Medicaid Spend Down: Pay for More Than Just Medical Bills

Senior man uses smartphone at home.Since the 1960s, Medicaid has provided health care coverage for low-income people across the United States. For millions of seniors, Medicaid offers financial assistance, helping them to cover the cost of long-term care services. Today, this joint federal-state program also benefits other qualifying populations with limited income, including children and people with disabilities.

Qualifying for Medicaid

You may not foresee yourself applying for Medicaid in the future. Yet in reality, research shows that roughly one in seven seniors are likely to require long-term care at some point later in life. Long-term care can be extremely costly; this is why many people have come to rely on the Medicaid benefits that cover these costs.

Given these sobering statistics, consider gaining a better understanding of Medicaid and shaping your plans sooner rather than later. To qualify for Medicaid, you may need to carry out certain actions at least five years prior to when you apply. That’s because most state Medicaid agencies will look back at the five years leading up to when you submit your application for the program.

If you happened to make certain purchases or gifts during this so-called “lookback” period, you could end up facing a penalty. Unfortunately, these penalties could mean you have to wait months, or even years, before you become eligible for Medicaid.

Medicaid is for people living on limited incomes. So, among the main criteria to qualify for Medicaid is that you have limited income and assets. Generally, you must have no more than $2,000 in your name to be eligible for this public benefits program. (Note that this limit can vary according to state, however.)

If you have more than that, you may find yourself having to “spend down” your extra assets to meet the $2,000 limit. Only after you have fulfilled this (and other) requirements would Medicaid begin paying for basic long-term care expenses.

The upside, however, is that not all your assets count against you in the eyes of Medicaid. For example, your primary home is typically exempt. You also can own one car without worrying about exceeding Medicaid’s asset limits. And, depending on your state, you may be able to spend your excess money on certain items that help make your life more comfortable.

Medicaid Spend Down

As mentioned above, each state dictates what the income and asset limits are for Medicaid applicants. These figures also tend to shift a bit every year. 

Take note that not every state allows for a Medicaid spend down. These so-called “income cap” states follow different rules.

Also, take care that items you do decide to buy as part of your spend down are specifically for the Medicaid applicant.

So, What Can You Pay For?

All that said, Medicaid applicants can generally spend down their excess income in several ways. Paying off credit card debt or medical bills is one possibility. Prepaying for your funeral services is often a legitimate spend down option, too. Admittedly, these sorts of payments might not bring you much enjoyment, but they still may be able to count toward your spend down amount.

In many cases, you can spend down your surplus assets on medical services, equipment, or health insurance premiums.

Perhaps you have come to rely on a wheelchair or cane or could benefit from hearing aids. You may want to have an eye doctor check your vision. If your prescription eyeglasses are out of date, you may be able to purchase a new pair. These are all medical expenses that could potentially be part of your spend down efforts.

At the same time, your excess income can go toward much more than unpaid medical debt or other bills. Purchases that help improve your quality of life tend to be permissible. Here are five tangible types of items you may be surprised to find you can legally purchase as part of your Medicaid spend down:

  • A new vehicle – You may need a reliable car or a wheelchair accessible vehicle to get to medical appointments. Keep in mind that some states place a limit on the value of your one vehicle. For example, you might not want to plan on purchasing an RV camper for road trips if you are seeking Medicaid assistance.
  • Electronics – In some states, upgrades to your smartphone, laptop, television set, or another communications device may be a possibility.
  • New clothes – It might be an ideal time for you to stock up on new socks, pajamas, or other clothing necessities.
  • Books or subscriptions – Sources of entertainment can boost your quality of life, too. You may prefer books or magazines, or subscriptions to streaming services like Netflix.
  • Towels and bedding – Check with a professional to see whether you can refresh your bedding or towel supply as part of your spend down. If moving to a long-term care facility, ask whether they provide these types of items for you.
  • Furniture – You may be moving to a facility that allows you to bring along certain preapproved furnishings. For example, you might benefit from a recliner chair with a power lift in your new space.
  • Home improvement – Even if you’ll receive long-term care at home, you might be able to spend your excess income on modifying your residence. Maybe you need to invest in fixing your plumbing, paving your driveway, or installing a wheelchair ramp.

Consult with your attorney to understand what is and is not permissible. (A bonus is that you may in fact be able to include legal fees as part of your spend down process.)

Why It’s Key to Work With Your Elder Law Attorney

The rules regarding Medicaid get complicated quickly. Be sure to talk to your elder law attorney about Medicaid planning. Discuss your needs with them and ask what your options might be for spending down your assets. They can identify strategies to help preserve your hard-earned savings while avoiding potential Medicaid penalties.

Whatever you do choose to purchase, keep all your receipts and detailed documentation in case any questions come up. You don’t want to break the rules by accident and end up facing a Medicaid penalty period.

Getting Help When Providing Care at Home for Aging Parents

Home health care aide serves a hot meal to an older adult in his home.As they grow older, your parents may prefer to continue living in their home rather than moving to a long-term care facility. They are not alone in this; more than three-quarters of adults over the age of 50 say they would prefer to age in place. If your parent can safely live at home on their own with your support, you may wish to seek some form of outside help. Fortunately, you have a number of options to explore.

Home Care Services for Seniors

Public as well as private agencies offer a variety of home care services for older adults. These may include the following:

  • Home health care, either part-time or 24 hours a day
  • Personal care and homemaking services, such as shopping, cooking, and cleaning
  • Services delivered to the home, such as meal programs, transportation, and home repair
  • Money management
  • Respite care service programs that provide unpaid family caretakers with a periodic break

Other Community and In-Home Support Options

The Program for All-Inclusive Care of the Elderly (PACE) is another initiative locally available to qualifying individuals. PACE provides services through adult health centers in different communities, with additional in-home support available.

More than 2,000 adult day care centers nationwide also offer such services as physical therapy and social support.

Medicare and Medicaid Home Health Care

Home care can cost far less than nursing home care. A growing number of states are therefore striving to provide services to older adults who wish to remain in their homes. Medicare and Medicaid are two programs that provide some coverage of the medical portion of home health care.

Coverage can often prove inadequate, however. Medicare will cover home health care services if you qualify. Meanwhile, Medicaid home care services vary widely from state to state.

If you have an older loved one who wants to age in place, you may need to combine Medicare or Medicaid with other resources.

Of the thousands of private home care agencies operating nationwide, about half are Medicare or Medicaid certified agencies. If Medicare or Medicaid cover the services these agencies provide, these programs will reimburse for these services. Such certification also means that the agency has met certain minimum federal standards regarding patient care and finances.

Private accrediting organizations can also certify home care agencies. The two major accrediting groups for home care agencies are the Community Health Accreditation Partner and the National Association for Home Care & Hospice.

Non-medical services are available to help older people remain independent as well. The Older Americans Act funds more than 10,000 senior centers and gives grants to states and Area Agencies on Aging to provide services for aging adults. Such services include Meals-on-Wheels, transportation, respite care, housekeeping and personal care, money management, and shopping. Services are usually free, but you may face waiting lists or staffing shortages, depending on where you live.

To find an Area Agency on Aging program near you, visit the Eldercare Locator or call 1-800-677-1116. In many cases, these agencies may offer case management and coordination services as well.

Support Though a Geriatric Care Manager

The profession of private geriatric care managers has evolved to help coordinate services for seniors. Geriatric care managers usually have a background in social work, nursing, or psychology. They offer expertise in helping older people and their families arrange for various kinds of long-term health care. They also help evaluate an older person’s needs, review available options, and monitor the older person’s care.

To find a geriatric care manager in your area, visit the website of Aging Life Care Association.

Additional Resources

As you navigate the options for home health care, reach out to your attorney. They can assist in long-term care planning, navigating Medicare and Medicaid, and finding ways to help cover the costs.

For further information on home care options, be sure to check out the following resources:

Websites

What You Should Know About Prepaid Funeral Plans

Mourner holds lillies in one hand and places the other on a casket during a funeral service.How Much Are Funeral Costs in the United States?

Funerals rank among the most expensive purchases many consumers will ever make. As of 2023, the median cost of a traditional funeral, with casket and burial, was $8,300.

The average cost varies depending on where you live as well. Data from 2024 shows that average funeral costs (for burial or cremation) are highest in the following seven states: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. Any “extras,” like flowers, death notices, acknowledgment cards, and limousines, can bring the total to well over $10,000.

The process of organizing a funeral or celebration of life for someone else is an overwhelming and emotional one. Many people consider a funeral or burial a reflection of their feelings for their deceased family member or friend. As a result, they may tend to “overspend” on these services.

Planning Your Own Services

Today, an increasing number of people are planning their own funerals or memorial services. They may also designate their funeral preferences in detail and sometimes even pay for funeral ceremony in advance.

In part, they may pursue a prepaid, or “pre-need,” funeral plan to help relieve their family members of the financial burden. They also do this to offer them some peace of mind. With plans already in place, their loved ones can forgo certain decisions amid their grief, when they’re likely also overwhelmed with other pressing tasks.

Prepayment for funeral services can serve as an effective Medicaid planning strategy, too. For example, you may be looking to apply for Medicaid and need to spend down your assets to qualify for the program. Opting into a prepaid funeral contract can help you do this.

In addition to burial or cremation costs like caskets, urns, or burial plots, you may be able to include other expenses in your prepaid funeral plan. This can vary, but may include:

  • transportation to a cemetery for your family members
  • floral arrangements
  • gravesite services
  • catering
  • services of a funeral director

What to Look Out for When Prepaying for Funeral Services

However, consumers lose millions of dollars every year when pre-need funeral funds are misspent. A funeral provider could mishandle, mismanage, or embezzle the funds. Some go out of business before the need for the pre-paid funeral arises. Others sell policies that prove to be virtually worthless.

In the 1980s, consumers received some protection from unscrupulous funeral providers with the creation of the Funeral Rule. Under this rule, the Federal Trade Commission (FTC) requires funeral providers to give consumers accurate, itemized price information and other specific disclosures about funeral goods and services.

Unfortunately, the Funeral Rule does not apply to many of the features of pre-need contracts that fall under state law. Plus, protections vary widely from state to state. Some state laws require the funeral home or cemetery to place a percentage of the prepayment in a state-regulated trust or to purchase a life insurance policy with the death benefits assigned to the funeral home or cemetery. Other states, however, offer buyers of pre-need plans little or no effective protection.

The FTC recommends exploring several aspects of a pre-need funeral arrangement in detail before you sign up. Consult with your attorney on these ideas before signing anything. The following come from tips the FTC shares on its Shopping for Funeral Services consumer advice page:

  • Ask what will happen to the money you will spend on a prepaid contract. States have different requirements for handling funds paid for prearranged funeral services.
  • Get information on what happens to the interest income on the money you prepaid and put into a trust account.
  • Determine whether or not you’ll have any protection if the firm you dealt with ever goes out of business.
  • Can you cancel the contract and get a full refund if you change your mind?
  • You may move to a different area or pass away when you are away from home. Determine whether someone can transfer your prepaid funeral plan if necessary. (This is often possible at an added cost.)
  • In addition, get details on exactly what you are paying for and compare this with other funeral providers.
  • Confirm that the price you are prepaying is final. You want to avoid anyone having to owe additional money to cover funeral expenses once you’ve passed away.

Communicate With Your Loved Ones

Of course, you can avoid many of these pitfalls by making decisions about your arrangements in advance, but not paying for them in advance. Either way, tell your family about the plans you’ve made and also make them aware of where you’ve filed the pertinent documents. You may also wish to consult your attorney on the best way to ensure that your family members follow through on your wishes.

If you’re just beginning to do your research and compare prices, connect with trusted loved ones on funeral homes they may recommend. See if one of them would be willing to join you when you make visits to different homes.

Consider a Payable on Death Account

To guarantee money is available to pay for your funeral, work with your bank to set up a payable-on-death (POD) account. (Note: Not all states offer POD accounts as an option.) Name the person who will be handling your funeral arrangements the beneficiary (and make sure they know your plans).

With a POD account, you will be able to maintain control of your money while you are alive. Then, when you pass away, it is available immediately to the beneficiary, without having to go through probate.

You be interested in exploring other potential options for prepaying, such as final expense insurance (also called burial insurance). Your insurance provider or your estate planning attorney can help you identify a suitable policy.

What Else to Keep in Mind

In some cases, it can be more convenient and less stressful to “price shop” funeral homes by telephone or online, rather than in person. The Funeral Rule requires funeral directors to provide price information to anyone who asks for it.

If you have questions about your state’s laws, most states have a licensing board that regulates the funeral industry. Your estate planning attorney also has the expertise to help you with planning and to guide you on your rights.

Are You a Family Caregiver? New Bill Seeks to Lower Costs

Elderly woman with dementia smiles with middle-aged caregiver daughter at home.Recently proposed legislation seeks to offer financial relief for unpaid family caregivers. Introduced in November 2023, the Lowering Costs for Caregivers Act of 2023 is the result of a bipartisan effort to lessen the costs of family caregiving. The American Association of Retired Persons (AARP) has also endorsed the bill.

If the act becomes law, it would amend the Internal Revenue Code to allow medical bills that you pay for your parents to count as qualifying medical expenses for health flexible spending arrangements (FSAs) or health reimbursement arrangements (HRAs). This would include health expenses for one’s parents as well as parents-in-law.

Flexible Spending Accounts

Flexible spending accounts and health reimbursement accounts allow individuals to set aside pre-tax money to pay for qualifying medical expenses. For HRAs, only employers provide funding, while both employers and employees can fund FSAs.

Under the current law, the funds can only go to the account holder’s medical expenses, as well as expenses for their spouses and dependents. It does not allow people to use their accounts to pay for their parents’ medical care.

By allowing use of FSAs or HRAs for parents’ health expenses, the Lowering Costs for Caregivers Act aims to help reduce some of the costs of caregiving.

The Financial Cost of Caregiving

The proposed legislation addresses the ever-increasing costs facing the 38 million unpaid family caregivers in the United States.

One 2021 survey by AARP revealed the economic toll of caregiving. Unpaid family caregivers spend an average of $7,200 per year on caregiving expenses. Over three-quarters of caregivers report incurring routine out-of-pocket costs. Caregiving-related spending consumes more than a quarter of unpaid caregivers’ annual income.

When family caregivers provide financial support for their aging parents, more than half of these funds typically goes to housing. Housing expenses that caregivers help with include rent, mortgage payments, and assisted living fees.

In addition, adult children serving as caregivers might help cover costs associated with modifying parts of their parents’ home. Older individuals who develop mobility challenges often need changes to their homes to continue living there safely. For example, someone using a wheelchair may need ramps. Others may need bars installed on the walls and in showers to help prevent slips and falls.

Medical costs are also significant. The caregivers in AARP’s survey spent an average of more than $1,200 annually on health care expenses, comprising one-fifth of their spending. They supplied direct payments to health care providers, hospitals, and therapists. They also paid for medical equipment and devices, in-home care, and adult day care programs.

Those who must balance working full- or part-time jobs with caregiving – roughly six in 10 caregivers – faced increased financial strain. When caregivers struggled to manage employment and their duties at home, the yearly average they spent on caregiving increased to $10,525.

How Caregivers Can Reduce Expenses

While the financial cost of caregiving is often substantial, several strategies can help you save money as a caregiver.

By claiming a parent as a dependent, you can receive a credit on your income taxes. For 2023, the maximum tax credit is $500. To be eligible for the credit, your parent, step-parent, or in-law must not make more than $4,700. You must provide more than half of the financial support for the parent in a calendar year. So, you could qualify if you are the primary caregiver and source of financial support.

Another strategy to reduce the economic toll of caregiving is helping your loved one apply for federal and state benefits, such as Supplemental Security Income (SSI). SSI is available to people with limited income and resources who have a disability, are blind, or are 65 and older. Participants receive a monthly benefit, which helps to cover such costs as food and shelter. If your aging loved one lives with you and receives SSI, you could charge them rent, which could help cover your household expenses.

Multi-generational living can also reduce costs for your family. Consider having a loved one who lives in assisted living or alone move in with you. This could reduce your loved one’s housing costs and your loved one could contribute to your household expenses.

Finally, when strategizing how to reduce the financial weight of caregiving, it can be extremely beneficial to have an advocate on your side. Working with your elder law attorney. They can help you create a successful and manageable caregiving plan for your loved one.

Do Caregiver Duties Help Older Women Live Longer?

Older woman cares for her senior husband at home who uses a wheelchair.Despite the considerable level of stress that can come with serving as a unpaid caregiver, a new study now suggests that taking care of a loved one may in fact lead to increased longevity among older women.

The findings, published in The Journal of the American Geriatrics Society, revealed that women who said they were taking care of a loved one on a regular basis had a mortality rate 9 percent lower than that of non-caregivers over the course of the study.

While the study did not find a direct connection between caregiving and reducing risk of death, its authors describe the association as robust. As they point out, the existing literature about the health impacts of caregiving has been contradictory. Research in this area will therefore need to continue exploring the potential connection between reduced death rates among women who choose to take on caregiving responsibilities – as well as the reasons why this may be the case.

Women and Caregiver Responsibilities

Today, more than 35 percent of caregivers in the U.S. are age 65 or older, with caregiving services mostly undertaken by older women.

This study followed nearly 160,000 women aged 55 to 79 over roughly 20 years. The participants took part in two assessments 10 years apart.

The data was collected as part of several clinical trials focused on prevention of major chronic conditions in older women. However, the assessments included questions on caregiving. Participants were asked about whether they were actively providing caregiving aid to a loved one and, if so, how many hours they dedicated to the service weekly. About 41 percent of them reported serving in a caregiver role anywhere from less than once to more than five times a week.

The women also provided information on a number of other factors, including depressive symptoms, race, living status, smoking, and history of cancer, diabetes, cardiovascular disease, and hypertension.

Results

The women who reported being a caregiver over the two assessments showed not only a 9 percent lower death rate from any cause than those who were not caregivers, but also a lower risk of death from cancer or cardiovascular disease. This proved to be the case no matter how frequently they reported performing caregiver duties. Other factors, including how old the women caregivers were or whether they lived alone, likewise did not appear to affect this result.

Need for Further Research Regarding Caregiving and Decreased Death Rates

Caregiving remains a critical need and will continue as Americans grow older and live longer. Currently, 10,000 people in the U.S. are turning 65 years old each day, according to AARP.

The Centers for Disease Control and Prevention (CDC) has identified caregiving – whether paid or unpaid – as a major public health issue. Because caregiving is such an expensive service, many older people rely on family members to stand in the gap and provide their care. The resulting burden on family caregivers can include burnout, lost wages, and a lack of support.

“The burden of caregiving demands and their influence on health will be substantial in coming years,” co-author Michael J. LaMonte of the University of Buffalo-SUNY said in a news release. “[It] is an increasingly important focus in epidemiologic research,” he adds.

Learn More

If you are serving as a family caregiver or are considering taking on such a role, be sure you do your research. You may not be aware of all the duties involved and could find help through various resources.

If you’re unsure what kinds of assistance may be available to you or your loved one, connect with elder law attorney Addison Goff of Ruston, Louisiana. He may be able to determine what programs you qualify for as well as how to pay for services. Visit www.GoffandGoffAttorneys.com or call 318-255-1760 to schedule an office visit or Zoom conference to learn what’s best for you and your loved ones. 

 

Medicare Benefits 2024: 5 Positive Changes for Seniors

Three senior women clap and celebrate together around a table.More than 65 million seniors across the country benefit from Medicare, a government health insurance program.

When Does Medicare Start?

At age 65, you become eligible for Medicare if you are a U.S. citizen. You do not have to wait until you retire to apply for the program.

You can enroll in Medicare beginning three months prior to your 65th birthday. You can also do so during the month of your 65th birthday or during the three months that follow. 

Can I Get Medicare at Age 62?

Certain individuals may be able to secure Medicare coverage earlier than age 65. For instance, if you have end-stage renal disease, ALS, or a disability, it’s possible you could qualify.

What Are the Different Parts of Medicare?

Medicare’s four main parts cover different aspects of health care:

  • Part A covers institutional care in hospitals and skilled nursing facilities. Part B pays for doctor visits and preventative care. This includes routine lab tests and certain outpatient treatments. Parts A and B serve as the so-called “traditional” parts of Medicare.
  • You can choose to enroll in the alternative to traditional Medicare, Medicare Part C, or Medicare Advantage. Part C plans bundle Parts A and B (and sometimes Part D) with other benefits, such as dental or vision care.
  • Medicare Part D coverage, which is often optional, covers many of your prescription medications.

Medicare Updates for 2024

Although 2024 Medicare premiums are seeing an increase, there are nevertheless a few bright spots.

Starting on January 1, 2024, Medicare enrollees may be pleased to hear about several positive changes taking place. These include the following five updates:

1. Medicare’s mental health coverage is expanding.

  • If you need a licensed mental health provider, you will be more likely to able to find a professional near you who accepts Medicare. About 400,000 more of these providers added nationwide by Medicare will include marriage and family therapists as well as mental health counselors.
  • Medicare can now help if you require treatment for alcohol abuse or substance use disorder. Older Americans are currently suffering from a substance abuse epidemic. In 2022, roughly 4 million seniors aged 65 and older were living with an addiction. Covered treatments will now include such services as psychotherapy, prescription drugs, and screenings.
  • Medicare will now cover up to 19 hours per week for intensive outpatient mental health care for qualifying patients. This includes enrollees who are struggling with serious mental health illnesses or substance abuse.

2. Up to 3 million more people could qualify for extra help paying their Medicare Part D premiums.

As of the start of 2024, the Medicare Extra Help Program will strive to boost its number of enrollees through various outreach efforts. Extra Help assists low-income seniors and people with disabilities. However, many who are eligible do not currently participate in the program, sometimes because they remain unaware of its existence.

In addition, another 300,000 individuals who already are part of the program will see their benefits expand further. They’ll see their out-of-pocket costs for their prescription medications drop by an average of $300 a year. These enrollees also will not have to pay a premium or deductible.

3. If your specialty medications are particularly pricey, you will see considerable savings in 2024.

Many people rely on certain expensive medications to treat such serious health conditions as cancer. Even with Medicare Part D, they may have no choice but to pay tens of thousands of dollars out of pocket each year for them.

If your prescription drugs covered by Medicare cost you more than $8,000 out of pocket, you will not be responsible for any other co-pays or coinsurance for the remainder of the calendar year. This is because Medicare Part D enrollees, as of 2024, will no longer have to pay a 5 percent co-pay for catastrophic coverage.

Note that if you rely solely on brand-name prescription medications, you will end up spending roughly $3,300 out of pocket to avoid the 5 percent co-pay. (Even better, come 2025, Part D enrollees will not pay more than $2,000 out of pocket for their prescription drugs in any given year.)

4. You’ll pay no more than $35 a month for insulin supplies covered by Medicare Part D.

As part of the Inflation Reduction Act, price cuts on insulin became effective on January 1, 2024. Medicare Part D plans therefore cannot charge enrollees more than $35 per month for insulin included in their plan. Part D deductibles for insulin supplies will no longer apply, either.

The cost of this medication has tripled over the past decade or so. Even for people who require insulin daily, many are still unable to afford it. In 2022, more than a million individuals with diabetes chose to ration their insulin supply because of the cost, according to one report.

5. If you suffer from chronic pain, Medicare will now cover your monthly services.

For the first time, people receiving Medicare who have persistent or recurring pain lasting longer than three months now can have such services has medication management and pain assessment covered by their plan. (You will still need to pay for your Medicare Part B deductible and coinsurance.)

Work With Your Attorney

If you need assistance navigating Medicare, reach out to Ruston, Louisiana-based elder law attorney Add Goff today. They can help you understand how to apply for or qualify for Medicare benefits.

Visit www.GoffandGoffAttorneys.com or call 318-255-1760. 

Most US Workers Say They Will File for Social Security Early

Sad senior woman looking into the distance with a blooming tree behind her.To secure the maximum amount in monthly Social Security retirement benefits, Americans must wait until full retirement age to start receiving their payouts. Results from a 2023 survey show that most of today’s workers know about this stipulation – and yet the vast majority say they’re willing to file for their Social Security benefits early anyway.

UK-based wealth management company Schroders surveyed 2,000 working Americans to learn more about their readiness for and perspectives on retirement. The results showed that a mere 10 percent of respondents said they plan to hold off until age 70 to take their Social Security benefits. This is the case even though 72 percent of them are aware their payments could be higher if they waited.

Why Are So Many People Willing to Give Up More Income?

Many of the survey participants – roughly 44 percent – said they worry about Social Security running out of funds. Their fears may not be entirely unfounded. The Social Security program has served as a safety net for millions of retirees, providing monthly benefits since 1940. However, based on some projections, timely payments may not be possible beyond 2037.

Another 36 percent of the respondents said they would take benefits earlier because they need the money sooner.

These fears, said Deb Boyden, head of US defined contribution at Schroders, reflect “a crisis of confidence in the Social Security system.”

“Fear about the stability of Social Security has people walking away from money that could improve their quality of life in retirement,” she said.

Other Key Findings

  • Nearly half of all survey respondents (49 percent) acknowledged that they do not have any strategies in place for retirement income.
  • Less than a quarter (24 percent) of those aged 60 to 67 who are still in the workforce said they believe they’ve accumulated sufficient retirement savings.
  • Among respondents aged 45 and older, 69 percent say they fret over money daily – on average, 1.6 hours every day. More than half of this same group (53 percent) said they worry that stress over finances will have a negative impact on their overall health.
  • Retirees who’d worked with a financial planner had higher average monthly incomes than those who had not sought out the help of an advisor ($5,075 per month versus $3,000 per month). Those who had set up a formal financial plan received nearly twice more per month on average in retirement – about $5,810.

Find more information on the survey results online.

Pay Monthly for Medicare Part D Prescriptions Come 2025

$100 bill under scattered pills.What Is Medicare Part D?

Adults who are age 65 and older can enroll in Medicare, a federal health insurance program. If you have signed up for Medicare Part A, Part B, or both, you can also sign up for Part D.

Available through private insurers, Medicare Part D remains optional and covers certain categories of prescription medications. When choosing a Part D plan, review the specific drugs that each plan covers. You may already rely on a particular prescription medication or medications. Take the time to determine whether it appears on the list of drugs covered by any plans you are considering.

To get a better understanding of the wealth of options available for Medicare coverage, be sure to visit the Medicare website.

What Is the Medicare Prescription Payment Plan?

In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced that a new Medicare Prescription Payment Plan will start in 2025. Under this plan, all Medicare prescription drug plans, including Medicare Advantage plans, will now offer enrollees the option to spread out their prescription drug out-of-pocket costs over 12 months.

How Will It Work?

You may have high prescription costs; about one-third of seniors today in fact have trouble affording their medications. Meanwhile, about one in five say they have chosen to skip dosages from time to time to make their high-cost prescriptions last longer.

If you normally pay at the pharmacy at the time you pick up your prescription, you will have another option under the new plan. Come 2025, you can opt to be billed for and pay these costs (capped at a certain amount) over time through your insurer. This is meant to make prescription drugs more accessible and manageable for those who need them most. It will not, however, change the prescription costs.

Starting in 2025, Part D enrollees may opt into the program by contacting their Part D sponsor and completing the Medicare Prescription Payment Plan election process. This is true regardless of whether you have a traditional or Medicare Advantage plan.

What Happens Next?

After enrolling in the plan, your sponsor will notify any pharmacy that fills a prescription of your status, and you will not pay anything at the register. Instead, you will be billed the cost in monthly installments by your plan sponsor.

If you do not pay the billed amount, your participation in the program may be terminated. However, you cannot be terminated from the Part D plan for failing to pay for your prescriptions. In addition, CMS guidance states the sponsor must do the following:

  • issue notices for missed payments,
  • give a grace period of at least two months for failure to pay the billed amount, and
  • create a reinstatement process to allow those enrolled to get back into the program if they can show good cause for failing to make payments.

The Plan May Not Be Right For You

If affording your medication is a hardship and spreading out payments over 12 months would not provide enough reprieve, a more appropriate option may be one of the four Medicare Savings Programs or the Medicare Part D Low Income Subsidy known as Extra Help. Not everyone is eligible for these programs, however, and you must apply for these options.

While the Medicare Prescription Payment Plan may be good news for many, it may not be right for everyone, such as those with low out-of-pocket prescription costs. It is expected that feedback from the public and other interested parties will add some further changes to the proposed Medicare Prescription Payment Plan to help as many people as possible.

Additional Resources

To learn more about Medicare, including your payment options, be sure to consult with your elder law attorney.

Visit www.GoffandGoffAttorneys.com or call 318-255-1760. 

Retirees: Deduct Your Long-Term Care Insurance Premium

Even if you have a long-term care insurance policy, you may likely be hoping that you won’t ever have reason to use it. Regardless of what the future holds, there’s one silver lining of which you may not be aware. That is, premiums on many long-term care insurance policies are in fact tax-deductible.

What Is Long-Term Care Insurance?

Long-term care insurance, or LTCI, can help you prepare for covering the cost of care in a nursing home facility or other setting when and if you need it. Unfortunately, the likelihood that you’ll need long-term care services at some point is high. In fact, about 70 percent of older adults find themselves having to rely on at least some long-term care in their later years.

When individuals require long-term care, it means that they need assistance when completing activities of daily living (ADLs). These basic daily tasks include dressing oneself, showering, or moving safely from one place to another in one’s household, such as from the bed to the bathroom, or in and out of one’s chair. In most cases, your LTCI policy will begin covering long-term care services if you cannot perform at least two ADLs on your own.

The cost of LTCI policy premiums can be out of reach for many people, and some insurers have been raising premiums over the course of time. According to one 2022 survey by HCG Secure, a mere one in 10 of Americans older than 65 have a long-term care insurance policy. However, if you have purchased a tax-qualified plan, you may be able to deduct the insurance premium as a medical expense.

Is My Long-Term Care Insurance Policy Tax-Deductible?

You can deduct numerous types of medical and dental expenses from your taxes. In addition to qualified long-term care insurance premiums, other deductible health expenses include the following:

  • prescription medications and insulin
  • substance use disorder inpatient treatment or smoking-cessation programs
  • prescription or reading eyeglasses
  • contact lenses
  • hearing aids
  • X-rays
  • artificial teeth
  • acupuncture treatments
  • the cost of caring for a guide dog for a person with a vision or hearing disability

When filing your 2023 federal income taxes, check with your insurance broker or state insurance commission to determine whether your LTCI policy qualifies.

Only certain long-term care insurance policies meet the criteria for a tax deduction. The National Association of Insurance Commissioners sets these rules. Typically, many hybrid long-term care policies do not qualify for a premium deduction. (For more information on what defines a qualified LTCI contract, consult the IRS’ Publication 502 for the current tax year.)

If your policy does qualify, you can deduct your LTCI policy premium up to a specified limit. Keep in mind that you will only be eligible for a tax deduction if all of your eligible medical expenses totaled more than 7.5 percent of your adjusted gross income for the year.

Select states also offer LTCI tax incentives, so be sure to check with your tax advisor. Note, too, that if you are self-employed, the rules regarding these deductions can differ.

How Much Can I Deduct in 2024?

If your annual LTCI policy premium is higher than the limit provided in the table below, it will count as a medical expense. The older you are, the higher your deductible limit. For example, if you are a 75-year-old individual at the end of 2023, you may be able to deduct up to $5,880 in LTCI premiums as qualified medical expenses.

Table 1. 2024 LTCI Tax Deductible Limits.

Attained Age Before the Close of 2023 Maximum Deduction in 2024
Age 40 or younger $470
Age 41 to 50 $880
Age 51 to 60 $1,760
Age 61 to 70 $4,710
Age 71 and older $5,880

These are lower deduction limits than in previous years. The Internal Revenue Service adjusts these limits each year.

The cost of long-term care services can in large part depend on where you live. Check out this online tool to get an estimate based on your ZIP code.

The ins and outs of LTCI products can prove to be complicated. Consult with Explder Law Attorney Add Goff to learn more about how LTCi can help your estate plan. An elder law attorney can provide guidance on purchasing an LTCI policy and also assist you in planning for the possibility that you will need long-term care in the future.  Goff and Goff cannot give tax advice. For tax questions, please consult with your tax professional.

Medicare Benefits 2024: 5 Positive Changes for Seniors

Three senior women clap and celebrate together around a table.More than 65 million seniors across the country benefit from Medicare, a government health insurance program.

When Does Medicare Start?

At age 65, you become eligible for Medicare if you are a U.S. citizen. You do not have to wait until you retire to apply for the program.

You can enroll in Medicare beginning three months prior to your 65th birthday. You can also do so during the month of your 65th birthday or during the three months that follow. (If it’s your first time enrolling in Medicare, learn more about rules that are making it easier to sign up.)

Can I Get Medicare at Age 62?

Certain individuals may be able to secure Medicare coverage earlier than age 65. For instance, if you have end-stage renal disease, ALS, or a disability, it’s possible you could qualify.

What Are the Different Parts of Medicare?

Medicare’s four main parts cover different aspects of health care:

  • Part A covers institutional care in hospitals and skilled nursing facilities. Part B pays for doctor visits and preventative care. This includes routine lab tests and certain outpatient treatments. Parts A and B serve as the so-called “traditional” parts of Medicare.
  • You can choose to enroll in the alternative to traditional Medicare, Medicare Part C, or Medicare Advantage. Part C plans bundle Parts A and B (and sometimes Part D) with other benefits, such as dental or vision care.
  • Medicare Part D coverage, which is often optional, covers many of your prescription medications.

Medicare Updates for 2024

Although 2024 Medicare premiums are seeing an increase, there are nevertheless a few bright spots.

Starting on January 1, 2024, Medicare enrollees may be pleased to hear about several positive changes taking place. These include the following five updates:

1. Medicare’s mental health coverage is expanding.

  • If you need a licensed mental health provider, you will be more likely to able to find a professional near you who accepts Medicare. About 400,000 more of these providers added nationwide by Medicare will include marriage and family therapists as well as mental health counselors.
  • Medicare can now help if you require treatment for alcohol abuse or substance use disorder. Older Americans are currently suffering from a substance abuse epidemic. In 2022, roughly 4 million seniors aged 65 and older were living with an addiction. Covered treatments will now include such services as psychotherapy, prescription drugs, and screenings.
  • Medicare will now cover up to 19 hours per week for intensive outpatient mental health care for qualifying patients. This includes enrollees who are struggling with serious mental health illnesses or substance abuse.

2. Up to 3 million more people could qualify for extra help paying their Medicare Part D premiums.

As of the start of 2024, the Medicare Extra Help Program will strive to boost its number of enrollees through various outreach efforts. Extra Help assists low-income seniors and people with disabilities. However, many who are eligible do not currently participate in the program, sometimes because they remain unaware of its existence.

In addition, another 300,000 individuals who already are part of the program will see their benefits expand further. They’ll see their out-of-pocket costs for their prescription medications drop by an average of $300 a year. These enrollees also will not have to pay a premium or deductible.

3. If your specialty medications are particularly pricey, you will see considerable savings in 2024.

Many people rely on certain expensive medications to treat such serious health conditions as cancer. Even with Medicare Part D, they may have no choice but to pay tens of thousands of dollars out of pocket each year for them.

If your prescription drugs covered by Medicare cost you more than $8,000 out of pocket, you will not be responsible for any other co-pays or coinsurance for the remainder of the calendar year. This is because Medicare Part D enrollees, as of 2024, will no longer have to pay a 5 percent co-pay for catastrophic coverage.

Note that if you rely solely on brand-name prescription medications, you will end up spending roughly $3,300 out of pocket to avoid the 5 percent co-pay. (Even better, come 2025, Part D enrollees will not pay more than $2,000 out of pocket for their prescription drugs in any given year.)

4. You’ll pay no more than $35 a month for insulin supplies covered by Medicare Part D.

As part of the Inflation Reduction Act, price cuts on insulin became effective on January 1, 2024. Medicare Part D plans therefore cannot charge enrollees more than $35 per month for insulin included in their plan. Part D deductibles for insulin supplies will no longer apply, either.

The cost of this medication has tripled over the past decade or so. Even for people who require insulin daily, many are still unable to afford it. In 2022, more than a million individuals with diabetes chose to ration their insulin supply because of the cost, according to one report.

5. If you suffer from chronic pain, Medicare will now cover your monthly services.

For the first time, people receiving Medicare who have persistent or recurring pain lasting longer than three months now can have such services has medication management and pain assessment covered by their plan. (You will still need to pay for your Medicare Part B deductible and coinsurance.)

Work With a Professional

If you need assistance navigating Medicare, reach out to Elder Law Attorney Add Goff in Ruston, La. at 318-255-1760 or info@GoffandGoffAttorneys.com.