February 29

Federal Court Grants Preliminary Injunction Continuing Medicaid Benefits in Decanting Case

A federal district court grants a Medicaid beneficiary’s request for a preliminary injunction preventing the Connecticut Department of Social Services from treating two trusts established for the beneficiary by her deceased mother as countable resources before they were decanted into supplemental needs trusts.  Simonsen v. Bremby (D.Ct., No. 15-cv-1399, Dec. 23, 2015).

Joy A. Miller established two inter vivos trusts for her daughter, Dawn Simonsen, that were funded when Ms. Miller died in 2003.  The trusts, established in Florida, gave the trustee the ability to “pay to [Dawn] or utilize for her benefit so much of the income and principal of her trust as the trustee deems necessary or advisable from time to time for her health, maintenance in reasonable comfort, education and best interest considering all of her resources known to the trustee . . . the trustee is encouraged to be liberal in its use of the funds for her even to the extent of the full expenditure thereof.”  

Ms. Simonsen, a quadriplegic on a ventilator, was admitted to a nursing home in October 11, 2013, and she applied for Medicaid on July 31, 2014.  On August 29, 2014, the trustee of the two trusts successfully petitioned a Florida court for permission to decant the two trusts into two new supplemental needs trusts.  Although the Connecticut Department of Social Services (DSS) initially approved Ms. Simonsen’s Medicaid application, it subsequently determined that the original trusts were countable resources and assessed a seven year transfer of assets penalty for the decanting into the clearly inaccessible supplemental needs trusts.  Ms. Simonsen appealed DSS’s decision and while that appeal was pending filed a request for a preliminary injunction with the federal district court asking it to prohibit the state from terminating her Medicaid benefits and to hold that the previous trusts were not accessible resources, voiding the transfer penalty.

Referring to the Social Security Administration’s Program Operations Manual System (POMS), the U.S. District Court for the District of Connecticut grants the motion for a preliminary injunction, finding that the original trusts are not countable resources because they “do not contain terms providing the beneficiary with any right or authority to direct any payments, and instead empowered the Trustee with the sole discretion to determine when to make a distribution . . . Moreover, the Predecessor Trusts contained a valid spendthrift clause . . . In short, if a trust contains a spendthrift clause, the beneficiary has no legal right or authority to access the trust principal, and, therefore, it is not counted as an available resource for SSI, and consequently Medicaid, eligibility purposes.”

For the full text of this decision, click here. 

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February 25

CMS Makes It Official That Medicaid Home Health Recipients Need Not Be Homebound

On February 2, 2016, the Centers for Medicare and Medicaid Services (CMS) will issue a final rule clarifying that Medicaid beneficiaries do not need to be “homebound” in order to receive home health services.  In addition, the final rule, which revises Medicaid home health regulations (42 C.F.R. § 440.70(c)(1-2)), makes clear that Medicaid home health services are not limited to home settings. 

As Gene Coffey, formerly an attorney with the National Senior Citizens Law Center (now called Justice in Aging), wrote in the January 2010 issue of Caring magazine, “Medicaid’s coverage for home health services plays a critical role in helping individuals stay in their homes and communities while also helping states meet their responsibilities under the [Americans with Disabilities Act].”

According to Justice in Aging, which has been at the forefront of efforts to bring federal and state regulations into compliance with federal law in this area, the final rule “codifies longstanding agency policy, previously articulated in a 2000 letter to state Medicaid directors, that a Medicaid homebound requirement for home health services violates the Americans with Disabilities Act (ADA), as articulated in Olmstead v. L.C., 527 U.S. 581 (1999).”  Despite this, some states have required that recipients be homebound.

Justice in Aging notes that the final rule does not change Medicare’s homebound requirement, although CMS acknowledges the challenges this poses for dual eligible recipients and notes in its rule commentary that “we would permit states the flexibility to authorize additional hours of home health services to account for medical needs that may arise out of the home.” (pg. 56)

The rule will take effect July 1, 2016.  However, to ensure that states and providers are implementing the rule appropriately, CMS is delaying compliance with the rule for up to two years, depending on a state’s legislative cycle.

For more details from Justice in Aging, click here.

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February 22

How Would the Presidential Candidates Change Social Security?

Millions of Americans rely on Social Security for some or all of their retirement income, and millions more are paying into the system in the expectation that it will be there for them when they retire.  What changes should be made to the current Social Security system, if any, to keep it solvent and ensure that retirees do not live in poverty?

The 2016 presidential candidates have a wide range of proposals, from raising the full retirement age (most of the Republican candidates) to increasing the minimum benefit (Bernie Sanders and Martin O’Malley).  As a way to increase revenue, all three Democratic candidates favor lifting the payroll tax cap; currently, no Social Security tax is paid on income over $118,500 (in 2016).

The Center for Retirement Research of Boston College has compiled a chart comparing the candidates on their proposed Social Security changes.  Four GOP candidates, including Donald Trump and Carly Fiorina, have not proposed changes to the program.

To view the chart, click here.

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February 18

Medicare Now Covers Conversations About End-of-Life Care

Medicare beneficiaries may now discuss options for care at the end of life with their health care providers. 

Beneficiaries of course were already free to talk about advance care planning with their doctors or other qualified health professionals, but the practitioners could be reimbursed for such discussions only during a patient’s “Welcome to Medicare” visit, a time when the topic may not seem very relevant. As of January 1, 2016, Medicare will pay physicians for speaking at any time with Medicare beneficiaries and their families about different options for care and treatment at the end of life. 

These purely voluntary conversations will help enable patients to end their lives on their own terms. Patients are often unable to express themselves when a crisis is at hand and a decision needs to be made about how much or little care they want when facing a terminal illness. According to the Kaiser Family Foundation, one-quarter of Medicare’s budget is spent on patients in their last year of life.  For many patients, life-prolonging medical procedurs are unwanted and unwelcome.  A 2011 study found that when medical personnel know what kind of care a patient wants at the end of life, Medicare can be spared significant sums and the patient is more likely to die at home rather than in a hospital in some areas.

Now that discussions about advance care planning are a regular Medicare benefit, seniors and other Medicare beneficiaries will be able to learn about health care options that are available for end-of-life care, such as advance directives, palliative care and hospice care.  They can then determine which types of care they would like to have, and share their wishes with their practititioners and family.  After sufficient conversations with their doctors and other health professionals, the beneficiaries may be ready to execute legal documents, such as advance directives or “POLST” forms, and name a health care proxy to ensure that their wishes will be carried out. Studies have found that 40 percent of people over age 65 have not written down their wishes for end-of-life treatment. 

An early version of the Affordable Care Act (aka “Obamacare”) would have allowed Medicare to pay for these patient discussions, but former vice presidential candidate Sarah Palin and other opponents of health reform characterized them as government “death panels,” and the provision never made it into the final health care legislation. The Obama administration tried again in 2011, enacting a Medicare regulation that would have reimbursed doctors for discussing end-of-life planning with patients during their annual checkups, but quickly reversed course and withdrew the regulation, apparently fearing that it would revive the specter of  “death panels” at a time when the health reform law was under fierce attack from Republicans. 

Under the new regulations, the advance care planning discussions can take place during the annual wellness visit or at a separate appointment.  They are a reimbursable benefit under Medicare Part B and there will be a copayment if the conversation is not part of the annual wellness visit.

Talk to your elder law attorney about drawing up the documents to help ensure you receive the end-of-life medical treatment you want — no more and no less.

 

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February 15

The Benefits and Drawbacks of Buying an Annuity Doubler to Pay for Long-Term Care

As long-term care insurance premiums keep rising and fewer companies are offering policies, seniors are looking for other ways to help pay for long-term care. Annuity “nursing home doublers” have emerged as a new long-term care option. These doublers can be beneficial, but as with any annuity product, customers should use caution before purchasing.

An annuity is a contract with an insurance company under which the consumer pays the company a certain amount of money and the company sends the consumer a monthly check for the rest of his or her life, or for a certain term. Immediate annuities are a way to receive a guaranteed income for life and can be useful in Medicaid planning. 

Many insurance companies that sell annuities are now offering “nursing home doublers” to help pay for long-term care. If the beneficiary of such an annuity needs long-term care, the insurance company will make double payments for five years or until the annuity’s cash value is depleted. To activate the doubler, the annuitant needs to be unable to perform two of six activities of daily living (i.e., eating, bathing, dressing, transferring, toileting, and continence). Once the five years are up and if the annuity still has a cash value, the insurance company would go back to making regular payments.

The benefit of a doubler is that it is relatively inexpensive. Many insurance companies offer the doubler at no additional cost beyond the lifetime income rider fee. If there are additional fees, the fees are usually low. The double payments are not designed to cover the full cost of long-term care, but the double payments can help defray the cost.

Before purchasing an annuity, you should fully research the product. While annuities—particularly immediate annuities–can be a valuable retirement product, annuity salespeople have come under scrutiny for targeting older Americans with deceptive sales tactics. Before purchasing an annuity with a doubler, find out whether it covers home care in addition to nursing home care. In addition, using a doubler depletes the cash value of your policy, which means there would be less left in the annuity to leave to your heirs. Also, if you purchase a joint annuity, the doubler will only cover one spouse’s long-term care.

Before making any purchases consult with your elder law attorney to find out the best way to plan for long-term care. 

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