Will Medicaid Come after My Mom’s Estate?

It’s very confusing when the estate recovery process begins with Medicaid, says nj.com’s recent article entitled “When will Medicaid recover funds from this estate?”

Under federal and state laws, the state Medicaid program is required to recover funds from the estates of Medicaid recipients who were 55 years of age or older at the time they received Medicaid benefits. This can be nursing facility services, home and community-based services and related hospital and prescription drug services. States have the option to recover payments for all other Medicaid services provided to these individuals, except Medicare cost-sharing paid on behalf of Medicare Savings Program beneficiaries.

In some situations, the money left in a trust after a Medicaid enrollee has passed away, may also be used to reimburse Medicaid. However, states can’t recover from the estate of a deceased Medicaid enrollee who’s survived by a spouse, child under age 21, or blind or disabled child of any age. States also must establish procedures for waiving estate recovery, when recovery would cause an undue hardship.

States may also impose liens for Medicaid benefits incorrectly paid pursuant to a court judgment.

States can impose liens on real property during the lifetime of a Medicaid enrollee who’s permanently institutionalized, except when one of the following individuals resides in the home:

a spouse
a child under age 21
a blind or disabled child of any age; or
a sibling who has an equity interest in the home.

States must remove the lien, when the Medicaid enrollee is discharged from the facility and returns home.

Note that any property that belonged to the deceased Medicaid recipient at the time of their death is subject to estate recovery, even when that property was owned jointly or individually.

Therefore, Medicaid postpones estate recovery, if there is a surviving spouse or a surviving child who is under the age of 21, or is blind or permanently and totally disabled in accordance with the Social Security definition of disability.

Given that the father in this case passed away in February 2020 with a surviving spouse, Medicaid will postpone estate recovery until the mother dies.

Reference: nj.com (May 26, 2021) “When will Medicaid recover funds from this estate?

What are the Biggest Blunders Made in Retirement?

Retirement is supposed to be a time to enjoy the fruits from decades of labor, but managing your health care can feel like a whole new job, says Money Talk News’ recent article entitled “5 Medicare Mistakes to Avoid for a Healthy Retirement.” This is no easy task because the official guide to Medicare, the federal health insurance program primarily reserved for people age 65 and older, is roughly 120 pages. This means it is easy to make Medicare mistakes. You may pay extra, or a blunder could leave you with a gap in coverage. If you haven’t enrolled in Medicare but are almost 65, here are some mistakes that seniors who are already enrolled in Medicare can’t afford to make with their coverage:

Not taking advantage of the “freebies.” Some medical services and products come at no charge for Medicare recipients—or recipients don’t have to pay anything extra, like a co-pay or meeting a deductible to take advantage of these freebies.
Missing your annual chance to switch plans. Your plan’s coverage, costs and benefits can change every year. You have a chance during open enrollment to examine your options, make sure you’re still getting the best value and, if you want, switch your plan. During the open enrollment, it’s wise to consider the plans that are available and see what the cost will be in the coming year. You should also confirm that your favorite pharmacies, hospitals and medical providers still will accept your plan in the new year.

Before you do this open enrollment homework, however, it helps to review these resources:

gov and its Medicare Plan Finder
The latest annual “Medicare & You” handbook
Evidence of Coverage document; and
Plan Annual Notice of Change document.

Losing in-network access. Remember that not all health care providers accept all Medicare coverage. As a result, if you go to a doctor who’s not in your plan network, you could see higher co-payments, or your insurer might refuse to pay any of the bill.
Losing Medigap coverage. People with Original Medicare have the option to buy a supplemental policy from a private insurer, known as a Medigap policy, to cover some of the costs that Original Medicare doesn’t fully cover. If you have a Medicare Advantage plan, you can’t buy a Medigap policy. Therefore, if you decide to switch to a Medicare Advantage plan from Original Medicare with a Medigap plan, you’ll drop the Medigap plan. That can be risky. Only during your initial Medigap enrollment period (which is when you first became eligible to sign up for Medicare) are you guaranteed coverage by a Medigap plan. That is the only time when are insurance companies cannot deny you coverage or charge you extra due to pre-existing conditions. After that, insurers typically ask about your health status. Thus, based on your health and where you live, if you lose your initial Medigap coverage because you switched to Medicare Advantage, you could wind up paying a lot more for a Medigap policy, if you later decide to switch back to Original Medicare. You might even be prohibited from certain plans.
A tax penalty for HSA contributions. If you contribute to your health savings account (HSA) while on Medicare, you may be penalized. You should stop making HSA contributions the month before your Medicare Part A coverage (which primarily covers inpatient hospital-related costs) begins, which can be as early as six months before you apply for Medicare or Social Security.

Reference: Money Talk News (June 7, 2021) “5 Medicare Mistakes to Avoid for a Healthy Retirement”

What Is Elder Law?

With medical advancements, the average age of both males and females has increased incredibly. The issue of a growing age population is also deemed to be an issue legally. That is why there are elder law attorneys.

Recently Heard’s recent article entitled “What Are the Major Categories That Make Up Elder Law?” explains that the practice of elder law has three major categories:

Estate planning and administration, including tax issues
Medicaid, disability, and long-term care issues; and
Guardianship, conservatorship, and commitment issues.

Estate Planning and Administration. Estate planning is the process of knowing who gets what. With a will in place, you can make certain that the process is completed smoothly. You can be relieved to know that your estate will be distributed as you intended. Work with an experienced estate planning attorney to help with all the legalities, including taxes.

Medicaid, Disability, and Long-Term Care Issues. Elder law evolved as a special area of practice because of the aging population. As people grow older, they have more medically-related issues. Medicaid is a state-funded program that supports those with little or no income. The disability and long-term care issues are plans for those who need around-the-clock care. Elder law attorneys help coordinate all aspects of elder care, such as Medicare eligibility, special trust creation and choosing long-term care options.

Guardianship, Conservatorship, and Commitment Matters. This category is fairly straightforward. When a person ages, a disability or mental impairment may mean that he or she cannot act rationally or make decisions on his or her own. A court may appoint an individual to serve as the guardian over the person or as the conservator the estate, when it determines that it is required. The most common form of disability requiring conservatorship is Alzheimer’s, and a court may appoint an attorney to be the conservator, if there is no appropriate relative available.

Reference: Recently Heard (May 26, 2021) “What Are the Major Categories That Make Up Elder Law?”

Do You Know about the Grandparents Scam?

The Miami-Dade State Attorney’s Office explains that the Grandparents Scam involves someone posing as a grandchild or relative of the victim and claiming to be out of town and in need of help, usually involving an arrest.

Local10.com’s recent article entitled “Man, 22, arrested in connection with ‘Grandparents Scam’” notes that, in some cases, the scammer says he or she is a relative’s lawyer or bail bondsman.

County prosecutors explain that the fake relative claims to require cash for bail, hospital bills, or other bogus expenses. The caller provides the victim with directions on how to deposit money into their bank account.

The victims are asked to not tell anyone and are sometimes called again, so the fake relative can ask for additional funds due to “negative developments” in their case, prosecutors said.

“When a 22-year-old like Alvaro Esteban Jaramillo Fajardo revels in helping to allegedly steal the savings of caring grandparents and the elderly, there is something truly wrong. Sadly, some people seem to believe that it’s always easier and more sophisticated to take someone else’s money rather than work for it oneself,” State Attorney Katherine Fernandez Rundle said in a statement.

“The grandparent scammers and those ensuring that the scam works all deserve to hear the sound of a jail door closing behind them.”

Jaramillo Fajardo is facing charges in connection with eight victims, ranging in age from 71 to 88.

In all, these Grandparents Scam victims suffered financial losses of more than $480,000.

According to a news release from the state attorney’s office, Jaramillo Fajardo acted as the facilitator of the cash withdrawals from his associates’ bank accounts, “which effectively laundered the stolen money.”

Prosecutors explained that Fajardo paid the account holders about $2,000 for each incident in which they were involved.

Authorities say the Defendant frequently sought out his associates on social media and also offered a finder’s fee, if they obtained new, usable bank accounts to receive the illicit funds.

Fajardo also boasted that none of the account holders had previously gotten into any trouble, prosecutors said.

Reference: local10.com (April 15, 2021) “Man, 22, arrested in connection with ‘Grandparents Scam’”

Will Mediterranean Diet Stave Off Alzheimer’s?

Researchers at the German Centre for Neurodegenerative Diseases in Bonn found the Mediterranean diet could protect the brain from disease triggers linked to Alzheimer’s, specifically protein deposits and the rapid loss of brain matter.

Barchester’s recent article entitled “Mediterranean diet could lower risk of dementia, study suggests” reports that Alzheimer’s disease is the most common form of dementia, affecting between 50 and 75% of people who are diagnosed with the condition.

Worldwide, approximately 50 million people have dementia. There are roughly 10 million new cases every year.

Alzheimer’s disease is the most common form of dementia and may contribute to 60–70% of cases.

Dementia is one of the primary causes of disability and dependency among older people worldwide.

There are physical, psychological, social, and economic impacts on people with dementia, as well as on their careers, families and society at large.

The recent German study results were published in the journal Neurology. The research involved 512 subjects, with an average age of 70 years. The participants were asked to fill out a questionnaire about the foods they regularly ate. Those who ate a considerable quantities of fish, vegetables and fruit, and only occasionally consumed foods considered less healthy, such as red meat–were given high scores on a scale used by the researchers.

Participants then underwent MRI brain scans and participated in tests examining cognitive functions, such as memory. The study also looked for levels of amyloid beta proteins and tau proteins in the cerebrospinal fluid. These are well-known signs of Alzheimer’s.

The results showed that those with the unhealthiest eating habits had more pathological levels of these biomarkers, when compared with those who regularly ate a Mediterranean diet.

In addition, individuals who regularly ate a significant quantities of fish, fruit and vegetables performed better in memory tests.

The lead author of the study, Tommaso Ballarini, expanding on the findings and explained: “There was also a significant positive correlation between a closer adherence to a Mediterranean-like diet and a higher volume of the hippocampus. The hippocampus is an area of the brain that is considered the control centre of memory. It shrinks early and severely in Alzheimer’s disease.”

The researchers are looking to re-examine the same study participants in four to five years, to have further insights into how nutrition can impact brain aging and health over time.

Reference: Barchester (May 10, 2021) “Mediterranean diet could lower risk of dementia, study suggests”

Should Vets Be on Look-out for COVID Vaccine Scams?

Officials from Operation Protect Veterans — a joint effort from the U.S. Postal Inspection Service and AARP that works on scams targeting veterans and military members — said they have seen a recent uptick in the number of illicit offers for veterans to “cut in the vaccination line,” if they provide cash to third-party groups.

Military Times’ recent article entitled “Warning: Post Office sees rise in COVID vaccination scams targeting veterans” says that the group also warned of scammers offering “cash payments or other incentives around obtaining a COVID vaccination.”

VA officials will reimburse veterans for the cost of vaccines by the department’s Foreign Medical Program. However, they do not help them find vaccine appointments.

Legislation approved last month by Congress allows all veterans, their spouses and caregivers to get coronavirus vaccines through the Department of Veterans Affairs free of cost. The timing and availability of those shots depends on local supplies.

However, VA officials have stressed the fact that people do not need to pay to receive a dose. Any outside group promising quicker delivery in exchange for cash are taking advantage of confused or frustrated veterans.

“In addition to many of the same scams that fraudsters use to target veterans, we’re now seeing more ‘timely’ scams, like those related to COVID,” said Chief Postal Inspector Gary Barksdale in a statement.

“And as May is Military Appreciation Month, it’s a great time for everyone to become informed and spread the word about scams targeting veterans in order to, in some small way, help repay the tremendous debt we all owe those who have served.”

An AARP survey from 2017 found that vets are twice as likely to be victims of scammers as the general public. The survey found that one in six veterans reported losing money to a bogus offer of benefits or assistance.

The U.S. Postal Service cautions vets not to divulge their personal information over the phone to strangers, especially bank account numbers, credit card numbers or Social Security numbers.

Moreover, they also said any veteran with questions about an unsolicited offer or program should check out the deal with a family member, friend, or local Veterans Affairs office.

Anyone who demands veterans act immediately on such a transaction are like scammers.

More information on scams and protections for vets is available at the Postal Inspection Service web site.

Reference: Military Times (April 30, 2021) “Warning: Post Office sees rise in COVID vaccination scams targeting veterans”

How to Protect Loved Ones from Elder Abuse

Predators had an open season on the elderly during the pandemic, as isolation necessitated by COVID severely limited family member’s ability to visit in person. In some instances, caregivers themselves were the predators, and manipulation on important legal documents, including durable power of attorney, trusts, wills and ownership of homes has occurred. All this was reported the article “Warning: Isolation Of Your Aging Parent May Be A Red Flag” from Forbes. The enforced isolation has created worrisome situations for all concerned.

If you haven’t seen your parents or grandparents for a year or more, and are all fully vaccinated, one expert strongly encourages visitation, as soon as is possible. Use the visit to review all of their legal matters and talk about how to increase engagement and end the isolation.

Consider the following a checklist of what needs to be done at that first visit:

Look for any signs that anyone who had access to loved ones may have taken advantage of their isolation during the past year. Don’t assume the best behavior of everyone around them. It’s not how we like to think, but caution needs to be exercised in this situation.

Check on their will and trusts. The pandemic has reminded everyone that life is fragile, and it’s important to go over legal documents or, if they don’t exist, create them. Find out if anyone has pressured family members to change legal documents—if they have been changed in the last year and you weren’t told about it, find out what happened.

If aging parents do not have a will or trusts, or these documents were altered in your absence, speak with an estate planning attorney who can create a new estate plan. Make sure all copies of older wills are destroyed. At the same time, this would be a good time to have their powers of attorney, healthcare proxy and living wills updated.

If your parent or grandparent lives on their own, find out if they are now in need of any caregiving. A year is a long time, and elderly people who started out fine during the epidemic may have had changes in their health or ability to live independently. Go see for yourself how they are managing. Is the house clean? Are the stairs too steep to be managed?

Not everyone will be able to return to “normal” without some help. Senior centers, gyms and recreational facilities have been shut down for a long time. They may need some help getting back into a routine of socializing and exercising.

The end of enforced isolation can also mean the end of an easy cover for anyone who was using isolation as a protection for financial elder abuse or any other type of abuse.

Isolation itself is a form of abuse, including not allowing others to visit in person or speak with a parent alone. You can overcome this by being engaged with family members on a regular basis, by phone, video visits or, if you are able to, more frequent in person visits.

Reference: Forbes (April 23, 2021) “Warning: Isolation Of Your Aging Parent May Be A Red Flag”

Link Possible between Diabetes, Dementia and Age

New research says those people who had type 2 diabetes for more than 10 years had more than twice the risk for developing dementia, as compared with those who were diabetes-free at age 70, according to Archana Singh-Manoux, PhD, of the Université de Paris in France.

MedPage Today’s recent article entitled “Diabetes, Dementia, and Age: What’s the Link?” reports that at age 70, every additional five years younger that a person was diagnosed with diabetes was linked to a 24% increased risk of incident dementia, even after adjustment for sociodemographic, health-related and clinical factors including cardiovascular disease, hypertension, body mass index and use of antidepressant or cardiovascular medications, among others.

This is equal to a dementia rate of 8.9 per 1,000 person-years among patients age 70 without diabetes versus a rate of 10 to 18.3 for those with diabetes, depending on age at onset:

Diabetes onset 5 years earlier: 10.0 per 1,000 person-years
Diabetes onset 6-10 years earlier: 13.0 per 1,000 person-years
Diabetes onset 10+ years earlier: 18.3 per 1,000 person-years

The strongest connection with incident dementia appeared to be younger age at onset of type 2 diabetes. Patients at age 55 who were diagnosed with diabetes within the past five years saw a twofold increased risk for incident dementia; those age 60 who were diagnosed with diabetes six to 10 years prior saw a similar twofold increased risk. However, late-onset diabetes wasn’t found to be tied to incident dementia. Prediabetes (fasting blood glucose of 110-125 mg/dL) also was not linked to risk of subsequent dementia. Singh-Manoux said this finding suggested that “a certain threshold of high glucose” might be needed to ultimately see hyperglycemia-induced brain injury.

However, cardiovascular comorbidities played into this link. Patients with diabetes who also had a stroke had a dramatically higher risk for dementia. Those with three heart conditions — stroke, coronary heart disease and heart failure – were at five times increased risk for subsequent dementia. Thus, these findings emphasize the importance of age at diabetes onset and cardiovascular comorbidities, when determining risk for dementia, the study authors said.

A few possible explanations could explain the connection between diabetes and dementia. “One hypothesis is that brain metabolic dysfunction is the primary driver of Alzheimer disease, highlighting the role of decreased transport of insulin through the blood-brain barrier, impairments in insulin signaling and consequently decreased cerebral glucose utilization,” they wrote. This idea was supported by findings from the 2019 SNIFF trial, which found some benefit with 40 IU of daily intranasal insulin for Alzheimer’s disease patients. The group also suggested that episodes of hypoglycemia, more often experienced by those with a longer diabetes duration, may increase the risk for dementia.

Reference: MedPage Today (April 27, 2021) “Diabetes, Dementia, and Age: What’s the Link?”

Do I Need to Pay Taxes on Life Insurance Proceeds?

Life insurance is designed to pay out a death benefit to your beneficiaries, if you die while the policy is in effect, usually in a lump sum. Fox 6’s recent article entitled “Is life insurance taxable?” explains that when large amounts of money change hands, taxes are usually a given. However, that’s not the case with most life insurance.

There are some special situations that may involve taxes, like inheriting a large estate or electing to receive policy benefits in installments. However, there are strategies you can leverage to avoid paying taxes on life insurance.

Beneficiaries don’t usually have to pay taxes on money received from a life insurance policy because the IRS doesn’t consider life insurance proceeds as taxable income. If you have an accelerated death benefit rider and need to access your own policy’s proceeds due to a terminal illness, that also won’t be taxed.

While you most likely won’t have to worry about taxes on a life insurance payout, there a couple of exceptions:

If all the policyholder’s assets meet the IRS’ federal estate tax threshold ($11.7 million in 2021), the policy’s proceeds could be taxable
If you elect to get the policy benefits in incremental installments instead of a one-time life insurance payout, you’ll have to pay taxes on any interest that accrues
If a person takes out a life insurance policy on someone other than himself – or herself, then policy’s benefits are considered a gift, and any monetary gifts above $15,000 are taxable; and
If the policyholder dies with an outstanding cash value loan, the policy’s death benefit could be used to settle it. Any amount the policyholder borrows beyond what they’ve paid into the policy is taxable.

These situations usually concern beneficiaries, but there are a few situations that could leave the policyholder responsible for taxes. In addition to taking out a policy loan, when you sell or surrender your policy and the cash value exceeds the amount you’ve contributed through premiums, the excess is taxable.

There are strategies for getting around this situation:

To avoid taxes, you can work with your life insurance company to legally transfer the policy to a new owner, such as the beneficiary so the policy’s proceeds aren’t included in the estate. However, this will place the responsibility for making premium payments and the ability to change the policy in the new owner’s hands.
An irrevocable life insurance trust or ILIT irreversibly transfers ownership of the policy to the trust, removing it from the taxable estate.
Installment payouts accrue interest and may be taxed, but a lump sum payment isn’t.

Talk to an experienced estate planning or elder law attorney about life insurance and how it can fit into your estate planning strategy.

Reference: Fox 6 (April 14, 2021) “Is life insurance taxable?”

How Long has Medicare Sequestration Holiday Been Extended?

The U.S. House of Representatives has overwhelmingly voted by a 384-38 margin in favor of a continued sequestration delay.

The bill was one of two measures introduced since early March designed to delay the return of Medicare sequestration, which is an automatic 2% cut for all health care providers paid through Medicare.

Home Healthcare News’s recent article entitled “Biden, Congress Extend Medicare Sequestration Holiday Through 2021” reports that recently President Joe Biden officially signed the legislation. Because the U.S. Centers for Medicare & Medicaid Services (CMS) has been expecting Congress to pass this type of law, it hasn’t been enforcing the 2% cut, despite the holiday’s expiration coming earlier in April.

Organizations, such as the Partnership for Quality Home Healthcare (PQHH) and others have supported the legislation. CMS has been cutting Medicare reimbursements to home health providers by 2%, as directed by Congress, since 2014. Under the law, payments that exceed Medicare’s cap must be returned to CMS.

In 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act stopped the automatic 2% cut to all Medicare providers. In December, this temporary moratorium was extended through March 2021.

This was intended to let home health providers have the resources to provide care during the COVID-19 emergency, while staying afloat financially.

The legislation will defer $36 billion in previously scheduled Medicare cuts in 2021.

In March, the House passed different sequestration legislation. However, the key difference between the two laws is, in addition to extending the sequestration delay, the previously introduced bill also dispensed with statutory pay-as-you-go (PAYGO) budget enforcement measures.

The PAYGO rule requires new legislation not to raise the federal budget deficit or lower the surplus.

The bill passed last week in the House and signed by the president doesn’t address the PAYGO issue.

Reference: Home Healthcare News (April 14, 2020) “Biden, Congress Extend Medicare Sequestration Holiday Through 2021”

Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

Will Medicaid Come after My Mom’s Estate?

What are the Biggest Blunders Made in Retirement?

What Is Elder Law?

Do You Know about the Grandparents Scam?

Will Mediterranean Diet Stave Off Alzheimer’s?

Should Vets Be on Look-out for COVID Vaccine Scams?

How to Protect Loved Ones from Elder Abuse

Link Possible between Diabetes, Dementia and Age

Do I Need to Pay Taxes on Life Insurance Proceeds?

How Long has Medicare Sequestration Holiday Been Extended?

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Will Medicaid Come after My Mom’s Estate?

What are the Biggest Blunders Made in Retirement?

What Is Elder Law?

Do You Know about the Grandparents Scam?

Will Mediterranean Diet Stave Off Alzheimer’s?

Should Vets Be on Look-out for COVID Vaccine Scams?

How to Protect Loved Ones from Elder Abuse

Link Possible between Diabetes, Dementia and Age

Do I Need to Pay Taxes on Life Insurance Proceeds?

How Long has Medicare Sequestration Holiday Been Extended?

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