Special Needs Community News
Spotlight on The Association for Retarded Citizens of Palm Beach County
The Arc of Palm Beach County provides quality services, education and advocacy for children and adults with developmental disabilities and their families. Their programs offer a continuum of care from birth throughout a person's life. For more information visit their website or call 561-842-3213. | |
Partner Howard S. Krooks, JD, CELA, CAP was quoted in the Wall Street Journal on March 27, 2010 in an article about siblings who overcome their differences when they "Step Up" and become caregivers for their parents. Click here to read the article. _______________________
Partner Ellen S. Morris, Esq. spent several days in Washington, D.C. this month with the National Council of Jewish Women where she lobbied Florida congress members and Senator Bill Nelson on many topics including the repeal of the Don't Ask Don't Tell law, the enactment of the Fair Pay Act, and the repeal of the Global Gag Rule. __________________
We provide The Elder Law Update to our clients and our colleagues who make up a wide range of service providers for seniors and people with disabilities to facilitate the dissemination of helpful and accurate information. We thank you for letting us share our knowledge with you. We continue to welcome your comments and questions. You may send them to Info@ElderLawAssociates.com. |
Health Insurer Wrongfully Denied Coverage When It Claimed That SNT Should Pay for Care
 A U.S. district court finds that a health insurance plan wrongfully denied coverage for a child with special needs after the insurer claimed that the child's special needs trust should have paid for the cost of his care. Martinez v. Beverly Hills Hotel (C.D.Cal., No. CV09-1222 SVW, March 9, 2010).
Steve Martinez, a minor, had an epileptic seizure at school that caused severe brain damage. Steve's parents reached a $7 million settlement with the school district and placed $3.67 million of it into a SupplementalNeeds Trust (SNT) for Steve's benefit. Steve's mother had employer-based health insurance provided by Blue Cross, but the company mistakenly neglected to file a lien against the trust for medical coverage related to Steve's injuries.
After the settlement, Mrs. Martinez's employer, the Beverly Hills Hotel, did not renew its policy with Blue Cross, choosing to fund its own private employee medical benefits plan instead. Mrs. Martinez submitted a claim for benefits related to Steve's care to the new plan, but the plan rejected her claim, arguing that the SNT was required to pay for Steve's care before the insurance plan took over. The plan based its decision on several clauses in the plan's operating agreement, including a subrogation clause, a reimbursement clause, and a coordination of benefits clause. After the plan rejected her internal appeal, Mrs. Martinez filed suit requesting a declaratory judgment that the plan violated her rights under ERISA.
The U.S. District Court for the Central District of California grants Mrs. Martinez's request for a declaratory judgment, finding that the plan abused its discretion when it denied her claim. After first finding that it should treat the plan's decision with skepticism (a legal distinction in ERISA litigation) because the plan administrator had a conflict of interest and committed procedural irregularities, the court finds that the plan abused its discretion because the clauses it cited as reasons for its denial of benefits did not relate to Mrs. Martinez's claim. The court determines that the subrogation and reimbursement clauses apply only to events that take place once a participant is enrolled in the plan, and that the coordination of benefits clause applies only when a policy, plan, or coverage provides benefits. In this case, the court finds that Steve's SNT "is a trust, not an insurance policy . . .[i]t was therefore unreasonable for the Plan to deny Plaintiff's claim on the basis of this interpretation of the Plan." |
More Seniors Eligible for Big Medicare Drug Subsidy
Reprinted by permission of retirementrevised
 A million low-income seniors have become eligible for a big assist on prescription drug expenses this year under a newly expanded federal program. The subsidy can defray thousands of dollars in costs, and in many cases eliminate prescription drug expenses entirely for participating seniors.
The Extra Help program which is administered by the Social Security Administration subsidizes Medicare Part D prescription drug premiums for eligible seniors. While the program is not new, eligibility rules have been changed this year in a way that expands its availability dramatically. 
The government estimates the average annual benefit to Extra Help participants at $3,900. That should be welcome news for low-income seniors coping with soaring Part D premiums. Average monthly premiums jumped 11 percent for 2010, and they have risen 50 percent since 2006, according to the Kaiser Family Foundation.
Seniors are eligible for Extra Help if their income is no greater than $16,245 a year for singles, and $21,855 for married couples living together. The value of stocks, bonds and bank accounts can not exceed $12,510 for singles and $25,010 for married couples. The income definition does not include the value of homes or automobiles.
But there are two significant changes in eligibility rules this year. The cash value of life insurance policies is no longer counted as a resource, and assistance received from friends and relatives to pay for household expenses such as food or utilities also no longer are included. The Social Security Administration is urging anyone who did not meet the income standards in the past to re-apply.
The assistance helps with monthly premiums, any annual deductibles, co-insurance and co-payments. The program even plugs the notorious doughnut hole, the current coverage gap in Part D that starts when beneficiaries exceed $2,830 in total drug costs for the given year. At that point, the beneficiary pays 100 percent of costs up to $6,440, when so-called catastrophic coverage kicks in.
Unlike standard Part D enrollment which occurs annually between November 15 and December 31, seniors can apply for Extra Help anytime during the year. But you will receive the maximum benefit if you are in a Part D plan with a monthly premium below a certain benchmark monthly premium set by Medicare for each region of the country.
"If you enroll in one of these plans, you receive no bills and do not have to pay up front and get reimbursed," says Kelly Brantley, a senior program manager for Health Assistance Partnership, a non-profit Medicare education organization.
If you are already enrolled in a Part D plan and enter the Extra Help program, you will be informed whether your premium is entirely covered, or that you need to pay the difference between the premium and the benchmark amount. However, you also have the right to change to a different plan at any time.
Low-income seniors who are not already enrolled in a Part D plan should apply for the Extra Help subsidy, and simultaneously enroll in a drug plan. "If you are eligible, the benefit is retroactive to the first day of the month when you apply," Brantley explains.
If you are switching plans or enrolling in Part D for the first time, use the Medicare websites plan finder to select a plan that maximizes your Extra Help benefit. You will input data about your specific prescriptions and some other personal data; the tool will take into account the expected subsidy when it presents Part D plan options to you. You will be looking for the plan with the fewest restrictions on your specific prescriptions, and one that works with a pharmacy you want to use. To learn more about shopping for plans, visit our page on how to shop for Medicare plans.
You can also get free counseling and assistance in selecting a plan from your local State Health Insurance Assistance Program (SHIP), a government-sponsored counseling service for Medicare beneficiaries. To find the SHIP near you, visit http://www.hapnetwork.org/ship-locator/.
To apply for Extra Help, visit this page Social Security Administration website, call Social Security at 1-800-772-1213 or visit your local Social Security office. |
|
Demise of Estate Tax Could Have Serious Consequences for Spouses
 As The Elder Law Update has reported, the estate tax expired on January 1, 2010. It remains to be seen whether Congress will reinstate it before it returns in 2011, but the fact that there is currently no estate tax can have unintended consequences for spouses. Standard language found in many estate plans could leave spouses with nothing. It is important to check with an elder law or estate planning attorney to make sure your estate plan does what you want it to do.
In previous years, estates could pass a certain amount of assets tax free (up to $3.5 million in 2009). In addition, spouses can receive an unlimited amount tax free. To take advantage of these rules, estate plans often contain a "bypass trust" (or "credit shelter trust") and a will with language in it that is designed to allow estates to pass without any estate tax. For example, the will may state: "I leave to my trustees the maximum amount that can pass free of estate tax and leave the residual to my spouse." Because there is currently no estate tax, individuals who die in 2010 with this language in their estate plan could wind up leaving nothing to their spouses.
While most states allow spouses to claim a portion of the estate (usually one-third), even if they don't receive anything under a will, this can be a time-consuming and expensive process. Some states are considering legislation to fix this problem created by congressional inaction, but to ensure your spouse is covered, you should talk to an attorney.
To learn more about the consequences of the estate tax repeal, click here. |
| Book Review: Next Steps: A Practical Guide to Planning for the Best Half of Your Life
 Jan Warner and Jan Collins. Next Steps: A Practical Guide to Planning for the Best Half of Your Life. Quill Driver Books. Fresno, CA. 2009. 255 pages.
$11.66 from Amazon (click on book to order)
Aging endangers many things we take for granted when we're younger: health, assets, family harmony and personal autonomy. In order to avoid threats to any of these, it is important to develop a plan for the future now. Next Steps offers practical advice to help Baby Boomers or older Americans prepare for whatever may come their way.
The book's title may sound familiar to newspaper readers. For more than a decade, the authors, Jan Warner, an elder law attorney who passed away before the book was published, and Jan Collins, a journalist, were coauthors of a nationally syndicated elder law column of the same name. Drawing on their years of experience and reader questions, in their book Warner and Collins stress the importance of creating a team to help develop a plan for the future. They say the team should include a lawyer, certified public accountant, geriatric care manager, financial advisor, and physician. The book explains the role of each team member as well as how to find them.
Next Steps also discusses how to create an estate plan, emphasizing the importance of flexibility. There are chapters on potential pitfalls, asset management, and health care planning, including Medicaid and nursing home rights. In addition, the book explains the effect of divorce on Medicare, Medicaid, and Social Security, among other issues. There is also a discussion of second marriages as well as domestic partnerships. Other chapters cover burial disputes, organ donations, and planning for pets.
Each chapter ends with sample questions and answers, illustrating how the information provided in the chapter works in real-life situations. Filled with practical information, Next Steps is a helpful resource for the estimated 5,000 people who are turning 65 every day, as well as their slightly younger contemporaries. |
How to Cope With Big Rate Hikes on Long-Term Care Policies
Reprinted by permission of retirementrevised
 If you have long-term care insurance, brace for the possibility of a steep increase in premiums this year. Some of the largest long-term care (LTC) underwriters are asking state regulators for large increases on some policies this year.
The current ultra-low interest rate environment is a key reason for the rate hikes. Low rates have cut sharply into the investment earnings that insurance companies depend upon to fund benefit payouts. Investment returns fund up to 60 percent of the funds used to pay benefits, according to the American Association for Long Term Care Insurance (AALTCI).
Another factor is the rising longevity of policyholders, and their tendency to hang on to their policies. Insurers expect a certain percentage of customers to drop their policies before they ever draw benefits and that is not happening in the case of LTC policies.
Investment News magazine reported recently that rate hikes are being sought by Prudential Insurance Company of America, Met Life Inc. and John Hancock Life and Health Insurance Co. The increase requests -- which will not cover all of the companies' policies -- range from 18 percent to 25 percent.
Notably, Hancock plans to raise premiums by up to 25 percent on policies held by up to 140,000 federal employees under age 65, according to the trade publication. MetLife -- the only insurance company to respond to my inquiries -- said it initiated the rate hikes in 2008, and has received approval from 41 states, with most of the increases set at 18 percent. In most cases, no rate increases have been put through for policyholders who were age 70 or older at the time the policies were sold.
LTC coverage can help protect you and your family from the potentially ruinous cost of care. The Urban Institute estimates that 25 percent of people over 65 will need help for an extended period of time with some aspect of basic personal care -- bathing, eating, getting in or out of bed or dressing. The average annual rate for a home health aide is $27,000, and the average semi-private nursing home rates are $72,270 per year, according to the Metlife Mature Market Institute.
If you do have LTC coverage and find yourself facing a big rate hike, here are some key questions to ask as you consider how to respond.
--Should I drop my coverage? Probably not, especially if you bought your policy years ago. Your premium almost certainly is much lower than you would get on a new policy today at an older age even with a steep rate hike thrown in.
--Is the policy still right for me? "Start with a review of why you bought the policy in the first place," says Joel Larsen of Navion Financial Advisors. "Does it still make sense? Remember, you're not just looking at long-term care insurance. You're also planning the what, where, when and how of care delivery. While the expense and funding is certainly important, it's what that expense does for you that matters."
--Has the policy value increased? About 40 percent of LTC policies have compound inflation riders that boost the value of daily benefits and total dollars available to policyholders. If you have that kind of coverage, assess the current value of the policy's benefits. An inflation-rider policy bought in 1998 by a couple aged 55 and 49, respectively, with an inflation rider and a $100 daily benefit would have a $171 daily benefit now; total pooled benefit dollars available to the policyholder would have jumped from $109,500 to $187,000, according to AALTCI. By 2018, when the husband hits age 75, the benefits would be $278 and $320,000, respectively.
--Can I save money by changing the coverage level? If you just can not afford the rate hike, cutting back the coverage always is an option -- and it is better than canceling the policy altogether. Cut back either the daily benefit or the period benefits are paid. "I'd look for ways to reduce the premium while maintaining the same daily benefit, such as increasing the elimination period," says Jon Beyrer, a Certified Financial Planner (CFP) with Blankinship and Foster.
Resources
The National Association of Insurance Commissioners publishes a useful guide to long-term care insurance.
Visit RetirementRevised's guide to long-term care.
Moneywatch.com offers an excellent analysis of major long-term care carriers, including AARP.
|
Medigap Coverage Is Changing
 Several changes are coming to Medigap plans, which supplement Medicare's coverage. In June 2010, four current plans will be dropped and two new plans will be added, bringing the total number of available Medigap plans to 10.
Between copayments, deductibles, and coverage exclusions Medicare does not cover all medical expenses. To supplement Medicare coverage, you may purchase a Medigap policy from a private insurer. There are currently 12 Medigap plans that are identified by letters A through L. Each plan package offers a different combination of benefits, allowing purchasers to choose the combination that is right for them.
Beginning June 1, 2010, plans E, H, I, and J will no longer be sold. Individuals who already have one of the plans can keep it as long as they like, but no new policies will be sold. At the same time, two new plans -- M and N -- will be added. Plan M will pay 50 percent of the Part A deductible and some of the cost of foreign travel emergencies. It will not cover the Part B deductible. Plan N will pay the full Part A deductible, but it will require a $20 copayment for Part B office visits and up to a $50 copayment for emergency room visits. Plan N will also cover foreign travel emergencies.
There will also be some changes to the benefits offered by plans. The home health recovery benefit and preventive care benefit offered by some plans will be dropped. The preventive care benefit is duplicative of services that regular Medicare offers. The home health recovery benefit covered some personal services for individuals receiving skilled care through Medicare, but was underused. In addition, all plans will include an additional benefit to cover the out-of-pocket costs imposed by the Medicare hospice benefit.
For more information on the changes, click here.
For more information on Medigap, click here. | |
| The Greatest Compliment ...
 We always appreciate referrals from our satisfied clients, friends, business partners, and family members. We welcome the opportunity to serve the people you care about. Click on the blue Forward Email at the bottom of the page to send this newsletter to someone who will benefit from our insights. | |
|
|
Elder Law Associates PA is a boutique elder law firm that practices exclusively in Medicaid and long term care planning including long term care insurance, Medicaid applications, home and community-based Medicaid waiver services, diversion program benefits, nursing home benefits, spousal refusal applications, and Medicaid fair hearings and appeals; nursing home and assisted living facility residents' rights litigation; asset preservation planning with a special focus on planning in light of the Deficit Reduction Act of 2005, including personal service agreements, the purchase of life estates, income producing real estate and spenddown planning; disability planning, including special needs trusts and guardianship; estate planning, including wills and trusts and advance directives; and probate, which encompasses estate and trust administration as well as litigation.
We assist clients in planning for the possibility of disability, incapacity, home health care, assisted living and/or nursing home placement. Our firm enables clients to avoid impoverishment caused by the escalating cost of long term care, to maintain their right to make health care decisions and to avoid unnecessary medical treatment.
We hope you have enjoyed The Elder Law Update. If you have questions about something you read, elder law matters or issues concerning persons with disabilities, we would be delighted to hear from you. We serve as an elder law resource to many professionals and organizations and want to become your elder law resource as well. You can reach us at Info@ElderLawAssociates.com.
Warm regards, |
|
Ellen S. Morris, Esq. & Howard S. Krooks, Esq., CELA, CAP
Elder Law Associates PA
phone: (561) 750-3850 / (800) 353-3752
fax: (561) 750-4069
This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client. |
|
|
