The January 2017 Bookmarks Newsletter can be viewed here.
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It is interesting that people create wills routinely to dispose of their property after death, but seldom consider documenting their desires for burial, cremation or other ceremonial issues. When prepaid burial plans are not purchased, next of kin usually make those decisions. But what about the blended family situation where there are children, step-children and later in life spouses? Each person needs to ask who he or she would want making those arrangements.
Often a later in life marriage is entered with an understanding between the parties that each will be buried beside their first spouse. Usually that presents no problem, but sometimes over time the wishes of individual members of the blended family change. Documentation of individual choices is useful in those situations to prevent disputes among the surviving family members.
Alabama law allows the inclusion of burial or cremation wishes in a last will and testament, but such arrangements have limited practical value when considering the immediate need to make arrangements for disposition. Sometimes the will is not located until weeks or months following death.
Of perhaps more use is an affidavit permitted by Alabama Code § 34-13-11 which allows a person to appoint an adult to be the authorizing agent who can control the location and manner of disposition. That document will control unless a person dies while on active duty in any branch of the United States Armed Forces, United States Reserve Forces, or National Guard, whereupon the person listed on the emergency data for the Department of Defense will have authority to control the disposition of remains.
While I do not normally provide form documents, the affidavit authorized under Code of Alabama § 34-13-11 is very simple and straightforward, and I am providing here a copy of the statutory form:
Affidavit Concerning Disposition of my Remains
State of Alabama
County of _______________
I, (name) ____________________ designate (person selected) __________________ to control the disposition of my remains upon my death. I
__ have not
attached specific directions concerning the disposition of my remains. If specific directions are attached, the designee shall substantially comply with those directions, provided the directions are lawful and there are sufficient resources in my estate to carry out those directions.
Subscribed and sworn to before me this __ day of the month of ___________ in the year _______.
____________________________ (signature of person creating the affidavit)
______________________________ (signature of notary public)”
Without an affidavit the following surviving people, listed in priority, will have the authority to make burial arrangement:
It is not a bad idea to think about what you want, who you want to make arrangements and prepare an Affidavit Concerning Disposition of Remains as part of estate planning. You can add additional instructions to the affidavit while designating an agent and rest assured your wishes will be followed.
I am frequently asked if a parent can reimburse a child or other individual for expenses paid for the benefit of the parent during the spend down phase preceding application for Medicaid without running into problems with Medicaid. In short, the answer is no unless there is evidence of a debt incurred in the form of a written agreement, promissory note, etc., for which the payment is made. This is a harsh and difficult position for many caregivers who do not think twice of paying moving expenses, deposits, medical expenses, etc., for a parent only to find that later they cannot be reimbursed because they did not make a formal agreement.
A New York appellate court case recently confirmed this application of the Medicaid regulations by allowing a penalty to be imposed on the transfer of assets to a caregiver daughter without presenting a written agreement to evidence the debt. Matter of Krajewski v. Zucker (N.Y. Sup. Ct., App. Div., 3rd Dept., No. 522888, Dec. 8, 2016).
In that case Jessie Krajewski lived with her daughter for two years before entering a nursing home. Ms. Krajewski’s husband withdrew money from their joint bank account to reimburse the daughter for her caregiving expenses. After Ms. Krajewski entered the nursing home, she applied for Medicaid. The state imposed a penalty period based, in part, on the transfers made to her daughter.
Ms. Krajewski appealed, arguing that because the transfers were made to reimburse her daughter for her care, the payments were not made in order to qualify for Medicaid. After a hearing, the state upheld the penalty period, and Ms. Krajewski appealed her case in court.
The N.Y. Supreme Court, Appellate Division, affirmed the agency decision, holding that Ms. Krajewski did not rebut the presumption that the transfers were made in order to qualify for Medicaid. The court found that there was no evidence of a written agreement between Ms. Krajewski and her daughter and the only evidence consisted of handwritten summaries of Ms. Krajewski’s living expenses, which was not enough to rebut the presumption.
The lesson to take from this case is that when a caregiver pays expenses for a person who will be applying for Medicaid, it is essential to have written proof of the debt before reimbursing the caregiver for those expenses. While this is a general rule for transfer of money to a caregiver, be aware of the fact that in Alabama more requirements need to be met to reimburse a family caregiver for actual care provided. If you want to establish such an arrangement it is important to seek legal advice first.
The importance of Medicare plan comparisons during Open Enrollment are published everywhere you look, but sometimes I think that those warnings go unheeded because folks just do not understand how drastically coverage by the same plan can change year to year.
I saw up close and personal how beneficial the SHIP program is and the importance of Open Enrollment this week. A gentleman we will call Mr. A came to a State Health Insurance Assistance Program (SHIP) Open Enrollment event in the South Central Alabama Development Commission region. He drove 20 miles to check out his coverage because he was unsure of whether he needed to keep or change his Medicare Part D prescription drug plan (PDP) for 2017. He opted to do the safe thing and check it out. Thank goodness he did.
Mr. A’s prescription drug plan for 2016 had a zero premium and covered his 10 medications prescribed by his doctor. That all worked out well, and during 2016 Mr. A’s total out of pocket expenses related to his prescription drug plan totaled $542.00. This was a manageable arrangement for him.
When a comparison of plans was run Mr. A was shocked to learn that his 2016 prescription drug plan would have a premium of $26.80, a deductible of $400.00, and his 10 medications had been reconfigured on the plan formulary resulting in 2 of his medications no longer being covered and 3 of his medications reclassified as Tier 3 medications, meaning that his copayments would be higher. In all, Mr. A would have had to pay $3276.00 in out of pocket expenses related to his prescription drug plan during 2017 if he made no changes in coverage.
The comparison provided Mr. A with several options, and he selected a plan that would result in $360.00 in total out of pocket expenses for 2017, saving him $2916.00 over what he would have had to pay if he had not had a comparison run.
While Medicare enrollees can run their own comparisons, they will need to use the online plan finder provided by Medicare. Comparisons are performed free and counseling provided through the SHIP program funded through the Alabama Aging and Disability Resource Centers. To learn more call 1-800-AGE-LINE.
I watched the debate last night and was particularly interested in the segment concerning Social Security and Medicare. I was disturbed to hear the prophecy of doom posed to the candidates by this question:
WALLACE: “All right. The one last area I want to get into with you in this debate is the fact that the biggest driver of our debt is entitlements, which is 60 percent of all federal spending. Now, the Committee for federal — a Responsible Federal Budget has looked at both of your plans and they say neither of you has a serious plan that is going to solve the fact that Medicare’s going to run out of money in the 2020s, Social Security is going to run out of money in the 2030s, and at that time, recipients are going to take huge cuts in their benefits.
So, in effect, the final question I want to ask you in this regard is — and let me start with you, Mr. Trump, would President Trump make a deal to save Medicare and Social Security that included both tax increases and benefit cuts, in effect, a grand bargain on entitlements?”
Candidate responses and proposals can be found at The New York Times transcript of the debate.
Wanting to know the truth about Social Security and Medicare solvency, I went looking and found the reports. The Social Security forecast can be read at the 2016 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. And the Medicare forecast can be read at the 2016 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
Social Security isn’t running out of money, and it is not going bankrupt, but the program will face a shortfall in 2034.
The Trustees now predict Medicare will exhaust its reserves by 2028, two years sooner than last year’s estimate.
There are manageable solutions to these problems, but action does need to be taken.
The full Forbes article can be read here.
Aging related issues and the relative positions of the presidential candidates can be read at Next Avenue, a web site produced by PBS.
It is that time of year to reexamine your Medicare coverage to determine if you like what you have or need to make changes. Medicare’s Open Enrollment Period (OEP), during which you can enroll in or switch plans, runs from October 15 to December 7 every year, so now is the time to review your options to determine if switching plans could save you money and to determine if your coverage will continue to meet your needs.
During this period Medicare eligible people may enroll in a Medicare Part D (prescription drug) plan or, if you currently have a plan, you may change plans. This is an important consideration since each year insurance plans have the option to change which drugs they cover. What was covered during the immediate past year may no longer be covered. Also during the seven-week OEP you can return to traditional Medicare (Parts A and B) from a Medicare Advantage (Part C, managed care) plan, enroll in a Medicare Advantage plan, or change from one to a different Advantage plans. While beneficiaries can go to http://www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health plan coverage, a terrific resource to determine the available options is the State Health Insurance Program operated by local aging and disability resource centers. Counselors can provide unbiased assistance in helping you maneuver through the maze of options.
Even beneficiaries who were satisfied with their plans in 2016 need to review their choices for 2017. Be sure to carefully review the plan’s “Annual Notice of Change” letter that you should receive. Prescription drug plans can change their premiums, deductibles, the list of drugs they cover, and their plan rules for covered drugs, exceptions, and appeals. Medicare Advantage plans can change their benefit packages, as well as their provider networks.
As an example of how drastically coverage can change year to year, Avalere Health, a consulting and research firm, reports that premiums for the 10 most popular drug plans will rise an average of 4 percent next year. According to the Centers for Medicare and Medicaid Services, the average Medicare Advantage premium is expected to decrease from $32.59 on average in 2016 to $31.40 in 2017.
This is a time when you will see advertisements all over television offering help with open enrollment. Understand that these companies are advertising to sell you their product. While their product may be what you want, it might not be, and you should not make a decision about that coverage without knowing all of the options available to you. Also remember that people who are perpetrators of fraud will inevitably use the open enrollment period to try to gain access to individuals’ personal financial information. Medicare beneficiaries should never give their personal information out to anyone making unsolicited phone calls selling Medicare-related products or services or showing up on their doorstep uninvited. If you think you’ve been a victim of fraud or identity theft, contact Medicare. For more information on Medicare fraud, click here or here.
Some resources to help you navigate open enrollment include:
The 2017 Medicare & You handbook, which all Medicare beneficiaries should have received. The handbook can also be downloaded online at here.
The Medicare Rights Center provides good educational materials to help.
You can find the State Health Insurance Assistance Program that serves your area here.
The online Medicare Plan Finder can be located here.