California Business & Estate Planning

A New Career- Health Advocates

A few years ago a relative found himself in the hospital with a serious stroke.  Most of the family could do little but ask what various procedures and medications were for, but they certainly were not qualified to make value judgments.  Then in came my wonderful daughter in law, a nurse practitioner, who cheerfully read, analyzed and questioned the charts.  It was this intervention that may well have saved his life, since the protocol being suggested was not working.  He, and most of us, need such an advocate and fortunately I’ve learned that there is now a whole industry devoted to just such help.  Even the best of us can’t always keep our heads above the rising tide of insurance company bureaucracy, legal snares, and other issues that can arise in the event of a medical-billings problem or an insurance coverage denial. The Wall Street Journal’s MarketWatch suggests hiring a private health care advocate (assuming you have the money).

An advocate cannot offer medical advice or address legal issues but they can help resolve medical billing problems, fight insurance-coverage denials, aid in complex medical decision-making and find the right specialist or hospital for a particular condition. Some even accompany patients to doctors’ offices and other care settings. Many are or were nurses or social workers – and can help push through a problem when you really need assistance or guidance. Most hospitals employ similar representatives that can help during your stay, but private advocates are often small businesses that can be called upon in far more circumstances.

Advocates typically charge $50 to $200 an hour, says Joanna Smith, president of the National Association of Healthcare Advocacy Consultants (NAHAC), a professional group in Berkeley, CA. If you are looking to hire a health-care advocate, you should expect a written estimate of costs and services, and feel comfortable with the advocate’s style, experience and expertise before signing on.  Still, it may well be the best money ever spent. 

 

 

 

 

Now Its The President's Turn on Medicare

I’ve got to weigh in on the Medicare debate, probably because it directly affects me and my generation.  The future of Medicare and Medicaid, as well as the source, quality, and type of care that seniors receive is in the hands of politicians now, so you may want to keep a weather eye on Capitol Hill.

I’ve previously directed your attention to the House Republican plan for debt reduction as championed by House Budget Committee Chairman Paul Ryan and how it could mean, according to the Wall Street Journal, increased costs and fewer benefits for Medicare seniors.

Now the President has issued his position in a speech that can be read here in its entirety, but The Kaiser Health News has also done their part to pare down the position just to where it is relevant to healthcare and Medicare.

The President’s plan also calls for heavy savings and spending cuts, saving $480 billion by 2023 and at least an additional $1 trillion over the subsequent decade. While calling for these cuts, the President’s plan retains the ultimate goal of supporting Medicare and Medicaid. The substance of the proposal is to add onto the Affordable Care Act of 2010 with further reform designed to reduce waste, increase accountability, promote efficiency and improve quality of care, “without shifting the cost of care to our seniors or people with disabilities.”

The biggest reform and substantive change is strengthening of the Independent Payment Advisory Board (IPAB) created by the Affordable Care Act. The purpose of the IPAB is to analyze, track, and cut down on excessive costs by informing Congress and recommending action best suited to serve beneficiaries. So bottom line is the President wants to take on the high costs of health care through dealing with big Pharma and Insurance companies to bring expenses in line with the rest of the civilized world.  The Republicans want to give everyone a voucher and hope these same institutions will lower their profits enough to give some coverage.

Should the House Passed budget survive, I strongly suggest you avoid illness at all "cost". 

 

 

 

 

A New Look at Alzheimers

 

A client will be coming in next week to talk about his wife of many years now going through the advance stages of Alzheimer’s disease.  I have seen her once since diagnosis and would certainly prefer to remember the vibrant couple I knew 10 years ago when I did their estate documents.  Fortunately those anticipated the current disease even though there was no thought it would take her life from her and her family just a few years later. 

Having him visit calls to mind last week’s story in The New York Times , saying that science is ready to rewrite the books on Alzheimer’s disease in a way that may usher in earlier detection and with it the possibility of earlier, more effective treatment.

The National Institute on Aging and the Alzheimer’s Association have come together to issue a new definition and medical guidelines for Alzheimer’s, the first serious reworking of the definition in 27 years. The full onset of dementia, what we classically define as the hallmark of the disease, is now thought of as the final of three progressive stages. Research indicates that the disease affects the brain long before the onset of dementia, and the first stage often shows no outward symptoms at all even as the brain begins to change. The second stage is an intermediary phase where neurological symptoms begin to set in but with little indication of the full extent to come.

The most striking addition to the guidelines concerns methods that assess brain changes, including brain scans and tests of cerebral spinal fluid. These methods measure biomarkers, the physiological indicators that someone is likely to develop dementia eventually, just as cholesterol and blood pressure are biomarkers of impending heart disease.

Will this affect medical practice just yet? Not quite. For now, the guidelines specify that Alzheimer’s biomarkers should not yet be put into widespread use, but used only with patients enrolled in clinical trials. That is because scientists cannot yet standardize the test results.

The importance, according to Dr. Pierre Tariot, director of the Banner Alzheimer’s Institute in Phoenix, is that we understand the disease to be a very long process. “The notion that Alzheimer’s disease is a continuum that has an extensive pre-symptomatic phase is a very important message to get out.”  Are many of us the walking wounded? 

Caring For Each Other Has Its Own Legal Challenges

I don’t watch much TV, but I do remember “The Golden Girls” from the 80’s. Bernard Krooks of Forbes recently offered some insight, and food for thought as an example of a new trend in next phase living. It turns out when the four savvy women decided to move in together to build a sort of ad-hoc “family,” they were simply doing (more than three decades ago) what an increasing number of seniors are doing, or considering doing, today.

Sociologists and popular social critics alike have been discussing the erosion of the nuclear family for years but here is a new twist: what is to become of those seniors who aging outside the nuclear family?

The baby-boomers are just starting to enter their next phase and they are far more likely than previous generations to have remained childless throughout life. Many never actually married, and others have already lost their spouses. What will happen to these people if they become disabled, incapacitated, or develop a chronic illness?  Or if they have kids, but don’t want to be a burden on probably already over-stressed families.

Most in-home care for the elderly is performed by family members. Hospital stays are getting shorter, driven by cost-saving initiatives, making it even more likely that these seniors will need outside help at some point in their lives.

Without family, seniors can only turn to friends, paid caregivers, or government-sponsored social services. Of course, paid caregivers are difficult for many seniors to afford, and government-programs present their own challenges, especially in light of the apparent desire of the country to do away with such services.  

The legal issue that I have seen come up is that friends are not currently accorded the same status as family members by a legal system that has always made the assumption of a nuclear family. There is an emerging movement, though, that seeks to change that. Some legal scholars are espousing the establishment of “friendship law,” which would confer certain rights upon “designated friends” who play a significant caregiver role – including hospital visitation, tax breaks and claims to an estate if no will has been established.

One thing we never saw the Golden Girls do was consult an attorney about their various “rights” to caring for one another. There was one episode, though, when Rose suffered a heart attack and the girls were not allowed to visit her in the hospital because they were not actual family members. A good elder law attorney might have helped the girls sort through some of those legal issues in advance.

By the way, you can watch portions of Rose’s “Heart Attack” episode on YouTube: http://youtu.be/xx3CMHpBLu8.

 

 

 

 

It's OK to Offend the Kids

Clients often ask me whether, say, the 2 kids can act as co-agents under an Economic Power of Attorney once a spouse is deceased.  This is the document that appoints who will write the checks and make decisions about care (not life and death- that is the Health Directive). Usually the parents are thinking they don’t want to offend one child by appointing the other. The problem with this, however, is that two heads are not always better than one.

What do you do if the kids just cannot agree? Or, more likely, what if they agree and one of them is in Sumatra on a 6 week trek? Or, worst of all, what if one of them is not acting in your best interest? ElderLawAnswers.com recently updated a short article on the problem with a list of potential solutions.

• First check the wording of the power of attorney document to see if it sets up a procedure for resolving disputes.
• If the power of attorney does not help, contact an elder law attorney, who can tell if your state’s power of attorney laws offer any guidance. There may be a state statute that deals with disputes.
• Your final step may be to file a petition in probate court to let the court decide.  The court can arbitrate or, if necessary, find one agent to not be acting in the best interest of the individual in question and so strip them of their power of attorney.

If you are creating a power of attorney and want more than one agent to share responsibility, you can minimize potential conflicts by allowing the agents to act separately. An alternative to naming co-agents is to name your agents in sequence. The first-named agent acts alone, but if they cannot serve for some reason, power goes to the next person on the list. Having two agents just creates more trouble than it is worth- and remember, you are still alive!

As you can see, situations can become quite complex. You can learn more about powers of attorney on my website, www.tierneywatsonhealy.com and click on to receive my monthly estate planning e-newsletter.

Power of attorney, living will, multiple agents, agent disputes

 

Social Security Goes Online

 

I guess the Boomers are getting savvy enough with the internet to do away with paper. If you’re not already familiar with the Social Security Administration’s website, it may be time to start. You may already know that you can go online to get an application to replace your Social Security card, apply for Medicare, retirement or disability benefits, even search popular baby names- something a friend just told me about and you know what, Dewey isn’t a popular name in any year from 1911 to the present! So that information is helpful, but soon your yearly earnings statement will be online as well.

The statements, mailed to 150 million people each year, show a projection of your future benefits and include a history of taxable earnings for each year – so people can check for mistakes – as well as the total amount of Social Security and Medicare taxes paid over your lifetime. While certainly a useful retirement planning tool for workers, the mailed statements cost the SSA more than $70 million a year.

In a recent article from the Associated Press, Social Security Commissioner Michael Astrue says the website offers the same estimates, while also allowing the individual to run scenarios to test their preparation and various outcomes. Nevertheless, critics point out that it does not, as yet, offer the detailed history of taxable incomes, which means you’ll have no way of catching possible mistakes. Plus, if you’re not really computer-savvy, or don’t have access to high-speed internet, the website could be quite difficult to use.

Stopping the mailed statements is part of a trend in government to conduct more of its business electronically. The SSA already mails out few paper checks. About 88 percent of beneficiaries have their payments deposited directly into bank accounts, and approximately 41 percent of applications for retirement benefits come in online.

Visit the SSA website to find out more about what you can now do online.

 

Social Security, yearly earnings statement, SSA

 

 

Medicare Might Be Dead- Celebrate the Early Funeral

The first salvo in the entitlements battle began last week with the Republican plan to do away with Medicare for those born after 1956.  This isn’t just me talking- I’m quoting from that bastion of liberal thinking, Rupert Murdoch’s Wall Street Journal. As reported in its SmartMoney section, Paul Ryan’s solution to stem rising Medicare costs is to end the current Medicare program for people born in 1957 and after. Starting in 2022, when those American begin turning 65, they would no longer get their medical bills paid directly by the government.

According to the Centers for Medicare and Medicaid Services, Medicare spent an average of $11,743 on beneficiaries in 2009, an amount Ryan calls “unsustainable.” (obviously it has been years since the Congressman ever paid a medical bill if he thinks that amount is too much) and his plan essentially aims to lower that average to $8,000 a year. So folks, if you are over 65, you will get $8000 to pay to an insurance company which may or may not pay your bills.  Since the average private medical insurance premium for persons over 60 (and before Medicare) is over $10,000 (today), I can’t imagine it getting cheaper when those people are 70.  In other words, Medicare would become more like aid to an individual in the form of assistance in guaranteeing insurance, but the actual mode of insurance will be privatized.

 

Reaching 65 and enrolling in Medicare before 2022 can grandfather you into the old system, as the plan now stands, but whether you’re affected or not the change could become vital to your plans and well-being. The Congressional Budget Office has admitted, under Mr. Ryan’s proposal "most elderly people would pay more for their health care than they would pay under the current Medicare system." And I’ll bet we all believe that between the profits of big pharma and the insurance companies, the cost of medical care will certainly go down over the next 2 decades! 

 

It isn’t law yet, but you can bet that the argument will be:  Kill Medicare or we will cause the the country to default on its debt. Even though the plan is far from law you might want to keep an eye on what is happening.  And maybe do something about it.

 

 

 

The Alphabet Soup of Retirement Plan Options

 

There is hope for the future of retirement plans for small businesses as the economy recovers.  The options are a mish-mash of acronyms, however, and it wasn’t until I came across a good summary in Forbes that I understood what they all were. The article considers the top three options to be the 401(k), the SEP IRA, and the SIMPLE IRA.

The 401(k), which is probably the most well known, is also the most versatile in that you can choose to match employee contributions or not and provide a vesting schedule. It’s also versatile for employees in that you can enable penalty-free access to the funds (by way of loans) and offer “catch-up” contribution opportunities to employees over age 50. Finally, you could also elect for Roth 401(k)s that switch taxation to contribution rather than distribution, if you or your employees fear higher taxes in the future.

The SEP IRA, or “Simplified Employee Pensions” is exactly that, the modern equivalent of a pension. It means that only the employer contributes to the fund, and must do so for all employees, rather than the employee contributing and the employer matching or not. The penalties are generally smaller, and it’s fairly easy to start, but this is because it is fairly stripped down in comparison to the 401(k) as there is no Roth, no catch-up contributing, no profit-sharing, and no loan option.

The SIMPLE IRA or the Savings Incentive Match PLan for Employees, offers the third option and lies somewhere in between the previous two. It is affordable, like the SEP IRA, but it operates by employer matching of employee contributions and offers catch-up options. Nonetheless, it is not quite as expansive as the 401(k), offering fewer options and having smaller contributions allowances.

These of course, are just outlines to get the ball rolling, and although more information can be found in the original article (which has a helpful chart) you will also want to consult your professional advisor.

 

 

 

 

The Toughest Decision-Long Term Care.

What is the toughest decision anyone ever makes? Anyone who has had to help place a parent in an Assisted Living or Independent Living facility knows the answer. Long-term care options are never favorite topics for conversation, regardless whether you are the elderly person needing care, or the family member trying to find care for a loved one. Still, with the fact that 40 percent of adults over the age of 65 will spend some time in a nursing home, the topic is likely to come up at some point. The question is how do you choose the right nursing home?

I came across a good article in SmartMoney which addressed the issue with some helpful tips. In essence, the name of the game is research, both remote research and actual field research at the prospective nursing homes.  Medicare also has this online tool which really helps identify the issues and the actual rated nursing homes. After you narrow down the list and have figured out cost (hopefully you can spend a lot since the quality of care is more often than not directly related) then you need to hit the sites, make multiples visits, and really study to get a feeling for your loved one’s prospective homes. You want to find out how the residents are, how the home runs, and how the employees operate. Speak with the Director of Nursing, the facility Administrator, and the Medical Director – and be sure to check out their qualifications. Be particularly vigilant for any possibility of elder abuse. Ask about the employees, and whether the facility performs background checks before hiring (92% of nursing homes employ at least one person who has been convicted of a crime, and nearly half employ five or more people with criminal backgrounds, according to a government report released this month). Ask about how they handle reports of abuse or neglect.

Finally, ask for a copy of the most recent federal inspection papers, which should enumerate all of the possible problems the home has had. Remember though, this is field research and it is tough, as SmartMoney puts it, “Now is no time to be docile. Grill management and employees.”
            To stay abreast of news and developments in this field, be sure to follow this blog and subscribe to my newsletter at www.tierneywatsonhealy.com

 

 

End of Life Decisions Get Their Own Day

I ran across an interesting initiative that might be of value to some of you- either for yourself or others.  The Advanced Health Care Directive (in California) is a critical document we all should have to let US, and not someone else, make end of life decisions.  In 40 years of practice, I have never come across someone who wanted extraordinary measures to be taken to keep them alive, but that is the default button if you don’t have a Directive. I just talked to a client who had an old Directive from his wife who now has advanced Alzheimer’s and he doesn’t have authority to not authorize invasive procedures to keep her alive.  That could not only create extreme cost, but years of suffering for both the wife and her struggling husband and kids.  

Now I find that there is a National Health Care Decisions Day set for April 16 (don’t know if this is related to what happens on April 15!). According to their website, this initiative is a collaborative effort of national, state and community organizations committed to ensuring that all adults with decision-making capacity in the United States have the information and opportunity to communicate and document their healthcare decisions. You also can learn more on their Facebook Page.

You can learn more about advance directives or health care proxies on our website www.tierneywatsonhealy.com .