Friday, August 28, 2015

Can You Legally Disinherit Your Wife or Husband?

[The following guest article was written by Nick Lutz, a lawyer with Marshall, Parker and Weber in Wilkes-Barre, Pennsylvania. It is reprinted here with his permission.]
Can you completely disinherit your spouse? The answer depends on the state you live in but for residents of Pennsylvania and most other states, the answer is no.
You can try…
Although I led off saying you cannot disinherit your spouse, that answer is based on technicality. The reason is that you can try to disinherit your spouse by leaving them out of your estate plan. You can choose not to name them in your will, decide to name others as your beneficiary on insurance policies and investment accounts, or even create joint accounts that pass by operation of law to someone other than your spouse.
Generally, there is nothing stopping you from doing these things. The question, though, is whether or not engaging in this behavior is going to be effective at producing the intended result – disinheriting your spouse.
Technicality of the “elective share”
Although you may try to ensure your spouse does not receive an inheritance from you, if you are a Pennsylvania resident when you die your spouse may claim what is called the elective share, or “forced share.” This amount is equal to roughly one-third of your estate.
Determining exactly which assets may be subject to the elective share is tricky.[i] The important point to remember is that this provision exists in Pennsylvania law and that a surviving spouse has the ability to make this election against the deceased spouse’s estate.
Why attempt to disinherit your spouse?
For many married couples, the answer is simple – you wouldn’t. Their estate planning goals can be accomplished with wills and beneficiary designations that leave all of their assets to each other. But other situations are more complicated.
One reason a married couple may wish to limit the inheritance the surviving spouse receives is if that spouse is in the nursing home. It is common practice for the community spouse (the “well” spouse) to attempt to limit an institutionalized (e.g. nursing home resident) spouse’s inheritance if the institutionalized spouse is receiving or may receive Medical Assistance to help pay for his or her long-term care expenses.
Sometimes complicated planning is done to help protect the couple’s assets which could be undone if the community spouse dies before the institutionalized spouse and measures aren’t taken to minimize the institutionalized spouse’s inheritance. For this purpose, a special type of will called an “elective share” will is drafted as part of the planning. These wills are designed to limit the institutionalized spouse’s inheritance to the amount they are entitled by electing to take their elective share.
A word of caution…
Both estate planning and long-term care planning present complicated issues for families. When you’re planning for your future, it’s best not to go at it alone. If you are wrestling with any of the issues presented in this article, you should seek the advice of an experienced attorney to guide you. If you live in Pennsylvania, the attorneys at Marshall, Parker & Weber would be happy to meet with you to discuss your estate planning and/or long-term care planning concerns.

[i] A description of property that may be subject to the elective share in Pennsylvania is found in 20 Pa.C.S.A. §2203. A more in-depth discussion of exactly what property is subject to the elective share or discussion of calculating the elective share is beyond the scope of this article. 

Friday, August 21, 2015

Paying Doctors for Discussions about End of Life Medical Care

Medicare is proposing that it compensate physicians for discussions with patients about end of life medical care. Currently such “advance care planning” is covered only as part of the “Welcome to Medicare” introductory visit for new beneficiaries.
Medicare is the federal program that insures 55 million older and disabled Americans. About 80% of people who die each year are covered by Medicare.
To many it seems obvious that doctors should be encouraged to talk with their patients about future medical care options. How can health care providers understand and honor patient’s values and wishes unless these conversations take place? The alternative would seem to be to risk providing care that the patient has never approved and does not want.  
Nevertheless, the suggestion that Medicare pay doctors to have discussions with patients about end of life care remains subject to controversy. Some of the objections have amounted to hyperbolic political noise. But there is a more genuine concern that patients could be encouraged to forgo life prolonging treatments in order to reduce health costs.  Rep. Steve King (R-IA) has introduced legislation to prevent the proposal from taking effect.
Medicare is currently accepting comments on the proposed rule and a final decision is expected by November 1st. Changes would not take place until 2016.   
The controversy over the proposal is described in the article below which was written by By Kristian Foden-Vencil, Oregon Public Broadcasting and Stephanie O'Neill, Southern California Public Radio and published by Kaiser Health News. It is reprinted with permission. Kaiser Health News is a nonprofit national health policy news service.

Medicare Says Doctors Should Get Paid To Discuss End-Of-Life Issues

By Kristian Foden-Vencil, Oregon Public Broadcasting and Stephanie O'Neill, Southern California Public Radio August 18, 2015
Remember the so-called death panels?
When Congress debated the Affordable Care Act in 2009, the legislation originally included a provision that would have allowed Medicare to reimburse doctors when they meet with patients to talk about end-of-life care.
But then Sarah Palin argued that such payments would lead to care being withheld from the elderly and disabled. Her comment ignited a firestorm among conservatives and helped fuel the opposition to the legislation.
Her assertions greatly distressed Dr. Pamelyn Close, a palliative care specialist in Los Angeles.
“It did terrible damage to the concept of having this conversation,” she said.
Amid the ensuing political uproar, Congress deleted the provision. And the lack of payments and concerns about the controversy further discouraged doctors from initiating these talks, according to Close.
“We just are not having these conversations often enough and soon enough,” Close said. “Loved ones who are trying to do always the right thing, end up being weighed with tremendous guilt and tremendous uncertainty without having had that conversation.”
When done right, according to Close, these counseling sessions often delve into end-of-life treatment options and legal documents, such as advance directives and living wills. The issues to be covered are complex and typically require a series of discussions.
Right now, Medicare only pays doctors for this sort of advanced care planning if it happens during the first visit for new Medicare enrollees. But the government recently has again proposed that Medicare reimburse doctors for including these conversations in their practice, whenever they occur.
Already, some private insurance companies are starting to do just that.
Meanwhile, the Alliance Defending Freedom, a conservative Christian organization, has formally opposed Medicare’s proposal.
“By paying doctors for these conversations, what we’re doing is opening the door to directive counseling and coercion,” said Catherine Glenn Foster, an attorney with the group. Foster says her organization supports end-of-life counseling and planning, but not in a doctor’s office.
“A doctor is not really the person you’d want to be having it with – particularly not a general practitioner who would not be able to advise on the nuances of end-of-life care in the first place,” she says.
But patients seem to want these talks. A 2012 study by the California HealthCare Foundation found that 80 percent of Californians would like to have an end-of-life conversation with their physician, but fewer than one in 10 has done so.
Many doctors who initiate the discussions often do so on their own dime. More often, they don’t have them at all, said Dr. Daniel Stone, an internist with Cedars-Sinai Medical Center in Los Angeles.
“When a doctor has patients scheduled every 15 minutes, it’s difficult to have a face-to-face conversation about values and goals related to the end of life, which is one of the most sensitive topics that you can possibly discuss with a patient,” Stone said.
Dr. Susan Tolle, an internist with the Center for Ethics in Health Care at the Oregon Health and Science University in Portland, says the informality with which such conversations are held now means that family members may not be included. Having the discussion as part of a formal doctor’s appointment can change that, she said.
“What it does is, it gives this really important conversation dignity and standing,” she said.
In Oregon, doctors have been squeezing end-of-life discussions into regular medical appointments for decades, under less-than-ideal circumstances. Over the last five years a quarter of a million Oregonians filed their wishes with a state registry. They use what’s known as a POLST form, which stands for Physician Orders for Life Sustaining Treatment. A version of it has been adopted by some other states, including New York and West Virginia.
Jo Ann Farwell, a retired Portland social worker who was recently diagnosed with a brain tumor, completed the form after talking to her doctor.
“I had surgery and had a prognosis of four to six months to live,” she said, after she was diagnosed with a brain tumor.
She did it, she said, to make sure her last hours are as comfortable as possible.
“I wouldn’t want to be on tube-feeding,” she said. “I wouldn’t want to be resuscitated, or have mechanical ventilation, because that would probably prolong my dying, rather than giving me quality of life.”
In the 1990s, health care workers all over Oregon recognized that the wishes of patients weren’t being consistently followed. So the health care establishment worked with the state and with ethicists to prioritize end-of-life talks; the result was the POLST form.
Rep. Earl Blumenauer, a Democrat from Portland, has introduced the Medicare reimbursement legislation every session since 2009. Until now, he says, the federal government hasn’t placed any value on helping people prepare for death, and he finds that ironic.
“The Medicare program will pay for literally thousands of medical procedures, many of them very expensive and complex, even if the person is at the latest stage of life and it may not do any good,” Blumenauer says.
From a purely financial point of view, the change could save money. But Blumenauer says that’s not what’s driving him.
“I don’t care what people decide,” he says. “If they want to die in an ICU with tubes up their nose, that’s their choice. What we want is that people know what their choices are.”
Farwell, the brain tumor patient, well remembers when her sister was dying from cancer.
“She never talked about death or dying,” Farwell said, “never talked about what she wanted at the end. It was very, very difficult for me to try to plan and give her care.”
Farwell wants her sons to be in a better position when it comes to carrying out her wishes.
The federal government is now accepting public comment on the Medicare reimbursement proposal. It’s expected to make a decision in November.
This story is part of a partnership that includes with KPCC, Oregon Public Broadcasting, NPR and Kaiser Health News.
[This is Jeff Marshall again.] Readers should note that the POLST document referred to in the article above is very different from a living will or health care power of attorney. The POLST is an actual medical order. It is only recommended for a limited class of patients - for persons who have advanced chronic progressive illness and/or frailty, those who might die in the next year or anyone of advanced age with a strong desire to further define their preferences of care in their present state of health. [See my previous article on the POLST and its applicability in Pennsylvania.] 
On the other hand, patient/physician discussions about end of life care are much more broadly appropriate and virtually everyone should have an advance directive like a health care power of attorney.  
Further Reading:

Thursday, August 20, 2015

Does Medicare Pay for Nursing Home Care?

[The following guest article was written by Elizabeth White, a lawyer with Marshall, Parker and Weber in Williamsport, Pennsylvania. It is reprinted here with her permission.]

The cost of long-term care in a skilled nursing facility continues to rise each year. A one year stay at a nursing home in Pennsylvania will cost, on average, $100,000.00. Understandably, many wonder how they could afford to pay for this care if they would require a nursing home stay. The first thought that some have is that Medicare will pick up the tab for a stay in a long-term care facility. But does Medicare pay for nursing home care?
Generally, the answer is, no, Medicare does not usually pay for care at nursing facilities. There are specific circumstances in which Medicare will pay for nursing home care, or a portion of the cost of nursing home care. But Medicare will pay only if certain criteria are met and then only for a limited time. Importantly, most private (supplemental) health insurance providers do not cover the cost for extended long-term care at a nursing home either.
In order for Medicare to pay for even a limited time, the nursing home admission must generally be preceded by a qualified hospital stay of at least three days. To count as a qualified stay, a patient needs to be admitted to the hospital and not be in the hospital on “observational” or “outpatient” status. For more information on a recent law to require notification of outpatient status please see Observation Status Bill Heads to President's Desk.
Assuming there is a qualified three day hospital stay prior to admission to the nursing home, Medicare can pay for, or pay for a portion of, up to one hundred (100) days so long as the resident needs "skilled care" (like intravenous injections or physical therapy). Medicare doesn’t pay if the resident only needs long-term care or custodial care.
If all of these qualification rules are met, the first twenty days of nursing home care may be covered in full by Medicare. During days 21 – 100 a portion of the daily cost can be covered by Medicare, with a co-pay by the nursing home resident of $157.50 per day (for 2015). Supplemental insurance policies will often cover all or a share of the co-pays up to the 100 days.
In order for Medicare to continue paying during this 100 day period, it must be medically certified that skilled care is needed by for the resident. This test is met if skilled care is required for maintenance purposes to prevent or slow a decline in the resident’s condition. If it is determined that the skilled care is no longer required, Medicare will  stop paying.
While Medicare can be a possible source of payment for a short-term stay in a nursing home, it is not available unless all of these various conditions are met. As a result of these limitations, Medicare covers only about 14% of nursing home residents.
Even if the resident gets their full Medicare coverage, after the maximum of 100 days, Medicare pays nothing, and the full cost of the nursing home is the resident’s responsibility. At that time, payment options include paying privately, using long-term care insurance benefits if the resident has a policy, or qualifying for Medical Assistance (Medicaid) benefits.
Although the names Medicare and Medicaid sound similar, Medicaid is a different program than Medicare. Medicaid is a joint Federal and State program that can cover payments towards the cost of long-term care at nursing homes, provided that the person seeking the benefits qualifies by meeting certain strict medical and financial criteria. Because of the enormous cost involved, most nursing home residents eventually wind up on Medicaid.
Bottom Line: While Medicare provides health insurance for medical services for most adults over the age of 65, it usually does not pay for the continued services that nursing homes provide, such as assistance with the activities of daily living of eating, bathing, dressing, and transferring. It is crucial to realize this and to determine how you would financially afford the cost of a nursing home should you ever need it. Marshall, Parker & Weber can advise you and develop a plan to help defray the costs of long-term care.

Sunday, August 16, 2015

Power of Attorney: One Size Doesn’t Fit All

Life is uncertain and dangerous. We are always at risk of becoming disabled due to accident, illness, or aging. Disability, as defined by the Americans with Disabilities Act, is an individual’s physical or mental impairment that substantially limits one or more major life activities of that individual.

The incidence of disability increases with age especially after age 65. The oldest old (aged 85 and over) are at highest risk. We cannot avoid this risk, but we can prepare for it.
In we become disabled we may require the assistance of others to help us handle the complicated tasks of living. A power of attorney is a legal document that allows you (the “principal”) to give someone else (your “agent”) the authority to act and make decisions for you in you are ever unable to act on your own behalf.

If you do ever lose the ability to handle your affairs and/or make appropriate decisions, the power of attorney may become the most important legal document you ever signed. Through advance preparation you can help ensure that the right decisions will be made for you by the right people at the right time and that your goals and values will always be respected.

Powers of attorney can be created to deal with personal and health care decisions, or financial matters, or both.
How can you ensure that this most important document will best meet your needs and goals if your agent is ever required to act? The reality is that you are going to need expert help.

Avoid relying on one-size-fits-all standard documents or forms. Standard form documents may limit your agent’s authority to what is provided in a state law. Or, they may grant your agent much more in the way of powers than you would want.
Standard form powers of attorney may omit functions that could be essential to allow your agent to meet your needs and achieve your goals. Your document needs to be prepared with your individual circumstances and goals in mind.

For those of us who are at risk of someday needing long term care (and that’s pretty much everyone) a power of attorney can be the key that opens the door to effective asset protection planning. It can protect us and our families from financial devastation due to personal care and health care costs. But a standard form or other poorly drafted document can deny our agent the power to do what is needed to preserve our assets.  

Unfortunately many documents, even when prepared by a lawyer, fail to address the critical issue of paying for long term care. Long term care is not covered by Medicare and most private insurance policies. Asset protection planning may be required to protect what you own from the cost of care. This is a complicated area of law and your power of attorney should be prepared by a lawyer who understands it and is an expert in benefit programs like Medicaid and VA pension. 

If you are concerned with protecting your home and other assets from health care and personal care costs that may arise if you become disabled you should (1) find a lawyer who is an expert in this kind of planning, (2) discuss your wishes with the lawyer – don’t hesitate to bring the matter up yourself if the lawyer fails to do so, and (3) make sure your power of attorney specifies the conditions, if any, under which your agent will be authorized to divest your assets in order to preserve them. The absence of appropriate authorizations in the document can seriously jeopardize the financial security of your spouse and family.
The Pennsylvania law that governs powers of attorney changed on January 1, 2015, so this is a particularly good time to create (or review and update) your power of attorney document. If you live in Pennsylvania you can contact my law firm, Marshall, Parker and Weber, for further information and assistance.  

Tuesday, August 11, 2015

Medicare Premium May Jump 52% for Millions of Seniors

Many seniors may see a 52% jump in their Medicare Part B premiums next year. Medicare provides health insurance coverage for approximately 54 million people. The increase could impact approximately 30% of Medicare beneficiaries including those who:
   (1) do not have their Part B premiums withheld from their Social Security checks, or
   (2) pay a higher Part B premium surcharge based on high income, or
   (3) are newly enrolled in Part B, or
   (4) are eligible for both Medicare and Medicaid.
The potential increase is noted in the annual Medicare Trustees report for 2015. The projected increase would take the standard Medicare Part B premium from $104.90 to $159.30 in 2016. This is a spike of $54.40 a month. Higher income beneficiaries who pay a premium surcharge would pay even more.
The increases have nothing to do with Obamacare. Instead, they result from a long-standing “hold harmless” provision in Social Security law [42 U.S.C. § 1395r(f)] which was enacted in 1988. This law limits the dollar increase in Part B premiums to the dollar increase an individual receives in their Social Security benefit. But, the impacted groups noted above are excluded from the protections of this “hold harmless” law.
The Medicare Trustees report that they anticipate no increase in the Social Security cost of living adjustment (COLA) next year due to recently low general inflation.  On the other hand, Part B program costs (which generally cover physician and outpatient services) have been increasing much more rapidly than general inflation.
This means that 70% of Medicare beneficiaries should see no increase in their Part B premiums. But since the hold harmless provision doesn’t protect the other 30% of Medicare recipients they will have to bear the full brunt of Medicare Part B program cost increases next year.
In other words, if most Medicare Part B beneficiaries do not have to pay for the Part B cost increases in 2016 the beneficiaries who do will see huge increases in their premiums.
Here is how Kaiser Health News describes the problem.   
The huge rate hike is predicted because of a confluence of two factors: Medicare Part B costs increased more than expected last year, and Social Security is not expected to have a cost of living increase next year. By law, the cost of higher Medicare Part B premiums can’t be passed on to most Medicare beneficiaries when they don’t get a Social Security raise. As a result, the higher Medicare costs have to be covered by just 30 percent of Medicare beneficiaries.
Higher income individuals may have to pay as much as $174 more each month. As reported by the Wall Street Journal:
The largest single group of people affected are the 3.1 million participants subject to higher Part B premiums because their incomes are above $85,000 (or $170,000 for couples). Within this group, the trustees projected that single individuals earning up to $107,000 (and couples earning up to $214,000) would have their 2016 monthly premiums rise from $146.90 a person this year to $223 in 2016. For those earning more than $214,000 (or $428,000 for couples), the projected increase is to $509.80 a month, from $335.70 in 2015.
It’s important to note that the 2016 rates will not be formally set until October. And Health and Human Services Secretary Sylvia Burwell may decide to take some as yet undetermined action to modify the increases.
Further Reading
Good News, Bad News In Medicare Trustees Report, Kaiser Health News, July 23, 2015
An Unexpected Spike for Medicare Premiums? Anne Tergesen, Wall Street Journal, July 31, 2015