More and more of the Medicaid applications we handle these days involve issues surrounding assets received by way of the death of a family member. More often than not it will be a spouse who died, however, it may also be a parent or other relative. As part of Medicaid applications now, the State routinely asks for documentation of withdrawals from the applicant’s accounts but also for deposits into these accounts which can be more difficult to explain. Because Medicaid rules require a 5 year look back, some of these transactions may be difficult to recall, especially if the applicant is the only person who knows. A little bit of detective work and knowledge of probate procedures can be especially important. I have always said that unexplained deposits can be more damaging than unexplained withdrawals. That’s because unexplained withdrawals will result in an approval with a Medicaid penalty. Once the penalty expires Medicaid benefits will begin. On the other hand, unexplained deposits will cause an application to be denied for lack of verification. In essence, the application is denied because it is incomplete. You can immediately refile but if you can’t explain the same unexplained deposits that caused the first denial you’ll end up with the same result - at
While I don’t spend much time here talking about Medicare issues, the end of the year is an important time. That’s because it is Medicare’s open enrollment period, a once a year special event. Medicare is one of the many government programs that can be confusing. There are so many different options to choose from. There is Part A which is mandatory but then Parts B, C and D are not. There is a smorgasbord of plans to select from. But, what if you opt for a plan and later change your mind? Well, that’s where the seven week period of open enrollment comes in. The government allows current Medicare enrollees to get into and out of any plan one time a year. We are about half way thru the current open enrollment period which runs between October 15 and December 7. (There are other times of the year that allow some changes but they are much more limited.) So, for example, you can switch from traditional Medicare to Medicare Advantage (Medicare’s HMO) or from Advantage back to traditional. You can switch between Medicare Advantage plans. You can also add drug plans (Part D), change drug plans or drop one entirely. Of course, having the
Last week I talked about some of the important Medicaid and VA numbers that will increase in 2021. This week we’ll review some more adjustments for 2021 in some of the other government programs and taxes relevant to our clients. Medicare Part B premiums will increase slightly next year. Most people pay the standard premium which will increase from $144.60 to $148.50 next year. Anyone with income at $88,000 per year or less ($176,000 for a married couple) pays the standard premium. For most people Medicare Part A is free. For those that must pay, the standard premium has increased from $458 to $471 per month. The deductible for hospitalization has increased. Last year it was $1408. For 2021 it has increased to $1484. The hospitalization copay for days 61 through 90 will increase from $352 to $371. At day 91 the copay will be $742 in 2021, up from $704 in 2020. Skilled nursing under Medicare is covered 100% for the first 20 days. There is a copay for days 21 through 100. Last year the copay was $176. For 2021 it will be $185.50 per day. After day 100 there is no coverage under Medicare. That’s when Medicaid, long term care insurance or private funds are required to pay for care.
The Social Security Administration recently announced its cost of living adjustment (COLA) for 2021. This adjustment is important not only because many seniors depend on Social Security benefits as their primary source of income. This adjustment is also applied to many of the other government programs that affect our clients’ lives. This year’s COLA is 1.3%, less than the 2020 increase which was 1.6%. Recipients will receive notification in December what their new amount will be. This includes changes to Medicare Parts B and D premiums if applicable. The COLA affects all programs administered by Social Security, including traditional old age and disability benefits as well as Supplemental Security Income (SSI). Many of the Medicaid numbers are tied to the Social Security increase. The Medicaid income cap will rise to $2379 per month. This is the upper limit of monthly income permitted to qualify for many Medicaid programs. For those exceeding this limit a Qualified Income Trust (also known as a Miller Trust) must be used to achieve and maintain eligibility. Many aging wartime veterans and their spouses receive benefits under the VA Aid and Attendance program. These pensions will also increase by the same 1.3%, beginning in December, 2020. The maximum benefit for a single veteran will increase to $1936. For a
As winter approaches, COVID-19 infection rates have started to climb again. At the same time we are entering influenza season. Health officials have talked for some time about the potential double whammy caused by COVID infections and flu cases occurring at the same time. The symptoms of the two illnesses are similar which further complicates things. One insurer is attempting to be proactive. UnitedHealthcare insures more than 5 million seniors via Medicare Advantage, the Part C coverage that is managed care, operating similar to an HMO. Last month UnitedHealthcare began reaching out to its members who are at the highest risk of complications from COVID-19 and the flu. What the company is offering is interesting. It’s members can sign up for kits that include Tamiflu, (the prescription antiviral flu treatment), a digital thermometer and a COVID PCR diagnostic test. These will be mailed to its members. If you feel sick, you can take the COVID test at home and mail it in for the results. If the COVID test comes back negative, then the assumption is you have the flu and then having the Tamiflu already means you can take start taking it sooner which helps lessen the severity of the illness. In order to receive the kit, however, members must agree
Last week I wrote about the questions we have been receiving from clients about tax law changes coming after next month’s election and what to do now. As I stated last week and I’ll say again, it is impossible to know now what changes may come, therefore, we can’t recommend any specific response. But, I can talk about what has been said and what that might mean for many Americans. Donald Trump has not provided any specifics on what he might do in a second term. Joe Biden has, so let’s look at that. Biden said he would undo some of the tax breaks given to corporations and wealthy individuals. He has also stated that he would cut in half the estate tax exemption which is currently $11.58 million per person. This is the amount that can be passed during one’s lifetime or at death in any combination that would be free of federal estate tax. Halving it would bring the exemption down to $5.79 million (the exemption is indexed for inflation so this number is based on the 2020 exemption). How would this affect most Americans? Not much because a very small percentage of estates even approach $5 million. The current exemption is higher than it’s every been. Cutting it in