 Elder Law Update
North Carolina Edition |
Vol 2 Issue Five
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October 2008
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Upcoming Speaking Engagements
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North Carolina Bar, Cary,
North Carolina - October 10, 2008
Powers of Attorney, Basics of Elder Law course (CLE)
VFW Post 9418, Randleman,
North Carolina - October 16, 2008
Veterans Aid & Attendance Benefits
Financial Planners Seminar, Savannah, Georgia
- October 22, 2008
Planning for the Middle Class Elderly (CE)
Financial Planners Seminar,
Asheboro, North Carolina - November 5, 2008
Planning for the Middle Class Elderly (CE)
Randleman First United Methodist Church, Randleman, North Carolina - November 8, 2008
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PLEASE VISIT MASON LAW
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I WANT TO KNOW
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| If you have an idea or comment that will help me make this a better newsletter please send it to me. Just click! |
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Greetings!
Is it time to PANIC? No, I don't think so. It is time to PLAN.
 As I write this, Congress just torpedoed the bailout plan. I'm no market expert, but I do not believe there will be a complete meltdown. I AM an avid student of politics, however. My guess is that the next week will be wild and very scary, and given that environment (with elections looming) Congress will have a meeting of the minds and do something.
Nor do I believe that the diversified investments of many retirees will be wiped out (I might worry if I held large positions in certain financial institution stocks . . . Wachovia perhaps).
Nor do tightened credit markets concern many of my clients. Most retirees simply are not borrowers.
Tight Money Means Tight Funding
While I don't think there will be any spectacular crash, what does worry me is the ripple effect. Over the past month the government has laid out or talked about committing (and still may commit) almost a trillion dollars. Or "$1,000,000,000,000" if you relate to images better than to words. Twelve zeros.
Also, our military is quite busy (expensively so).
Many government services are stretched. In fact, both Georgia and North Carolina have ordered further budget-saving cutbacks in social service agencies. Facing a $1.6 billion budget shortfall, Georgia's governor has ordered unpaid vacations across state agencies (including certain DFCS employees at county offices.
Most government program administrators must live with the tension between service delivery and budgetary integrity. Elected executives and legislators hold administrators accountable for delivering the services mandated within the budgets allocated. When there is little budgetary pressure, there is less tolerance for tightening up on service access. When the government feels the pinch, however, the pressure is on the administrators to find ways of further restricting access to services.
Enter the ripples. Someone has just tossed a huge concrete block into the pond, and I am looking at the ripples working across the pond. In fact, the ripples may look more like a tsunami.
Look for tightening rules in long term care financing programs. What can you do? Get planning!
Are You A Gazelle . . . Or A Lion?
 Charles Becton, President of the North Carolina Bar Association (Bec is my 'Bar Boss' because I am the Elder Law section chair this year) recently passed on a story I very much like.
Every morning in Africa, a lion wakes up and thinks "I must run faster than the slowest gazelle, or I will starve." Every morning in Africa, a gazelle wakes up and thinks "I must run faster than the fastest lion, or I will be killed." The lesson: Whether you are a lion or a gazelle, when the sun comes up, you better be moving!
Get moving. Get planning.
FDIC Reminder
See the box immediately below for articles on FDIC coverage.
Looking Down The Page
Medicare shopping season is upon us. Below I start a two part series on Medicare Advantage Plans. See if you can guess how I feel about them.
Dr. Beth warns us that flu season is coming up . . . but don't get that shot too early.
Ever heard of a Daily Money Manager? Neither had I. Penny Louis will fill you in below.
Finally, Social Security guru Warren Coble discusses widows' (and surviving ex-spouses') benefits. Next month, he'll be discussing Part D plans and enrollment.
Have a good October. Don't panic . . . but don't just sit there either.
Bob Mason
Certified Elder Law Attorney
Certified by the
National Elder Law Foundation, recognized by the American Bar Association as
the certifying entity for specialization in Elder Law.
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Medicare Dis-Advantage Plans?
Look Before You Leap
Bob Mason
 Medicare
can be confusing enough as it is. The past few years Medicare has gotten even
more confusing with new "Part D Drug Plans" and the somewhat older "Medicare
Advantage Plans" (which until recently had been called Medicare+Choice Plans).
Whew.
To the
chagrin of some insurance professionals (many of them friends of mine), I am
going to take a two-part swipe at Medicare Advantage Plans in this and my next
column. Medicare Advantage Plans have been under scrutiny lately, and for a
reason. If you are covered by one (and I bet you are not thrilled with it) or
if you are thinking of switching to one read my words carefully.
Very
aggressive (as in illegal) sales tactics have lured some seniors to switch to
Advantage Plans, and then when the bloom is off the rose (and they realize
they've been hoodwinked) many have difficulty backing out.
Medicare
Advantage plans were initially touted as a great way to partner private
enterprise with the financing and delivery of Medicare services. One benefit
was to be cost savings. The problem is, Uncle Sam spends more on Advantage plan
participants than standard Medicare participants (120% more, in fact).
Brief Medicare Primer
First, a
bit of background on Medicare (I'll try to keep this simple). The law divides
Medicare into four parts. Part A and Part B are what many think of as
"traditional" Medicare. Tried and true, they've been around for years. Part C
covers Medicare Advantage Plans (under my knife below). Part D constitutes the
newer prescription drug plans (I will not touch that here).
Medicare
Part A has been the traditional route for medical coverage needed by the
elderly and disabled in medical facilities. Part B applies to services provided
by physicians and other medical practitioners, home health services, durable
medical equipment and other services not covered by Part A. (For a more
complete discussion of Medicare go to the Mason Law Medicare corner by clicking HERE or simply Google "Medicare" and read until you drop).
When combined
with good Medicare supplemental insurance policies (popularly called Medigap
policies) and the new Part D Drug plans, Part A and Part B provide fairly
complete coverage. There are gaps, however.
Enter the Advantage Plan
Traditional
Medicare, for example will not pay for most dental care, vision care, hearing
care and preventive care. On the other hand, many Medicare Advantage plans
offer to fill some of those gaps. But at a cost (and often hidden). For example there may be higher coinsurance
amounts or deductibles, or other restrictions on who may provide services.
Some of the
newer Medicare Advantage Plans may be patterned after health maintenance
organizations, which offer a wide variety of services as long as the member
uses participating providers.
Other
Advantage plans may be patterned after preferred provider organizations and
managed care organizations that offer broader service but hold down costs by
preapproving services or placing other restrictions on the medical providers.
Most of
the abuses do not involve these plans; they usually involve a type called a "Private
Fee-for-Service" plan. These are sometimes called "PFFS Plans".
Private Fee For Service Plans
So what IS a PFFS Plan? A PFFS Plan is a health plan offered by a private
insurance company under contract with the Medicare program. This insurance plan
is not a Medigap plan, and it works very differently. You must continue to pay
the Medicare Part B premium to participate in the PFFS plan in addition to any
additional premium the Private-Fee-for-Service plan may charge.
You may receive services from any
doctor, hospital or other provider willing to accept your PFFS plan's terms of
payment. You may get, say, dental coverage . . . but end up paying very high
co-insurance amounts for other services. Or you may find that your favorite
doctor does not participate in your Medicare Advantage Plan. Or you may find
that you no longer have drug coverage that you need.
Even
though the marketing problems have involved PFFS Plans, do think very carefully
before switching to any type of
Advantage Plan; the deal may not be as "advantageous" as it first seemed.
Abusive Marketing
Recently
Medicare Advantage plans have come under close scrutiny by authorities after
discovery of abusive PFFS hard-sell tactics by private insurers. About a year
ago CMS (the federal agency that runs Medicare and Medicaid) suspended seven
plans from marketing PFFS plans, but later relented after receiving assurances
that abusive marketing practices would cease. As recently as last August, Massachusetts was
investigating additional potentially illegal marketing.
That's
good news. The problem is that many seniors who are in Medicare Advantage Plans
and who may want out are having a terrible time trying to get to the exit.
Stay
tuned . . . I'll cover the exit next month. In the meantime: Be careful. Look carefully before switching from
traditional Medicare to a Medicare Advantage Plan.
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'Tis The Season . . . the Flu Season
Beth Hodges, MD
As hard as it is to
believe, it's that time again. It's time for flu shots. My practice in  Asheboro, North
Carolina, is very proactive in disease prevention.
Every year, we give over one thousand pneumonia vaccines and more than
seventeen hundred flu vaccines.
We try very hard to
educate patients about what the vaccines can and cannot do, but every year I
end up having to dispel the same old myths that have been around for years.
Busting Myths
The flu shot will not
give you the flu. It is made from a dead virus, so unless you believe in
ghosts, it cannot come back to life and make you sick. Years ago, it was made
from a weakened live virus that could give someone a mild case of the flu, but
that is no longer the case.
On the flip side, the flu
shot can only protect you from the influenza virus. It cannot protect you from
colds or sinus infections or bronchitis.
Sometimes people who get
the flu shot still get the flu. That is true for a couple of reasons. First of
all, we tend to have a very late flu season here in the South. We often have
the height of our flu cases in March. The flu shot only lasts 120 days. People
who are going to their local pharmacy and getting flu vaccines in September are
going to be exposed by the end of the season. It is best to wait for late
October or early November to get vaccinated.
Also, the flu vaccine is
made up of the three most prevalent influenza strains in East
Asia for that year. Unfortunately, sometimes another strain (not
included in the vaccine) makes its way around the world, as it did last year. I
would like to point out that for those unlucky enough to get sick despite
having had the vaccine, the strain most of you got was a MINOR flu strain, not
as severe as a MAJOR strain, and you probably still did not get as sick as you
would have otherwise due to partial immunity.
The Truth of the Matter
Now let's discuss some
truths about influenza and its vaccine. The truth is that 35,000 Americans,
many of them seniors, will die this year from the flu and its consequences.
Furthermore, 250,000 heart attacks will occur due to the stress placed on
seniors by flu illness.
Who should get the flu
vaccine? Almost anyone is eligible for the vaccine. It is strongly recommended
for children over six months of age, pregnant women, healthcare workers,
asthmatics, people with chronic lung or heart disease, diabetics, cancer
patients, and seniors age 55 and older.
Who should not get the
flu vaccine? Anyone with a true egg allergy or a history of a rare neurologic
disorder called Guillain Barre syndrome.
As for the pneumonia
vaccine, it is recommended for anyone with chronic lung or heart disease,
cancer, diabetes, and anyone age 65 and older. One dose may be sufficient for
lifetime immunity, but higher risk individuals should consider a booster dose
in five years.
There are many health
issues we cannot prevent or avoid. Influenza is not one of them. Take Aunt
Sally to her doctor to get her vaccine. Don't let your elderly relatives become
part of the statistics.
Beth Hodges, MD, is a principal in Hodges Family Practice with offices in
Asheboro and Randleman, North Carolina.
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SOCIAL SECURITY BENEFITS FOR THE WIDOW (and the divorced survivor)
-Warren Coble
 Last
month we looked at the eligibility and computation of divorced spouse benefits
and children's benefits. We now move on
to the eligibility and computation of widow(er)'s benefits and surviving
divorced spouse benefits.
Eligibility
for regular widow(er)'s benefits is based on a valid marriage to the deceased
wage earner that lasted for at least nine months. There is no gender distinction in survivor
benefits. Men qualify on the same
requirements as women. Both are required
to be at least age 60 to begin receiving benefits. Generally, remarriage prior to age 60 bars
eligibility on the deceased worker's record.
Termination of the subsequent marriage may allow later eligibility on
the deceased worker's account.
Surviving
divorced spouse benefits are payable so long as the deceased worker and
applicant were validly married for a period of at least 10 years, from date of
marriage to date of divorce. There is no
limit to the number of surviving divorced spouse applicants who can qualify on
a deceased's record, so long as each meets the 10 year marriage
requirement. Additionally, surviving
divorced spouse applicant benefits will not affect the benefit rates for other
survivors getting benefits.
Disabled
widow(er)s may receive benefits on the deceased spouse as early as age 50,
provided they become disabled within 7 years of the date of the worker's death,
or within 7 years of their last eligibility for mother's/father's
benefits. Benefits for disabled
widows/widowers are computed as if the widow(er) were age 60 at the time of
eligibility.
The
amount of widow(er)'s benefits again depends on the Primary Insurance Amount,
or PIA, based on the deceased worker's average lifetime earnings. Full benefits are payable based on the
widow(er)'s attainment of full retirement age (gradually increasing to age 67
for widow(er)s born 1940 or later). Reduced
benefits at age 62 generally equal 71 ½ per cent of the deceased worker's PIA.
It is
important to understand that retirement benefits and widow(er) benefits can be
applied for separately, generally saving the higher of the two benefits for age
66 or later to maximize lifetime benefits.
For example, if the PIA for the retirement benefit and widow(er)
benefits are similar, say $1000.00, it would probably be advantageous to file
for the lower widow(er) benefits at say age 60, or 62, or 65, and save the
higher retirement benefit payable at full retirement age or later. Additionally, delayed retirement credits
could increase the retirement benefit even higher by waiting until age 70 for
the retirement.
Another
factor to consider is if the deceased worker received reduced retirement
benefits. In that situation, the
surviving spouse benefit is limited to a maximum of 82 ½ per cent of the
deceased worker's PIA.
Next
month we'll revisit Part D Prescription Drug Plans and Open Enrollment.
Social Security expert Warren Coble welcomes your
questions regarding Medicare, Social Security and
Senior Life in general! Email Warren by clicking
HERE.
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PLANNING AHEAD FOR YOUR MONEY
MANAGEMENT NEEDS
- Penny Louis, MPA
Planning
ahead can mean the difference between a serene and secure transition from
 managing your own personal monetary affairs to one that is chaotic and
crisis-driven. Financial management
often involves a variety of professionals including financial planners,
investment advisors, CPAs, stockbrokers and attorneys. However, today I am going to address the
topic of daily money management, which does not require any of the above
mentioned professionals.
Daily
money management is, simply stated, paying attention to the details of your everyday personal monetary affairs. It
includes bill paying, checkbook balancing, banking business, managing bank
accounts and bank records, organizing and filing of tax, financial and other
important documents, management of medical insurance premiums, bills and
claims, and general office and paperwork organization. While these tasks are usually performed by
individuals for themselves, there may come a time when they become confusing,
overwhelming and unmanageable. In some
cases physical impairments limit a person's ability to perform these tasks for
themselves. In other cases, it may
involve mental impairment such as dementia or Alzheimers disease.
The wise
course of action is to plan ahead for assistance with daily money management
tasks when it may become needed. Some
elders are fortunate to have adult children ready, willing and able to assume
these tasks for them. But often,
children may live at a distance or be too busy with their own children, jobs
and chaotic lives to be able to assist their parent(s) with their daily money
management needs.
This is
when a professional Daily Money Manager (hereinafter referred to as a "DMM")
can be called in to assist the elder with their personal monetary affairs. It is wise to secure the help of a DMM before
it is needed. That way, the DMM will
become acquainted with the elder's methods of handing their daily monetary
affairs, or will be able to assist with setting up systems, files and a
schedule for staying current with bills, banking and money management.
When
hiring a DMM, it is wise to ask if the DMM is willing to work with family
members and other professional advisors; whether or not he or she is insured;
if he or she is a member of professional associations or other local
organizations that you are familiar with; if he or she can provide references
from several existing clients; and finally, how does the DMM bill for his or
her work. An initial consultation with
the DMM is usually free of charge and gives the elder an opportunity to
interview the DMM and find out how they will work together.
Planning
for future needs is a way to avoid getting into financial trouble when things
become unmanageable. You can seek DMM
referrals from trusted sources such as friends, relatives, accountants,
attorneys and financial advisors. Or you
can contact the American Association of Daily Money Managers to find a DMM in
your area. Their website is www.aadmm.com, e-mail is info@aadmm.com or
phone them at 877-326-5991.
Penny Louis, MPA is the Managing
Partner of Financial Care for Elders, LLC, Savannah, Georgia, which provides personal business
assistance to clients who have difficulty managing their personal monetary
affairs. She is a member of the American
Association of Daily Money Managers. You may email Penny by clicking HERE.
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The Usual Disclaimer: This newsletter is for general information only. Please do not rely on anything you read in this email as definitive legal advice applicable to you. All situations are different, including yours. Nothing you read in this newsletter is a suitable substitute for professional advice you may receive from your attorney, your accountant, or your tax advisor.
All contents copyrighted 2008 by Mason Law, PC. Contents may be republished with written permission of Mason Law, PC (which permission will usually be given!). |
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