Monday, May 4, 2015

Using Twitter to Stay Informed about Elder Law Developments

I think Twitter is a great and fun way to keep up with current news and ideas. By following the right people you can keep up on what’s happening on subjects that interest you. And because Twitter is so restricted (tweets are limited to a maximum of 140 characters) that it takes only a few moments to use. 
Twitter is all about quick reads, not about extended discussion. You can check in to twitter on your phone or tablet during a TV commercial or while you are standing in line at the grocery.
Twitter is filled with serious posters who provide links to other content on the web. When you follow someone, their posts appear in your twitter stream. If you follow the right people, you will get a continuous stream of news and links about current developments and ideas in elder law (or whatever other subjects interest you).   
If you follow me - @ElderLawGuy you can see who I am following. This includes journalists, other lawyers, associations, agencies, legislators, courts, and advocates who post on elder law subjects. Choose a few who interest you, click on them, and then click on "follow." Once every day or two take a look at the tweets of the people you are following. See what links they are providing – and what posts they are re-tweeting - this will lead you to other people to follow. 
If you follow more than 25 people, consider setting up twitter “lists” to keep them organized into categories.
You don’t have to worry about tweeting yourself. If you want you can just “retweet” interesting things that have been posted by other users (it takes about 5 seconds to do a retweet). When you “retweet” another user’s message, their message is shared to all of the people who follow your account. It also pings the original user to let them know that you shared their message. (They appreciate that.)
In my opinion, the best part of twitter is the information you are receiving from it, not what you are posting. You benefit most from the information provided by the people you follow, not from the information you post.
While Twitter only takes a few moments, you do have to check it from time to time. If you set up an account, but never look at it, why bother.
Here are examples of some elder law related Posters you might want to follow:
@CQHealthTweet (Congressional Quarterly’s Health Beat tweets)
@KaiserFamFound (Kaiser Family Foundation)  
@RetirementRsrch (The Center for Retirement Research at Boston College)
@hillhealthwatch (The Hill Healthwatch)
@CMSGov (Centers for Medicare & Medicaid Services (CMS)).
@AARPpolicy (Research and analysis from the AARP Public Policy Institute)
@jrovner (Julie Rover of Kaiser Health News)
@ConsumerVoices (Advocacy Group for Quality Long-Term Care)

@NCOAging (The National Council on Aging)

Thursday, April 23, 2015

Government to Slowly Remove SSN’s from Medicare Cards


In a previous blog article I complained about Medicare’s inclusion of my complete Social Security number (SSN) on my Medicare identification card. See, Your Medicare Card: What does the letter after the SSN mean? (February 3, 2013).
Here was my complaint -
Another good question is: why does the government keep showing social security numbers on the Medicare cards we have to carry and use so often, given the serious threat of identity theft? Unfortunately, I don’t have a good answer for that. 
I do understand that changing to a new numbering system would cost the government some money and require reissuance of over 50 million cards. But exposing Medicare beneficiaries to an increased risk of identity theft is just unacceptable. Wouldn’t it be nice if Congress required a change in this dangerous practice as part of any upcoming changes to the Medicare program?  
Well, Congress has now addressed the problem. Section 501(a) of the recently enacted “doc fix” law - The Medicare Access and CHIP Reauthorization Act of 2015 – mandates that the “Social Security account number (or derivative thereof) is not displayed, coded, or embedded on the Medicare card issued to an individual who is entitled to benefits . . .”
Thank you Congress!
Now for the bad news. The law gives Medicare up to four years to start issuing cards with new identifiers to new Medicare beneficiaries. And it gives Medicare an additional four years to reissue cards held by current beneficiaries. 
This means current beneficiaries (like me) may have to wait for up to 8 years to get a Medicare ID card that does not include my SSN. That is a heck of a long time.
What should you do while you are waiting (for up to 8 years) for your new safer Medicare ID card. For myself, I’m going to continue to follow the suggestion I made in my earlier post:  
In the meantime, we are stuck with seeking other ways protecting our identity and privacy. Personally, I don’t carry my original Medicare card. I carry a photocopy from which I have removed the social security number.  I give my social security number verbally to the health care provider at the time I present a photocopy of the card and request services.
Not a perfect plan, I’ll admit. But, at least it may help protect me if my wallet gets lost or stolen.
Further Reading:
Your Medicare Card: What does the letter after the SSN mean?, Marshall Elder and Estate Planning Blog, February 2, 2013
New Cards for Medicare Recipients Will Omit Social Security Numbers, Robert Pear, New York Times, April 20, 2015

Tuesday, April 21, 2015

Taxes on Gifts: Tips for Understanding the Rules



People are often confused about the laws that apply when they make a gift. Some are surprised to learn that gifts are regulated at all. Unfortunately there are rules - both in terms of taxes and Medicaid qualification. And the laws are complicated.  
Adding to the confusion - the tax rules related to gifts are very different from the rules that apply to Medicaid eligibility. This article discusses the tax rules. See my earlier blog post: Don’t Confuse Medicaid Rules with Tax Rules, for more on the Medicaid disqualification rules that can apply when you make a gift.
Here are some tips that should help you understand whether your gift is going to taxable. 

State Gift Taxes

In general gift taxes laws are federal not state. 
Most states do not tax gifts made from detached or disinterested generosity. However, transfers of cash or property in payment for services, or as an inducement to perform services, may be subject to state (and federal) taxes. 
As far as I am aware Connecticut is currently the only state that imposes a state gift tax. The Connecticut tax applies when the aggregate amount of the Connecticut taxable gifts made on or after January 1, 2005, exceeds $2 million. 
Pennsylvania residents should note, however, that gifts made within one year of the death of the donor are subject to PA inheritance taxes to the extent they exceed $3,000 per donee. A few other states also impose some form of so called “gifts-in-contemplation-of-death” rules similar to that of Pennsylvania. 

Federal Gift Taxes

Here are some useful tips (drawn from information provided by the IRS) about gifts and the federal gift tax.

1.    Nontaxable Gifts.  The general rule is that any gift is a taxable gift. However, there are exceptions to this rule. The following are not taxable gifts:
  • Gifts that do not exceed the annual exclusion (see below) for the calendar year,
  • Tuition or medical expenses you paid directly to a medical or educational institution for someone,
  • Gifts to your spouse (for federal tax purposes, the term “spouse” includes individuals of the same sex who are lawfully married),
  • Gifts to a political organization for its use, and
  • Gifts to charities.
2.    Annual Exclusion.  Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you give a gift to someone else, the gift tax usually does not apply until the value of the gift exceeds the annual exclusion for the year. For 2014 and 2015, the annual exclusion is $14,000.

3.    No Tax on Recipient.  Generally, the person who receives your gift will not have to pay a federal gift tax. That person also does not pay income tax on the value of the gift received.

4.    Gifts Not Deductible.  Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than deductible charitable contributions).

5.    Forgiven and Certain Loans.  The gift tax may also apply when you forgive a debt or make a loan that is interest-free or below the market interest rate.

6.    Gift-Splitting.  You and your spouse can give a gift up to $28,000 to a third party without making it a taxable gift. You can consider that one-half of the gift be given by you and one-half by your spouse.

7.    Filing Requirement.  You must file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, if any of the following apply:
  • You gave gifts to at least one person (other than your spouse) that amount to more than the annual exclusion for the year.
  • You and your spouse are splitting a gift. This is true even if half of the split gift is less than the annual exclusion.
  • You gave someone (other than your spouse) a gift of a future interest that they can’t actually possess, enjoy, or from which they’ll receive income later.
  • You gave your spouse an interest in property that will terminate due to a future event.

Further Reading:

Much of the information in this article is drawn from, Seven Tips to Help You Determine if Your Gift is Taxable, IRS Tax Tip 2015-51.
For more information, see Publication 559, Survivors, Executors, and Administrators.
See also, “Permanent” Gift and Estate Tax Rules Set By New Fiscal Cliff Law, Marshall Elder and Estate Planning Blog, January 10, 2013.

Friday, April 17, 2015

New Law Raises Medicare Premiums for Higher-Income Retirees


A new law means wealthier Medicare beneficiaries will be paying more for their Part B and Part D coverage in the future. 

The Medicare Access and CHIP Reauthorization Act of 2015 was signed by the President on April 16, 2015. In addition to increasing Medicare premiums for wealthier Medicare recipients, the law also sets a new formula for calculating payments to doctors and other providers who treat Medicare patients. It passed Congress by overwhelming margins.
Medicare Part B covers physician services, outpatient services, and some home health and preventive services. It is financed in part by beneficiary premiums which traditionally had been set at 25% of estimated program costs. Medicare Part D covers outpatient prescription drugs. Its cost is also funded in part through beneficiary premiums.
Since 2007 higher income beneficiaries have had to pay higher premiums. Several income brackets were created with enrollees in higher brackets paying a greater percentage of program costs.  
In 2015 individuals with modified adjusted gross income (MAGI) of $85,000 or less and couples with $170,000 or less pay only the base Part B premium of $104.90. But, beneficiaries with incomes between $85,000 and $107,000 (couples between $170,000 and $214,000) pay 35% of program costs or $146.90.
Beneficiaries above $214,000 (and couples above $428,000) pay the top monthly premiums of $335.70 in 2015, more than 3 times the base amount.  Higher income beneficiaries likewise pay higher premiums for their Part D coverage. See Medicare Premium Rules for Higher-Income Beneficiaries.
Beginning in 2018, the new law will raise the premiums due from many higher-income enrollees. It does this mainly by lowering the thresholds at which beneficiaries must pay higher applicable percentages of program costs. For example, the percentage of program costs paid by Medicare beneficiaries with MAGI between $133,501 and $160,000 ($267,001-$320,000 for a couple) will increase from 50 percent to 65 percent. And the income threshold for the highest premium (80 % of program costs) will be lowered to $160,001 (from $214,000) for individuals and $320,001 (from $428,000) for couples.
Here are the 2018 premium thresholds for individual beneficiaries:
If the modified adjusted gross income is:                             Percentage
More than $85,000 but not more than $107,000                   35%    
More than $107,001 but not more than $133,500                 50%
More than $133,501 but not more than $160,000                 65%
More than $160,000                                                               80%

Here are the 2018 thresholds for couples:
If the modified adjusted gross income is:                             Percentage
More than $170,001 but not more than $214,000                 35%    
More than $214,001 but not more than $267,000                 50%
More than $267,001 but not more than $320,000                 65%
More than $320,000                                                               80%
The law also reduces future inflation adjustments to the brackets. Prior law froze the income thresholds through 2019, at which point they were to be indexed to inflation as if they had not been frozen. But under the new law, any prior inflation will be disregarded and the threshold for inflation will be based on the brackets as they are in 2019. Reducing the inflation adjustment in this manner will increase the number of beneficiaries who will be subject to higher Medicare premiums.  
In determining your income for purposes of computing your Medicare premiums for Parts B and D, Social Security uses your modified adjusted gross income as reported on your IRS tax return from 2 years prior. (This is the most recent tax return information provided to Social Security by the IRS). This means that your Medicare premiums in 2018 will be determined by your MAGI as shown on your 2016 income tax return. 
Note that your MAGI or “modified adjusted gross income” is your adjusted gross income plus your tax exempt interest income.
Further Reading
Medicare Access and CHIP Reauthorization Act of 2015, TITLE IV—OFFSETS.
Analysis Prepared by the Staff of the House Energy and Commerce and Ways and Means Committees, March 24, 2015.
FAQ: Congress Passes A Bill To Fix Medicare’s Doctor Payments. What’s In It? by Mary Agnes Carey, Kaiser Health News, April 15, 2015. 

Medicare’s Income-Related Premiums: A Data Note, Kaiser Family Foundation, March 20, 2015