Category: Government Programs

Reader is Confused: “Doesn’t Medicare Pay for Long-Term Care?”

August 27, 2024 / David Russell

I'm confused. My 78 year old dad recently had heart surgery and was released to a long term care facility for several weeks of rehab. He has Medicare and has a Medigap policy as well, but a long term care expert recently told me that Medicare won't pay for long term care. We've yet to get a bill from the facility, but now I'm concerned he's going to have to pay for this out of his pocket. Can you clarify this please?

Jeff P.

Sorting through health insurance details can sometimes feel like navigating a maze, especially when it comes to your dad’s recovery after heart surgery. If you’ve recently been told that Medicare won’t cover long-term care while he’s in a facility for rehabilitation, you’re certainly not alone in your confusion.

Medicare and Rehab Services

First off, let’s tackle the terminology. When we talk about long-term care, we often think of assistance provided in a nursing facility over an extended period. However, after a hospital stay, what your dad is receiving at that facility is actually classified as rehabilitation services – not long-term care —and that’s where Medicare comes into play.

To qualify for Medicare coverage in a skilled nursing facility (SNF), your dad needs to meet a few key requirements:

Hospital Stay: He must have a qualifying hospital stay of at least three consecutive days. Two days just won’t cut it, nor does admittance “for observation.” It must be an actual admittance for treatment in a hospital for at least three consecutive days!
Timely Admission: He needs to be admitted to a Medicare-certified skilled nursing facility within 30 days of being discharged from the hospital.
Type of Care: The services provided must primarily be skilled nursing care or rehabilitation therapy (think physical or occupational therapy).

Coverage Duration

Now that we’ve established that Medicare does indeed help with rehabilitation in a long-term care facility, let’s cover the specifics of what’s included:

Days 1-20: Medicare Part A kicks in and covers 100% of the costs in a Medicare-qualified rehab facility. It just so happens that many of these facilities are also nursing homes.
Days 21-100: From day 21 onward, there’s typically a daily copayment involved. For 2024, this amount is expected to be around $200 per day. Definitely something to factor into your budgeting.
Days 101 and Beyond: After the first 100 days, Medicare steps back and does not cover any costs. It’s all out-of-pocket!

Out-of-Pocket Costs and Medigap Magic

With the basics in mind, let’s get to the crucial part: out-of-pocket expenses. This is where your dad’s Medigap policy can really come to the rescue.

What is Medigap?
A Medigap policy is basically supplemental insurance that covers some of the costs that traditional Medicare doesn’t. Most Medigap plans help cover the daily copayment that starts after day 20.

Plan F: Offers full coverage of those copayments after the 20th day.
Plan G: Generally covers the copayments but requires that annual Part B deductible to be paid first.
Plan N: This one can require some copayments for certain services, but it still provides significant coverage for the days beyond 20.

Taking a closer look at your dad’s specific Medigap plan will give you the clarity needed to manage these potential costs.

Tips for Managing Long-Term Care Costs

Communicate with the Facility: When that first bill rolls in, don’t hesitate to reach out for clarification. Ask them questions about what Medicare is covering to understand your father’s financial responsibilities better.
Review the Medigap Policy: Make sure you’re familiar with the details of your dad’s Medigap plan. Each plan can have different coverage options, so understanding what’s included can help avoid surprises down the line.
Explore Other Aid: If costs start feeling overwhelming, consider looking into additional resources, like Medicaid or veterans’ benefits, which may help cover expenses once Medicare and Medigap benefits have been exhausted.
Get Professional Guidance: If you find yourself feeling lost in the financial fog, consulting with a financial advisor who specializes in elder care can provide direction and peace of mind.

While it’s easy to mix up the terminology surrounding Medicare, particularly when dealing with rehabilitation services in a long-term care facility, the key takeaway is this: If your dad is eligible and receiving rehab services, Medicare can help cover those costs—at least for a while! Understanding how Medicare and Medigap work together will empower you to make informed decisions about your father’s care and manage any potential financial burden.

Remember, you’re not alone as you navigate this. It may feel complicated now, but with a bit of persistence and the right information, you’ll find your way through!

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Most People Are Confused by Medicare

August 17, 2022 / drussellcfp

Financial Planners are failing big time to educate their age 65 or over clients about one of the most significant financial decisions they will make. Medicare applicants are confused about which health plan is right for them. Many seniors do not know enough about plan components, are bombarded by Medicare advertising, and lack the knowledge to choose a plan that meets their needs.

These are the conclusions of a newly released study by Sage Growth Partners, a national health care consultancy. Key findings in the study include:

Only 20% of Medicare-eligible individuals have a good understanding of Original Medicare; only 31% have a good understanding of Medicare Advantage.
63% are “overwhelmed” by Medicare advertising; only 31% of respondents “strongly agree” that they can make effective selection decisions.
More than half (58%) stay in their current Medicare plan each year rather than reviewing their plan options and enrolling in the best plan for their evolving needs.
33% have a financial advisor, but only 2% use that advisor to help with plan selection.

Source: New Report Reveals Significant Gaps in Medicare Knowledge Among Older Adults

Regarding their experience with working with Medicare as an institution, respondents to the survey rated their experience with Medicare as “poor to terrible.”

Respondents who were newly eligible for Medicare (those aged 64) give
their experience the lowest possible score (-50). The only age group to give it a positive score were those aged 76 and older. By comparison, cable TV providers, notorious for low customer approval, have an average NPS (Net Promotor Score) score of +2.

Check out our 2022 Flipbook Guide to Medicare for a comprehensive explanation of Medicare Parts A, B, C, & D as well as the Medicare Supplemental policy options.

What Seniors Can Expect When COVID Vaccines Begin to Roll Out | Kaiser Health News

December 18, 2020 / drussellcfp

Seniors in nursing homes and assisted living centers will be among the first Americans vaccinated, following recommendations last week by a federal advisory panel. Older adults living at home will need to wait a while longer.Many uncertainties remain. Among them: What side effects can older adults anticipate and how often will these occur? Will the vaccines offer meaningful protection to seniors who are frail or have multiple chronic illnesses?Here’s a look at what’s known, what’s not and what lies ahead.

Source: What Seniors Can Expect When COVID Vaccines Begin to Roll Out | Kaiser Health News

How Covid-19 Will Change Aging and Retirement – WSJ

December 16, 2020 / drussellcfp

As the pandemic wreaks havoc on our mental and physical health, it is also quietly reshaping how Americans will face retirement and old age in the years to come.The virus is bringing sweeping change, mainly by “accelerating developments already under way,” says physician and entrepreneur Bill Thomas. For example, “isolation of older people has long been a problem, but Covid is focusing attention on the issue and adding urgency” to address it.

In this Wall Street Journal Article, writer Anne Tergesen reports on some of the effects that the COVID virus could have on aging and society. Among her findings:

More will age at home.
Older people will benefit from a technology boom.
Lifespans will decline. (Though perhaps only for the short term)
We will have a better handle on what we want to do with our time.
We will plan for death.
We will embrace healthier lifestyles.
We need to save more to retire.
The 401(k) will morph into a multipurpose account.
We will work longer.
Our views on aging will change.

Source: How Covid-19 Will Change Aging and Retirement – WSJ

In France, Postal workers deliver more than Christmas Cards.

December 18, 2019 / drussellcfp

French postal workers will be delivering more than Christmas packages and greeting cards this holiday season. A service that began in France in 2017 called Veiller Sur Mes Parents (“Watch Over My Parents”) employs the country’s postal service workers to check on their older customers and report their well-being to family members.

A month of these weekly visits plus an emergency-call button costs about $40.00. The fee is collected by the French postal service. Every day except Sunday, postal workers inform the program’s subscribers, through an app, if their elderly relatives are “well”: if they require assistance with groceries, home repairs, outings, or “other needs.” Since V.S.M.P. was introduced, about six thousand elderly women and fifteen hundred elderly men have been enrolled across the country.

The program is just one of several that have been implemented in order to bring better financial stability to the country’s postal service, where volume is down by nearly 50% from ten years ago, and revenues from postage cannot support the quasi-public postal service. In some places, French postal workers now pick up prescriptions, return library books, and deliver flowers. Last year, only 28% of La Poste’s revenue came from sending mail.

Could this work in the U.S.? About 28 percent of older adults in the United States, or 13.8 million people, live alone, according to a report by the Administration for Community Living’s Administration on Aging of the U.S. Department of Health and Human Services. Like the French postal service, the United States Postal Service is also hemorrhaging financially, reporting nearly $2.3 Billion of losses in the third quarter of 2019 among the backdrop of falling volume. In her third-quarter report, Postmaster General Megan Brennan stated that the Postal Service’s “largely fixed and mandated costs continue to rise at a faster rate than the revenues that can be generated within a constrained business model, which is ill-suited to ensure the long-term sustainability of the Postal Service.”

Why couldn’t postal workers become a front-line force for checking in on isolated and elderly customers along their daily routes? What a tremendous use of under-utilized resources and an added revenue source for the USPS! France seems to have taken a very capitalistic lead on a very social issue; one that will address both the concern families have for their aging loved ones living alone as well as the financial losses experienced by their postal service.

Sources:

Poll, Z. and Poll, Z. (2019). In France, Elder Care Comes with the Mail. [online] The New Yorker. Available at: https://www.newyorker.com/culture/annals-of-inquiry/in-france-elder-care-comes-with-the-mail [Accessed 6 Dec. 2019].

National Institute on Aging. (2019). Social isolation, loneliness in older people pose health risks. [online] Available at: https://www.nia.nih.gov/news/social-isolation-loneliness-older-people-pose-health-risks [Accessed 6 Dec. 2019].

About.usps.com. (2019). U.S. Postal Service Reports Third Quarter Fiscal 2019 Results – Newsroom – About.usps.com. [online] Available at: https://about.usps.com/newsroom/national-releases/2019/0809-usps-reports-third-quarter-fiscal-2019-results.htm [Accessed 6 Dec. 2019].

Too much trustee discretion prevents elderly beneficiary from Medicaid eligibility.

October 21, 2019 / drussellcfp

A New York Appeals court recently affirmed the State’s Medicaid division’s decision to deny Medicaid eligibility to the beneficiary of a trust, arguing that the trust gave the trustee too much discretionary authority. The case underscores the need to have an experienced attorney familiar with local Medicaid rules, draft trust documents where protecting Medicaid eligibility is a major concern.

In this instance, the applicant’s son was trustee of a living trust established for the benefit of the applicant. As trustee, the son took out a home equity loan using trust assets as collateral, and used the loan proceeds to pay for his father’s living and caregiving expenses. Once the trust assets were depleted, the father applied for Medicaid benefits but was denied because the State ruled that the trust assets were available to the applicant, and imposed the required “look-back rule” in denying eligibility.

In upholding the State’s determination, the Appeals Court stated:

Because the trust instrument gave the trustees broad discretion in the distribution of the trust principal, including for petitioner’s benefit, the agency did not err in concluding that the principal is an available resource for purposes of petitioner’s Medicaid eligibility determination

For the full text of the ruling, click here.

Undocumented Caregiving results in Medicaid Penalty Period

August 26, 2019 / drussellcfp

In a case that stresses the importance of keeping accurate records, especially for paid family caregivers, a New Jersey appeals court upheld a penalty period imposed by Medicaid against a Medicaid applicant for payments the applicant’s daughter received for providing caregiving service. E.B. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-3087-15T4, July 13, 2018).

The daughter [J.W.] testified that, in 2003, her then eighty-year old mother moved into her home. There was an area of J.W.’s home which, although physically attached to the house, was a separate unit where her mother lived. Her mother moved into the apartment because she was afraid of living by herself and was unable to shop or cook for herself.

In 2009, J.W. resigned from her job in order to care for her mother full time. In addition to providing supervision, J.W. assisted her mother with the activities of daily living. In 2011, J.W. was finding it too difficult to make ends meet because she was not earning income. She determined she either had to return to work and let a third party care for her mother during the day, or pay herself from her mother’s savings to compensate her for providing companion services. She chose the latter solution.

After some adjustments, Medicaid determined that $69,211.90 paid from the mother’s funds in order to pay for companion services was not for fair value, and imposed a penalty period. [Normally, the length of the penalty period is determined by the disallowed transfer – $69,211.90 – divided by the average monthly cost of nursing case in the area in which the applicant lives. For example, if the average cost of care in her area was $6,000 per month, then the penalty period would last for roughly one year.]

In making its determination, Medicaid found that the “proof of services rendered on a daily basis to the petitioner deficient”. There were no log sheets or like records tracking the hours she worked and the duties she performed. Second, it found the hourly rate paid to J.W. was not substantiated as appropriate for companion services. Third, J.W. began receiving wages when it was “foreseeable that advanced age and deteriorating condition would require intensive care and the possibility of entering a nursing care facility.” Finally, he observed there was no pre-existing written agreement between the mother and J.W. to pay for the subject services.

In denying her appeal, the Superior Court of Appeals in New Jersey stated:

We understand J.W.’s reasoning, specifically, that if she had to return to work, petitioner may as well pay her rather than a third party to provide companion services, especially because J.W. is a family member and would have her best interests in mind. Nevertheless, “a transfer of assets to a friend or relative for the alleged purpose of compensating for care or services provided free in the past shall be presumed to have been transferred for no compensation.” N.J.A.C. 10:71- 4.10(b)(6)ii.

Family caregivers should take note and adopt written care agreements, and keep time and task logs to guard against similar penalty impositions. Above all, seek the advice of a qualified Medicaid attorney in the state the applicant lives in to help navigate the complex process of applying for Medicaid.

For the full text of this decision, go to: https://www.judiciary.state.nj.us/attorneys/assets/opinions/appellate/unpublished/a3087-15.pdf?cacheID=TSSOcTe

Are you liable for your parent’s nursing home bills?

August 20, 2019 / drussellcfp

Unbeknownst to most Americans, more than half of U.S. states (29 plus Puerto Rico) have “filial responsibility” laws in effect that could potentially obligate adult children to support their impoverished parents. That includes paying the tab for basic necessities like food, housing, clothing, and medical attention, according to Little.

Source: Are you liable for your parent’s nursing home bills? | MassMutual

Turns out however that even states with such laws rarely enforce them, mainly because they weren’t needed after Medicaid became available, but also because federal laws enacted in 2016 prohibit nursing homes from requiring payment from third parties. In most states, for a child to be held accountable for a parent’s bill, all of these things would have to be true:

The parent received care in a state that has a filial responsibility law.
The parent did not qualify for Medicaid when receiving care.
The parent does not have the money to pay the bill.
The child has the money to pay the bill.
The caregiver chooses to sue the child.

Nevertheless, as the cost of long term care stresses the funding limits of Medicaid, and with Medicaid planning used as an asset preservation strategy of those with significant assets, don’t be surprised if public opinion influences legislation that shifts more of the cost burden on the family and away from the government.

Senators slam abuse in nursing homes; criticize CMS over reporting requirements

August 15, 2019 / drussellcfp

If there’s anything that will bring a bipartisan group of U.S. senators together, it’s the topic of abuse in nursing homes and a hearing Tuesday was proof yet again.Abuse deficiencies cited in nursing homes more than doubled in four years, increasing from 430 in 2013 to 875 in 2017, a Government Accountability Office report released Tuesday found. The most common physical and verbal abuse was by staff, at 58%, investigators said.

Source: Senators slam abuse in nursing homes; criticize CMS over reporting requirements – McKnight’s Long Term Care News

Nursing home has no standing in suit against resident’s daughter.

August 12, 2019 / drussellcfp

A New Jersey appeals court ruled that a nursing home has no standing to lodge a conversion claim or infringement of fiduciary duty against the daughter of a resident who transferred the resident’s cash to herself, resulting in a Medicaid penalty period.

M.D. is the daughter of B.S. In 2010, She started helping her mom financially. When she suspected that her mom’s husband had dementia and was spending her mom’s money “recklessly” she transferred money from a joint account into M.D.’s personal account. Over the next three years, she used some of the money transferred to provide care for her mom.