of both spouses and to consider the possible alternative of not purchasing long-term care insurance. Failure to consider these issues can result in purchasing too little coverage, which can actually be worse than purchasing no coverage at all.

For example, consider Joe and Linda, a married couple, facing Joe’s nursing home costs of $7,500 per month (a few hundred dollars lower than the average cost in Northern Virginia). Joe has $2,000 in monthly retirement income, as well as a long-term care insurance policy with a monthly benefit of $6,000 (based on a daily benefit of $200). Linda’s only income is Social Security of $700 per month. At first glance, the couple seems better off with the long-term care policy; they have an extra $6,000 per month, without which they could not afford the nursing home. They can pay for Joe’s nursing home and have an extra $500 per month to put towards Linda’s monthly expenses. Unfortunately, Linda’s regular expenses are approximately $2,400 per month, so with only $1,200 per month of income she is unable to make ends meet. Joe is not eligible for Medicaid assistance because his income (including the long-term care insurance benefit) is greater than the nursing home bill. In this example, Joe’s long-term care insurance policy does not provide enough of a benefit to allow Linda to have sufficient income to meet her needs. If Joe’s long-term care insurance policy provided a $7,500 monthly benefit ($250 per day instead of $150), all of Joe’s retirement income would be available for Linda’s monthly expenses, so Linda would still have enough income to live on.

If Joe and Linda had recognized this shortfall and decided to not purchase the long-term care insurance, or if they could not afford the increased premiums for the increased monthly benefit, they could instead use Medicaid assistance to help pay for Joe’s nursing home costs. Most of Joe’s $2,000 per month of income would normally be required to pay the nursing home expenses; Linda would keep her $700 per month. However, because Linda’s income is so low, the Medicaid rules would allow Linda to receive part of Joe’s income to help her with her monthly living expenses. Linda could receive a monthly maintenance needs allowance of up to $2,610, (including her income) which includes allowances for housing and utilities. Therefore, in this case, Joe and Linda would have the nursing home costs paid, and Linda would have $2,610 monthly for her support – more than enough for her regular needs.

The bottom line? Be sure to buy enough coverage, and be sure to buy it for the right spouse. It doesn’t make sense to pay insurance premiums and then be bankrupted by nursing home fees anyway because of insufficient coverage. As with other medical expenses, the inflation rate in nursing home fees is currently quite high. In 10 years, the cost of the nursing homes, at the current rate of inflation, will be about twice what it is today.

How Much Coverage Do You Need?
On average, someone age 65 today will need long-term care services for three years. Women need care for longer (on average 3.7 years) than do men (on average 2.2 years). Although twenty percent of today’s 65-year-olds will need care for more than five years, I don’t recommend anyone purchasing more than five years of long-term care insurance, because after moving to a nursing home, your family can commence the process of Medicaid Asset Protection so long as you have a good Long-Term Care Plan in place.

Purchasing Long-Term Care Insurance
Lifecare Financial Services, LLC is a Virginia insurance brokerage co-owned by Evan Farr and specializing in Medicaid-Friendly Long-Term Care Insurance (i.e., Partnership Qualified) and Medicaid-Friendly Annuities. Lifecare Financial is dedicated to assisting and supporting not just consumers, but also Elder Law and Trust & Estate attorneys with clients in Virginia who face the challenges of assisting their clients as they plan for long-term care.

Lifecare Financial offers a unique value proposition to referring attorneys and other professionals because it only works with the top financially rated companies for long-term care insurance and annuities. Referring professionals can be confident in knowing that the insurance products recommended by Lifecare Financial have been thoroughly vetted for financial strength, stability, and measurable experience in their relevant product line. For further information about Lifecare Financial, call 703-691-1888.

How Do I Know The LTC Insurance Company Won’t Go Bankrupt?
You don’t, and that’s why it’s important to deal only with top-rated companies. For your protection, it is the policy of Lifecare Financial Services, LLC to work only with insurance companies that have a Comdex Rating (a rating that combines the ratings from all of the top rating agencies) of at least 95%.

Conclusion
A good Long-Term Care Plan may or may not include long-term care insurance. As you make your decision, it is prudent to seek the advice of a Certified Elder Law Attorney. The Farr Law Firm can help guide you through the considerations of whether or not long-term care insurance makes sense for your Long-Term Care Plan.