Some Ohio Seniors Discover That Medicare Advantage is to Their Disadvantage
When the Affinity salesman came to the door of 70-year-old Marcolina Sanchez’s New York City apartment, he persuaded her to sign up for a Medicare Advantage private health insurance plan.
“He promised her better coverage [than traditional Medicare],” said Mrs. Sanchez’s daughter, Catherine Santiago. “But when she went to see her regular doctor at her local clinic, she was told she couldn’t go there anymore. She had to go to someone in the company’s network. But why would my mother want to change doctors? No one told her that would be necessary.
Lincoln Richards, 75, of Palm Bay, Florida, had a similar experience after being persuaded to switch from regular Medicare to HealthFirst, another Medicare Advantage provider. Mr. Richards is still reeling from his discovery that HealthFirst would not cover the emergency care he needed when he fell in the street and injured his spine. Now, Mr. Richards has bills from the anesthesiologist and the hospital that he is unable to pay.
“The policy says I’m not insured to be seen outside their group, but I didn’t even think of that then. I’m worried sick. I don’t have that kind of money,” he said. “It’s hard enough to pay the premiums every month.”
For both Mrs. Sanchez and Mr. Richards, and many others like them across the country, the problems with their new Medicare Advantage coverage have caused them and their families emotional distress and weeks of bureaucratic wrangling to disengage from the plans.
Medicare private health plans, called Medicare Advantage, have grown fast since 2003 when the Bush administration began showering them with increased subsidies to entice seniors to leave the traditional Medicare program. Thanks to the extra government money, these plans can offer seniors attractive benefits not found in traditional Medicare, like dental coverage. But sales agents rarely explain the network restrictions that prevent enrollees from receiving care from any Medicare provider, as they did before. In addition, Medicare Advantage enrollees often discover that they are incurring charges like co-pays for doctor visits that they wouldn’t pay under traditional Medicare.
For Medicare advocates and many health professionals who work with the elderly, beneficiaries like Mrs. Sanchez and Mr. Richards are the real-world victims of the zeal to privatize the Medicare program, and their experiences are a cautionary tale for Medicare beneficiaries everywhere.
Rampant Marketing Abuses
The idea behind the federal subsidies for Medicare Advantage plans was that eventually the investment would pay off because the private plans would lower costs through competition and managed care. So far, the hoped-for payoff hasn’t arrived; to the contrary, the plans have required the infusion of more and more cash over the years just to keep them from exiting the market. The plans currently receive between 12 percent and 19 percent more in federal financing than do traditional Medicare providers, amounting to a total subsidy of $5 billion a year.
Because the amount of federal money a Medicare Advantage plan receives is based on how many enrollees it has, in the last few years these plans have been working overtime to persuade as many traditional Medicare beneficiaries as possible to switch to their plan. Today, nearly 8.3 million of the 43 million Americans with Medicare have signed on with a private Medicare plan. But this growth has been accompanied by widespread reports of marketing abuses.
Gladys Cruz [not her real name] crossed paths with a HealthFirst representative in front of her New York City drug store, where, she claims, the salesman blocked her way and harassed her into buying. The salesman also offered her a drug store card that would enable her to get $600 worth of medicine free for signing up — one of HealthFirst’s most popular inducements.
“I hear those private insurance salesmen promise the world, and later the people find out they’ve got a huge co-pay or they can’t see their usual doctor,” said an office assistant at the geriatric medical practice where Mrs. Cruz is a patient. (Like Mrs. Cruz, the office assistant also requested anonymity.)
HealthFirst’s vice president of external affairs, George Hulse, denies that his representatives harass elderly customers or confuse them by hiding restrictions.
“We are here to improve the quality of life for seniors, not to hurt them in any way,” Hulse says. “We do not hard sell or cold call, and we have a verification line where an expert goes over everything with the seniors to ensure they understand all their options
For the Medicare Advantage plans, the extra federal money and marketing have proven to be enormously lucrative. In 2005, according to the Government Accountability Office, their profits were $1.14 billion more than projected.
Double the Amount of Paperwork
Discontent about Medicare Advantage plans has spread to health professionals as well. Elizabeth Oram, a geriatric nurse practitioner at St. Vincent’s Hospital in New York City, has seen the havoc the new plans have wrought in her outpatient clinic.
“The best thing about working in geriatrics was that everyone had Medicare, so there were no concerns about how a patient would pay; I could see everyone,” Oram said. “The new private Medicare plans have changed all this. The other day a woman arrived in a wheelchair, but I couldn’t see her. She had a private policy, and we couldn’t take it. These new plans have turned our department upside down, and given supervisors double the amount of hassles and paperwork.”
Aggressive and deceptive marketing by Medicare Advantage plans has been the subject of hearings on Capitol Hill in recent months. In response, the Bush administration proposed new marketing rules for these plans. Among other provisions, the rules would prohibit cold-calling, door-to-door marketing and unsolicited selling in places such as waiting rooms and senior centers. However, many lawmakers and consumer advocates say that the federal Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, lacks the manpower to enforce any new rules and that states must be given enforcement authority.
However, Congress in a single vote may already have done more than any regulation could do to curb marketing abuses. On July 16, 2008, it overrode President Bush’s veto of a bill delaying a 10.6 percent pay cut to doctors who treat Medicare patients. The delay will be financed by a sizeable reduction in payments to Medicare Advantage plans — $14 billion over five years. This could go a long way toward eliminating what the New York Times characterized in a May 21, 2008, editorial as “the root cause of the problem: the high subsidies that prop up these plans and make them so attractive to high-pressure marketers.”
For critics of the playing field tilted to the advantage of the Medicare Advantage plans, the real issue is preserving one of the most popular government programs ever.
“It’s about the future of Medicare,” says Paul Precht, director of policy and communications at the Medicare Rights Center. “Paying out to companies more than it would cost under traditional Medicare only hastens the insolvency of Medicare and leads to its destruction.”
For Marcolina Sanchez, it will be enough just to be able to see her regular doctor again.
Ohio Estate Planning: Bipartisan Senate Bill Would Fix Estate Tax at 2009 Level
A bipartisan bill that would freeze the estate tax at the level that will prevail in 2009 under the current law has been introduced in the Senate.
The legislation, S.3284, was introduced July 17, 2008, by Sens. Tom Carper (D-DE), Patrick Leahy (D-VT) and George Voinovich (R-OH). The bill would create a lifetime estate tax exemption of $3.5 million, indexed for inflation, and impose a top tax rate of 45 percent.
“I believe our bipartisan approach to fixing the estate tax problem is a fair way of handling the issue and would cost roughly three-fifths as much as legislation making the repeal permanent,” Sen. Carper said. “Rather than giving up on finding a solution to the estate tax dilemma, I hope other senators will see our proposal as an acceptable middle ground.”
Under the legislation, only two estates out of every 1,000 would be subject to the estate tax, according to Carper’s office. That amounts to 11,000 estates by 2012. By comparison, 50,000 estates were taxed in 2001 when the tax started being phased out.
Two days earlier, Rep. Jim McDermott (D-WA) introduced an estate tax reform bill in the House.
H.R. 6499 would freeze the current $2 million estate tax exemption and impose other reforms, including providing for estate and gift tax reunification by permitting lifetime gifts up to a maximum of $2 million rather than the $1 million gift tax limit under current law.
Under the Economic Growth and Tax Reconciliation Act of 2001, the estate tax will expire for the year 2010, followed in 2011 by an individual exemption of $1 million and a top tax rate of 55 percent, unless Congress acts in the interim.
To read the Senate bill, log on to http://thomas.loc.gov/cgi-bin/query/z?c110:S.3284.
To read the House bill, log on to http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.6499.
High Court Rules Ohio Medicaid’s Treatment of Trust Depends on Rules at Time of Application
In a case argued by ElderLawAnswers member William J. Browning, the Ohio Supreme Court rules that whether a trust is an available asset to a Medicaid applicant depends on the eligibility rules in effect on the date of the application, not when the trust was created. Pack v. Osborn (Ohio, No. 05-CA-83, Jan. 17, 2008).
In 2004, Charlotte Osborn, who is physically and mentally disabled, was determined ineligible for home-based Ohio Medicaid services because of her beneficial interest in a trust her mother had executed in 1987. The trust stated that the income and principal were intended to meet Ms. Osborn’s supplemental needs over and above those met by entitlement benefits. After the trust was created, however, Ohio’s Medicaid regulations concerning trust beneficiaries changed at least eight times.
Loretta Pack, the trustee, sought to have the trust assets declared unavailable to Ms. Osborn. The trial court ruled that the trust was a countable resource because the trustee could be compelled to invade the trust principal for Ms. Osborn’s medical care. Ms. Pack appealed. The Court of Appeals of Ohio reversed, holding that the trust was not a countable resource because the eligibility determination must be based on the eligibility rules in effect when the trust was created. The court found that the Settlor clearly intended to provide Ms. Osborn “with a source of supplemental support that would not jeopardize her access to basic assistance from Medicaid.”
The Ohio Supreme Court reverses, ruling that while the trust itself must be interpreted based on the intent of the Settlor when the trust was created, Ms. Osborn’s eligibility for Medicaid benefits depends on the Medicaid eligibility rules in effect on the date of her application for benefits. The court notes that the legislature has frequently amended eligibility provisions that allowed individuals to receive Medicaid benefits who could otherwise pay for them. The court states, “The rules regarding eligibility for public assistance are not forever locked into place by the establishment of a trust.” The case is remanded to the Court of Appeals for a determination of Ms. Osborn’s interest in the trust and whether the trust qualified as an available resource on the date of her application.
COMMENTS: This case will have significant impact on future planning using the Ohio Irrevocable Trust. It will be even more important in the future to make sure you are not making recommendations when the rules may not allow for this type of action in the future.
Seven Reasons That You Should Consult an Ohio Elder Law Attorney Before Disaster Strikes
With the holiday weekend upon us, it’s a time of celebration for many families. It’s also the time when children question whether Mom and Dad are doing okay. Are they getting around and are they eating right. Are their daily needs being met? Are they getting socialization?
The elder care journey is a difficult one that my Ohio Elder Law firm has dealt with many times over the years. I have focused on estate planning in the Cleveland area for 25 years and the relatively new field of elder law since 1990. I have helped numerous seniors untangle the web that long term health care planning has become.
I am not a financial planner, however…I am a consultant who is able to walk you through the options that are available to you and as an attorney I am permitted to provide legal advice. The earlier you plan, the more options you have.
Most people don’t think about this until they are at the point of crisis, when they are suddenly in the position of having to go into assisted living or into a nursing home. Suddenly they have immediate decisions to make under pressure, and they don’t know what to do or where to turn. Normally, they don’t plan in advance because this isn’t something that people really want to think about.
Our clients are often experiencing some type of pain – physical challenges, mental incapacity or emotional pain. That pain may come from a situation connected with long-term disability, a loved one’s troubles, or substantial medical expenses. Our clients may be pressed by concerns about either their own long-term care or the disability of a loved one. The facts and circumstances vary, but the pain is an ever-present reality.
One of my main goals is to relieve anxiety and provide hope. We don’t have a magic wand, so the pain doesn’t vanish, but the family has found someone who listens to their story and works to provide solutions that either give measurable financial benefits, additional care options for their loved one, and peace of mind.
When you are visiting Mom and Dad this holiday weekend, if things don’t seem just right, maybe it’s time to sit down and talk. This is a good time to start discussing their strategy for their long-term care.
I would suggest making an appointment with an Ohio elder law attorney to review your options and bring your children or caregivers along.
There are several reasons why you should see an elder law attorney before disaster strikes:
- It’s important to deal with an attorney who concentrates his or her practice
on these types of issues. An attorney who concentrates his practice in this area will not only understand the technical part of the law, they also understand the emotional aspects. - The attorney’s staff will also be well trained to deal with elder law issues. You may often be dealing with the support staff and want to be sure you will be as comfortable with them as you are with your attorney.
- You want an attorney who understands the governmental programs that are available to you such as Medicare, Ohio Medicaid and Veteran’s Benefits. It’s important that you deal with an attorney who works frequently in this area and is used to dealing with the State and government agencies.
- It’s important to deal with an attorney who knows how to help you protect your life’s savings. It’s important to you and your family that you pass along as much of it as possible. It is important to help arrange things so that you receive the care you need, while still preserving your assets for your family to the extent allowed by law.
- Avoiding Ohio Probate. One of the most important concerns in the event of death is having your estate pass to your loved one without going through probate. It is important to deal with an attorney who can show you how to arrange your estate to avoid Ohio probate when appropriate.
- It is important to work with an attorney who knows the value of a dollar. Consider an attorney who works on a flat fee so you don’t feel like you are being charged extra for every question you ask or every time you pick up the phone.
- Select an attorney who makes house calls when the need arises. It is common practice for the client to go to the attorney’s office for a consultation. Choose an attorney who gives a free consultation and one who will come to your home when needed.
We believe that when your health declines, your lifestyle, privacy and dignity shouldn’t. We understand that our clients are dealing with complex emotional, physical and financial issues and we serve as strong patient/client advocates in helping to address all of these needs.
In order to help with your long-term planning, I have written several guidebooks about elder care planning, veterans benefits and hospice care, as well as a brand new book entitled, Alzheimer’s Survival Guide: Seven Secrets of Estate Planning for People with Memory Loss and Dementia. All proceeds from the book are being donated to the Alzheimer’s Association. For a free copy of any of the guidebooks, or to attend one of his educational Ohio Elder Care seminars, please email Paul at elder@stanolaw.com or call his office at 440-888-6448.
Ohio Estate Planning - Is It Better to Remarry?
Finding love later in life may be unexpected and exciting, but should it lead to marriage? The considerations are much different for an older couple with adult children and retirement plans than for a young couple just starting out. Before deciding whether to get married, you need to look at your estate plan, your Social Security benefits, and your potential long-term care needs, among other things. Whatever you decide to do, you may want to consult a lawyer to make sure your wishes will be carried out. Here are some things to think about:
Estate Planning. Getting married can have a big effect on your estate plan. Even if you don’t include a new spouse in your will, in most states spouses are automatically entitled to a share of your estate (usually one-third to one-half). One way to prevent a spouse from taking his or her share is to enter into a prenuptial agreement in which both spouses agree not to take anything from the other’s estate. If you want to leave something to your spouse and ensure your heirs receive their inheritance, a trust may be the best option.
Long Term Care. Trusts and prenuptial agreements, however, won’t keep a spouse from being responsible for your long-term care costs or vice versa. In addition, getting married can have an effect on your or your spouse’s Medicaid eligibility. If you can afford it, a long-term care insurance policy may be a good investment once you remarry.
The Family Home. So you’ve set the wedding date, but before combining households you will need to think about what will happen to the house once the owner of the house dies. If the owner wants to keep the house within his or her family, putting the house in both spouse’s names is not an option. On the other hand, the owner may also not want his or her heirs to evict the surviving spouse once the owner dies. One solution is for the owner of the house to give the surviving spouse a life estate. Once the surviving spouse dies, the house will pass to the original owner’s heirs.
Social Security. Many divorced or widowed seniors receive Social Security from their former spouses, and remarriage can affect benefits. If you are a widow(er) or divorced and you remarry before age 60, you will not be able to receive Social Security retirement benefits based on your deceased or divorced spouse’s work record. You will still receive benefits, however, as long as you remarry after age 60. You may also be able to collect spousal benefits from a new spouse if those benefits are higher.
Alimony. If you are receiving alimony from a divorced spouse, it will likely end once you remarry.
Survivor’s Annuities. Widows and widowers of public employees, such as police officers and firefighters, often receive survivor’s annuities. Many of these annuities end if the surviving spouse remarries. In addition, widows and widowers of military personnel may lose their annuities if they remarry before age 57. Before getting married, check your annuity policy to see what the affect will be.
College Financial Aid. Single parents with children in college may want to reconsider before getting married. A new spouse’s income could affect the amount of financial aid the college student receives.
Paul Stano has several books to help with long-term planning, veteran’s benefits and hospice care. His recent book is entitled, Alzheimer’s Survival Guide: Seven Secrets of Estate Planning for People with Memory Loss and Dementia with all proceeds donated to the Alzheimer’s Association.
For a copy of any of his guidebooks or for information, visit Paul’s Ohio Elder Law web site or e-mail him at elder@stanolaw.com.
Caregiver - The Ohio Elder Care Job NOBODY Wants
No one would apply for a job like that. Yet, 80 percent of all chronically-ill patients are cared for by family members who often lack adequate support, finances, and training for this demanding job. Often times the decision to become a caregiver is made when your loved one is diagnosed with an illness or during hospitalization.
In my practice, I see a lot of frazzled family members, and I’ve found that it’s important for the caregiver to receive counseling and support because depression, exhaustion, guilt, and anger can overpower an individual faced with these challenging responsibilities.
Here are a few steps that can help alleviate some of the stress and ensure that everyone has a safe and happy holiday.
- SIMPLIFY – Drastic changes in routine can be upsetting. Stick to the same basic schedule while rolling with the punches whenever necessary.
- PREPARE – Update friends and relatives on your loved one’s condition so there are no surprises.
- BE POSITIVE – Have a sense of humor and maintain a positive attitude.
- GIVE YOURSELF A BREAK – You don’t have to do it all yourself. Let family and friends help. Day care workers, adult day care centers, and respite care centers are also great resources.
- FOCUS – Focus on what’s really important.
- CALL – Call our office for a free copy of the “Twelve Steps for Caregivers.” You may not be able to control the disease, but you can control how it affects you.
- REMEMBER — When that “Job that Nobody Wants” becomes overwhelming, understand that even the most devoted caregiver will probably need to find alternatives for taking care of their loved one.
Paul Stano has written a new book entitled The Alzheimer’s Survival Guide: Seven Secrets of Estate Planning for People with Memory Loss and Dementia. All proceeds from the book are being donated to the Alzheimer’s Association. For instant free access to the Alzheimer’s Survival Guide eBook, or for more information on caregiver resources, please visit Mr. Stano’s Ohio Elder Law web site.