Recent Legal Issues Seniors Should Understand

By  //  January 18, 2014

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CRITICAL FOR SENIORS TO STAY INFORMED

BREVARD COUNTY • MELBOURNE, FLORIDA — Last year was an important time for news that affected our senior and veteran populations. Many stories affecting these groups made national headlines. This is a review of some of the top stories of 2013 and why the related issues may continue to dominate headlines in 2014.

THE DOMA DECISION

The US Supreme Court’s decision of US v. Windsor stemmed from a widow from a same-sex marriage who was denied tax relief under the “Defense of Marriage Act (DOMA).”  The Supreme Court found DOMA to be unconstitutional, ruling in favor of Edith Windsor and striking down the part of the law defining marriage as a union between a man and a woman.  The Court noted that the law deprived same sex couples of both rights and responsibilities.

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Then President Bill Clinton signed DOMA into law in 1996, but now says the law is discriminatory and supported the Supreme Court’s ruling that DOMA is unconstitutional.

The well-publicized ruling of this case impacted many federal laws which fell under the Act’s definition of marriage, including benefits such as Medicaid, Social Security, housing, food, stamps, tax laws, federal employee benefits and Veteran’s benefits.

Whether there is an impact to an individual or couple in a same sex marriage will depend on factors such as the benefit in question and whether the state in which the individual resides recognizes same-sex marriage and whether the couple was validly married in a state that recognized same-sex marriage on the date of marriage.

For example, Medicaid will not recognize a marriage unless it is being administered in a state that recognizes an otherwise valid same-sex marriage.  But, where the state recognizes a same-sex marriage, the impact in terms of Medicaid is great.

In regards to Medicaid financial eligibility, the change means an increased allowance of assets from that of a single person (approximately $2,000) to those of a married couple (up to $117,920). The sword cuts both ways, though, as Medicaid will consider assets of both parties to the marriage and not just the applicant.

AFFORDABLE CARE ACT

We have all been inundated by information regarding the Affordable Care Act (ACA). Regardless of your feelings on the new law, seniors will likely be affected by its implementation.  More significant to the senior population than the individual mandate, are the changes to Medicare, the prohibition against pre-existing conditions clauses, nursing home care changes, changes to community-based long term services and supports, and the funding of the ACA.

ACA and Medicare

Changes in Medicare include a prescription drug coverage increase that will eventually reach 25 percent across the board for all prescription drugs and will be felt by those who spend more than $2,800 per year on prescription drugs. Where there was no coverage by Medicare when the prescription drug expense of an individual was between $2,800 and $4,550, there will eventually be coverage of 25 percent for all such expenses for those receiving Medicare.

The ACA provides preventive care without seniors having to meet a deductible, copayment, or cost-sharing. Medicare beneficiaries were previously paying 20% of preventive services.

The ACA provides preventive care without seniors having to meet a deductible, copayment, or cost-sharing. Medicare beneficiaries were previously paying 20% of preventive services.

Another Medicare change under the ACA is increased coverage of preventive care. These now-covered services include annual wellness visits, flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases.

Finally, the ACA’s changes to Medicare include a funding cut to Medicare Advantage Plans. The ACA also places more restrictions on the options that can be provided by these plans, which is projected to result in fewer choices for seniors and creates an uncertain future for Medicare Advantage Plans.

ACA and the Prohibition Against Pre-Existing Conditions Clauses

The ACA’s prohibition against pre-existing conditions clauses received a great deal of attention in the news. This part of the law prohibits insurance companies from considering existing health problems when one applies for health care coverage. It also prohibits insurance companies from charging varying amounts to individuals based on heath, sex, age or other factors. The elderly will benefit from this portion of the law because the risk of insuring them will now be evenly distributed among the entire population, old and young alike.

ACA and Nursing Homes

Another major change affecting seniors under the ACA concerns nursing homes. The ACA requires the Center for Medicare and Medicaid Services (CMS) to provide a consumer-friendly website, posting comprehensive information regarding nursing homes.

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The CMS website, Nursing Home Compare, allows consumers to compare information about nursing homes, and contains quality of care information on every Medicare and Medicaid-certified nursing home in the country.

The purpose of the website is to provide data regarding the nursing home’s inspections, complaints and number of violations received, as well as identify the owner of the home and show expense reports comparing resident care costs versus administrative costs.

In addition, the ACA will make it easier to file complaints against a nursing home.  In the event a nursing home decides to close its doors, the ACA mandates advance notice so that all its residents can relocate. Further, the home must ensure all residents have successfully relocated prior to closing.

ACA Funding

The aspects of ACA funding that will have an impact on seniors include: $145 million cut to Medicare Advantage Plans over a 10 year period; a surcharge tax of 3.8% to unearned income; an increase in the floor for medical expense deductions from 7.5% to 10% of AGI; and a .9% Medicare payroll tax on high income earners, defined as single taxpayers earning income over $200,000 or a family earning over $250,000.

PROPOSED VA PENSION CHANGES

There have been two bills introduced this past year that would make changes to Veterans’ pension benefits. The house introduced H.R. 2189 and the Senate introduced S. 944. Both bills propose essentially the same changes. The bills, if passed, will affect wartime Veterans and surviving spouses of wartime Veterans who apply for pension benefits in a number of ways.

It's important for Veterans to follow the status of two Congressional bills introduced this past year that would and have a significant impact on wartime Veterans and surviving spouses of wartime Veterans who apply for pension benefits.

It’s important for Veterans to follow the status of two Congressional bills introduced this past year that would have a significant impact on wartime Veterans and surviving spouses of wartime Veterans who apply for pension benefits.

First, the proposed law imposes a penalty against the claimant who disposes of property for less than fair market value if that transfer reduces the amount of the claimant’s estate. There is currently no penalty if a pension applicant gives away assets and then applies for benefits.

Second, the bill imposes a 36-month look-back period for transfers made prior to the submission of an application. Under this portion of the law, the VA will review the applicant’s gifts and other transactions to trusts, annuities or other investments over the past 36 months to ensure no penalties described in the prior paragraph should apply. The goal appears to be to thwart Veterans’ beneficial pension planning strategies that currently exist and, according to bill proponents, the proposed legislation is misguided and being misused.

CRITICAL FOR SENIORS TO STAY INFORMED

Several big changes occurred in 2013 that will impact seniors and Veterans in the coming months and years. While some of the changes will have a positive impact on the senior and Veteran populations, others will not.  Make sure you stay informed and understand the ramifications of these changes on your life.

ABOUT THE AUTHOR

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Victor Kostro

Victor S. Kostro is an attorney in private practice with the law firm of O’Brien, Riemenschneider & Wattwood, P.A.  He has extensive experience as a corporate, transactional, healthcare attorney having served as Associate Corporate Counsel/Corporate Risk Manager for Health First, Inc.  In this role, Vic provided representation related to physician employment, practice sales/acquisitions, regulatory and compliance issues, peer review and disciplinary actions, and counseled on issues related to fraud and abuse, anti-kickback laws, Stark, self-referral and the False Claims Act. In addition, Vic managed the entity’s Risk Management Department, which included oversight of all medical negligence and personal injury claims asserted against the entity, its hospitals and physicians. Vic is well versed in medical practice entity formation, and contractual matters, employment, shareholder and partnership agreements, purchase and sale agreements, estate planning and asset protection.  Vic holds a Master of Laws in Taxation from the University of Florida.


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