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UW Retirement Association Presentation

January 22, 2013

"You're Only Old Once" Planning to Age in Place1

Julie A. Short JD

Haskins Law LLC 3866 Johns Street

Madison, WI 53714 (608) 237-6673

 

 

 

 

 

                                                                                                                         1  Copyright  2013.  Attorney  Julie  A.  Short.    No  part  of  this  presentation  or  outline  may  be  reproduced  without  the  express  written  permission  of  the  author.  

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Copyright 1986 by Dr. Suess and A.S. Geisel.

Dedication:

  "With Affection for and Affliction with the Members of the Class of 1925"

 

 

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"One day you will read in the National Geographic of a faraway land with no smelly bad traffic. In those Green-pastured mountains of Fotta -Fa-Zee everybody feels fine at a hundred and three 'cause the air that they breathe is potassium free and they chew nuts from the Tutt-a-Tutt tree.

And you'll find yourself wishing you were out there in Fotta-Fa-Zee and not here in this chair in the Golden Years Clinic on Century Square for Spleen Readjustment and muffler repair.

Just why are your here? You're not feeling your best..."

 

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"You've come in for an Eyesight and Solvency Test.”

 

 

 

 

 

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"When at last we are sure you've been properly pilled, then a few paper forms must

be properly filled so that you and your heirs may be properly billed."

 

 

 

 

 

 

 

 

 

 

 

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You’re Only Old Once Planning Ahead to “Age in Place"

I. Introduction: What is aging in Place?

• Aging in Place is growing older without having to move

• According to the Journal of Housing of the Elderly it is not having to move from one's present residence in order to secure necessary support services in response to changing need.

• Some 70% of seniors spend the rest of their life in the place where they celebrated their 65th birthday (Seniorresource.com)

II. What are the Challenges to Aging in Place?

A. Functional

– Some increased physical limitations

– Transportation issues

– Correlation with increase in age with need for assistance with daily activities

– Age related health conditions (Alzheimer’s disease, Diabetes)

B. Financial

– Earned income less to non-existent

– Primary source of income for individual’s over age 65 is Social Security

– Lack of financial assistance for non-medical / custodial services as well as vision and dental care

– Exorbitant cost of long-term care and insurance

C. Social

– Family and friends often far away

– Some social isolation due to transportation / rural areas

– Children’s ability to assist limited by employment / childcare

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Scenario One: Aunt Jane Needs Help At Home

Aunt Jane is 92, lives alone in an apartment building with other seniors in Madison. She lost her husband four years ago. She is mentally very strong but has balance issues and needs a walker. Just recently, she has had some undiagnosed digestive problems and is very weak and needs assistance bathing (getting in and out of the tub) and sometimes needs assistance to get out of bed and/ or a chair. Her mobility difficulties have contributed to her having difficulty preparing meals and eating and drinking which only make her more weak and frail. Her income is $2,000 month. Aunt Jane would like services to assist her with shopping, meal preparation and to shower at least three days a week. Given her low income she would like help paying for these services. Aunt Jane has original Medicare Part A and Part B.

I. Question One: Will Medicare Part B help Aunt Jane pay for the home health care assistance she needs?

A. Medicare Home Health Services/ Provided under Part B*

i. A physician has signed or will sign a care plan.

ii. The patient is homebound

This criterion is met if leaving home requires a considerable and taxing effort which may be shown by the patient needing personal assistance, or the help of a wheelchair or crutches, etc. Occasional but infrequent "walks around the block" are allowable. Attendance at an adult day care center or religious services is not an automatic bar to meeting the homebound requirement.

iii. The patient needs skilled nursing care and /or Physical Therapy on an intermittent basis

Intermittent means for as much as every day for recurring periods of 21 days – if there is a predictable end to the need for daily care – to as little as once every 60 days

Skilled care: Physical or speech therapy; Care that requires administration or supervision by a Nurse or therapist. CNA and or custodial care is not skilled care

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iv. The care must be provided by, or under arrangements with, a Medicare-certified provider.

v. The care must be medically necessary. All Medicare benefits only apply if covering a medical expense that was incurred due to medical necessity.

vi. All Part B services require a 20% co-pay.

*As a general rule Medicare Part B covers outpatient medical care. Exceptions include observation care at a hospital and prescription medicine services required to be provided in a doctor's office.

The monthly premium for most people is in 2013 is $104.50 (For individuals with annual incomes of $85,000 or less / $170,000 for a married joint return)

** Annual enrollment period January 1, 2013 to March 31, 2013 every year.

I. Answer Number One: Probably Not. Although Aunt Jane has mobility issues because she is able to ambulate most of the time with a walker she is probably not homebound. If she gets to a point where she cannot get out of a chair and needs to use a wheelchair, she would be homebound. If Aunt Jane was homebound, she would still need to receive skilled care to benefit from home health care under Medicare Part B. If a physician prescribed physical therapy with a goal of increasing Aunt Jane's physical abilities to get her back to being able to use a walker, Medicare Part B should pay for some home health services. Another potential area of assistance that might meet this criteria would be the need to be evaluated by a nurse at home to ensure proper hydration and nutrition if tied to a specific diagnosis and treatment plan to mitigate or eliminate her digestive problems. But the care would only be skilled if needed to be monitored by a nurse. If she received home health services she would need to satisfy her annual Part B deductible of $147 (2013), if she had not already paid for any other Medicare Part B services.

II. Question Two: What if Aunt Jane had a Medicare Supplemental (Medigap) Policy. Would that help her pay for home health services?

A. Medigap policies are available to individuals with original Medicare and cover co-pays, deductibles and co-insurance. Some cover services not covered in original Medicare (unusual). Most Medigap policies do not pay benefits unless Medicare benefits were paid or would have been paid but for a deductible. Medigap covers the 20% co-pay that applies with every Medicare Part B covered service.

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B. Medigap policies are regulated in WI and they must cover Home Health Care.

1. Up to 40 home care visits per year in addition to those provided by Medicare (with no increase in premium). Must offer coverage for 365 visits but can charge an additional premium.

2. Note that the underlying criteria is the same as above with original Medicare Part B; Physician prescribed plan, homebound, intermittent skilled care that is medically necessary.

C. Medigap policies are guaranteed renewable no matter how bad your health gets as long as coverage is maintained for example, this could be lost if opt out of Original Medicare to elect a Medicare Advantage plan.

II. Answer Number Two: Probably not. Aunt Jane will only receive financial assistance for home health care under her Medigap policy if she first qualifies for and receives Medicare home health services under Medicare Part B, as discussed above, unless her Medigap plan specifically provides for Home Health services not covered by original Medicare Part B (something to watch for when shopping around). The Medigap policy will only help if there is a need for skilled care as discussed above as;

• Per State of Wisconsin guidelines home health Medigap required coverage is only available if a Doctor certifies but for the care a stay at a Skilled Nursing Facility (SNF) would be needed

• Essentially Medicare will not pay for care that does not have a skilled care component and thus will not finance assistive services / bathing assistance aka custodial care.

III. Question Three: Would Aunt Jane get assistance with these expenses if she had a Medicare Advantage plan?

A. Medicare Advantage /aka Medicare Choice/ aka Medicare Part C

1. Opt out of original Medicare Part A and Part B and then through the Medicare program (CMS /Centers for Medicaid and Medicare) you purchase a private health plan; the Medicare Advantage Plan

2. Medicare Advantage plans are annual contracts and are not guaranteed renewable as is required for Medicare supplement policies

3. The plan must meet minimum state and federal requirements for licensure, benefits offered, access to providers, quality of care, and reporting and must provide the same benefits as original Medicare

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4. Must continue to pay Medicare Part B premium in addition to the Medicare Advantage plan premium

5. Statistics show that these plans generally do to provide better health coverage for most individuals than with Original Medicare and generally they cost about 17% more for CMS to administer.

III. Answer Question Three: Medicare Advantage Home Health coverage is unlikely for Aunt Jane as Medicare Advantage will only assist if the specific policy has coverage that would cover custodial care as the same issues apply as to the need for skilled care etc. Medicare Advantage does not have to provide more than Original Medicare thus the standards will be the same unless the policy expressly adds this coverage component (something to keep in mind when shopping). Note use of Medicare Advantage precludes the use of a Medigap policy because Medigap only supplements original Medicare. When reviewing a Medicare Advantage plan one should ensure that there is coverage for co-pays, deductibles and co-insurance and if not evaluate the savings and determine if original Medicare with a Medigap policy would be better/ more affordable.

IV. Question Four: Will Medicaid Help Aunt Jane?

IV. Answer to Question Four: No. Medicaid has an asset and income test. Aunt Jane’s income of $2,000 is over the Medically needy limit of $591.67 per month. If Aunt Jane was on SSI (supplemental security income), she would qualify, even though SSI income of $678 a month is above the medically needy limit as WI ties MA to SSI. If Aunt Jane had regular medical expenses that are high she could qualify for Medicaid through a deductible plan but her assets would have to meet Medicaid criteria.

Ex. Aunt Jane can own a home and a car and any personal property but could not have an IRA, and/ or bank accounts, and /or CDs, and or investments and /or cash value life insurance with a combined value over $2,000.

V. Question Number Five: What if Aunt Jane could not afford to pay her Medicare premiums?

V. Answer Number Five: She could get assistance under a program called QMB (Qualified Medicare Beneficiary) if she meets the following qualifications. She will not as her income is above $11,170 per year. A. QMB / Medicaid pays all Medicare premiums, deductibles and co-insurance

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B. Eligibility: 1. Countable incomes below 100% of Federal Poverty Levels (FPL/ $11,170 per year for a single person);

2. Countable resources below $6,940 for an individual and $10,410 for a couple

VI. What if Aunt Jane has long-term care insurance? Will a long-term care insurance policy pay for the home health services she wants?

A. What type is her policy?

Three types

1. Long-Term Care Insurance Policies: Cover both institutional (nursing home or other facility) care and care in the community (home health care or other community-based services).

2. Nursing Home Insurance Policies: Cover only institutional care, such as in a nursing home.

3. Home Health Care Insurance Policies: Cover only community care, such as home health care or care in an assisted living facility and or a community-based residential facility (CBRF).

C. Mandatory Home Health Coverage in WI LTC Ins Policies: policies that include home health care benefits must pay for community-based (home health) care

– Whether or not you have an acute medical problem. – Even if the services are not provided by a Medicare-certified agency or

provider. – Even if you were not previously in a hospital or nursing home

VI. Answer to Question Number VI: If aunt Jane had a LTC Insurance policy and or a health insurance policy she may be able to get some benefits to cover home health and assistive services if the policy language does not have any exceptions or exclusions for coverage that would preclude benefits. Policies often require certification of a health care provider (defined) that a certain number of functional limitations exist (referred to inability to do activities of daily living). When submitting a claim it is essential to meet each and every written requirement of the policy.

VII. What community resources might be able to provide assistance for Aunt Jane?

VII. Answer to Question VII: In Madison and Dane county there are some wonderful community resources:

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A. Area Agency on Aging of Dane County serves individuals who are age 60 and over and/or their family members by providing information and assistance in accessing services that will help older adults stay in their own homes and communities.

• Dane County has 16 Senior Center Focal Points with Case Manager Services

B. Possible Services to Assist Aunt Jane:

• Home assistance with light housekeeping, laundry, lawn care, and minor home repairs.

• Examples of other community-based services include: congregate and home delivered meals, caregiver support, and help with benefit questions.

• Many of these services are provided free or on a donation basis/ funded under the Older Americans Act

C. Elderly Benefit Specialist Program

• Elder Benefit Specialists provide free advocacy and assistance adults age 60 or older with public and private benefits including Medicare, Medicaid, Social Security retirement, Supplemental Security Income, FoodShare, and SeniorCare. They provide information on program eligibility criteria, assistance applying for benefits, and appealing benefit denials.

D. SAIL / Supporting Active and Independent Lives (sailtoday.org)

– SAIL is a non-profit membership organization of people over age 55 in the Madison area. Members join as they wish to remain active independent in their own homes and maintain social connections. SAIL assist in finding and screening resources.

– Membership includes referral to prescreened service providers; daily automatic check-in service, house checks, wellness services and social events and clubs. members-helping-members, volunteer opportunities, discounts and other services.

E. Naturally occurring retirement communities (NORC)

• A NORC is a community or neighborhood where residents remain for years, and age as neighbors, until a Naturally Occurring Retirement Community develops. A NORC may refer to a specific apartment building, or a street of old single family homes where residents have stayed and aged.

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• In a NORC it is possible to band together and to develop, or seek help to develop, access to services to aid those needing assistance, thereby retaining the highest quality of life for all residents as they age. SAIL is one example of one manifestation of this idea.

F. Share the Care / See Sharethecare.org

– mission is to improve the quality of life of person who are seriously ill or disabled or experiencing the challenges of aging and to reduce stress, depression, isolation and economic hardship often suffered by their family caregivers.

– The paradigm is that family and friends pool resources / efforts to ease the burden on the family caregivers and those without family or friends nearby. This pooled resource center is called a station.

– caregiving responsibility tends to fall upon one or two family members often resulting in caregiver burnout, isolation of those in need of care and high rates of institutionalization for patients lacking adequate social supports

– Madison LBGT community has created a Share the Care Station

Scenario 2: Aunt Jane Needs Help Paying for Long-term Care

Aunt Jane trips while using her walker to go get her mail and breaks her hip. The hospital has cared for her for five days and now is discharging her to a skilled nursing facility (SNF) for rehabilitation services. Aunt Jane wants to be sure that she receives all of the assistance she can to pay for her rehabilitation stay, as she has been told the cost of staying at the SNF is $250 per day.

Question I. What benefits will Aunt Jane receive under Medicare to help her pay for her hospital and SNF stay?

Answer to Question I: Before Medicare Part A will pay for her hospital stay, Aunt Jane will have to pay a deductible for Days 1–60 of $1,18 4 for each benefit period in 2013. A new benefit period begins if an individual has been out of the hospital for at least 60 days. Once the deductible has been satisfied there is a$296 per day co-payment for inpatient hospital services for days 61-90. There is 60 days of lifetime reserve that can be used to cover some of the cost for days 91-150 ($592 per day co-pay). After that there are no Medicare benefits.

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At the SNF, if Aunt Jane Qualifies for Medicare Part A coverage*, days 1-20 are covered in full but then there is a $148.00 per day co-payment for skilled nursing facility services after the 20th day; No coverage after 100 days.

* note the existence of the three day qualifying hospital stay ( Observation status stays in the hospital do not count issue) / medically necessary/ daily skilled care/ “beware of the improvement issue”

Question II: Will Medicaid Pay for Aunt Jane's stay?

Answer to Question II: Maybe....The monthly cost of Aunt Jane’s care in the SNF is At least $7,500. This exceeds her income of $2,000 so she qualifies on an income basis. The issue will again be her assets as discussed above.

Question III: If Aunt Jane's husband was still alive, would it change how the Medicare or Medicaid rules are applied?

Answer to Question III: Medicare. There would be no impact upon Aunt Jane's Medicare coverage as a result of her husband still being alive. Marriage can help with eligibility if one spouse does not work enough to acquire his or her own Medicare coverage. Thus, if Aunt Jane did not work enough to acquire her own Medicare coverage, and then her Medicare coverage would be dependent and derivative upon that of her husband. Once a person is eligible for Medicare there are no issues as to income and assets (unless individual or couples have annual income in excess of $85,000 / $170,000) as Medicare is not a means tested program but rather a government run insurance program. High income individual do have to pay premiums for Medicare Part A and Part B depending upon their annual income. See Medicare.gov.

As for Medicaid, if aunt Jane was applying and she had a spouse living in the community, it would change the rules significantly as Spousal Impoverishment Protections would apply allowing Jane's husband to possibly retain more income and both of them more assets but note that within one year of a spouse qualifying for Medicaid the title of all the assets are to be in the name of the spouse in the community.

A. Community Spouse Asset Share (CSAS): 1/2 of all countable assets between $50,000 - $117,920 (home, car, burial funds are not counted)*

B. Community Spouse Income Allocation/ Minimum Monthly Maintenance Allowance (MMMNA):

– Unless a larger amount is ordered by a fair hearing or court, the maximum allocation is the lesser of :

$2,898 or

$2,521.67, plus excess shelter (housing expenses in excess of $756.50)

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Example. If Jane’s husband had an income of $2,000 per month, Aunt Jane would be able to shift at least $521.67 of her income to her husband. Remember once a person is on Medicaid, all of his or her income, except for a personal needs allowance of $45 and the cost of any medical insurance, is paid to the state as a cost of care contribution.

In this example, Aunt Jane’s income would be treated as follows:

$2,000

(45.00) Personal Needs Allowance

(104.50) Medicare part B Premium

(30.00) Medicare part D Premium

(120.00) Medicare Supplemental Insurance Premium

(521.67) MMMNA

1,178.83 Aunt Jane’s monthly Cost of Care Contribution

*Determining which assets are countable and not countable is very complicated and the list of assets that are not counted is extensive and changes frequently. The same goes for income considerations and calculating the cost of care contribution. Note that it is possible to get more income allocated to a community spouse but that requires the assistance of a knowledgeable attorney and a court appearance. Consultation with an elder law attorney who is knowledgeable of Medicaid rules is essential. Keep in mind when paying over $7,000 per month for a SNF stay, paying an elder law attorney often pays for itself in savings.

WARNING: THE INFORMATION IN THIS OUTLINE IS IN SUMMARY FORM AND IS CURRENT AS OF THE DATE PRESENTED. TITLE 19 LAW CHANGES DRASTICALLY, FREQUENTLY, RAPIDLYAND SOMETIMES EVEN RETROACTIVELY. MEDICAID, MEDICARE BENEFITS AND FEDERAL POVERTY LEVEL NUMBERS CHANGE ANNUALLY. IF ANY SIGNIFICANT AMOUNT OF TIME PASSES BETWEEN THIS PRESENTATION AND YOUR NEED FOR INFORMATION CONCERNING TITLE 19 BENEFITS, IT IS IMPERATIVE THAT YOU CHECK ON THE LAW BEFORE MAKING APPLICATION.

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Top 10 Tips

1. Execute Advance Directives and Powers of Attorney for Health Care and Finances.

2. Participate actively in discharge planning between care settings.

3. Engage in estate planning and financial planning before a crisis occurs. Review the plan on an annual basis at tax time.

4. Create a crisis kit/box: See sample list attached.

5. Make modifications to your residence to make it accessible.

6. Educate yourself about local Aging Network resources: If in Wisconsin, meet your local elderly benefit specialist or at least know how to contact the county elderly benefit specialist.

7. Take full advantage of any public benefits for which you may be eligible: Medicare Premium and cost assistance (QMB discussed above), SNAP, Energy Assistance, Homestead credit.

8. Review your Medicare Prescription Drug coverage options (do not forget Senior Care) and your Medicare Advantage plan, if applicable, every year.

9. If you are a veteran, educate yourself about all veteran's benefits to which you may be entitled. Aid and Attendance benefits and other VA benefits are highly underutilized. Get to know your county veteran's service office and /or consult with a VA accredited attorney.

10. Be an advocate for yourself and appeal Medicare and LTC Insurance denials when coverage is denied due to failure to improve, observation status or the care being not medically necessary.

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Resources:

Dane County Aging Unit / ADRC / Elderly Benefit Specialists (EBS)

Dane County Elder Benefit Specialist Program Aging & Disability Resource Center of Dane County 2865 N. Sherman Ave. Madison WI 53704 Phone: 608-240-7474 Fax: 608 240-7401 Email: aaa@countyofdane.com

How to local an EBS Statewide

• To locate Elder Benefit Specialists from throughout the State of Wisconsin, go to: www.dhs.wisconsin.gov/aging/EBS/counties.htm .

Wisconsin Bar Association: Lawyer Referral and Information Service

Refer to an attorney in your area who has indicated an interest in your type of legal situation. Attorneys referred through LRIS agree to charge no more than $20 for the first consultation up to one half hour.

Call us: (800) 362-9082 or (608) 257-4666 (in Dane County and outside of Wisconsin). Monday through Friday from 8AM to 5PM.

Medicareadvocacy.org: terrific website with non legalese and detailed description of Medicare coverage and how to handle denials and appeals.

WisPACT.org: Wisconsin's Poled and Community Trust for individual with disabilities and their families.

Seniorresource.com: Good basic description of Aging in Place

NAELA.org: Good list of Elder Law Attorneys in Wisconsin but note, not all good elder law attorneys are members

Medicaid Handbook: Only available online. This is what the State uses when reviewing the MEH rules. http://www.emhandbooks.wisconsin.gov/meh-ebd/meh.htm

Medigap Helpline: 1-800-242-1060. Call regarding Medicare Insurance, employer coverage, subsidies; Medigap and Medicare Advantage Plans and long term care insurance. Publications are also available.

Medicare Part D helpline: Wisconsin Prescription Drug Helpline at 1-800-242-1060. Operated by the Board on Aging and Long-Term Care.