Medicare- Getting Started

(Originally featured in our newsletter 6/15/2016)

The first thing you have to do is either be 65 years of age or qualify for enrollment due to disability or other special situation.

Qualifications- You must have “A” or “B” on your red, white, and blue Medicare card from the social security administration. You must also be a United Sates citizen or a legal resident who has lied in the United States for at least five consecutive years.

Types of Medicare- Part A is government-provided and helps with hospital care; Part B is also government-provided and helps with doctor’s visits and outpatient care; Part C is Medicare Advantage, Part D is prescription drug coverage. Both C and D are offered by private companies. Medicare Supplement (also called Medigap) plans are also offered by private companies.

Your biggest decision, and one to make first, is whether you want original Medicare, an Advantage plan, or a full supplement. If you decide to stay on original Medicare, you will need to add a Medicare Part D to cover your prescription drugs; the same applies to full supplements. If you choose an Advantage plan, offered by private companies, and most of them cover prescription drugs. You’ll need to choose from several companies and plans to purchase the one that best fits your needs. It would be advisable to make an appointment with a broker/agent to go over all of your options.

Enrollment- You can sign up for a Medicare plan three months before your 65^th birthday, the month of or three months after giving you a seven month window. If you miss the enrollment window, you must wait to enroll between October 15^th, and December 7^th unless you qualify for an exception. Enrolling later could mean higher premiums.

Cost- You’ll pay a premium for Part B. The amount depends on your yearly income and can be automatically deducted from your Social Security benefits. You may pay a penalty if you don’t sign up for Part B when you are eligible. Your cost for Part B may go up 10% for each full 12-month period that you don’t participate in Part B. You will pay that penalty for as long as you’re enrolled. This penalty may not apply to you if you are still working for an employer who provides group health coverage.

What isn’t covered- Part B focuses on helping you pay the costs of medically necessary care when you’re sick. Only in very limited situations does it cover any care for your eyes, teeth, or hearing. Part B does not cover medical care you receive outside the United States, except in a few very limited situations. Part B also doesn’t cover the cost of help with the activities of daily life, like eating, bathing, or getting dressed.

-Bev Cline

Medicaid- Legal Basics

(This content was originally featured in the newsletter on 6/1/2016)

In a previous article on trusts, available on the blog, we discussed how to protect your assets from the Medicaid look-back period. In this article we will discuss what Medicaid is and how it works.

Unlike Medicare, Medicaid is used to provide long-term care at a nursing facility. So, if you need long-term care and you do not have the funds to cover the cost, Medicaid will cover the cost, but with some strings attached. While you are generally not required to repay Medicare for services that you might receive, Medicaid does require repayment. In fact, in order to qualify for the Medicaid system, you must only have $1,500.00 to your name, or less. Also, there is a five-year look-back period where Medicaid will seek proof that your assets were spent on things necessary to the care of the person seeking to qualify. So, you can’t just give away your stuff in order to qualify, you must actually use any funds available during that five year period on the care of the person. This includes assets such as the home or the car, but does not include whole life insurance policies that do not have a face cash value (typically set up to pay for funeral expenses).

Selling the home or the car can be difficult and does result in some time constraints. With the exception of the home, as soon as the person’s funds are reduced to below $1,500.00 the Medicaid application should be submitted. Medicaid will provide a timeline with which you will have to sell the home, typically 9 months. You must sell the home for at least 90% of the current appraised value. That value is important because it is based on the county auditor’s evaluation. Since the housing crash, many of the home values have plummeted but the auditor’s evaluation has not been updated to reflect that. Or, the interior of the home may have fallen into disrepair which would also have an impact on the auditor’s valuation of the home. To lower the value, the qualifying person would have to file a complaint with the local auditor’s office between January 1^st to March 31^st of that year (the only time you can file this type of complaint). Because of this time constraint, timing of the filing of the Medicaid application is crucial. Guardianship attorneys have the most practice with Medicaid requirements and I highly recommend consulting one if you are facing the Medicaid system because of these time deadlines.

Besides the monetary impacts of going on Medicaid, there are further pitfalls. If you go straight into a nursing home on Medicaid, you may not end up at the facility of your choice. Many of the nicer nursing homes require two to five years of private pay prior to going on Medicaid. For this reason, you might want to consider long-term care insurance that would provide for that private pay period before Medicaid and allow you into a nicer facility. After going on Medicaid, any funds received by the person (from pensions, social security, etc.) must be paid directly to the nursing home and Medicaid will then cover the balance.

-Attorney Michael Wagner