Selling a home or securities can push clients into a higher income tier, triggering premium increases

By Mary Beth Franklin

There’s a new Grinch in town and her name is IRMAA. That’s shorthand for the Income-Related Monthly Adjustment Amount notices that the Social Security Administration sends at the end of each year to inform Medicare enrollees how much they will pay in premiums the following year.

This year’s IRMAA notices are dampening the holiday spirit of a lot of retirees.

One reader wrote to me about the “unconscionable” increase in the Medicare premiums that his 84-year-old father will have to pay next year resulting in a 23% reduction in his net Social Security benefit in 2018. Unfortunately, the premium amounts cited in his IRMAA notice are correct based on new income tiers that take effect next year.

PREMIUMS and COLAs

In 2018, most Medicare enrollees will pay $134 per month for Medicare Part B, which covers doctors’ visits and outpatient services. In most cases, Medicare Part B premiums are deducted directly from monthly Social Security benefits.

For many retirees who had been paying a $109 per month premium for each of the past two years, the new Medicare Part B premium represents a $25 per month increase. The premium hike will virtually wipe out the 2% cost of living adjustment in their Social Security benefits next year.

Some Medicare enrollees who were not protected by the “hold harmless provision” have already been paying $134 per month for Medicare Part B in 2017 so their premiums will remain the same in 2018. They will see a net 2% increase in their Social Security benefits next year.

But high-income retirees, defined as individuals with incomes above $85,000 and married couples with incomes topping $170,000, will pay even more next year for Medicare Part B and Medicare Part D prescription drug coverage. These are the people who receive IRMAA notices.

There are five income tiers based on modified adjusted gross income (MAGI), which includes adjusted gross income from the latest tax return plus any tax-exempt interest. Medicare Part B and D premiums in 2018 are based on 2016 tax returns. If MAGI exceeds the top limit of an income bracket by just $1, clients will be catapulted into the next tier.

Premium surcharges in 2018 range from an additional $53.50 per month to an extra $294.60 per month per person—the same level as in 2017. That is on top of the standard $134 per month Part B premium.

But upper income tiers that trigger those premiums have changed, meaning some retirees will pay even more for Medicare Part B and D next year even if their income remained the same. Those affected by the higher surcharges in 2018 include individuals with incomes that topped $133,500 in 2016 and married couples with incomes that exceeded $267,000 in 2016.

HOUSE SALE

In the case of the reader’s elderly parents, the sale of a house in 2015 increased their income from $70,000 to $267,000. The higher income boosted the Medicare Part B and D premiums in 2017 which were deducted from their Social Security payments. As a result, the father’s net Social Security benefit declined from $1,554 per month to $1,361.80 per month in 2017—a loss of more than $2,000 a year in net Social Security benefits.

The following year, the father sold some bonds, boosting his income to over $276,000 in 2016. With the new income triggers, that pushed him in the fourth income tier, triggering even higher premiums for Medicare Parts B and D in 2018. His net Social Security benefit will drop to $1,193.20 per month—a decline of more than $4,300 per year since 2016.

In some cases, clients can appeal a Medicare premium surcharge if they have experienced a life-changing event that caused their income to decrease or if they can prove that the income information that Social Security used to determine the IRMAA premium is incorrect or outdated.

The Medicare Rights Center offers a free downloadable guide for financial advisers to help their clients appeal Medicare premium surcharges.

However, a one-time boost in income due to the sale of a vacation home or large portfolio distribution does not qualify as a life-changing event and would boost the client’s Medicare premium for at least a year.

A federal district court holds that a nursing home suing on behalf of its residents has a private right of action to sue the state for violating federal Medicaid law regarding patient liability amounts. Westminster Nursing Center v. Cohen (U.S. Dist. Ct., E.D. N.C., No. 5:17-CV-96-FL, Nov. 22, 2017).

Medicaid recipients at a nursing home were required to pay some of their income to the nursing home as a patient monthly liability amount. The recipients missed their payments and incurred a negative account balance with the nursing home. The recipients applied for a deviation in monthly payments based on the arrearage in payments to the nursing home, but the state either denied their requests or did not respond, claiming that under state regulations an arrearage in patient monthly liability is not a type of necessary medical expense that must be deducted from patient monthly liability.

The nursing home, as the designated representative for the Medicaid recipients, sued the state, alleging violations of the Medicaid Act’s medical assistance and nursing facility services mandate, among other things. Under the mandate, the state may reduce payments for long-term nursing home care if a resident has independent income, but the state may not consider amounts that the regulations allow a resident to set aside for other purposes, such as medical expenses. The state filed a motion to dismiss, arguing that the nursing home did not have a right to sue under § 1983.

The United States District Court, Eastern District of North Carolina, denies the motion to dismiss in part, holding that the medical assistance and nursing facility services mandate creates a private right of action that is enforceable under § 1983. The court rules that the federal Medicaid provision regarding Medicaid patient monthly liability amounts is “couched in mandatory, rather than precatory, terms.”

Advocates Oppose Tax Cuts That Will Jeopardize Health Care for Older Adults,
People with Disabilities & Their Families

Washington, DC ─ More than 40 organizations whose missions are to promote access to affordable, high-quality health care and long-term services and supports for older adults, people with disabilities, and their families, sent a letter to leaders in the US Senate as they consider tax changes this week. The letter expresses the organizations’ strong opposition to tax bills that would diminish health and long-term care availability and affordability for older adults and people with disabilities.

Both Senate and House tax bills under consideration would explode the national debt by $1.5 trillion and drive up the yearly deficit. The letter’s signatories oppose the bills because this tremendous revenue shortfall will lead to cuts in Medicaid, Medicare, Social Security and other programs that millions of older adults, people with disabilities, and their families rely on. For example, more than 57 million older adults and people with disabilities rely on Medicare, including 11 million low-income beneficiaries who have both Medicare and Medicaid.

The Senate tax plan repeals the Affordable Care Act’s (ACA) individual mandate and would leave 13 million Americans uninsured. The letter explains that this repeal will raise the costs of insurance for people with preexisting and chronic conditions, making it more difficult for the 3.3 million adults over 55 who obtain insurance through the ACA marketplaces to afford health care.

The elimination of the medical expense tax deduction, currently in the House bill, would also disproportionately harm older adults, people with disabilities and their families. This population has particularly high out-of-pocket health costs that create a significant financial burden. Repealing the medical expense tax deduction would threaten the financial security of people already struggling with health and economic challenges.

The organizations’ letter urges Senate leaders to adopt a bipartisan, transparent process for tax reform that takes these issues into consideration – and includes public hearings, open comments, multi-stakeholder meetings, and sufficient time for the Congressional Budget Office (CBO) to analyze the bill.

Read the full letter and see list of signatories here.

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The Center for Medicare Advocacy (http://www.medicareadvocacy.org) is a national, nonprofit, non-partisan law organization that works to advance access to comprehensive Medicare coverage and quality health care for older people and people with disabilities through legal analysis, education, and advocacy.

Justice in Aging (www.justiceinaging.org) is a national non-profit legal advocacy organization that fights senior poverty through law. Formerly the National Senior Citizens Law Center, since 1972 we’ve worked for access to affordable health care and economic security for older adults with limited resources, focusing especially on populations that have traditionally lacked legal protection such as women, people of color, LGBT individuals, and people with limited English proficiency.

The Medicare Rights Center (www.medicarerights.org) is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs, and public policy initiatives.

Center for Medicare Advocacy – Matt Shepard: 860-456-7790, mshepard@MedicareAdvocacy.org
Justice In Aging – Vanessa Barrington: 510-256-1200, vbarrington@justiceinaging.org
Medicare Rights Center – Mitchell Clark: 212-204-6286, mclark@medicarerights.org

By Robert Preidt, HealthDay Reporter

TUESDAY, Nov. 28, 2017 (HealthDay News) — More doctors in the United States are turning to a new clinical specialty — nursing home care.

The number of physicians and health care providers concentrating on nursing home patients grew by about one-third between 2012 and 2015, researchers from the University of Pennsylvania School of Medicine found.

The trend is likely driven by the aging population and increased federal government oversight of nursing homes, the researchers said.

“We don’t know how this trend will play out in the long term, but nursing home specialists have the potential to change the way health care is delivered in this setting,” said lead author Dr. Kira Ryskina, an assistant professor at UPenn.

“On one hand, clinicians who practice in the nursing home exclusively could improve patient outcomes and reduce costs by leveraging expertise in nursing home processes of care, for example,” Ryskina said in a university news release.

“But concentrating patient care among nursing home specialists could also mean that patients are no longer seen by their primary care providers, who traditionally follow patients for years and across care settings,” Ryskina added.

Nursing home specialists were defined as people for whom nursing home care accounts for at least 90 percent of their billing.

Analyzing Medicare data, the researchers found that the number of doctors, nurse practitioners and physician assistants who were nursing home specialists rose from about 5,100 in 2012 to more than 6,800 in 2015 — about 34 percent.

During that same period, there was little change in the overall number of these health care providers billing from nursing homes — 33,218 to 33,087.

Of all health care providers who do any work in nursing homes, 21 percent now “specialize” in nursing home care, according to the study.

The findings were published Nov. 28 in the Journal of the American Medical Association.

There are more than 15,000 nursing homes in the United States, with a total capacity of nearly 1.7 million beds. Because of a wide variation in the quality of health care, the U.S. Centers for Medicare and Medicaid Services has proposed reforms and penalties for low-quality care.

The nursing home industry may now be adapting to closer government oversight by employing physicians who specialize in nursing home care, according to the study authors.

Hospitals did something similar over the past two decades, the researchers pointed out.

“Hospitals in recent years have sought to improve care by concentrating it among ‘hospitalist’ physicians who focus on treating hospitalized patients,” Ryskina said.

“Twenty years ago, the hospitalist movement started in the same way, wherein hospitals were under pressure to reduce costs, and readmissions. We might be seeing the beginnings of a similar trend in nursing home care,” Ryskina added.

Article Courtesy of HealthDay.com

Article Courtesy of PBS.org

WASHINGTON — As part of its effort to expand private health care, the Department of Veterans Affairs is exploring the possibility of merging its health system with the Pentagon’s, a cost-saving measure that veterans groups say could threaten the viability of VA hospitals and clinics.

VA spokesman Curt Cashour called the plan a potential “game-changer” that would “provide better care for veterans at a lower cost to taxpayers,” but he provided no specific details.

Griffin Anderson, a spokesman for the Democrats on the House Veterans Affairs Committee, said the proposal — developed without input from Congress — would amount to a merger of the VA’s Choice and the military’s TRICARE private health care programs. Committee Democrats independently confirmed the discussions involved TRICARE.

News of the plan stirred alarm from veterans groups, who said they had not been consulted, even as VA urges a long-term legislative fix for Choice by year’s end.

Health care experts also expressed surprise that VA would consider a TRICARE merger to provide private care for millions of active-duty troops, military retirees and veterans. The two departments generally serve very different patient groups —older, sicker veterans treated by VA and generally healthier service members, retirees and their families covered by TRICARE.

TRICARE is insurance that is paid by the government, but uses private doctors and hospitals. The VA provides most of its care via medical centers and clinics owned and run by the federal government, though veterans can also see private doctors through VA’s Choice program with referrals by VA if appointments aren’t readily available.

“My overarching concern is these are very dramatic changes in the way health care is delivered to veterans,” said Carrie Farmer, a senior policy researcher on military care at Rand Corp., who has conducted wide-ranging research for VA. “There haven’t been studies on what the consequences are in terms of both costs and quality of care.”

Navy Commander Sarah Higgins, a Pentagon spokeswoman, confirmed it was exploring with VA “many possible opportunities to strengthen and streamline the health of our service members and veterans.” She declined to comment on specifics “unless and until there is something to announce.”

In its statement to The Associated Press, Cashour explained that VA Secretary David Shulkin was working with the White House and the Pentagon to explore “the general concept” of integrating VA and Pentagon health care, building upon an already planned merger of electronic health care records between VA and the Pentagon. Because Shulkin has said an overhaul of VA’s electronic medical records won’t be completed for another seven to eight years, an effort such as a TRICARE merger couldn’t likely happen before then.

“This is part of the president’s efforts to transform how government works and is precisely the type of businesslike, commonsense approach that rarely exists in Washington,” Cashour said.

At least four of the nation’s largest veterans’ organizations — The American Legion, Veterans of Foreign Wars, AMVETS and Disabled American Veterans — called a TRICARE merger a likely “non-starter” if it sought to transform VA care into an insurance plan.

“VA is a health care provider and the VFW would oppose any effort to erode the system specifically created to serve the health care needs of our nation’s veterans by reducing VA’s role to a payer of care for veterans,” said Bob Wallace, executive director of VFW’s Washington office.

Louis Celli, director of veterans’ affairs and rehabilitation for The American Legion, said any attempts to outsource services away from VA medical centers and clinics would be financially unsustainable and likely shift costs unfairly onto veterans with service-connected disabilities.

He noted something similar occurred with TRICARE — military retirees were promised free care from military base hospitals. But then TRICARE began offering insurance to use private-sector care and TRICARE beneficiary co-pays are now rising. “The precedent the TRICARE model sets is not something we would accept on the VA side,” Celli said.

During the 2016 campaign, President Donald Trump pledged to fix VA by expanding access to private doctors. In July, he promised to triple the number of veterans “seeing the doctor of their choice.” More than 30 percent of VA appointments are made in the private sector.

Some groups have drawn political battle lines, with the left-leaning VoteVets and the American Federation of Government Employees warning of privatization and Concerned Veterans for America, backed by the billionaire conservative Koch brothers, pledging a well-funded campaign to give veterans wide freedom to see private doctors.

Rep. Tim Walz of Minnesota, the top Democrat on the House Veterans Affairs Committee, said the quiet discussions to integrate TRICARE with VA’s Choice were evidence “the White House was taking steps to force unprecedented numbers of veterans into the private sector for their care.”

“The fact that the Trump administration has been having these secret conversations behind the backs of Congress and our nation’s veterans is absolutely unacceptable,” said Walz, the highest-ranking enlisted service member to serve in Congress. He called for an immediate public explanation “without delay.”

A spokeswoman for Rep. Phil Roe of Tennessee, the Republican chairman of the House committee, said he planned to continue proceeding with his bipartisan legislative plan to fix Choice without integrating TRICARE.