Friday, January 12, 2018

New Medicare Cards are being Issued - Here is what you Need to Know

Your Medicare card is being replaced.
For many seniors their red white and blue Medicare card is one of their most important possessions. The card lists your name and related Social Security Number and shows the dates you became eligible for health overage under Medicare Parts A and B. The card is your entry ticket for services by hospitals, physicians, and other health care providers.
Beginning in April 2018 Medicare will start issuing new cards. The new cards will replace the Social Security number on the card with a new Medicare number. You should receive your new card sometime between April 1, 2018 and April 1, 2019.
Here are some things you should know about these new cards.
  • You don’t need to take any action to get your new Medicare card.
  • The new card won’t change your Medicare coverage or benefits.
  • Medicare will never ask you to give them personal or private information to get your new Medicare Number and card.
  • There's no charge for your new card.
The new cards are being issued as a result of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. That law requires Medicare to remove Social Security Numbers from all Medicare cards by April 2019. They will be replaced by a new 11-character Medicare Beneficiary Identifier (MBI) which will be used for Medicare transactions like billing, eligibility status, and claim status. 
Your new card should look something like this:


The new MBI numbers and cards are being issued in order to fight identify theft.
The cards will be mailed out on a geographic basis. There will be a transition period during which you can use either your old SSN based claims number or your new MBI. The transition period will end on December 31, 2019.
After the transition period ends on January 1, 2020, you will generally need to use your MBI on Medicare claims.
Medicare health and drug plans (e.g. Medicare Advantage plans) will also have to change your ID claim number if the existing numbers include whole or parts of the beneficiary’s Social Security Number
Watch out for scams
Be very careful if you are contacted about your new Medicare card. Medicare warns that scam artists may try to get your current Medicare Number and other personal information by contacting you about your new Medicare card. They may claim to be from Medicare and use various scams to get your Medicare Number. Medicare beneficiaries should expect that scammers will try to take advantage of confusion surrounding the issuing of new cards. For example, scammers may call you:
  • Asking you to confirm your Medicare or Social Security Number so they can send you a new card.
  • Telling you there's a charge for your new card and they need to verify your personal information.
  • Threatening to cancel your health benefits if you don’t share your Medicare Number or other personal information.
These will be fraudulent calls. Do NOT give out your Social Security Number, MBI, or other personal information to the caller. If someone calls you and asks for your Medicare Number or other personal information, HANG UP. If you want you can report the fraudulent call to Medicare at 1-800-MEDICARE (1-800-633-4227).
What you Should Do
  • Make sure your mailing address is up-to-date. If your address needs to be corrected, contact Social Security at gov/myaccount or 1-800-772-1213. TTY: 1-800-325-0778.
  • Remember Medicare will never ask you to give them personal or private information to get your new Medicare number and card.
For the most updated information on the New Medicare Card please go to https://www.cms.gov/newcard



Friday, January 5, 2018

PA Medicaid Penalty Divisor Set at $330.19 for 2018

For many Pennsylvania families qualification for Medicaid long-term care benefits is critical to meeting the cost of care for a frail family member. But, an applicant for this government assistance may be made ineligible for benefits if he or she has disposed of assets for less than fair market value during a five year look-back period.
Imposition of a transfer penalty denies benefits for individuals who otherwise need and qualify for Medicaid long term care benefits. A denial can also effectively make an individual’s children liable for the costs of the needed care. See: Law Can Require Children to Pay Support for Aging Parents.
The transfer penalty applies when a transfer was made by the individual applying for Medicaid long-term care benefits, or their spouse, or someone else acting on their behalf.
Unless the transfer is for some reason exempt, if an asset was transferred for less than fair consideration within the look-back period, then a period of ineligibility is imposed based on the uncompensated value of that transfer.
New Penalty Divisor for 2018
The length of the penalty period is calculated by taking the uncompensated value of the asset transfer and dividing it by the average private patient cost of nursing facility care in Pennsylvania at the time of application for benefits. The average cost to a private patient of nursing facility care is often referred to as the “private pay rate” or the “penalty divisor.”
The penalty divisor is revised each year as nursing facility care costs increase. As of January 1, 2018, the penalty divisor is set at $330.19 per day. This means that the PA Department of Human Services has calculated that the average monthly nursing facility private pay rate in Pennsylvania is $10,043.28 a month.This is a 2.56% increase from 2017. [The penalty divisor is different in states other than Pennsylvania].
Uncompensated transfers made during the look-back period will be calculated at one day of ineligibility for every $330.19 transferred away. In Pennsylvania, a transfer penalty will be imposed when the value of transfers made in a month exceeds $500.
The rules are complicated. Seniors considering making gifts or other transfers of assets are well advised to consult with an experienced elder law attorney before completing the transaction. 


Tuesday, January 2, 2018

This New Year - Plan to Protect your Future



As the New Year begins, many people resolve to do some things they know they should do, but have put off. In various years past I have vowed to lose weight, get organized, save more, spend more time with my family, eat healthier foods, and get more exercise. In truth, these are pretty much continuing resolutions that I have to revisit every year.
A recent study from the University of Scranton’s Journal of Clinical Psychology shows that 45% of people make New Year’s resolutions. The most frequent resolution is to lose weight. (See the list of top ten resolutions below.) Unfortunately, only 8% of people keep their New Year’s resolutions. Still, it seems worthwhile to make them. If you have made any resolutions for  the New Year, I wish you success.
This year, if you are getting older like me, I suggest you make a resolution to protect yourself and your family by creating a plan for getting older.
According to data compiled by the Social Security Administration:
– A man reaching age 65 today can expect to live, on average, until age 84.3.
– A woman turning age 65 today can expect to live, on average, until age 86.6.
And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.
You need to put a legal plan together for the problems that can arise from an extended life span. You need to plan to be old and for the reality that your aging is likely to eventually include some level of disability. A majority of people who are over age 85 have some form of disability.
At age 65 the chances we will need some care support during our remaining lives is 70%. 40% of us will need support for over 2 years, and 20% will need care assistance for 5 years or more. The financial costs and personal burdens placed on care-giving families can be substantial. But, you can create a strategy now to protect yourself and your family from these potential costs and burdens.
Part of your strategy should be to have the proper legal documents in place now, before a crisis arises and they are needed. Your power of attorney, health directives, trust and other documents need to be specifically designed to implement a good plan for your aging. These planning tools should not be standard “off the shelf” documents. They need to be tailored to your unique personal goals and family situation. One size does not fit all.
Yes, it’s complicated. To put together a good strategic plan for getting older you are going to need the help of experts in financial and estate planning and elder law. The good news is, the help you need is available – and this New Year’s resolution should be much easier to keep than one that involves losing weight.
Key Documents in Planning for Aging
Here are some of the documents that may be essential components of your planning strategy.
Financial Power of Attorney – This critical document allows a trusted agent of your choosing to step in to pay your bills and manage your financial affairs in the event you can no longer do so. You need to make sure you choose the right person. Don’t neglect to name a backup in case your first choice can’t serve.
You may want to notify your financial advisors and institutions of your choice in advance. If a financial institution has its own “in-house” power of attorney form, you may want to complete it as a supplement to your primary document. And make sure your chosen agent knows how to get access to the financial information he or she will need when they have to step in.
A financial power of attorney is a very sophisticated and complicated document. This is not something to take lightly or buy online. You need to make certain that your agent has the powers required to protect you and your family and that those powers are consistent with your personal situation and goals.
Seek expert guidance to create a document that has the provisions you need.
Health Care Directives – These documents allow you to give directions regarding the kinds of care you want to receive in the event you become incapacitated. And you can designate the persons you want to be making health and personal care decisions for you. The key planning document in this regard is the Health Care Power of Attorney.
Will – this is a document that says who gets what when you die. It also names someone to be in charge of finalizing your affairs. But, many people don’t realize that they have created other documents that can trump the provisions of their Will. These include trusts, beneficiary designations, and joint ownership. If you become incapacitated you may not be able to change the terms of your Will. So, you may want to have your Will and beneficiary designations reviewed and updated as needed as you have your aging plan prepared.
 Trust – this is a document that can be used to provide for management of some of the investments and other things that you own. Trusts can be very useful tools in planning for aging. Special forms of trust can allow you to set aside a home or savings to be protected in the event you or your spouse encounter serious health and long term care costs later in your life.
 Quality Guidance: As Important as Your Documents
The above documents are important components of your aging plan. But a good plan requires more than having the right documents. You also need to put a well thought out strategy in place.
People often don’t appreciate the complexity of planning for aging and long term care. It is imperative that you get the highest quality advice in putting together your plan. Be sure to talk with a lawyer who is a recognized expert in elder law and estate planning. If you live in Pennsylvania, you can call my law firm, Marshall, Parker and Weber and set up an initial meeting.
The bottom line is that the likelihood that your goals will be achieved both during your life and after your death depends largely on how good your plan is, and whether you keep it up to date. The quality of the advice you get in putting together your plan and creating and updating your documents is critical to protecting you and your family. Don’t be penny wise and dollar foolish when your security and your family’s future are at stake.
Further Information:
Here are the top ten New Year’s Resolutions people made in a recent year:
1.    Lose Weight
2.    Get Organized
3.    Spend Less, Save More
4.    Enjoy Life to the Fullest
5.    Stay Fit and Healthy
6.    Learn Something Exciting
7.    Quit Smoking
8.    Help Others Achieve their Dreams
9.    Fall in Love
10. Spend More Time with Family
New Years Resolution Statistics(Source: University of Scranton. Journal of Clinical Psychology.)
Want to know your life expectancy? Social Security has a simple Calculator that gives a rough estimate of how long you (or your spouse) may live. http://tinyurl.com/ho5uahu.
[This article is an update of one I originally posted in January 2016]

Sunday, December 31, 2017

New Tax Law Highlights for Older Adults and the Disabled


The new tax law (the Tax Cut and Jobs Act or TCJA) is getting a lot of coverage by the news media. A main thrust of the TCJA is to reduce corporate tax rates. For individuals tax brackets are reduced modestly. The standard deduction is increased but the personal exemption is gone and itemized deductions are limited.
The TCJA is a sweeping law which will take a while for tax experts to fully digest. And don’t be surprised if Congress makes changes through “technical corrections” legislation to deal with unforeseen consequences.
Most of the tax changes for individuals don’t take effect until the 2018 tax year and will apply to returns filed in April 2019 (but a notable exception is the medical expense deduction which is changed retroactively as discussed below). Most of the individual tax changes are scheduled to end on December 31, 2025.
The TCJA will impact all American taxpayers. Some of the provisions are particularly notable for older or disabled Americans. Here are a few you might have missed.
Medical Expense Deduction. Instead of doing away with the medical expense deduction Congress actually expanding it temporarily. For the years 2017 and 2018 the deductibility threshold is reduced from 10% of adjusted gross income (AGI) to 7.5%. Note that this change applies retroactively to medical expenses incurred in 2017 and claimed on returns due in April, 2018.
Home Equity Loans. The new tax law eliminates the deductibility of interest paid on home equity indebtedness. In tax years after 2017 interest on home equity debt will no longer be deductible. This change will apply even to already existing debt. The rules regarding exactly what constitutes home equity indebtedness are complication. If you have been deducting interest on a home equity loan you may want to check with a tax expert to see whether it is impacted.
529 Plans. 529 plans have been a tax advantaged way to save for college costs. The TCJA expands this tax provision to allow 529 plan tax free distributions to be used within limits to pay for elementary and secondary school expenses for private, public and religious schools and some homeschooling related expenses. Educational therapies for children with disabilities are included. There is a $10,000 per student annual limit.
ABLE Accounts. The TCJA makes some complicated adjustments to the rules governing ABLE accounts. ABLE accounts (established under section 529A of the Internal Revenue Code) allow some individuals with disabilities to retain higher amounts of savings without losing their Social Security and Medicaid benefits.
Under the TCJA money in a 529 education plan can be rolled over to a 529A ABLE account. But there are significant limitations. For example, it appears that rollovers will count toward the annual contribution limit for ABLE accounts ($15,000 in 2018). On the other hand, the TCJA also changes the rules regarding contributions to ABLE accounts by designated beneficiaries who have earned income from employment. Experts will be figuring out how to best take advantage of these changes.
As with most of the individual tax provisions in the TCJA, the ABLE account provisions are not effective for distributions after December 31, 2025.
Federal Estate and Gift Tax Exemption Amounts. The TCJA doubles the previous exemptions for federal estate and gift taxes. This change applies to decedents dying and gifts made after December 31, 2017 and before January 1, 2026.
In 2018 the exemption amounts will be:
$11.2 million dollars - Individuals
$22.4 million dollars - Married Couples
Note that these increased amounts apply only to deaths occurring after December 31, 2017 and before January 1, 2026. With the exception of the change to the exemption amounts, the rules governing estate and gift tax remain the same.