The Legal Checkup Blog

I've been feeling compelled to once again urge folks to update their basic estate planning documents and take steps to protect themselves and their hard-earned assets because I have seen a significant increase in crisis cases over the past few months.  One panicked daughter could not find out if her mother had been admitted to a psychiatric hospital as she suspected because mom’s Health Care Proxy did not have HIPAA (the health privacy law) release language in it.  The hospital would not speak with the daughter even though she was the named Health Care Agent because the Health Care Proxy is only effective when the principal is deemed incapacitated by a doctor. 

Then I received a call from Margaret to schedule an appointment for her mom (Betty), as her dad (Joe) was hospitalized and would need nursing home care when discharged.  After my meeting with Margaret and Betty, I knew I had to focus on this topic once again.  You see, this family represents the typical readers and, in fact, the typical clients.  Margaret has two siblings, and all of the children have been urging Betty to see an attorney.  They had actually cut my ad out of the SSSN a year ago for mom, who carried it in a folder with some other important information.  Whether Betty was in denial of her husband’s decline, too overwhelmed to deal with the issues, or just resigned that it was too late to do any thing to protect the estate, she didn’t make the call.  Margaret and her siblings did not want to overstep their boundaries and respected Mom’s independence.

So, there we were, faced with crisis planning to ensure that Joe receives quality care while preserving as much of the estate as possible for Betty’s security. There are more options available with advance planning, for sure, but we could still protect most of the estate with crisis strategies. Joe and Betty own four pieces of real estate and have other assets valued at approximately $519,000. Joe may not have more than $2,000 in his name and Betty is only allowed to retain about $109,000. The primary residence is non-countable by MassHealth in this case. Therefore, our plan needed to address the three additional properties and other “excess assets” of about $410,000.  We could protect two of the properties by utilizing exemptions in the MassHealth regulations to convey them out of Joe and Betty’s names.  One property would need to be sold, and we could take all of the excess assets (including the proceeds of the sale of the fourth property) and purchase an annuity that will pay a significant monthly income to Betty.  By converting the countable excess assets to an income stream for the community spouse, we could protect the estate.  Not bad for a crisis plan, right?  Not so fast … while we were able to develop a fantastic plan to protect nearly the entire estate, we can’t implement it!!  Not yet at least.

In order to implement this fantastic plan, we need Joe to sign the Deeds to convey all of the properties out of his name and to transfer all other assets to Betty.  If Joe had executed a comprehensive Durable Power of Attorney that provided Betty with the authority to sign such documents on Joe’s behalf, we could implement the plan using the DPOA.  But he didn’t.  As I tried to explain the problem to Betty and Margaret, Betty reassuringly said, “But he can still sign his name…”  I wish it was that easy, but it is not.  Due to Joe’s dementia, he would not understand what he was signing and I could not, therefore, notarize his signature on the Deeds.  While this plan could have been implemented within a week or two with a proper DPOA, we were instead required to seek the authority of the Court.  We filed a Petition asking the Court to appoint Betty and Margaret as co-guardians of Joe.  Since a guardian (even if it is the spouse) may not convey property of the Ward without Court approval, we must also file a Petition for Authority to Establish an Estate Plan, along with a number of emergency motions to try to get the approval as quickly as possible.  Betty must pay privately for Joe’s nursing home care until we obtain the Court’s approval to do the transfers under the guardianship and obtain MassHealth eligibility.  

I am reminded on a daily basis that the message of the importance of advance planning warrants repeating – over and over and over again.  Don’t be caught carrying an ad a year from now – take steps today to protect yourself.  Update your documents while you can still (knowingly) sign your name! Schedule a Legal Check Up to get started at http://www.thelegalcheckup.com/contact-us/

Social Security is adding 13 new conditions involving the immune system and neurological disorders to the list of Compassionate Allowances.

The Compassionate Allowances program fast-tracks disability decisions to ensure that Americans with the most serious disabilities receive their benefit decisions within days instead of months or years.

"Social Security handles more than three million disability applications each year, and we need to keep innovating and making our work more efficient," Commissioner Michael J. Astrue said.  "With our Compassionate Allowances program, we quickly approved disability benefits for more than 60,000 people with severe disabilities in the past fiscal year."

The new Compassionate Allowances conditions include:

Malignant Multiple Sclerosis
Paraneoplastic Pemphigus
Multicentric Castleman Disease
Pulmonary Kaposi Sarcoma
Primary Central Nervous System Lymphoma
Primary Effusion Lymphoma
Angelman Syndrome
Lewy Body Dementia
Lowe Syndrome
Corticobasal Degeneration
Multiple System Atrophy
Progressive Supranuclear Palsy
The ALS/Parkinsonism Dementia Complex

For more information on the Compassionate Allowances initiative, see the press release at www.socialsecurity.gov/pressoffice/pr/ss-expands-compassionate-allowances.html

A great decision just came down from The United States District Court for the District of Vermont in the class action lawsuit known as "Jimmo" vs. Kathleen Sebelius, Secretary of Health and Human Services.  The Defendant's Motion to Dismiss the case for Failure to State a Claim was DENIED.

For more details, go to www.thelegalcheckup.com/legislative-alerts/ 

SOCIAL SECURITY ADMINISTRATION ANNOUNCES 3.6 PERCENT BENEFIT INCREASE FOR 2012

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration announced today. The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011. Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800. Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.  Information about Medicare changes for 2012, when announced, will be available at www.Medicare.gov.   For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.  The Social Security Act provides for how the COLA is calculated. To read more, please visit <http://www.socialsecurity.gov/cola>.

We all want to age in place in our own homes, on our own terms -- any place other than a nursing home.  Sometimes situations change quickly, however, and for a number of reasons it just may not be possible to remain safely in the community.  It is at these times of crisis that folks often discover that all the ideas they had about their long-term care security and how they would pay for nursing home care if needed are basically … well, wrong.  There are five major payment sources for nursing home care, each worthy of its own full-length column, but I offer the following brief summary to help dispel some of the myths on this topic. 

The most common misconception I hear from seniors is that Medicare is going to cover all of their nursing home costs.  This simply is NOT true.

MEDICARE

Medicare will only cover “skilled” care, and only if all of the following conditions are met:

• You have Medicare Part A (hospital insurance) and have days left in your benefit period;

• You have a qualifying hospital stay, which is an inpatient stay of three consecutive days or more, starting with the day of admission and not including the day of discharge. (ALERT:  If you are held for “observation” for part of your hospital stay prior to being admitted, you may not have met the minimum requirement.  This is an issue that should be promptly appealed.)

• Discharge to the rehabilitation facility either directly or within 30 days;

• Your doctor orders the services you need for SNF care, which require the skills of professional personnel such as registered nurses, LPNs, phsyical, occupational, and speech therapists, and are furnished by or under the supervision of these skilled personnel;

• You require the skilled services on a daily basis (5 days per week qualifies).

The availability of 100 days is not, however, a guaranteed coverage period of 100 days.  In fact, it is far from guaranteed with the average period of SNF care covered by Medicare being only 23 days.  You must also qualify according to the clinical criteria set forth by Medicare.  Medicare requires the facility to conduct periodic assessments of your condition and goals to determine whether you will be approved for extended skilled coverage.

Medicare will pay the full cost for days 1-20, and you will be responsible for a significant daily copayment from days 21-100.  Medicare does not pay beyond the 100-day period, unless you have a break in your coverage for at least 60 days.  In that case, with the above conditions met again, you would have a new 100-day period available.

(ALERT:  If you receive a Notice of Medicare Provider Non-Coverage informing you that your Medicare coverage will terminate because you have “reached a plateau,” “are stable,” “custodial care” or not improving, consider filing an immediate appeal.  If you need continued skilled services in order to maintain your present condition, then you are entitled to continued coverage under the Medicare Act and federal law.)

VETERANS BENEFITS

Nursing home care is not automatically available to all veterans enrolled in the VA health plan.  Only the following veterans automatically qualify for unlimited nursing home care:

• Veterans who are seeking nursing home care for a service-related condition;

• Veterans with a service-connected disability rating of 70 percent or more;

• Veterans who have a service-connected disability of 60 percent and are unemployable;

• A service-connected disability is a disability that the VA has officially ruled was incurred or aggravated while on active duty in the military and in the line of duty. The VA must rule that your illness/condition is directly related to your active military service, and it assigns each disability a rating. The ratings are established by VA regional offices around the country;

• The VA may provide nursing home care to other veterans if space permits. Veterans with service-connected disabilities receive priority.

LONG-TERM CARE INSURANCE

The popularity of long-term care insurance is growing, for obvious reasons.  The problem with this payment option, however, is that many people don’t consider purchasing long-term care insurance until they need it.  When they need it, they simply will not qualify for it.  If you have not had a diagnosis that would affect your ability to obtain long-term care insurance, look into it today.  Even if you pay more for it based on your age, the statistics show that your investment will be well worth it down the road.  In addition, there are tax incentives available for purchasing long-term care insurance, and certain qualifying policies can make your home a non-countable asset for Medicaid/MassHealth purposes.  Call my office if you would like a referral to a trusted insurance professional. 

PRIVATE PAYMENT

This is the most non-desirable payment option for extended nursing home payment, but most folks do not do adequate pre-planning.  Let me be clear.  Facilities provide care, and facilities need to be paid for their services.  Pre-planning is critical, however, to ensure that you take advantage of laws that allow you to protect your spouse and protect your own quality of care for the future.  Private payment can average from $10,000-$12,000 per month – could you afford to pay this expense for an extended period of time without putting your spouse or your security at risk?  Have you taken the necessary steps to ensure that your security will not be left to chance?

MEDICAID

Medicaid is the federal program that is known as MassHealth inMassachusetts.  When you run out of funds to pay for your nursing home care, you can apply for MassHealth coverage.  An individual may only have $2,000 in assets, and a married couple may have a combined $111,560.  There are some assets that are “non-countable” in that limit, such as the marital home, life insurance with a face value of $1,500 or less, a car, life insurance that you can not access or surrender (such as a group or term policy).  There are a myriad of regulations that apply to specific situations, and penalties imposed if you give your funds away within the five years prior to applying for MassHealth.  It is imperative to do advance planning to ensure that you apply the regulations to your particular situation in a manner that will maximize your future security without jeopardizing your eligibility for this important benefit.

This summary is far from comprehensive, but I hope it causes you to reflect on your own situation.  If you would like more information on long-term care payment options or to schedule a Legal Check Up, contact us today.

Long-term care planning is a significant part of most elder law practices.  While the ideal clients seek counsel long before there is a crisis, the usual clients do not.  It is in these crisis situations that clients benefit most from an elder law attorney's knowledge of the resources available in their communities and an understanding of the medical and financial criteria for eligibility.
PACE, the Program for All-Inclusive Care for the Elderly, is a national comprehensive health program created to help elders remain at home as long as possible.  While PACE is a valuable resource for many elders, it remains a fuzzy concept for many attorneys and is, thereby, under utilized.

WHERE IS PACE?
Unfortunately, PACE is not available in all cities and towns, but is available in:
Allston, Arlington, Avon, Beverly, Boston, Braintree, Brighton, Brookline, Cambridge, Canton, Charlestown, Chelsea,  Danvers, Dedham, Dorchester, East Boston, Essex, Everett,  Gloucester,  Hamilton,Hudson, Hyde Park, Ipswich, Kenmore, Lynn, Lynnfield, Magnolia, Malden, Manchester, Marblehead, Marlboro, Mattapan, Medford,  Middleton, Milton, Nahant, Norwood, Peabody, Quincy, Randolph, Revere, Roslindale, Rockport, Roxbury, Salem, Saugus, Sharon, Somerville, South Boston, South Hamilton, Stoughton, Swampscott, Topsfield, Wakefield, Wenham, West Roxbury, Weymouth, Winthrop, all towns in WorcesterCounty,  

WHO IS ELIGIBLE FOR PACE?
In order to be eligible for PACE, applicants must be 55 years of age or older, live in a PACE service area as outlined above, and must be certified by the state as eligible for nursing home care but able to safely remain in the community with the additional supports PACE offers.  Members must also agree to receive all health services exclusively through the Elder Service Plan.  While many elders are initially hesitant to give up their primary care physicians or other medical professionals, it is the interdisciplinary team model of PACE that allows each member to maximize his or her potential to remain in the community and ensures that nobody falls through the cracks.

HOW IS PACE FUNDED AND WHAT SERVICES DOES PACE COVER?
PACE is jointly funded by Medicaid (2/3) and Medicare (1/3) in a capitated system.  In other words, Medicaid and Medicare each pay a set rate per member per month.  Medicaid presently pays $3,497 per member per month, with the Medicare rate dependent on the diagnosis codes of each member.  Each PACE program must offer a number of Core Services, and may offer elective services based on the various needs of their members.  This flexibility allows each program to customize individualized care plans designed to help each member maximize his or her potential.

Interdisciplinary teams of doctors, nurses, social workers, therapists, nutritionists, and other medical staff work together to provide primary medical care, home health, adult day health (recreation), rehabilitation services, transportation, medications, podiatry, optometry, dental, social services, and more.  While the majority of PACE services are provided at an adult day center to encourage socialization and activity, services are provided in the home when appropriate.  Some PACE programs offer residence in certain Assisted Living Facilities. PACE members never pay more than their income for a PACE apartment in an assisted living facility.  If nursing home care becomes necessary, it is paid for by PACE and PACE continues to coordinate the member’s care, so long as the member does not disenroll from the PACE program.

WHAT IS THE FINANCIAL CRITERIA FOR MEMBERSHIP?
PACE accepts Medicare, Medicaid, and private payment.  For married couples, only the income and assets of the applicant are countable.  For members with monthly income of $2,022 or less per month, there is no monthly spenddown and they can keep the entire $2,022.  For members who have income over $2,022, there is a monthly spenddown to $542.  Members with monthly income over $4,039 (which represents the MassHealth amount of $3,497 plus the deductible of $542) would pay privately, while members with income below $4,039 would apply for MassHealth in order to keep the $542 monthly.   Private pay members pay only the portion that Medicaid would pay, or $3,497 per month.

WHY SHOULD YOU CONSIDER JOINING PACE?
The most significant reason that PACE is appealing is that its primary goal is to provide each member with the individual supports needed to remain in the community as long as possible.  Another benefit to consider is that PACE is covered by Community MassHealth, under which transfers of assets are presently not penalized.  Therefore, for people who have not done prior planning who are suddenly faced with the need for long-term care services, the option of joining PACE should be explored for 1) quality of life issues and 2) additional planning options.  In addition, the application process for Community MassHealth/PACE is far less burdensome than the long-term care MassHealth application, requiring only a few months of financial statements to verify assets (as compared with up to five years of verifications for long-term care MassHealth).  Members are free to disenroll from PACE at any time. PACE is not for every body, but if you are fortunate enough to live in a PACE service area, this is an option that warrants consideration. 

Call my office at 781-681-6638 if you are interested in exploring the PACE program to help you remain safely in your home.