Tag Archives: Health Care

Critter Corner: Gidget Chirps In

Written by Evan Farr

Dear Gidget:  I just read a story in the latest National Geographic about how certain fats in the blood of a python help its organs to double in size after eating a big meal to facilitate digestion. Apparently, it’s a healthy thing to have all that fat after all! So does this mean that I can now eat all the cheeseburgers I want?

Gidget’s Answer:  Not necessarily! Since parakeets can sometimes become dinner for pythons, I try to stay away, but this story grabbed my attention as well. Apparently, pythons have an extremely high level of fatty acids in their blood that assist with the massive increase of organ size immediately after a meal to help with digestion. What is most unusual to scientists is that despite the high levels of fat in the blood, the pythons are extremely healthy with no signs of heart disease, whereas humans with the same condition face serious cardiovascular problems. More research is being conducted to determine if the specific combination of lipids is providing healthy heart protection, something that could be very useful to you humans.  Read the full article on National Geographic’s website.

On the topic of fat for humans, much of mainstream medicine these days tells you humans that it’s the “types” of fat you eat that really matter. So-called “bad fats” supposedly increase your cholesterol and your risk of certain diseases, while so-called “good fats” have the opposite effect, protecting your heart and supporting overall health.  Click here for an article on “good fat v. bad fat.” On the other hand, there’s actually no real scientific proof that the so-called “bad fats” clog arteries and cause heart disease in you humans. Click here for a detailed article examining this lack of proof.

So, my bird-brain conclusion (not based on scientific research) is that you humans should eat all the cheeseburgers you want, as that helps keep you away from eating poultry.  After all, being a bird, some of my best friends are poultry.

Gidget is our token member of the aviary community and the beloved feathered friend of our Assistant Director of Client Services Grace Everitt. The lovely Gidget is an extremely vocal parakeet in shocking tones of turquoise, black and white. He enjoys watching “Friends” on television and has learned to mimic the sounds of the laugh track. His favorite thing in the world is the small mirror in his cage, where he spends hours looking at and talking to himself (or the other bird he is so confident is there.) Gidget along with Chancellor, Tiger Lilly and Sporty Sport is a regular contributor to our “Critter Corner!”

Obamacare Warfare: Why is the Public Positively Puzzled on Health Reform?

Written by Evan Farr

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-DispatchThe 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

A Mixed Bag in Virginia: Federal Law Prohibits 2011 Social Security Increases, but Federal Agency Grants Millions to Disadvantaged Groups

Written by Evan Farr

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.

Reverse Mortgage Rules Changing Again

Written by Evan Farr
money-question-markI’ve written several times over the years on the topic of Reverse Mortgages.  My first article explained the concept and requirements of a Reverse Mortgage and how seniors can use a reverse mortgage.  My second article, entitled Using a Reverse Mortgage to Pay for Home Care, explained how the Reverse Mortgage can be used as a tool to help seniors stay in their homes and age in place.  My most recent article, entitled Huge Problem with Reverse Mortgage Industry, raised a nationwide alarm about how the reverse mortgage industry is “shooting itself in its collective foot” (and, I believe, discriminating against disabled and incapacitated adults) by routinely second-guessing the legitimacy of every power of attorney document and therefore imposing unnecessary obstacles for, and sometimes turning away, the very people who need a reverse mortgage the most — those frail elders who are unable to care for themselves but wish to remain at home and age in place rather than being forced to sell their homes and move into a long-term care facility.  Here’s the link for the ElderLawAnswers article which picked up on my concerns and confirmed the enormous scope of this problem.
Now, having already maimed itself with the power of attorney fiasco, the reverse mortgage industry seems intent on digging its own grave.   According to Stephen Pepe, JD, a Reverse Mortgage Consultant with MetLife Bank, there are big changes coming soon to the HECM Reverse Mortgage programs, changes which for many seniors are going to significantly increase the expenses of obtaining a reverse mortgage after October 4, 2010, while also making the reverse mortgage counseling process “much longer and more involveddue to significant changes in HUD’s HECM counseling protocol.”
In an email sent to the members of the National Academy of Elder Law Attorneys, Pepe explained as follows:
“Congress and HUD have made some significant changes to the Home Equity Conversion Mortgage (HECM) reverse mortgage program that take effect on October 4, 2010. These changes impact any applicant that does not have an FHA Case Number assigned to his or her HECM application before that date.”

Specifically, Pepe says that HUD’s ongoing Mortgage Insurance Premium will be increasing from 0.5% to 1.25% (a 150% increase!), and that the size of new HECM reverse mortgages will shrink anywhere from 1% to 5% depending on the applicant’s age.

However, Pepe also points out that homeowners will soon have a second HECM reverse mortgage option, called the “HECM Saver.” According to Pepe, the HECM Saver is a smaller and less expensive reverse mortgage. Under the HECM Saver, a reverse mortgage applicant will gain access to significantly less money, but in return, says Pepe, “HUD will waive its pricey Initial Insurance Premium, saving the applicant up to $12,510 in initial costs.” 

Pepe did not mention whether HUD will be waiving or reducing the ongoing Mortgage Insurance Premium, so I’m guessing it won’t be.

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Be Prepared

Written by Evan Farr
Evan and Family at Centennial National Scout Jamboree

Evan and Family at Centennial National Scout Jamboree

In my last blog post, I mentioned I’d be spending a week and a half working as a member of the archery staff at the BSA National Scout Jamboree, helping the Boy Scouts of America celebrate its 100th Anniversary.   Well, I’m happy to report that I made it back to work last week, safe and sound despite having spent 10 days surrounded by sharp flying objects. 


This being my first BSA National Jamboree, I didn’t really know what to expect.   “Boy Scout camping” typically involves getting away from civilization, sleeping in small tents in the woods, being surrounded by nature, practicing outdoor skills, sitting around the campfire at night, singing silly songs, roasting marshmallows.  But for me and the other 45,000 Scouts and adult leaders who attended the 2010 National Scout Jamboree, this was a very different “camping” experience indeed.

Boy's Life coverTo be fair, the Jamboree is not really about “camping” at all.  We were not away from civilization; on the contrary, with 45,000 people in attendance, the Jamboree was approximately double the size of Fairfax City, where my office is located.  And just as in Fairfax, the Jamboree had almost all of the modern amenities you can imagine — multiple shopping venues, concerts and entertainment every night, even air conditioned bathrooms and shower houses to help keep us comfortable while we created memories for a lifetime.   Oh yes, and lots of modern technology.

Modern Technology in Boy Scouts?

When the Boy Scouts of America was founded in 1910, the latest advancement in communication was the manual telephone switchboard. Now, 100 years later, the BSA has fully embraced modern technology.  All Jamboattendees had access to wireless Internet connection.  Portable cell towers dotted the landscape, and Scouts were encouraged to bring and carry cell phones to communicate with each other and their leaders.  A text messaging system was used to communicate important alerts directly to Scout leaders, staff, youth, or visitors, and an emergency notification system was in place to broadcast directly to Scouts, Scouters, and their families. 

Technology was the rage throughout the Jamboree.  Those visiting the Merit Badge Midway were able to earn the Inventing Merit Badge — the newest BSA Merit Badge.  At the Technology Quest program area, my son and I got a taste of Robotics (the next BSA Merit Badge under development) by using the device that modern surgeons use to perform robotic surgery. 

There was even an ”Extreme Duo” who wore cameras attached to their heads to deliver an immersive day-in-the-life sampling of their experiences which you can view on the jamboree Web site.  Check out the video segment that’s posted at http://www.bsajamboree.org/Virtual/Archery.aspx and you’ll see the Extreme Duo at the archery range where I was working.  If you look real close, you’ll even see me towards the end of the video (my face is obscured by shadow, but I’m one of the instructors in the bright yellow shirts).   

Technology was also at the forefront of Jamboree health and safety preparedness.  The Jamboree had 20 fully staffed medical centers and hundreds of roving EMTswho were able to access an electronic medical record system that, with a simple scan of a jamboree ID card, delivered almost instant wireless access to a patient’s medical record and enabled medical staff to record treatments electronically and track public health trends.  Fortunately, there were no major injuries that I’m aware of — just lots of little ones.  I’m still itching from a spider bite that made my arm swell up. 

What Does All This Have to Do with Elder Law and Estate Planning?

Much has changed, in Scouting and in our society, in the past 100 years.  Like everything else, today’s Estate Planning is very different from the Estate Planning of yesteryear.  When I started practicing law in 1987, a General Power of Attorney was an extremely simple, one-page document; today, my powers of attorney are twenty-page documents — not because longer is necessarily better, but because the law and society have become much more complex.  In 1987, most people used Wills to transfer their assets at death.  Today, most people use living trusts to transfer assets at death in order to avoid probate because of the complexity of the probate process.  As for Elder Law — in 1987, the field of Elder Law didn’t even exist. 

But one thing that hasn’t changed in the past 100 years — either in Scouting or in life — is the need to plan ahead and prepare for life’s eventualities.  The Boy Scout Motto — “Be Prepared” – is as important now as it was in 1910, and it applies to Estate Planning and Elder Law just as much as it applies in Scouting.   You never know what life is going to throw at you, but if you plan ahead and expect the unexpected, you’ll always Be Prepared.

Survey Shows Some Nursing Homes May Bill For Services Not Provided

Written by Evan Farr

A recent Washington Post article concludes that many nursing homes have been “up-coding” billing for care of residents for years, meaning that some nursing homes sometimes bill a resident more than they should be billed by using a special billing category intended to be used only for the five percent of nursing home patients who need highly specialized care and rehabilition. 

The article quotes Marie-Therese Connolly, who headed the Justice Department’s Elder Justice and Nursing Home Initiative from 1999 to 2007, as stating that “[u]pcoding, billing for services not rendered, and billing for worthless services have been significant problems for years, costing taxpayers many millions, if not billions, of dollars.”

In the Washington area, two nursing homes owned by HCR ManorCare put their residents in the most expensive billing category at nearly five times the national average, according to the Washington Post analysis.  The ManorCare nursing home in Silver Spring, MD put 45 percent of its residents into that category, and the ManorCare facility in Wheaton, MD put 43 percent of its residents into that category.  According to the article, a spokesman for ManorCare denied any improper billing or upcoding, stating that residents are coded into billing categories based on their medical and rehabilitative needs.

According to the Post article, this billing program is specifically targeted in President Obama’s health-care legislation passed last week by Congress, changing two rules that experts said have been exploited by nursing homes to inflate bills.  For a review of how the new health-care legislation affects seniors, see my article Health Reform: Changes in Store for the Elderly.

Health Reform: Changes in Store for the Elderly

Written by Evan Farr

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 the Patient Protection and Affordable Care Act, 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

New Medical Conditions — Including Early-Onset Alzheimer’s Disease — Now Qualify for Automatic Disability Benefits

Written by Evan Farr

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

Using a Reverse Mortgage to Pay for Home Care

Written by Evan Farr

Many of my clients ask me how I feel about reverse mortgages, and even more so this past week because of a favorable story that appeared in last week’s Washington Post entitled “Reverse Mortgages are Not the Next Subprime.”  This excellent article was written by the ”Mortgage Professor,” a Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania (incidentally, my Alma Mater), and clears up much of the confusion and myths and fears surrounding the reverse mortgage.  I encourage all of you to read it.  Another good source of information about reverse mortgages is the Federal Trade Commission Fact Sheet

As a Certified Elder Law attorney, one of my primary goals is to help preserve the dignity and enhance the lives of my elderly clients.  For many of my clients, remaining in their homes as long as possible is one of their highest priorities.  I have been a long-time fan of reverse mortgages because they help my clients do exactly that — remain in their homes as long as possible.  

Why? Because in order to remain in your home as long as possible, you will most likely at some point need some home care.  “Home Care” can be health care and/or supportive care provided formally in your home by health care professionals (typically referred to as home health aides) or by paid or unpaid family members or friends (typically referred to as caregivers).  Often, the term “home care” is used to mean non-medical care, or custodial care, which may be provided by persons who are not nurses, doctors, or other licensed medical personnel.  The term “home health care” typically refers to care that is provided by a licensed health care professional — most often a Certified Nurse Assistant (CNA).  However, the terms are often used interchangeably, and for simplicity in this article I will use the term “home care” to refer to both types of care.

The goal of home care is typically to to allow you to remain at home and age in place, rather than being forced to move to an assisted living facility or nursing home.  Home Care providers render services in your own home. These services typically include a combination of health care services and life assistance services.

Health care services may include services such as wound care, administration of medication, physical therapy, speech therapy, and occupational therapy.  Life assistance services typically include help with daily tasks such as meal preparation, medication reminders, laundry, light housekeeping, errands, shopping, transportation, companionship, and help with the activities of daily living (ADLs), which typically refers to six activities (bathing, dressing, transferring, using the toilet, eating, and walking). 

Although some home care is provided by family members for free, most family caregivers need to be paid, and these payment arrangements should always be made pursuant to a written caregiver contract (prepared by an Elder Law Attorney) between the caregiver and the care recipient.  Because home care is quite expensive, having the proceeds from a reverse mortgage is often one of the  only ways that elders can afford to pay for appropriate home care. According to The 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, the 2009 national average hourly rate for home health aides increased by 5.0% from $20 in 2008 to $21 in 2009. The national average hourly rate for homemaker/companions increased by 5.6% from $18 in 2008 to $19 in 2009. 

Most of my clients, when they start out needing home care, will typically start with receiving 4 hours of care 3 days a week, which costs about $1,000 per month and is easily affordable for many people.  But over time, most of my clients progress to the point of needing upwards of 12 hours per day of home care, costing over $7,000 per month, and very few people can afford to pay for this type of care without eventually tapping into their home equity via a reverse mortgage.

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which completely protects your ability to remain in your home. So long as you pay your property taxes and homeowners insurance, and maintain your property, you can remain in your home forever. If the reverse mortgage lender fails, any unmet payment obligation to the borrower will be assumed by FHA. 

According to the Mortgage Professor’s article mentioned in my first paragraph, in 2009 about 130,000 HECMs were written, and feedback from borrowers has been mostly positive. In a 2006 survey of borrowers by AARP, 93% said that their reverse mortgage had a mostly positive effect on their lives.

For many of my clients, a reverse mortgage is the best way, and often the only way, for them to be able to afford to remain at home, despite the fact that reverse mortgages are expensive to obtain.  However, reverse mortgages are not for everyone, as there are other programs that may be able to help you remain in your home.  For instance, many of my clients are eligible for the Veterans Aid and Attendance benefit or for home-based Medicaid, or can be made eligible for these benefits through our process of Asset Protection

Whether you own your home outright or in a Revocable Living Trust or in my proprietary  Living Trust PlusTM Asset Protection Trust, if you think a reverse mortgage might be the solution you need, please contact me for a free consultation so I can evaluate your specific situation and advise you as to whether a reverse mortgage is your best option for allowing you to live comfortably in your home.

Important Elder Law and Estate Planning Numbers for 2010

Written by Evan Farr

Under current law, there will be no cost-of-living adjustment (COLA) in Social Security in 2010 — the first time that has happened since automatic cost-of-living adjustments began in 1975. Several bills before Congress would grant a special increase in Social Security payments for 2010.

In addition, when no Social Security COLA is provided, Medicare Part B premiums — which are deducted from Social Security checks — are frozen for most beneficiaries so that the Social Security checks do not drop (click here for more information).

Below are figures for 2010 that are frequently used in the elder law practice, including the new Medicaid spousal impoverishment figures, the long-term care insurance deductibility limits, and Medicare premiums and co-pays, and Social Security Figures:  

Medicaid Figures for 2010 

Divestment Penalty Divisor $ 6,654.00 – Northern Virginia (Arlington, Fairfax, Loudoun and Prince William Counties and the Cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park.)
$ 4,954.00 – All Other
Individual Resource Allowance $ 2,000.00
Monthly Personal Needs Allowance $ 40.00
Minimum Community Spouse Resource Allowance $ 21,912.00
Maximum Community Spouse Resource Allowance $ 109,560.00
Minimum Monthly Maintenance Needs Allowance $ 1,821.25
Maximum Monthly Maintenance Needs Allowance $ 2,739.00
Shelter Standard $ 546.38
Standard Utility Allowance $ 141

Estate Tax Exclusion / Exemption Equivalent Amount: 

Unlimited Exemption (Estate Tax Temporarily Repealed for 2010).  Exemption currently set to revert to $1 million in 2011.

 Annual Gift Tax Exclusion: $13,000  

Attained age before the close of the taxable year Maximum deduction
40 or less $330
More than 40 but not more than 50 $620
More than 50 but not more than 60 $1,230
More than 60 but not more than 70 $3,290
More than 70 $4,110
Beneficiaries who file an individual tax return with income: Beneficiaries who file a joint tax return with income: Income-related monthly adjustment amount Total monthly premium amount
Less than  or equal to $85,000 Less than or equal to $170,000 $0.00 $110.50
Greater than $85,000 and less than or equal to $107,000 Greater than $170,000 and less than or equal to $214,000 $44.20 $154.70
Greater than $107,000 and less than or equal to $160,000 Greater than $214,000 and less than or equal to $320,000 $110.50 $221.00
Greater than $160,000 and less than or equal to $214,000 Greater than $320,000 and less than or equal to $428,000 $176.80 $287.30
Greater than $214,000 Greater than $428,000 $243.10 $353.60

Social Security Figures for 2010

         (Click here for SSA Press Release)
         (Click here for SSA Fact Sheet)

  • Cost of Living Increase: 0 percent 
  • Maximum Taxable Earnings: $106,800   

SSI Federal Payment Standard:  

  • Individual: $674/mo.
  • Couple: $1,011/mo.