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Getting the Most Out of Social Security Survivor’s Benefits

Social Security survivor’s benefits provide a safety net to widows and widowers. However, to get the most out of the benefit, you need to know the right time to claim. 

Although you can claim survivor’s benefits as early as age 60, if you claim benefits before your full retirement age your benefits will be permanently reduced. If you claim benefits at your full retirement age, you will receive 100 percent of your spouse’s benefit or, if your spouse died before collecting benefits, 100 percent of what your spouse’s benefit would have been at full retirement age. 

However, it is important to be aware of the differences in delaying survivor benefits and your own retirement benefits. If you delay taking your own retirement benefits past your full retirement age, depending on when you were born your benefit will increase by 6 to 8 percent for every year that you delay up to age 70, in addition to any cost of living increases.

However, unlike with retirement benefits, delaying survivor’s benefits longer than your full retirement age will not increase the benefit. 

You cannot take both retirement benefits and survivor’s benefits at the same time. However, you can take survivor’s benefits and delay your retirement benefits to a later time. Your choice to take survivor benefits does not need to be a permanent decision. When deciding which one to take, you need to compare the two benefits to see which is higher. In some cases, the decision is easy – one benefit is clearly much higher than the other. In other situations, the decision can be a little more complicated and you may want to take your survivor’s benefit before switching to your retirement benefit. 

To determine the best strategy, you will need to look at your own retirement benefit at your full retirement age as well as at age 70 and compare that to your survivor’s benefit. If your retirement benefit at age 70 will be larger than your survivor’s benefit, it may make sense to claim your survivor’s benefit at your full retirement age. You can then let your retirement benefit continue to grow and switch to the retirement benefit at age 70. 

Example: A widow has the option of taking full retirement benefits of $2,000/month or survivor’s benefits of $2,100/month. She can take the survivor’s benefits and let her retirement benefits continue to grow. When she reaches age 70, her retirement benefit will be approximately $2,480/month, and she can switch to retirement benefits. Depending on the widow’s life expectancy, this strategy may make sense even if the survivor’s benefit is smaller than the retirement benefit to begin with. 

Keep in mind that divorced spouses are also entitled to survivor’s benefits if they were married for at least 10 years. If you remarry before age 60, you are not entitled to survivor’s benefits, but remarriage after age 60 does not affect benefits. In the case of remarriage, you may need to factor in the new spouse’s spousal benefit when figuring out the best way to maximize benefits. 

The calculations are very complicated and there are many possible options. In fact, some experts believe that it is usually not possible to know what claiming strategy is most advantageous without the aid of a financial advisor, or at least benefit claiming software. To find out the strategy that would work best for you, consult with a financial professional, particularly if you have one with whom you already have a professional relationship. Although there is software which will help with the calculations, such as Maximize my Social Security or Social Security Timing, advice from a professional is generally the best way to go.

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Caregiver Agreements in Pennsylvania

It is becoming more and more common, and encouraged, for those who are in increasing need of medical services to stay at home and receive the needed care in-home. What are the rules when someone is providing such care?

Anyone can provide care to an individual in need, but states have different rules for payment for such care depending on the relationship of the caregiver to the care receiver. Every state has such programs, but the rules vary by state.

For Medicaid purposes, in Pennsylvania, when a close family member such a child or sibling provides in-home care for a person who needs or may in the future need skilled nursing level of care, such as provided in a nursing home, the state presumes that care is provided out of love and affection, and the state will not recognize payments made to that care-giver for such care.

That rule can be very costly to a person who is applying for Medicaid to pay for skilled nursing level of care. However, there is an exception: if the caregiver and the care receiver have an appropriate written caregiver agreement, the state will approve payments under that agreement. 

Caregiver agreements need to meet certain criteria to pass muster for Medicaid. Essentially, they must be drafted the same as contracts for care between professional caregivers and care receivers. They should specifically and in detail spell out the services provided, such as room and board if the care receiver is living in the care-giver’s home, and specific services to be provided by the caregiver, such as meals, specific chores or tasks provided, and the like.

The agreement should also set out the time spent on each such service, and determine a value for, or an hourly rate at which, those services are provided, which cannot be any more than the rate that professional third party providers or agencies would charge for the same or similar services. The agreement needs to spell out the duties and responsibilities in a way which Medicaid will approve. Thus, it is important that such agreements are prepared by an attorney who is familiar with the requirements for Medicaid eligibility.

It is even possible to have a Medicaid-compliant caregiver agreement if the care receiver is giving a lump sum, and not a monthly payment, to the caregiver, such as, for example, when a parent gives a child a cash payment to add an addition onto the child’s house for the care receiver to live in, commonly known as “in-law quarters”.

However, these types of payments are tricky, and the caregiver agreement has to be carefully drafted to avoid having all or some of the payment disallowed by Medicaid, and a penalty imposed on the care receiver when he or she applies for Medicaid for skilled nursing level of care.  

Even non-professional third parties who provide care, such as loving friends or more distant relatives, should have a written caregiver agreement with the care receiver, to assure that, in the event that the care receiver applies for Medicaid, the payments made for such care will be approved, and not be considered benefit-delaying gifts. 

The importance of properly drafted caregiver agreements cannot be overstated, as a poorly or inadequately drafted agreement will result in penalties or delay in Medicaid benefits. Thus, if you are considering the need to provide care to someone in need of some level of care, you should consult with an attorney who is quite familiar with the requirements for Medicaid eligibility as early as possible to discuss the appropriateness of a caregiver agreement.  We can help!  Just fill out our short online form by clicking here and we’ll be in touch.

Jeffrey Bellomo, Esq.

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Medicare’s Hospice Benefit

All of us would like, at the end of our lives, to go peacefully to sleep, without any suffering or hardship. Unfortunately, many people at the end of their lives are faced with a terminal illness, which is a process, and can last weeks or months.

In such cases, Medicare provides a hospice which benefit covers any care that is reasonable and necessary for easing the course of a terminal illness.

It is one of Medicare’s most comprehensive benefits and can be extremely helpful to both the terminally ill individual and his or her family, but it is little understood and underutilized. Understanding what is offered ahead of time may help Medicare beneficiaries and their families make the difficult decision to choose hospice if the time comes.

The focus of hospice is palliative care, which means helping people who are terminally ill and their families maintain their quality of life. Palliative care addresses physical, intellectual, emotional, social, and spiritual needs, while also supporting the terminally ill individual’s independence, access to information, and ability to make choices about health care. 

To qualify for Medicare’s hospice benefit, a beneficiary patient must be entitled to Medicare Part A, and a doctor must certify that the patient has a life expectancy of six months or less. If the patient lives longer than six months, the doctor can continue to certify the patient for hospice care indefinitely. However, the patient must also agree to give up any treatment to cure his or her illness and elect to receive only palliative care.

This can seem overwhelming, but patients can also change their minds at any time. It’s possible to revoke the benefit and reelect it later, and to do this as often as needed.

Medicare will cover any care that is reasonable and necessary for easing the course of a terminal illness. Hospice nurses and doctors are on-call 24 hours a day, 7 days a week, to give beneficiaries support and care when needed. Services are usually provided in the home. The Medicare hospice benefit provides for:

  • Physician and nurse practitioner services
  • Nursing care
  • Medical appliances and supplies
  • Drugs for symptom management and pain relief 
  • Short-term inpatient and respite care 
  • Homemaker and home health aide services 
  • Counseling 
  • Social work service 
  • Spiritual care 
  • Volunteer participation 
  • Bereavement services 

Services are considered appropriate if they are aimed at improving the patient’s life and making him or her more comfortable.

Because the patient is electing palliative care over treatment, there are things the hospice benefit will not cover:

  • Room and board. If the patient is in a nursing home, hospice will not pay for room and board costs. This is important to understand; Medicare will pay for the hospice services, but not the cost of the facility. However, if the hospice team determines that the patient needs short-term inpatient care or respite care services, Medicare will cover a stay in a facility.
  • Treatment to cure the patient’s illness. 
  • Prescription drugs other than for symptom control or pain relief. 
  • Care from a provider that wasn’t set up by the hospice team, although the patient can choose to have his or her regular doctor be the attending medical professional. 
  • Care from a hospital, either inpatient or outpatient, or ambulance transportation unless it arranged by the hospice team. The patient can use regular Medicare to pay for any treatment not related to the patient’s terminal illness. 

Medicare’s Hospice Benefit booklet can be found at www.medicare.gov/Pubs/pdf/02154-Medicare-Hospice-Benefits.PDF. This is well worth reviewing and even printing out.

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Having “the talk” with your parents

How many of us know what our parents’ wishes are for healthcare and long-term care as they age and approach the end of their lives? The only real way to know is to ask them – but how many of us have done that?

It can seem like an awkward and unappealing conversation to begin. No one likes to think about a time when they may be too sick or too old to care for themselves, or that their parents might reach that point. However, those situations can arise suddenly and without warning.  Only by talking with them about this now will you be prepared if a healthcare crisis occurs. And parents – if your kids don’t want to bring this up, then you need to sit them down and tell them your wishes.

You may think you know what care your parents want, but chances are you will be a little – maybe a lot – surprised about what they tell you their wishes are – mom may want to stay at home instead of going to a facility, or dad may no longer want to be resuscitated. If you KNOW, then you will be in a position to honor their actual wishes.

Also, talking about this as a family and knowing their wishes can avoid tearing a family apart during a crisis, when sis wants to do this, brother wants to do that, and you are the tie-breaker, or worse. All too often, these disputes can end up in court, and every member of the family pays a significant financial and emotional cost. 

In addition to you and your parents talking candidly about their preferences, assure that they each have written healthcare directives, which include living wills, which will make clear what their end-of-life decisions are, but will also make clear whom they want to make decisions about their medical care when they are unable.

And while you’re at it, get your own house in order – if you have adult children, have this discussion about your own wishes with them, and put your own advance directives in place!    

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Wellness Visit or Physical for Medicare Recipients

For those of us on Medicare, which generally includes those over the age of 65 or disabled persons, Medicare offers a little-known free benefit, an annual wellness visit, as part of the preventative care services it provides. However, confusing a wellness visit with a physical examination could be very costly. 

As part of the Affordable Care Act, Medicare beneficiaries receive a free annual wellness visit. At this visit, your doctor, nurse practitioner, or physician assistant will generally do the following: 

  • Ask you to fill out a health risk assessment questionnaire 
  • Update your medical history and current prescriptions
  • Measure your height, weight, blood pressure and body mass index
  • Provide personalized health advice 
  • Create a screening schedule for the next 5 to 10 years
  • Screen for cognitive issues

You do not have to pay anything, not even a deductible, for this visit. You may also receive other free preventative services, such as a flu shot. 

The confusion arises when a Medicare patient requests an “annual physical” instead of an “annual wellness visit.” During a physical, a doctor may do other tests that are outside of an annual wellness visit, such as check vital signs, perform lung or abdominal exams, test your reflexes, or order urine and blood samples. These services are not offered for free, and Medicare patients may have to pay co-pays and deductibles when they receive a physical. Kaiser Health News recently related the story of a Medicare recipient who had what she assumed was a free physical only to get a $400 bill from her doctor’s office. 

Adding to the confusion is that when you first enroll, Medicare covers a “welcome to Medicare” visit with your doctor. To avoid co-pays and deductibles, you need to schedule it within the first 12 months of enrolling in Medicare Part B. The visit covers the same things as the annual wellness visit, but it also covers screenings and flu shots, a vision test, review of risk for depression, the option of creating advance directives, and a written plan, letting you know which screenings, shots, and other preventative services you should get. 

To avoid receiving a bill for an annual visit, when you contact your doctor’s office to schedule the appointment, be sure to request an “annual wellness visit” instead of asking for a “physical.” The difference in wording can save you hundreds of dollars. 

Of course, those who have supplemental insurance in addition to Medicare (Medigap or Medicare Advantage) may have a different experience, including having to pay nothing for a physical examination; if you want a physical instead of just a wellness visit, you should check with your supplemental insurance carrier or your doctor’s billing office to determine whether there will be a charge based on the additional insurance coverage that you have.

If you have questions about this topic or estate planning in general, contact us by giving us just a little information here, and we’ll be in touch.

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