According to the Centers for Medicare & Medicaid Services (CMS) Office of Public Affairs, 2012 will be bringing in some changes to Medicare and healthcare coverage for many Americans. Do you know if, or how, you will be affected? This is the third post in our “Medicare Premiums and Deductibles For 2012” series, which can also be found at http://www.talkeldercare.com.

Medicare Part D:

The CMS estimates the average 2012 Part D premium for basic coverage is $30.  “This is slightly lower than the actual average for 2011 of $30.76,” reports the CMS. “The estimate for the average 2012 Part D premium for supplemental coverage is $8.  The estimate for the average 2012 total Part D premium is $38.”

Medicare Advantage Plans:

On average, Medicare Advantage premiums will be four percent lower in 2012 than in 2011, and plans project enrollment to increase by 10 percent.  Of people with Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage plan, and benefits remain consistent with those offered in 2011. 

Income Related Adjustment:

“As required in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, beginning in 2007 the Part B premium a beneficiary pays each month is based on his or her annual income,” reported the CMS. “Specifically, if a beneficiary’s “modified adjusted gross income” is greater than the legislated threshold amounts ($85,000 in 2012 for a beneficiary filing an individual income tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return) the beneficiary is responsible for a larger portion of the estimated total cost of Part B benefit coverage.”

Affected beneficiaries must pay an income-related monthly adjustment amount in addition to the standard Part B premium. These income-related amounts were phased-in over three years, beginning in 2007. Luckily, most enrollees will not be affected by the slight premium raise in 2012 – only about four percent of current Part B enrollees are expected to be subject to these higher premium amounts.

The 2012 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are shown in the following table provided by the CMS:

The information provided in this post is from a recent press release from the Centers for Medicare & Medicaid Services (CMS) Office of Public Affairs.

As 2011 is drawing to an end, it is necessary to be prepared for the changes to come in Medicare in the next year. This is the second post in our “Medicare Premiums and Deductibles For 2012” series, which can also be found at http://www.talkeldercare.com

 The Centers for Medicare & Medicaid Services (CMS) Office of Public Affairs reported that the standard Medicare Part B monthly premium will be $99.90 in 2012, a $15.50 decrease over the 2011 premium of $115.40.  According to a recent CMS news release, “Most Medicare beneficiaries were held harmless in 2011 and paid $96.40 per month. The 2012 premium represents a $3.50 increase for them.”

 What does Medicare Part B cover? This portion of Medicare covers a portion of the cost of physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. By law, the standard premium is set to cover one-fourth of the average cost of Part B services incurred by beneficiaries aged 65 and over, plus a contingency margin. The contingency margin is an amount to ensure that Part B has sufficient assets and income to cover Part B expenditures during the year, cover incurred-but-unpaid claims costs at the end of the year, provide for possible variation between actual and projected costs, and amortize any surplus assets. Most of the remaining Part B costs are financed by Federal general revenues.  (In 2012, about $2.9 billion in Part B expenditures will be financed by the fees on manufacturers and importers of brand-name prescription drugs under the Affordable Care Act.)

 Physician Fees

The largest factor affecting the contingency margin for 2012 is the current law formula for physician fees, which will result in a payment reduction of about 29 percent in 2012.  For each year from 2003 through 2011, Congress has acted to prevent smaller physician fee reductions from occurring. The 2012 reduction is almost certain to be overridden by legislation enacted after Part B financing has been set for 2012. In recognition of the strong possibility of increases in Part B expenditures that would result from similar legislation to override the decrease in physician fees in 2012, it is appropriate to maintain a significantly larger Part B contingency reserve than would otherwise be necessary.  The asset level projected for the end of 2012 is adequate to accommodate this contingency. 

 Social Securtiy in 2012

“In 2012, Social Security monthly payments to enrollees will increase by 3.6 percent,” reported the CMS. “The dollar increase in benefit checks is expected to be large enough on average to cover the increase in the Part B premium of $3.50 that most beneficiaries will experience. For those who were paying the standard premium of $115.40, their benefits checks will only increase.”

If you have any questions about how these changes will affect you or your loved one, consult a professional or patient advocate.

The information provided in this post is from a recent press release from the Centers for Medicare & Medicaid Services (CMS) Office of Public Affairs.

As we and our loved ones age, we worry about losing our edge, and even becoming incompetent.  If we are worried about a family member’s ability to continue to make good decisions, we may talk to their doctor about whether the person is still competent to manage his own affairs.

Whether someone is competent is actually a legal, not a medical decision. Only a court can make the official determination of whether a person has sufficient understanding to make or communicate decisions.  What’s more, someone can have the capacity to make some decisions, but not others.  For example, in order to make or sign a will, a person only needs to demonstrate that he understands the scope of his estate and “the objects of his bounty” (in other words the people to whom he wants to leave it).  However, that same person may require a conservator because a physical or mental condition causes him to be unable to effectively manage his property or financial affairs.

Mental health professionals will often determine that a person is incompetent because she has been diagnosed with a condition that affects cognitive ability from which she will not recover, such as Parkinson’s Disease or Alzheimer’s Disease.  While this individual may eventually be determined to lack legal capacity, the diagnosis alone does not mean that she is not able to receive and evaluate information to make and communicate decisions at any given moment.  People at early stages of these conditions are often very capable of understanding and executing powers of attorney and other legal documents.  Moreover, the fact that the person may have difficulty remembering that she has signed such a document does not mean that she did not have a full understanding of what she was doing at the time.

The best way to avoid a conflict about whether a person had the capacity to sign powers of attorney or estate planning documents is get them done when you are young and unquestionably in control of all mental faculties.  Accidents can occur at any age, and disease can creep up on us when we least expect it.  Planning ahead is the best defense.

At the risk of duplicating many other blogs that provide information to seniors and those who care about them, I hope that we all celebrate Elder Americans Month with our businesses and families. 

 Americans are now living longer, healthier and richer lives than ever before. Many of my friends – the eldest of the baby boomers  – are beginning to turn 65, without feeling the least bit “elderly.”   At the same time, as many more people than ever before live into their 80s, 90s and even 100s, it is important to be aware that at some time, these people may need our help.   We in the “young old” generation are in a perfect position to develp new ways for us to live, and care for one another, over the next 25+ years.

See the President’s Proclamation at the link below:

http://www.whitehouse.gov/the-press-office/2011/04/29/presidential-proclamation-older-americans-month

A unique educational forum taking place at Home Instead Senior Care – Greater Phoenix will provide education to active duty military personnel, veterans and their families, while also benefitting Operation Homefront-Arizona.  See the attached Press Release  for more details.

Many people spent countless hours providing care services to parents or other family members, sometimes moving out of their homes or giving up their jobs to do so.  Did you know that you could arrange to have them pay you, and if you do, you could be doing them a favor?

Click on this link for an excellent piece that aired on this topic on NPR’s Marketplace on March 18:  http://marketplace.publicradio.org

Although most of us  don’t plan to rely on Medicaid to care for our parents if they become ill or incapacitated, for families with modest savings, it may be a necessity.  However, as it says in the Marketplace piece, Medicaid will not cover the cost of care until most of the savings are gone.  Having your parents give their money to you is not a solution, because Medicaid will impose a penalty.  But if you contract with your parents to provide specific services (say, at the same rate that they would pay a non-medical care agency), then the money they pay you for those services is not a gift, so it doesn’t result in a transfer penalty.

If this makes sense for your family, you should consult an Elder Law Attorney to help you navigate the requirements of your state’s Medicaid rules, and draft an appropriate Personal Service contract.  You should also consider factors such as whether you should be an employee or an independent contractor, and the tax implications of those choices for both you and your parents.

The law uses different definitions of “competency” to decide who is capable of making their own decisions in different areas.  For example, for a person to be considered competent to sign a will, he only needs to have “testamentary capacity.”  This means that he knows “the natural objects of his bounty” (in other words, he understands that he has children or charities to whom he wants to leave his property); that he has a general understanding of the scope and nature of his property; and that he can comprehend the relationship between the two so he can make a rational plan to leave his property to those beneficiaries.  Since this  standard does not require the person to be capable of managing his financial affairs or handling day-to-day business transactions, it is possible that someone who needs to have an attorney-in-fact or a fiduciary handle these matters still has capacity to execute a will.

As if this isn’t confusing enough, the mental health community uses different definitions and has different standards for competency.

The American Bar Association, in conjunction with The American Psychological Association, published An Assessment of Older Adults with Diminished Capacity: A Handbook for Lawyers. Despite the title, this guide is very readible, and helpful to any professional struggling with the rules and ethical considerations of working with someone whose capacity is declining.