New ABLE accounts – an option in special needs planning

Mo & downs syndrome childCollege savings plans, often referred to as “529” plans (“NextGen” plans in Maine) have been around for a long time, as a way for parents to set aside funds for a child’s education. These accounts receive favorable tax treatment and have been quite popular with parents and grandparents.

However, this option is generally not useful for parents and grandparents of special needs children, who may never pursue post-secondary education because of their disabilities. These families also worry that a 529 plan will cause the child to lose benefits such as SSI and MaineCare (Medicaid).   Just the same, these disabled children are likely to need funds in the future for things other than college, such as adaptive equipment, transportation, health and wellness activities, and job training.

Soon these families will have the opportunity to set money aside for their disabled children in an account known as an “ABLE” account. “ABLE” stands for “Achieving a Better Life Experience” and is a federal law enacted in 2014.

These are some of the features of an ABLE account:

  • The funds in the ABLE account will grow tax free.
  • Distributions for “qualified expenses” (such as the things referred to above) are not taxed. (Non-qualified expenses, however, are taxed and subject to a 10% penalty.)
  • As much as $14,000 per year can be contributed each year to the beneficiary’s ABLE account.
  • Funds in the ABLE account, up to $100,000, will not affect the beneficiary’s eligibility for SSI or MaineCare (Medicaid).
  • Any funds remaining in the ABLE account when the beneficiary dies must pay back the state of Maine (or other state where the beneficiary lives) for what the state has paid for the beneficiary under the Medicaid program.

Before this savings option becomes available to special needs children and their families, the state must establish its own ABLE account program. This is likely to occur through the Financial Authority of Maine (FAME), which administers the NextGen program.   Hopefully this will happen soon, so that special needs families have the same opportunities to save for a disabled child’s future as they do for non-disabled children.

Medicare coverage when you are in a foreign country

By Sally M. Wagley, Maine elder law attorney

Many retirees look forward to travel, including international travel. But don’t assume that Medicare or your Medicare supplement policy will cover your care in another country, without the purchase of additional insurance.

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Medicare has extremely limited coverage for international travel, even if there is an emergency. Here’s what you need to know:

1. Medicare Part A will not cover care outside the US unless: a) the nearest hospital is in a foreign country rather than in the U.S. (e.g. Canada or Mexico) or 2) you are traveling through Canada to or from Alaska by the most direct route.
2. Medicare Part B will only cover services outside the U.S. if you are on board a ship which is less than six hours away from a U.S. port and within territorial waters adjoining U.S. land.
3. Some Medicare supplement plans and Medicare Advantage plans may cover care while you are traveling outside the U.S. – check your policy –but probably only during the first month or two of your trip.
4. Consider purchasing additional coverage through policies available from private companies. The U.S. Department of State has information on this at http://tinyurl.com/elr-insurance-abroad

Note: Medicare does cover care in U.S. territories such as Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Northern Mariana Islands.

Under no circumstances will Medicare pay for your care if you are living in a foreign country. Consider the following:

1. If the country has a strong national health plan, you pay be able to pay into the plan and receive coverage.
2. Look into “expatriate” health insurance plans available from private companies.
3. If you are moving to a place which is remote or has poor local health care, look into evacuation coverage.
4. Make sure the coverage includes any preexisting conditions for which you might need care.
5. Think twice before cancelling your Medicare “B” coverage. If you later move back to the U.S., you will incur penalties and have to pay a significantly higher premium.

The information provided on this website is for informational and educational purposes only. This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Home Care: My Mother’s Story

By Sally M. Wagley, Maine elder law attorney

My mother, pictured here as a young woman, was healthy and active for a long time. But in her mid 80’s, she developed peripheral artery disease, resulting in the amputation of her leg. grandma victory bonds 2

The silver lining in this story is that my mother continued to live independently until her death, just short of her 91st birthday. This, in spite of the dire predictions of her rehabilitation team, who insisted that Mom have 24-hour care, preferably in a facility. Mom wanted to go home and we hired 24- hour care from a local agency. But after three days the workers had little to do. Mom, thanks to years of exercise and a strong will, was able to transfer from her bed to her wheelchair without help and to fix herself simple meals.

We replaced the workers with non-medical help from another agency, Neighbors, based in Brunswick. These workers, who became like family, came in three days a week, two hours a day, to do light housekeeping and laundry and prepare lunch. In addition, an RN from another agency, CHANS, came in once or twice a week to change bandages, take vital signs and check Coumadin levels. It was also helpful that Mom lived in an apartment in senior housing, where the evening meal was served and emergency response was available. Thus, the six to ten hours a week of in-home services (at a far lower cost than institutional care) enabled my mother to remain at home.

This happy ending is not possible for many Maine seniors, who cannot pay privately for services. A recent Portland Press Herald article reported on serious underfunding of home care and long waiting lists. Government reimbursement rates have not increased since 2005. Workers receive low wages, leading to labor shortages in. This short-sighted policy is inhumane and costs the taxpayer more: an average of $558 per person per month, versus an average of $4150 for a nursing home resident.

The information provided on this website is for informational and educational purposes only. This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Bringing suit against a Maine nursing home for negligence, abuse or neglect

By Sally M. Wagley, Maine elder law attorney

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Elders who reside in nursing homes are very vulnerable. Most are heavily dependent on others for help with their daily activities. Many are cognitively impaired and unable to speak for themselves. Nursing homes in Maine and elsewhere are often understaffed and struggle to meet the needs of their residents. As a result, residents may experience problems such as pressure ulcers (bed sores), malnourishment, dehydration, falls and elopement. This can lead to a needless suffering and even death.

The first step, when encountering abuse, neglect or negligence, is to report it to the Maine Department of Health and Human Services’ licensing division, who will promptly investigate. Another resource is Maine’s Long Term Care Ombudsman, which will advocate for you or your family member and work with the facility to correct the problems.

Increasingly, however, residents and their families are going further: seeking the assistance of Maine elder law attorneys and personal injury attorneys in bringing suit against Maine nursing homes to get money damages for the elder. These attorneys use, as a basis for the law suit, the federal and Maine nursing home laws which set standards for nursing homes.

Unlike the medical malpractice case, which usually concerns a discrete act by a health care provider, the nursing home case typically involves a pattern of inadequate care over a period of time. An attorney who is skilled in Maine nursing home cases will gather evidence by interviewing the resident (if the resident is competent), the family and the staff, and will also review the patient’s chart.

If you or a family member have been harmed as a result of inadequate care in a Maine nursing home, we will be glad to evaluate the case and partner with skilled counsel to bring a suit for damages.

The information provided on this website is for informational and educational purposes only. This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Understanding Long Term Care Insurance

By Sally M. Wagley, Maine elder law attorney

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Have you been advised to purchase long term care (LTC) insurance? Before making such a purchase it is important to understand what such insurance will and will not cover. These are some of the things you need to know:

Nursing home-only coverage vs. coverage of assisted living and home care: Ideally, the policy should cover these different types of care. Most people prefer to be cared for someplace other than a nursing home.

Benefit “triggers”: Most policies will not start to pay out until you are very disabled, mentally or physically, and your care needs are high. These policies require that you be at the point that you need as substantial amount of help with at least three activities of daily living or be so mentally impaired that you are a danger to yourself or others.

Daily benefit rate: The policy will cover up to a certain amount per day: for example, $150, $200 or $300 per day. The higher the daily benefit rate, the more the policy will cost. Currently, nursing home care in Maine costs an average of $8000 a month, and some facilities charge as much as $10,000. Thus, your LTC insurance will likely not cover the full cost and you will need to use some of your income or savings.

Elimination period: Most policies will not start covering the cost on day one. The policy will require that you receive care for a certain number of days before it will start to pay: for example 30 to 90 days. This means that you will need to draw on your savings until the elimination period is over.

Length of benefit period: There are few if any policies these days that will cover you for your lifetime. Policies will generally cover your care for two to five years. This means that if you need care for longer than this, you will need to start paying from your savings.

Inflation protection: Long term care costs increase every year. If you decide to buy LTC insurance, you should consider opting for inflation protection so that years from now if you need care, the benefit amount will more closely match the cost.

The information provided on this website is for informational and educational purposes only. This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Medicare patients in nursing homes CAN leave for a special event

By Sally M. Wagley, Maine elder law attorney

Are you or a family member a Medicare resident of a skilled nursing facility, perhaps rehabilitating after a hospital stay? Have you or your relative asked to leave the facility for a few hours or a day for a special event or purpose such as Christmas dinner or a short visit home? Frequently, to the great disappointment of the resident, the facility may tell the resident that if he or she leaves, even for a few hours, he or she will lose Medicare coverage.

This is not accurate. Medicare rules state: “An outside pass or short leave of absence for the purpose of attending a special religious service, holiday meal, family occasion, going on a car ride, or a trial visit home, is not, by itself evidence that the individual no longer needs to be in a skilled nursing facility for the receipt of required skilled care.” As long as the resident returns to the facility by midnight, the facility can bill Medicare for the day’s stay. Medicare rules state that it is “not appropriate” for a nursing home to tell a resident otherwise.

In short, you should feel free to talk to nursing home staff about a short visit out of the facility. The nursing home staff may have legitimate concerns about how such a trip may affect your health and safety; but should not refuse your request based on misinformation about Medicare coverage.

The information provided on this website is for informational and educational purposes only. This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Medicare Recipients and ObamaCare

By Sally M. Wagley, Maine elder law attorney

With the launch of the government’s new health care exchanges on October 1, 2013, I have had a number of clients ask me how this will affect them as Medicare recipients. The answer is “not at all.” The exchanges are intended to serve people you don’t get Medicare: typically people who are not yet retired.

If you are on Medicare, you will continue to get your coverage the same way: You will automatically receive Medicare Part A and you will have the option of signing up for Medicare Part B by paying a premium which is automatically deducted from your Social Security check. (Some recipients opt to have a “Medicare Advantage Plan” which takes the place of Parts A and B.) You will also continue to have the option of purchasing a Medicare supplement policy and a Medicare prescription drug plan.

A stitch in time saves nine

By Patrice A. Putman, Maine elder law attorney

The old saying “A stitch in time saves nine.” makes a lot of sense. Unfortunately, too often, people don’t know that there may be a legal “stitch” needed. Below is a situation that I’ve seen. Luckily, if discovered and fixed early, a client can save a lot of time, money, and frustration.

Most married couples own their home as “Joint Tenants”. This means that when one spouse dies, the property automatically becomes owned entirely by the other spouse. Nothing needs to be done to accomplish the change in ownership. In order for this transfer of ownership to the surviving spouse to happen automatically, the deed into the spouses must expressly state the concept that the spouses own as “joint tenants” or that the surviving spouse is to automatically become the sole owner of the home.

It is also possible for a married couple to own their home jointly, but as “tenants-in-common”. The home will be owned by the spouses as tenants-in-common if the deed is not explicitly a “joint tenancy deed”. If the home is owned as tenants –in-common, the surviving spouse does not automatically end up with ownership of the entire home. Rather the half owned by the deceased spouse must go through probate and title passes according to the will of the deceased or through the laws of succession (if there is no will). The property must go through probate, a personal representative must be named and the property must then be deeded according to either the Will or intestate laws.

There are times when a new widow or widower who thought she/he owned the property as a joint tenant finds that she/he did not.

Here is a hypothetical: Husband and wife own property together. The deed says “I seller, give to you, husband and wife, a piece of property.” This deed is a tenancy in common deed, something which the spouses didn’t understand and didn’t intend. Husband dies. Wife goes to a lawyer to see if she needs to do anything with regard to probate. All the bank accounts were jointly owned (no probate needed), life insurance had a beneficiary listed (no probate needed), the IRA has a listed beneficiary (no probate needed), cars were owned jointly (no probate needed). Then the lawyer asks to see the deed, and sees that the deed is not a joint tenancy deed. Now a probate estate must be opened, heirs must be notified, if there is a Will, the original must be found and filed, probate and attorney fees must be paid and a new deed will need to be executed and recorded. If the Will says “all to my spouse” then, after the personal representative has been appointed, a new deed can transfer the deceased spouse’s share to the spouse. If there is no Will or if the Will leaves part of the estate to others, the widow who thought she owned her house entirely, may now own it partially with children, step-children or others. Either way, things just got a lot more expensive and complicated.

Here’s the simple solution: Go look at your deed(s). If your deed(s) say you own the property as “joint tenants” or if the deed is clear that the surviving owner is to be the sole owner, then you are joint tenants and when one of you dies, the property will be owned entirely by the other automatically. If your deed is not a joint tenancy deed, then you and your spouse own as tenants in common. Once you understand how you own the property, then you can decide whether it fits your needs, or whether you need to see an attorney to get advice on whether your deed fits your needs. If a fix is needed, it’s an easy fix while both of you are alive. It may be needlessly expensive and upsetting if you find out after your spouse has died that the form of ownership didn’t work to your best advantage. This is clearly a situation where a stitch in time saves nine. Go read your deed! Make sure it says exactly what you need it to say, so that it does exactly what you want it to do. If you are not sure, get help sooner rather than later!

The information provided here is for educational purposes only. It should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Beware This Very Expensive Medicare Detail

By Patrice A. Putman, Maine elder law attorney

Medicare rules and policies are always confusing but there are some rules that, over time, people tend to hear about. One of the Medicare policies that people tend to be familiar with is the one that basically says, if you have been an inpatient in the hospital for three or more days, Medicare will pay for Skilled Nursing Care for up to 100 days. This rule has recently been at the forefront of much news because of a settlement in the Jimmo v. Sebelius case. Prior to this settlement, Medicare would often deny payment for Skilled Nursing Care if the patient was not making “substantial improvement”. Now, since the Jimmo settlement, Medicare must pay for care during those 100 days if the care is needed to maintain or simply prevent deterioration in the patient’s clinical condition. Continued improvement is no longer necessary.

The Jimmo settlement is great for patient care, but there is another detail in the Medicare law that people should be keenly aware of. This has to do with those three days of “inpatient” hospital care. The unknown detail has to do with what is considered “inpatient” hospital care. For Medicare purposes, in determining what is considered an “inpatient” hospital stay, emergency room care and being in an “observation” status do not count as inpatient care. A patient can be held in “observation” status for multiple days, on a regular hospital unit, in a regular hospital bed without any clues that, for Medicare purposes, they are not considered an inpatient. Then, when that patient is later transferred to a Skilled Nursing Unit, Medicare will not cover their care. The Center for Medicare Advocacy states in its Summer 2013 Center News: “Hospitals stays that are classified as observation, no matter what types of services are provided and no matter how many days the patient remains hospitalized in a bed, are considered outpatient.”

Congress has put forward legislation that would require time spent in observation to be counted toward meeting Medicare’s three day requirement but its passage appears doubtful despite large bipartisan support and 90 co-signers, so this problem is not going away quickly.

What can you do? ASK!!! If you or a loved one has been admitted into a hospital and are likely to move to a Skilled Nursing Unit, speak to your doctor or the Nurse Manager of your hospital unit about whether you are classified as an “inpatient” or an “observation” patient. If you are told that you are an observation patient, ask your physician to review this status and explain to your doctor why it matters; they may not know. Once you know that you are considered an “inpatient”, ask that this be confirmed in your medical record. Not knowing or not speaking up can lead to a financial disaster when you assume your care at a Skilled Nursing Unit is covered (because you have been in the hospital for 3 or more days) and later find out that Medicare will not pay for that care.

The information provided here is for educational purposes only. It should not be construed as rendering legal advice or offering an answer to a specific legal problem.

Long-term health care planning for same sex couples

By Patrice A. Putman, Maine elder law attorney

On June 26, 2013, the US Supreme Court overturned essential parts of the Defense of Marriage Act, a decision that has a major impact on many of my friends and clients. Until then, the federal Defense of Marriage Act “DOMA” did not allow the recognition of same sex marriage. This meant that a married same sex couple who had lived together for 20 or even 60 years was not able to take advantage of the hundreds of federal benefits that the government gives to married heterosexual couples. Many people realize that same sex couples have not been able to take advantage of the tax benefits associated with filing joint federal income tax returns or Social Security benefits. Something that people are less aware of is the inequity in how long-term care rules have applied to these couples. Now, in Maine, a state where same sex marriage is recognized, these inequities can begin to be addressed.

When a family receives a diagnosis of dementia, they not only need to live with frightening health consequences, they also need to deal with a myriad of financial consequences. Where health insurance and Medicare pay for the diagnosis and treatment of most illnesses, they do not pay for long-term care costs when a person needs to move into an assisted living or nursing home. Only long-term care insurance and Medicaid (called MaineCare in Maine) pay for long-term care. Long-term care generally costs $70,000 a year or more. MaineCare will begin contributing to long-term care costs when a person has less than $10,000 in assets.

When a married person moves into an assisted living facility, MaineCare allows the couple to transfer their assets to the spouse who still lives at home. This means that while the spouse who moves into the assisted living facility can only have $10,000, the rest of the couple’s assets can be kept and used by the spouse at home. When a married person moves into a nursing home, MaineCare allows the spouse living at home to own a home, a car, personal property, and have other assets totaling $115,920. Unmarried couples do not have these options. Only the $10,000 rule applies to the unmarried person.

Now that the Supreme Court has declared significant parts of DOMA to be unconstitutional, the federal government must begin providing same sex spouses the same ability to transfer and protect their hard-earned assets that other married couples have always had. Now, when dementia hits a married gay or lesbian couple, they will have the same heartbreak and the same financial concerns that other married couples have, not 100 times more – at least if they are lucky enough to live in a state like Maine where same sex marriages are allowed and recognized.

The information provided here is for educational purposes only. It should not be construed as rendering legal advice or offering an answer to a specific legal problem.