Elder Law of Louisville's Blog

Thursday, February 10, 2011

2011 Long Term Care Insurance Price Index

A 55-year-old individual can expect to pay $1,480 annually for $169,000 in current benefits, which would grow to $354,000 of coverage by age 80, according to the 2011 Long-Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance, an industry group.

A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2,350 a per year (combined) for about $338,000 of current benefits, which would grow to about $800,000 of combined coverage for the couple when they turn age 80. If the 55-year-old couple did not qualify for preferred health discounts, but rather for standard rates as a result of having one or more health issues, their cost would increase by $325 annually.

The study found that rates for comparable coverage from leading insurers could vary by between 41 and 48 percent.

According to Association research, three-fourths (78 percent) of long-term care insurance policies are bought by couples where either both or just one spouse purchases coverage. The average age for individual purchasers is 57, with some 76.3 percent of purchases made between ages 45 and 64 according to the Association's research.

The 2011 Price Index analyzed costs for couples at ages 55, 60 and 65. In addition, for the first time, the analysis included a 3 percent compound inflation growth factor versus the 5 percent formula that has been used in prior studies. "More purchasers are opting for this formula which significantly reduces the cost of coverage and can be quite adequate in terms of future benefits," said Jesse Slome, the association's executive director. The Price Index also looked at rates for policies including the newer Shared Care option whereby two policyholders can each access a combined pool of benefits.

The full Price Index will be available only in the Association's 2011 Long-Term Care Insurance guide.


Courtesy Elder Law Answers.

Monday, February 7, 2011

An Historical Perspective on the Estate Tax

In a compromise between the Republicans in Congress and President Obama, the federal estate tax has been set for the next two years to apply only on those estate larger than $5 million and beginning at a 35% rate.  This is the lowest rate since the estate tax was instituted.  In recent years, the limits and rates were as follows:

Year                       Tax Threshold                   Highest Rate

1975 $60,000                                 77%

1980 $400,000                              70%

1985 $600,000                              55%

1990 $600,000                              55%

1995 $600,000                              55%

2000 $675,000                              55%

2005 $1,500,000                           47%

2010 Choice of 2011 rates or no tax.  (2011 tax structure has capital gains tax advantages.)

2011 $5,000,000                           35%

Tuesday, February 1, 2011

Elder Financial Abuse Checklist of Warning Signs

1. Enrollee's personal belongings, papers, or credit cards are missing; or there are signs of a break-in or vandalism on the premises.

2. Signatures on checks or legal documents that do not resemble enrollee's signature.

3. Frequent checks made out to "cash".

4. Enrollee appears truly fearful when questioned about another person's handling of the enrollee's finances.

5. Notice of eviction or foreclosure.

6. Notice to cut-off utilities or property tax past due.

7. Large number of credit cards to manage.

8. Numerous unpaid bills.

9. Purchase of home improvements that are more costly than appropriate for the home's value or enrollee's budget.

10. Enrollee owns home but no longer gets tax notice and doesn't know why.

11. Enrollee has signed blank legal or financial document "to be filled in later".

12. Problems with income taxes.

13. Enrollee has a trustee, conservator or representative payee AND enrollee's basic needs are not being met.

14. Enrollee signs on loan for another person.

15. Withdrawals from bank accounts or transfers that the enrollee cannot explain.

16. Unusual activity in the enrollee's bank accounts; such as large withdrawals, frequent transfers between accounts.

17. Explanations given about the enrollee 's finances don't make sense.

18. Enrollee has no documentation about financial arrangements.

19. The enrollee does not understand or know about financial arrangements that have been made for him or her.

20. Bank statements and canceled checks no longer come to the home, and enrollee does not know why.

21. Banking activities at new accounts at banks with which the enrollee has no prior connection.

22. A new person's name is added to a bank account and enrollee does not know why.

23. Frequent phone calls from charities or telemarketers.

24. Enrollee is spending money on sweepstakes, gambling games, psychics and other scams.

25. Relatives or caregivers, who were never involved before, suddenly appear and want to be very involved.

26. Enrollee is repeatedly solicited for un-prescribed "health services".

27. Telephone bill is unusually high.

28. Someone else controls the money and refuses to spend it on the enrollee.

29. Frequent or expensive gifts to a caregiver, friend, family or provider.

30. Someone else expresses too much interest in how much money is spent on the enrollee's care.

31. Enrollee is unaware of monthly income or recurring bills.

32. Legal documents suddenly appear, which the enrollee doesn't understand.

33. Enrollee or caregiver state that a contract exists for enrollee to pay for caregiver's services, especially if payment is a gift of the home.

34. Multiple visits by door-to-door salesmen.

35. New "best friends," or suspicious "sweetheart, including an improperly chummy or flirtatious provider.

36. Enrollee unaware of reason for upcoming appointment with banker or attorney.

Courtesy of

Tuesday, February 1, 2011

Elder Abuser Registry Proposed

Advocates hope to strengthen laws against adult abuse and neglect and financial exploitation in the 2011 legislative session.  A key issue for many advocates this year is creation of a state registry of people found to have abused or neglected adults — similar to the one the state already maintains for child abusers. Bills have been filed in both the House and Senate to do so.

Advocates say they will work to advance Senate Bill 38, sponsored by Sen. Julie Denton, R-Louisville, and House Bill 101, filed by Rep. Ruth Ann Palumbo, D-Lexington, despite concerns from state officials about potential costs.
Among the supporters is the Council on Developmental Disabilities, which believes a registry would help protect disabled or elderly adults by giving potential employers a place to check the backgrounds of people they hire to provide personal care at home such as housekeeping or bathing and grooming.
Courtesy Courier-Journal.

Monday, January 31, 2011

Minimum Monthly Maintenance Needs Allowance Gets Increase

The Department of Health and Human Services has announced a modest rise in the poverty income guidelines for 2011. This means that the lower limit of the minimum monthly maintenance needs allowance (MMMNA) will rise to $1,838.75 in the 48 contiguous states and the District of Columbia, effective July 1, 2011. The amount will be $1,821.25 until that time, as it has been for the past two years.

The maximum MMMNA remains at $2,739.00.

Monday, January 31, 2011

What is a Medicaid Asset Protection Trust?


1. Trustee Holds Your Assets 

2. You Get the Income

3. Assets are Protected from Nursing Home Costs

4. Penalty Period Applies Since You Made a Gift

One very useful Medicaid planning technique involves the creation of an irrevocable Medicaid Asset Protection Trust. With this type of trust one person or a married couple (called the settlor, or grantor) transfers some type of property to another person (called the trustee) to hold and manage for the benefit of one or more individuals (called the beneficiaries).
Example: Bill and Betty have savings and investments of $300,000, mostly from the recent sale of their home. They currently live off the income from that sale plus their social security. They worry that if either of them requires nursing home care, their funds will quickly be dissipated.
After consulting with an experienced elder law attorney, Bill and Betty decide to transfer $200,000 of their assets to a Medicaid Asset Protection Trust. The trust provides that all the income from those assets - and only the income - will be paid to the two of them during their lives, and that if either enters a nursing home, the income will be paid to the healthy spouse. After the death of both, the trust will terminate, and whatever is left in the trust will be paid to their children. In this way they can protect their assets and provide a stream of income for the remainder of their lives.
There are some disadvantages to this type of planning. Gifts (including gifts to a Medicaid Asset Protection Trust) can cause the donors to be ineligible for Medicaid benefits for a limited period of time. The length of the ineligibility period depends upon the value of the assets given away. After the ineligibility period has expired, the assets in the Medicaid Asset Protection Trust should be protected from nursing home costs. The other drawback to this kind of trust is that neither spouse can have access to the principal (or assets) of the trust. It is precisely this lack of access that protects the trust assets from nursing home costs. The Trustee can, however, be permitted under some circumstances to distribute trusts assets to the couple's children.
The Medicaid Asset Protection Trust is not for everyone, but in the right circumstances it can be an outstanding means of protecting a family's financial security. The legal rules that apply to these trusts are complicated. If you decide to use this method of protecting your assets, it is important that you use an attorney who is familiar with the intricacies of the Medicaid laws and who has experience in creating this type of trust.
Please note: The Irrevocable Medicaid Asset Protection Trust referred to above is very different from the revocable "living trust" that is currently being sold through "Living Trust Seminars." A revocable "living trust" provides no protection from nursing home costs.

Tuesday, January 25, 2011

Federal Lawsuit Over Medicare's Denial of Therapy

Five national organizations have filed a in Vermont challenging the Medicare's denial of needed therapies and medical services to chronically ill Americams, alleging the federal government is illegally denying thousands of chronically ill Americans needed therapies and medical services.  Specifically, the class action lawsuit is challenging a controversial Medicare policy requiring that patients show improvement in order to qualify for physical, speech and occupational therapy and skilled nursing care. 

If such improvements are absent, such as if the receipient reaches a plateau in their improvement, Medicare often will refuse to pay for services and medical providers will cut them off.  Critics say that, as a result, stroke survivors, accident victims and people with Parkinson's disease or multiple sclerosis are wrongfully deprived of care that could help them remain independent, maintain current abilities and prevent deterioration.

Under the law, Medicare is obligated to provide health care and therapy that are "reasonable and necessary for the diagnosis or treatment of illness or injury," according to the legal complaint. Yet through the years, Medicaid program administrators have decided that services will only be reimbursed if patients show signs of getting better, the complaint notes.  Though a handful of individual lawsuits have successfully challenged Medicare's policy, none of those decisions is binding on the federal health program. 

Joining the current legal action are four Medicare enrollees, including Edith Masterman, 79, of Wilton, Maine, who has used a wheelchair since 1949 after suffering a spinal injury in a farm accident.  In an interview, Masterman described being told by a Medicare home health agency a year ago that she did not qualify for services after undergoing surgery for a painful bedsore, recovering in a rehabilitation facility and trying to return home. The home health care agency reportedly said the wound would never heal and a nurse's attention was unnecessary.  Before Masterman's surgery, a nurse had come every other day to help the elderly woman. "They shouldn't refuse care just because someone has a problem that looks like it isn't going away," Masterman said.

Another plaintiff is Miriam Katz, widow of David Katz, 90, of Bloomfield, Conn., who died in December of metastatic rectal cancer. Medicare initially covered his stay in a nursing home but cut off payments for the facility at the end of November. After challenging that decision, Katz received a notice from Medicare saying coverage was denied because "the care you are currently receiving is considered custodial and could be performed by unskilled aides."

In Chicago, Victor Pirsoul, 36, who is not associated with the lawsuit, has been struggling to recover from the aftereffects of multiple sclerosis flare-ups. When he reaches a plateau in his physical therapy, therapists tell him they can't help him any longer because Medicare won't pay. "They say, 'This is all we can do for you; just continue your exercise program at home,' but my parents are elderly and haven't been able to help me with the exercises required," Pirsoul said.  When Pirsoul's condition worsens, as is common with MS, he has been able to obtain more therapy, but the help never lasts long.  "I have definitely declined instead of increasing my mobility and my overall health," he said. "I could have been much, much better than I am now-- if only I had some assistance."

Courtesy of AARP

Tuesday, January 25, 2011

Supreme Court to Hear Challenge to State's Plan to Cut Medicaid Payments

The U.S. Supreme Court has agreed to hear an appeal of three California cases that could decide whether Medicaid recipients and their health care providers have a federal constitutional right to challenge a state's proposed reduction of benefit payments.

Faced with a massive budget deficit, in 2008 the California legislature ordered a 10 percent cut in reimbursements to Medi-Cal (the state's Medicaid program) providers, including doctors, dentists, pharmacies and adult day care centers. Critics asserted that the cuts would drive doctors from the Medi-Cal program and make it harder for the millions of poor and unemployed Californians who rely on Medi-Cal to get acceptable health care. The cuts were originally proposed under former Gov. Arnold Schwarzenegger, although incoming Gov. Jerry Brown's proposed budget seeks to make many of the same reductions to address California's $25 billion budget deficit.

In three separate cases -- Maxwell-Jolly v. Independent Living Center (09-958), Maxwell-Jolly v. California Pharmacists (09-1158), and Maxwell-Jolly v. Santa Rosa Memorial Hospital (10-283) -- the providers challenged the cuts in federal court, asserting that California could not make them and still comply with a federal requirement that Medicaid reimbursements be "consistent with efficiency, economy and quality of care and are sufficient to enlist enough providers so that care and services are available to the general population." The state countered that the reductions were necessary in light of the budget deficit and that the providers lacked legal standing to challenge them. The Ninth Circuit Court of Appeals stopped California from implementing the proposed cuts and the state appealed to the United States Supreme Court.

Despite advice from the U.S. Solicitor General to decline the case, the Court agreed to hear the three consolidated cases and to address the narrow question of whether Medicaid beneficiaries and their providers have standing under the U.S. Constitution's Supremacy Clause to challenge the state's reductions for violating federal Medicaid law. The court granted one hour of oral argument, the date of which has not been set, although the Court's failure to expedite briefing suggests the case will be heard in the Term starting October 3, 2011.

While federal law is not clear as to how much states may reduce reimbursements, 22 cash-strapped states have joined California in the appeal, making the outcome one of potentially national significance.


Wednesday, January 19, 2011

Gov. Beshear Wants to Shift Medicaid Funds to Avoid Shortage

Seeking to prevent deep cuts in services, Gov. Steve Beshear said Wednesday that he will ask lawmakers to shift $166.5 million from next year's Medicaid budget into the current fiscal year.  The maneuver would allow Kentucky to draw more federal matching money for Medicaid from federal stimulus funds, though it only postpones the need to achieve savings or make cuts in the program.  The stimulus funds expire June 30, which is also the end of the current fiscal year. 

If nothing is done, Kentucky’s $6 billion-a-year Medicaid program could wind up as much as $600 million short this year, the governor said.  And that, he said, could lead to “devastating” cuts of up to 30 percent in the federal-state health plan for the poor and disabled that serves more than 800,000 people.  The cuts most likely would be made in payments to health care providers, such as hospitals, physicians and nursing homes.

“I am very confident this will pass, and I am very confident it will pass with bipartisan support,” said Beshear, who announced the proposed legislation at a news conference with several top Democrats who control the House, including House Speaker Greg Stumbo of Prestonsburg and budget chairman Rick Rand of Bedford. 

But prospects are less certain in the Republican-controlled Senate.  Senate President David Williams, R-Burkesville, refused to say whether he thought the Senate would approve such a measure.  But he said the governor must explain to lawmakers why he has achieved only about two thirds of the $125 million in Medicaid cost savings he promised in the current budget. 

“This governor needs to explain to the people of the Commonwealth of Kentucky why he has not properly managed the Medicaid system,” said Williams, who is seeking his party’s nomination to challenge Beshear, a Democrat, in his bid for a second term. “He’s got a lot of explaining to do.”

Further complicating the matter is that a “super-majority” in both chambers would be needed to approve the measure.  Lawmakers vote on a biennial budget every two years — which they did in 2010. Any changes to the budget in an alternate year require a three-fifths majority of lawmakers — 60 of the 100 House members and 23 of the 38 members of the Senate — under the state Constitution.

Courtesy Courier-Journal.

Tuesday, January 18, 2011

Daughter Not Responsible for Dad's Nursing Home Bill

A Massachusetts trial court rules that a daughter who signed a "Financial Responsibility Agreement" upon her father's admission to a nursing home is not responsible for unpaid medical expenses following the father's failure to properly apply for Medicaid benefits when his personal funds ran out. 34 Lincoln St., Inc. v. Estate of Grace, (Mass. Sup., Middlesex, No. MICV2009-00618, Nov. 1, 2010).

In 2006, Arthur Grace, moved into the Riverbend nursing home. Although Mr. Grace was competent at the time, his daughter, Catherine Grace, acting in her individual capacity and not as her father's attorney-in-fact or guardian, helped Mr. Grace with the admission paperwork. Although Mr. Grace signed the majority of the paperwork himself, Ms. Grace, along with a nursing home representative, signed a "Financial Responsibility Agreement" as the "Responsible Party," but Mr. Grace did not sign the document as the "Patient."
A year later, Mr. Grace ran out of money and Ms. Grace assisted him with a Medicaid application, which was denied after Mr. Grace failed to file the proper back-up documentation. Mr. Grace continued to live at Riverbend, without submitting any further payment, until his death in 2008. Riverbend subsequently filed suit against Ms. Grace for breach of contract, unjust enrichment and breach of fiduciary duty, alleging that she had a responsibility under the Financial Responsibility Agreement to pay the balance of Mr. Grace's bill. Ms. Grace filed a motion for summary judgment, claiming that the Financial Responsibility Agreement was too vague, and that her role as a signatory was not properly defined in the document.
The Superior Court of Massachusetts, Middlesex Division, grants Ms. Grace's motion for summary judgment. The court explains that "[i]n order to have an enforceable contract, Riverbend must show the existence of mutual promises set forth in a manner that might intelligibly be understood as imposing specific obligations upon the parties . . . [t]his agreement, drafted by Riverbend, does not by its express terms impose upon [Ms. Grace] the obligations which Riverbend seeks to assert". The court distinguishes its ruling from several prior Massachusetts cases in which courts found that surviving relatives were responsible for patients' bills because the relatives used powers of attorney to divert funds into their names and away from the nursing home in an attempt to avoid payment.

Tuesday, January 18, 2011

Why Walsh & Wilson Does Not Like Co-Power of Attorneys

Our clients can attest, we do not recommend naming two or more people to act as a Power of Attorney, Health Care Surrogate, Executor, Trustee, etc.  It is a breeding ground for conflict.  If two people have to act together, what happens when they disagree?  Nothing gets accomplished.  What happens if one of them gets mad and just walks away?  Nothing gets accomplished. 

Attorney Craig Reeves, former President of NAELA and practicing elder law attorney in Kansas City, MO, agrees.  Here is an answer he provided for the NY TImes' Ask an Elder Law Attorney section of their New Old Age Blog:

Q: What is done when a power of attorney is left to both siblings jointly but one decides to become uncommunicative and “checks out,” not participating in decision-making, handling estate matters or caring for a parent with dementia? Does the sibling left with shouldering the burden really have to go to court to get the other sibling’s name taken off the power of attorney? — Kcz

A: I think you may have to go to court, but there are two avenues you should pursue first.
First, take a close look at that power-of-attorney document. Re-read the section where you and your sibling are named (it usually will refer to you as “attorney-in-fact” or “agent”). Make sure the document really requires both of you to act together and doesn’t say “either may act alone” or something similar. In the statutes I’ve checked, if you don’t see language like that, you will have to act together.

Also carefully review the document to see if there’s any provision that allows one agent to remove the other or otherwise describes a process for handling this type of situation. It’s not common, but it may be buried in there somewhere. Perhaps the attorney who drew up the document foresaw the possibility of conflict.

If nothing in the document helps, the next alternative is to look at the state statutes. Every state has laws that authorize durable powers of attorney, and there may be a statute or case law in your state that addresses this situation. You can usually find these statutes online.


If neither of these approaches helps, the only way to change an existing legal document is to file a petition asking the court to modify it. Typically, this would be the court that deals with wills and trusts; they tend not to have long dockets, so you should get a hearing fairly quickly. You’ll need an elder law attorney at this point.

Your question indicates why naming multiple agents in a durable power of attorney and giving them equal authority can create chaos. If everyone gets along, if everybody’s always available, the partnership may work. If there’s conflict, or someone can’t be present when needed, problems arise.

I always recommend that a durable power of attorney name agents one at a time, in order of priority. The first person can serve alone, but if that person dies or is incapacitated or not available, then the next person can act alone, and so on down the list.


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