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What is the Medicare donut hole?

By Hook Law Center

The Medicare donut hole is the coverage gap that is within the majority of Medicare Prescription Drug Plans. There is a short-lived restriction on what drugs most plans will cover. The coverage gap does not apply to everyone. It starts after you and your drug plan spend a specific amount purchasing covered medications.

For the year 2016, you are in the coverage gap when you and your plan have spent $3,301 on covered medications. This figure is subject to change every year. In addition, those who have Medicare, and who receive additional assistance with payment of Part D costs will not be included in the coverage gap.

Upon reaching the coverage gap in 2016, you will pay a maximum of 45 percent of the plan’s cost for brand-name prescription drugs that are covered. You will get these savings if you purchase your prescription drugs at a pharmacy or place an order by mail. Even though you will pay a maximum of 45 percent of the price for the brand-name prescription in 2016, 95 percent of the price will be considered out-of-pocket cost that will help you leave the coverage gap.

This figure represents the 45 percent that you pay plus the 50 percent manufacturer discount payment. Your out-of-pocket costs do not include the amount the drug plan contributes toward the cost of the drug, or 5 percent, and the amount the drug plan contributes toward the dispensing fee, or 55 percent of the fee.

In 2016, Medicare will pay 42 percent of the cost of generic drugs during the coverage gap. You will pay the remainder, or 58 percent of the cost. The amount you pay for generic drugs during the coverage gap will be reduced every year until it is 25 percent in 2020. The coverage for generic drugs operates in a different manner from the way in which the discount for brand-name drugs works. With respect to generic drugs, only the amount you pay will be applied toward helping you out of the coverage gap.

Posted on Thursday, July 28th, 2016. Filed under Medicaid, Newsletter.

Learn what government benefits are available to help pay for long-term care

By Hook Law Center

There are a few government programs, including Medicare and Medicaid, that can help pay for long-term care services. Each program has certain regulations concerning which services are covered, your eligibility for benefits, the length of time you can receive benefits, and your out-of-pocket costs. In order to prepare for your long-term care needs, you should be aware of the facts regarding your coverage, and keep informed about any changes within each program.

Medicare

Medicare only covers care that is medically necessary, including medical acute care, such as visits to the doctor, medications and time spent in the hospital. In addition, Medicare covers short-term services for ailments that are predicted to improve, including physical therapy.

In order to become eligible for Medicare, you must be age 65 or older, under age 65 with certain disabilities, or any age and have end-stage renal disease, which is permanent kidney failure that has to be treated with dialysis or a kidney transplant.

Medicare does not pay for the most significant aspect of long-term care services or personal care, including assistance with bathing, or for supervision that is frequently referred to as custodial care. Medicare covers the cost of a brief stay in a skilled nursing facility, hospice care, or home health care if you meet certain conditions:

You have recently stayed in a hospital for a minimum of three days;
Within 30 days of your time previously spent in a hospital, you were admitted to a nursing facility that is certified by Medicare;
You require skilled care, including skilled nursing services, physical therapy or other kinds of therapy.

If you meet each of these conditions, Medicare will pay for some of the expenses for a maximum of 100 days. For the initial 20 days, Medicare pays 100 percent of your expenses. Then you are responsible for your expenses up to $140 per day, as of 2013. Medicare pays any remaining balance. After day 100, you are responsible for the entire cost of each day spent in a skilled nursing facility.

Medicare also pays for specific long-term care services for a certain period of time if your physician states that they are medically needed to treat an illness or injury. If you suffer from a terminal illness, and it is anticipated that you will not live more than six months, Medicare will pay for hospice care.

Medicaid

Medicaid is a joint federal and state government program that assists low-income people with the payment of part, or all, of their health care expenses. It covers medical care, including visits to the doctor, and the cost of hospital stays. It also covers long-term care services in nursing homes, as well as those given at home, including visiting nurses and help with personal care. Medicaid differs from Medicare in that it covers the cost of custodial care in nursing homes and at home.

In order to become eligible for Medicaid, you must meet certain qualifications, including having earnings and assets that are not greater than the levels used by your state. Under federal law, if Medicaid pays for your long-term care services, that state must recover the amount that Medicaid expended on your behalf from your estate after your death. This is called Medicaid Estate Recovery.

Posted on Wednesday, May 25th, 2016. Filed under Long-Term Care, Medicaid.

Spending down Medicaid assets safely

By Hook Law Center

“Spending down” your assets is the term used to describe the reduction of your assets in order to qualify for Medicaid.

There are some assets that are not required to be sold or spent in order to be eligible for Medicaid. These are called noncountable assets, and they include the home, a car, household goods and furnishings, personal effects, prepaid funeral and burial expenses and cash limited to $3,000 for a couple. However, the decision to exempt certain assets is made based on the factors of each case. The Medicaid program for your state will consider the laws of your state, your marital status, living arrangements and other circumstances.

Following are some of the expenses for which it is usually permissible to spend down your money or assets. But since there are differences in each state, it is recommended that you seek advice from an estate planning attorney. When applying for Medicaid, you can spend down your assets on any legitimate debt belonging to you or your spouse. Such debts include mortgage payments, medical bills, rent, utilities, car payments, taxes and credit cards. Full or partial payments of the afore-mentioned expenses, as well as prepayments of loans, are also acceptable.

However, prepaid amounts to caregivers are disallowed for services that have not yet been rendered. Such a prepayment will be considered a gift, and will cause the applicant to be ineligible for Medicaid for a period of time. Similarly, prepayment of any expense prior to the time at which the service is rendered or the applicant receives the benefit, is also disallowed.

A Medicaid applicant can purchase noncountable assets, such as an exempt home or car if the applicant or his or her spouse will be operating the car. In addition, payments made for the maintenance or improvements of a noncountable asset, such as a home, are permitted.

Posted on Saturday, October 31st, 2015. Filed under Medicaid, Senior Law News.

How to spend down Medicaid assets (safely)

By Hook Law Center

Spending down your assets is the term used to describe the reduction of your assets in order to qualify for Medicaid. There are some assets that are not required to be sold or spent in order to be eligible for Medicaid. These are called noncountable assets, and they include the home, a car, household goods and furnishings, personal effects, prepaid funeral and burial expenses and cash limited to $3,000 for a couple. However, the decision to exempt certain assets is made based on the factors of each case. The Medicaid program for your state will consider the laws of your state, your marital status, living arrangements and other circumstances.

Here are some of the expenses for which it is permissible in most states to spend down your money or assets. When applying for Medicaid, you can spend down your assets on any legitimate debt belonging to you or your spouse. Such debts include mortgage payments, medical bills, rent, utilities, car payments, taxes and credit cards. Full or partial payments of the aforementioned expenses, as well as prepayments of loans, are also acceptable. However, since there are differences in each state, it is recommended that you inquire about the laws of your state or seek advice from an estate planning attorney.

However, prepaid amounts to caregivers are disallowed for services that have not yet been rendered. Such a prepayment will be considered a gift, and will cause the applicant to be ineligible for Medicaid for a period of time. Similarly, prepayment of any expense prior to the time at which the service is rendered or the applicant receives the benefit, is also disallowed.

A Medicaid applicant can purchase noncountable assets, such as an exempt home or car if the applicant or his or her spouse will be operating the car. In addition, payments made for the maintenance or improvements of a noncountable asset, such as a home, are permitted.

Due to drastic changes in the Medicaid program, those who are members of the middle class will also be eligible. And those who are not disabled or in long-term care facilities, will not have to spend down their assets as long as their Modified Adjusted Gross Income (MAGI) complies with income requirements.

Posted on Thursday, October 29th, 2015. Filed under Medicaid, Senior Law News.

Choosing between Original Medicare and Medicare Advantage

By Hook Law Center

Deciding what type of health insurance to get can be a daunting task for seniors. Medicare is highly regarded and very popular, but Medicare Advantage differs in ways that could be advantageous to some.

Original Medicare includes Medicare Part A (hospital expenses) and Part B (other health care such as doctor’s office visits). The monthly premium for most participants is $104.90. Participants also pay “coinsurance” of 20 percent of most medical services.

Medicare Advantage, or Medicare Part C plans, are run by private insurance companies, and must offer comparable coverage to parts A and B. Some Medicare Advantage plans charge the same premium as Original Medicare, but many charge an additional premium. Most also charge coinsurance or a copay (a flat fee for a medical service), and these fees vary from plan to plan.

Original Medicare offers the widest choice of doctors and other health care providers. This may be particularly important to you if you like to travel. Original Medicare also has a lower monthly cost than most Medicare Advantage plans.

Most Medicare Advantage plans cover prescription drugs, which costs extra under Original Medicare. Medicare Advantage plans, by law, have a maximum out-of-pocket expense of $6,700 per year. This can give peace of mind, but most people’s out-of-pocket Medicare spending is far less than this amount. Some plans also offer vision, dental, assisted living and nursing home care, unlike Original Medicare.

The decision to go with Original Medicare or Medicare Advantage can only be made based on the particular terms of the Advantage plan that interests you. Because they are offered by private companies, Advantage plans vary widely in terms of their coverages, premiums, copays and coinsurance fees. Consider carefully the pros and cons of each option and consult with an expert if you need help deciding.

Posted on Wednesday, July 29th, 2015. Filed under Long-Term Care, Medicaid, Public Benefits, Senior Law News.

How to appeal a Medicare denial

By Hook Law Center

If you were denied coverage or payment by Medicare, you have the option of filing an appeal. The denial must be from Medicare, your Medicare Prescription Drug Plan or your Medicare health plan. It is within your right to file an appeal if you were denied any of the following:

  • A health care service, prescription drug, item or supply which you think you are entitled to
    receive;
  • Payment for a health care service, prescription drug, item or supply that you already received;
  • A change in the amount you are required to pay for a healthcare service, prescription drug,
    item or supply.

You can also file an appeal if Medicare or your plan ceases to offer or pay for your health care service, prescription drug, item or supply. If you are enrolled in a Medicare Medical Savings Account (MSA) Plan, you can file an appeal if you believe that you have satisfied your deductible or you think that a service or item should be applied toward your deductible.

In the event that you decide to file an appeal, request any information that could be helpful to your case from your physician, health care provider or supplier. The appeals process consists of five levels. If you do not agree with the decision reached at any level, you can usually proceed to the next level.

The first step in filing an appeal is to review your Medical Summary Notice (MSN), which lists all of the services and supplies that were billed to Medicare during a time frame of three months. It also reveals the amount paid by Medicare, and the amount you may be required to pay the provider. In addition, the MSN shows whether Medicare has denied your medical claim.

You will receive an MSN by mail every three months. Should you decide to file an appeal, you must do so within 120 days of the day on which you received the MSN in question.

Here are the three ways in which you can file an appeal:

  1. Complete a “Redetermination Request Form” and mail it to the Medicare contractor.
  2. On the back of the MSN, there are instructions for you to follow. You are required to mail your
    request for redetermination to the firm that manages Medicare claims.
  3. Mail a written request to the firm that manages Medicare claims.

You can also consult an elder law attorney who can help you file an appeal of a claim or reimbursement that was denied.

Posted on Monday, July 27th, 2015. Filed under Medicaid, Public Benefits.

Seniors may qualify for Medicaid by spending down assets safely

By Hook Law Center

Federal law dictates that only someone below a benchmark level of assets can qualify for Medicaid, beyond which it is determined that the individual does not have the assets to pay for his or her own care. Many seniors who apply do not receive Medicaid because their asset level is too high to qualify.

In order to qualify for Medicaid, it is sometimes prudent to “spend down” assets in order to reduce their value. Spending down should be done carefully, ensuring both continued financial security and the receipt of Medicaid.

Not all assets influence whether an individual can receive Medicaid, and these assets do not need to be spent down. A person’s home, car and physical possessions may not be counted. Prepaid funeral and burial arrangements and some cash may also be exempt. However, exemptions are determined on a case-by-case basis.

Medicaid programs allow individuals to spend down their assets on certain expenses. Assets may be used to pay off credit cards, mortgages or loans, including prepayment. They may be used for the prepayment of certain burial and funeral expenses.

The applicant can also use their existing assets to purchase an exempt asset, such as a home or automobile that meets the requirements for exemption. Assets can be used in the upkeep of non-countable assets, such as home repairs.

For people who are married, purchasing an annuity for the spouse can be an excellent way to spend down assets. An annuity guarantees the spouse a fixed income for a given number of years. Annuities purchased for the purpose of spending down must be non-transferable, and Medicaid must be listed as the primary beneficiary after the spouse’s death.

There are certain expenses that should not be used for spending down. For example, prepayment of caregiver services or other services is considered a gift and will actually cause the applicant to be ineligible for Medicaid for a period of time.

The process of spending down to quality for Medicaid can be complex. An estate planning attorney can assist in developing Medicaid planning strategies that are compatible with Virginia’s Medicaid regulations.

Posted on Wednesday, August 27th, 2014. Filed under Estate Planning, Medicaid.

Facts to know about Medicare and retirement

By Hook Law Center

If your 65th birthday is approaching, you should make sure you are aware of your Medicare options and are prepared to enroll in Medicare if necessary. Here are a few things you should know.

First, if you are receiving Social Security benefits already, then you will be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance) automatically. You should receive information about enrollment three months prior to your 65th birthday. You will become eligible beginning the first day of the month you turn 65. If you turn 65 on the first day of the month, then you will be enrolled beginning on the first day of the prior month.

Most people not already receiving Social Security benefits will have to enroll in Medicare through the Social Security Administration. You can enroll anytime during a seven-month period that starts three months prior to your 65th birthday. You also have the option of choosing a Medicare Advantage (Part C) private insurance plan as an alternative to Part A and Part B. If you choose a Medicare Advantage plan, it may include prescription drug coverage; otherwise, you will have to join a Medicare Prescription Drug Plan (Part D).

Finally, be sure to consider the timing and interaction of any health insurance you receive through your employer. If you are retiring at age 65 and moving into Medicare, be sure to coordinate the dates of your coverage. If you will keep working past age 65, then you will need to understand how your employer’s group health plan interacts with Medicare; it may still be necessary for you to enroll in Medicare.

Posted on Tuesday, July 29th, 2014. Filed under Estate Planning, Long-Term Care, Medicaid.

Advance Medical Directives Need Easy Accessibility

By Hook Law Center

Many people are aware of the importance of advance medical directives. In the event that you become incapacitated, these directives detail what procedures you do or do not want and who should make decisions for you. Because these are important documents, people often keep copies in safe deposit boxes or leave them in the care of their attorneys, but copies also need to be easily accessible in case of a medical emergency.

In response to this need, the American Bar Association’s Commission on Law and Aging has introduced an app that allows advance directives to be stored electronically. My Health Care Wishes is a convenient way for you or family members to present such documents to medical professionals via email or Bluetooth. Other information, including contacts and health information, can also be stored within the app. The electronic documents have the same legal authority as the paper originals. The app is available in a basic free version, and a $3.99 version offers additional features. Before launching, the Bar Association tested the app with health insurers and health care providers with solid results.

There are other options to store important documents in accessible electronic formats, including Dropbox and Docubank. Whichever method you use, make your documents available so that they can be useful when a problem appears.

Posted on Monday, June 30th, 2014. Filed under Estate Planning, Long-Term Care, Medicaid.

Continuing Care Retirement Communities Offer One Option for Retirees

By Hook Law Center

There are many living options available for seniors, and continuing care retirement communities (CCRCs) have become one of the most attractive. Many retirees consider such communities because they typically provide a range of services in one location, including independent living, adult care facilities and nursing home care. This setup allows seniors to “age in place,” staying in the same community as their needs change. Typically, residents pay an entrance fee (which may be refunded) and monthly charges.

However, consumers should consider the contract terms and other aspects of the community carefully, as there are potential risks involved.

Residents of a California CCRC have filed a class action lawsuit against the company that owns it, claiming misrepresentation and breach of fiduciary duty. The community, Vi at Palo Alto, charges a high entrance fee that is refunded if the resident moves out or passes away. The refunds naturally become part of the estate plans of the residents. However, the plaintiffs in the lawsuit claim that the company has no reserve fund to pay refunds and has moved money from entrance fees to a parent company that has no responsibility to pay refunds. For its part, the company says the refunds will be paid, and that it follows standard business practices.

The dispute is a reminder that consumers should be fully informed before entering into any long-term care contract. For more information about CCRCs in Virginia, visit the Virginia Division for the Aging, at www.vda.virginia.gov/ccrc.asp.

Posted on Thursday, June 19th, 2014. Filed under Estate Planning, Long-Term Care, Medicaid, Public Benefits.