THE NATIONAL HANDBOOK ON LAWS AND PROGRAMS AFFECTING SENIOR CITIZENS AMERICAN BAR ASSOCIATION SENIOR LAWYERS DIVISION     © 1998 American Bar Association The materials contained herein represent the opinions of the authors and editors and should not be construed to be the action of either the American Bar Association or the Senior Lawyers Division. Nothing contained in this book is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. This book and any forms and agreements herein are intended for educational and informational purposes only. This publication may be reprinted and/or adapted, provided such use is for informational, non-commercial purposes only, that it is distributed at or below manufacturing cost, and that it includes the exact copyright notice as it appears below. Copyright © 1998 American Bar Association. All rights reserved. This handbook is based on the Senior Citizens Handbook: Laws & Programs Affecting Senior Citizens in Virginia Copyright © 1996, The Virginia State Bar, 707 East Main Street, Suite 1500, Richmond, VA 23219-2803 ACKNOWLEDGMENT The Senior Lawyers Division acknowledges the work of the Virginia State Bar in the preparation of a Senior Citizens Handbook, which was the genesis of our Handbook. In particular, the Division expresses its appreciation for the work of the University of Virginia law students and to Lora Hamp of Virginia Commonwealth University, who were the principal drafters of this Handbook. FOREWORD The National Handbook on Laws and Programs Affecting Senior Citizens is a reference guide offered by the Senior Lawyers Division of the American Bar Association to state bar associations, senior lawyer groups and other selected organizations to disseminate to senior citizens and the general public. Originally developed by the Virginia State Bar, the handbook has been one of its most successful public service educational publications. The book describes Federal laws and programs, including Social Security, Medicaid and Medicare; and gives an overview of such topics as housing options, wills and probate, health care, long term care, nursing homes, continuing care retirement communities, advance directives, powers of attorney, guardianship and protection of legal rights, legal assistance, age discrimination, elder abuse, and a consumer guide. The discussion of these topics is designed for lay persons and explained in clear, easy-to-understand language. Recipients of the handbook are encouraged to Acustomize@ this book by creating and adding material not covered in the original, but which the recipient organization believes will be of interest to seniors residing in its area. As the handbook is published in loose-leaf format, additional material can easily be added. Bar association and senior lawyer groups will receive written permission to reproduce the handbook in quantity, provided credit is given to the Senior Lawyers Division of the ABA and the Virginia State Bar; and the books are not sold for profit. Information contained in the handbook is not meant as legal advice and the reader should consult with his or her attorney before acting upon any of the information in the handbook. Additional copies of the handbook may be obtained for $10 each from the Senior Lawyers Division, American Bar Association, 750 N. Lake Shore Drive, Chicago, Illinois 60611. National Handbook on Laws and Programs Affecting Senior Citizens Table of Contents Section A: Financial Assistance Social Security 1 Introduction General Eligibility ………………………………………….. 1 Retirement Benefits ………………………………………… 1 When Should You Retire ………………………………….. 2 Survivor’s Benefits …………………………………………. 2 Disability Benefits ………………………………………….. 3 Applying for Benefits ………………………………………. 4 Appeals Process for Social Security ……………………….. 4 Overpayments ………………………………………………. 4 Representative Payee ………………………………………. 5 Direct Deposit ………………………………………………. 6 Supplemental Security Income 6 Introduction Eligibility ……………………………………………………. 7 Penalties ……………………………………………………. 7 Applying for Benefits ……………………………………… 7 Appeals Process for SSI …………………………………… 7 Overpayments ……………………………………………… 7 Pensions 8 Introduction Pension Eligibility ………………………………………….. 8 Types of Pension Plans ……………………………………. 8 Pension Rights ……………………………………………… 9 Breaks in Service …………………………………………… 10 Benefits for Workers’ Spouses ……………………………. 10 Protection of Pension Funds ………………………………. 10 Appeals ……………………………………………………… 10 Veterans Benefits 11 Eligibility …………………………………………………… 11 Relationship of VA Income to Social Security Benefits ….. 11 Applying for Benefits ……………………………………… 12 Right to Appeal ……………………………………………. 12 The Food Stamp Program 12 Introduction Food Stamp Myth …………………………………………. 12 Applying the Food Stamps ………………………………… 13 Eligibility …………………………………………………… 13 What to Do If Refused …………………………………….. 14 Federal Tax Relief for the Elderly 14 Federal Income Taxes …………………………………….. 14 Federal Income Tax Credit ……………………………….. 15 Earned Income Credit ……………………………………. 15 Taxpayer Who are Blind or Older than 65 ………………. 15 Medical Expenses ………………………………………….. 15 Sale of Principal Residence ……………………………….. 16 Medical Savings Accounts ………………………………… 16 Long Term Capital Gains ………………………………… 17 Estate and Gift Tax Exemption …………………………… 17 Other Important Tax Changes ……………………………. 17 Section B: Health Care Medicaid 18 Introduction Coverage ……………………………………………………. 18 Eligibility …………………………………………………… 19 Resource Limitations ……………………………………… 19 Transfer of Assets ………………………………………….. 19 Medicaid and Long Term Care …………………………… 20 Appeals ……………………………………………………… 20 Conclusion …………………………………………………. 20 Medicare 20 Introduction Two Parts of Medicare ……………………………………. 20 Applying for Medicare ……………………………………. 21 Medicare Part A …………………………………………… 21 Medicare Part B …………………………………………… 22 Medigap Supplemental Insurance 23 Introduction Medigap ……………………………………………………. 23 Description of Medigap Packages ………………………… 23 Chart of Ten Standard Medicare Supplemental Plans …. 25 Managed Care 26 Introduction Fee-for Service Plan ……………………………………….. 26 Managed Care …………………………………………….. 26 Health Maintenance Organizations ……………………… 26 Managed Health Care Plans for Retirees ………………… 27 Advantages and Disadvantages of Managed Care Plans .. 28 Questions to Ask …………………………………………… 28 How to Enroll in a Managed Care Plan …………………. 29 Long Term Care Insurance 29 Introduction Coverage …………………………………………………… 29 Federal Income Tax Advantages ………………………… 29 Considerations When Buying a Policy …………………… 29 Eligibility …………………………………………………… 30 Conclusion …………………………………………………. 30 Alzheimer’s Disease 31 Introduction Symptoms ………………………………………………….. 31 Services Available ………………………………………….. 32 Healthcare Services ………………………………………… 32 Rest for the Caregiver …………………………………….. 33 Resources for Families ……………………………………. 34 Legal Considerations for Alzheimer Patients …………… 34 Section C: Long Term Care Nursing Homes 35 What Is A Nursing Home? ……………………………….. 35 Nursing Home Staff ……………………………………… 35 Financial Assistance ……………………………………….. 36 Nursing Home Regulation ………………………………… 37 Resident Rights ……………………………………………. 37 Choosing A Facility ……………………………………… 38 Questions to Ask …………………………………………… 39 Long Term Care Ombudsman Program 40 Assisted Living Facilities 40 Introduction Design ………………………………………………………. 41 Regulation …………………………………………………. 41 Paying for Assisted Living ……………………………….. 41 Choosing an Assisted Living Facility ……………………. 41 Adult Day Care 42 Introduction Services Provided ………………………………………….. 42 Paying for Adult Day Care ……………………………….. 42 Home Care 43 Introduction Types of Services Available ……………………………….. 43 Arranging for Home Care ………………………………. 44 Choosing a Home Care Provider …………………………. 44 Questions to Ask …………………………………………… 44 Paying for Home Care …………………………………….. 45 Continuing Care Retirement Communities 46 Introduction What Is A Continuing Care Retirement Community? ….. 46 CCRC Fees …………………………………………………. 47 Pros and Cons ……………………………………………… 47 Choosing A Continuing Care Retirement Community …. 47 Seek Professional Advice ………………………………….. 48 Sections D: Housing Landlord - Tenant Issues 49 Obtaining Necessary Information ……………………….. 49 Understanding Your Lease ………………………………. 49 Security Deposits ………………………………………….. 50 Duties of Landlord and Tenants …………………………. 50 Important Points to Remember ………………………….. 50 Rental Assistance Program 51 Eligibility …………………………………………………… 51 How Does Program Work? ………………………………… 51 Utility Assistance Program 52 Energy Assistance Programs ……………………………… 52 Other Energy Assistance Programs ………………………. 52 Telephone Assistance Programs ………………………….. 52 Reverse Mortgages 52 What is a Reverse Mortgage? …………………………….. 52 The FHA-Insured Reverse Mortgage ……………………. 53 Disadvantages of a Reverse Mortgage …………………… 53 Section E: Planning for the Future Divorce and the Elderly 55 Probate and Estate Administration 55 Probate ……………………………………………………… 55 Estate Planning …………………………………………….. 56 Wills ………………………………………………………… 56 Living Trusts ………………………………………………. 58 Joint Ownership as a Will Replacement ……………….. 58 Advance Directives 59 Introduction Types of Advance Directives …………………………….. 59 Preparing an Advance Directive ………………………… 59 Power of Attorney and Durable Power of Attorney 60 Guardianship 61 Introduction Procedures for the Establishment of Guardianship ……… 61 Who Needs a Guardian …………………………………….. 61 Funeral Services 62 Planning Ahead ……………………………………………. 62 Planning at Time of Need …………………………………. 62 Benefits …………………………………………………….. 63 Section F: Protection of Legal Rights Legal Assistance 64 When Do You Need A Lawyer ……………………………. 64 How to Find a Lawyer ……………………………………. 64 Consumer Guide 65 Introduction Contracts and Credit Buying …………………………… 65 Basic Contracts Do’s and Don’ts …………………………. 66 Unsolicited Credit Cards ………………………………….. 66 Lost or Stolen Credit Cards ……………………………… 66 Bad Credit Ratings ………………………………………… 66 Error in Bill ………………………………………………… 67 Collection Agencies ………………………………………. 68 Door-to-Door Sales ………………………………………… 68 Mail Order Merchandise …………………………………. 69 Unordered Merchandise ………………………………….. 69 Telemarketing Sales ……………………………………….. 70 Unscrupulous Practices ……………………………………. 71 Home Repair ……………………………………………….. 71 Health Quackery …………………………………………… 72 Consumer Remedies ………………………………………. 72 Age Discrimination 73 Introduction Employment ……………………………………………….. 73 Federal Programs ………………………………….………. 73 Credit ……………………………………………………….. 74 Discrimination Based on Disability 74 Grandparent’s Rights 75 Visitation …………………………………………………… 75 Grandparent Custody ……………………………………… 76 Elder Abuse 76 What is Elder Abuse ………………………………………. 76 Signs of Elder Abuse ………………………………………. 77 Preventing Abuse …………………………………………... 77 Reporting Abuse …………………………………………… 78 Alternative Dispute Resolution 78 Arbitration …………………………………………………. 78 Mediation …………………………………………………. 78 Section G: References and Referral Information Financial Assistance 80 Health Care 80 Long Term Care 80 Legal Information 80 Other Helpful Contacts 81 Other Resources 82 This Page Left Blank Intentionally Section A: Financial Assistance Social Security Introduction Different types of benefits are payable under various provisions of the Social Security Act, but when the average person uses the phrase "social security benefits" he or she usually means the Retirement, Survivors, Disability and Health Insurance Program (RSDHI). These are monthly cash benefits paid to you as a retired or disabled worker, to qualified spouses, children, and parents of retired or disabled workers, and to qualified widows, widowers, and divorced spouses of workers. The RSDHI program is largely financed out of taxes paid by employers and employees. It is an insurance program. Benefits received by you and your dependents have been earned by you through your employment and the taxes collected regularly from your wages. These tax deductions are shown on your paycheck next to the initials "FICA." The letters "FICA" stand for "Federal Insurance Contributions Act," which is the official name for the federal laws which established the Social Security program in 1935. These deductions go up periodically. The money collected from this tax goes into trust funds, and current benefits are paid out of these funds. General Eligibility Eligibility for Social Security benefits depends on the length of time you have been working and paying Social Security taxes. Generally, an individual is eligible for benefits after a lifetime total of ten years in employment covered by Social Security. "Covered" employment refers to all employment and self-employment in which the employee and employer are obligated to pay a payroll tax to the Social Security Administration. The ten years may be calculated by adding up the total number of "quarters" worked by the individual. A "quarter" is defined as a three-month period; that is, there are four quarters per year. Thus, ten years of employment is the equivalent of forty quarters. If you stop working before you have the forty quarters needed to qualify, your quarters will be kept on record. If you start working again, your quarters will continue to accumulate. In some cases, you may not need the forty quarters to qualify for benefits. To find out how many quarters you have or how many you need to qualify, contact your local Social Security Administration Office. Retirement Benefits The amount you receive in Social Security retirement benefits is dependent on how much income you averaged over your career. If you made a high amount of income, your benefits will be proportionately greater than if you had periods of no work or low salary. Your level of benefits is also affected by when you begin receiving Social Security. If you are eligible for benefits, certain family members can also receive benefits: your spouse age 62 or older, your spouse under 62 if caring for a child under 16 years old or a disabled child, your former spouse age 62 or older and unmarried (provided you were married 10 years or longer), children up to age 18, children up to age 19 if still in school, children over age 18 if disabled before the age of 22, and a widow or widower in certain situations. When Should You Retire Individuals are eligible to receive full retirement benefits at age 65, providing they have obtained the necessary work quarters and have worked for the requisite amount of time. It is possible to obtain benefits at 62 years of age, but the amount you receive will be reduced by 20 percent. If you do not take Social Security at 65 years of age and continue to work, you will receive additional money when you apply for and receive your Social Security Benefits. Your benefits will be raised by a certain percentage each year that you delay retirement. You can also choose to receive Social Security benefits after age 65 and remain at work. Between the ages of 65 and 69, your Social Security benefits will be reduced slightly if you are making over $13,500 per year. (The amount of this earnings limit changes every year.) When you are 70 or older, you can work and receive full Social Security benefits with no limit on earnings. If your post-retirement earnings are greater than your earnings in pre-retirement years, you may be entitled to larger Social Security benefits. Ask your local Social Security office to recalculate your benefits if your post-retirement earnings have significantly increased. The earnings limit applies only to earnings from self-employment and wage income. Interest, dividend and other passive income, are not included in the calculation. In other words, investment income will not cause you to lose your social security benefits. A year before you retire you should consult with a Social Security representative to help you plan the best time to apply to get the maximum benefits. There are advantages for some people in retiring at age 62, and for others it makes sense to wait until later. Your Social Security representative can help you interpret the complex rules. Note: If you choose to delay your retirement, generally you should still sign up for Medicare at age 65. See your Social Security office for more details. Survivor’s Benefits When a fully insured worker or retired worker dies, survivor’s checks can go to certain members of the worker’s family: widow or widower who is over age 60 (or age 50 to 59 if disabled) surviving divorced spouse over age 60 (or age 50 to 59 if disabled) provided you were married 10 years or longer, widow or widower under age 60 if caring for a child under 16 years old or disabled child, unmarried minor and disabled children, and parent of a deceased worker if parent is 62 or older and was dependent on the deceased worker for half of his or her support. When a fully insured worker or retired worker dies, a small lump sum death benefit may be paid to an eligible surviving widow, widower, or entitled child. Disability Benefits There are benefits for certain disabled persons who are not old enough to qualify for regular Social Security payments. If you are disabled and have worked under Social Security for more than five years, you may be entitled to Social Security disability payments. For a worker to qualify for disability benefits, the worker must be unable to engage in any substantial gainful activity due to a physical or mental impairment that is expected to result in death or has lasted, or is expected to last, for at least 12 months. An individual is eligible for Social Security Disability Insurance (SSDI) on the date he or she becomes permanently disabled. From this date, there is a waiting period of five months before benefits begin. In the event that an applicant is approved for SSDI after the sixth month of disability, the Social Security Administration will make a retroactive payment. The level of monthly disability benefit is determined by the amount of one’s earnings, age at onset of disability, and date of disability. You may receive an estimate of your benefits through your local Social Security office. If you are eligible for SSDI, certain family members may also be eligible for benefits: your children under 18, your child who was disabled on or before age 22, your spouse, if 62 or over, your spouse if under 62 and caring for a child under 16 or disabled. There are also benefits for certain disabled adults and minors who have not worked under Social Security or do not have enough Social Security credits to obtain regular social security benefits. The program is called Supplemental Security Income. If you or your child is disabled, you may be entitled to such payments. In both of those situations you should contact the Social Security Administration local office and file an application. You may also contact a counselor or attorney to help in this claim. Any fees will come from whatever you receive and are set by the Social Security Administration. Applying for Benefits Apply for benefits by going to your local Social Security office, or calling the toll-free number: 1-800-772-1213. The Social Security Administration has many free pamphlets and articles to advise you of your rights and duties. They will inform you on how to apply for benefits and how to receive your benefits. Social Security will also furnish a form allowing you to check the status of your Social Security account. Appeals Process for Social Security If your application for Social Security benefits is denied OR if any of your benefits are reduced or terminated, you have the right to appeal the decision. The appeals process has four steps: 1) reconsideration, 2) administrative hearing, 3) review by Appeals Council, and 4) federal court. Step 1: Make a written request for reconsideration within 60 days of the date you receive notice of the denial. If you have been receiving benefits and you receive notice that your benefits are being reduced or terminated, you must make the request within 10 days so your benefits will continue during the appeal. A Social Security representative will help you with your request. Step 2: If you are not satisfied with the result of the reconsideration, you may appeal again and ask for a hearing before an Administrative Law Judge. Many decisions are reversed after the hearing. You must request the hearing within 60 days of the date you receive notice of the reconsideration decision. Step 3: If you disagree with the judge’s decision, you may request a hearing by the Social Security Appeals Council in Arlington, Virginia, within 60 days of the hearing decision. Step 4: If the Council refuses to hear your case or decides against you, you have another 60 days to appeal to a federal court. At this stage, if not before, you should seek assistance from an attorney. Winning an appeal at any level may entitle you to receive lost benefits retroactively to the date of application, reduction, or termination. Contact your local Area Agency on Aging or Legal Aid office for assistance with your appeal. Overpayments Every month, thousands of Social Security beneficiaries receive documents entitled "NOTICE OF OVERPAYMENT". Overpayment occurs when the Social Security benefits you receive are more than the amount for which you are eligible. If you receive notice of overpayment which tells you that you will have to pay back the money or it will be withheld from your future check, you have the right to appeal that decision. You should appeal within 30 days of receiving notice of overpayment. In order to protect your rights, you should request one or both of the following: Reconsideration of Overpayment: You have the right to ask the Social Security Administration to look at the decision again. Request reconsideration if you feel you were not at fault in causing the overpayment and if repayment of the money would create a serious hardship for you. Waiver of Repayment: You have the right to ask that the Social Security Administration not recover the overpayment. Request a waiver if you feel no overpayment ever occurred or if the amount which Social Security claims is overpaid or wrong. Representative Payee A "representative payee" is a person or organization designated to receive Social Security benefit checks on behalf of a beneficiary who may not be able to manage his or her own affairs. The representative payee has the primary responsibility of using the Social Security check for the beneficiary’s basic or personal needs. Usually, the representative payee is a spouse or other relative, friend, or legal guardian. Institutions, such as nursing homes and mental health centers, may also be designated to receive Social Security benefit checks on behalf of a beneficiary. To have a representative payee appointed for a beneficiary, the Social Security Office must be notified that the individual is incapable of handling his or her own affairs. The Social Security Administration can then appoint a payee if it decides that this is in the individual’s best interest. The SSA makes such decisions based on doctor reports, court decisions, and statements from others who know the beneficiary. If a representative payee is appointed for you, The SSA must tell you in writing before sending benefits to the payee. Any appointment may be challenged by appeal. If your representative payee does not use your benefit check for you, the SSA may have to reimburse you. You should immediately contact the SSA with reports of misuse of benefits. Direct Deposit You can sign up to have your Social Security check deposited directly into your bank account. Ask about this option when you sign up for benefits. Direct deposit will become mandatory for Social Security recipients on December 31, 1998. Supplemental Security Income Introduction Supplemental Security Income (SSI) is a federal program administered by the Social Security Administration which provides income assistance to aged, blind, and disabled persons. The SSI program provides monthly cash payments to those individuals who meet income and eligibility criteria. Essentially, the program guarantees a certain income to an individual or couple. SSI will provide supplemental payments so that the total income for an individual or couple will equal the guaranteed amount. The SSI program is administered by the Social Security Administration, but it differs from Social Security retirement or disability benefits because you can get SSI even if you have never paid into the Social Security system. Eligibility You must be at least age 65, blind, or disabled and have only limited income and assets in order to qualify for SSI. Under the SSI program, "blindness" is defined as the following: Central visual acuity of 20/200 or less in the better eye with the use of a corrective lens, or Visual field restriction to 20 degrees or less. "Disabled" is defined as inability to engage in any substantial gainful employment due to a physical or mental impairment, which has lasted or is expected to last for at least 12 months or is expected to result in death. An individual or couple must satisfy the following asset and income requirements for eligibility: An applicant’s assets must total less than $2,000 for an individual or $3,000 for a couple, after certain deductions and exclusions are made. An applicant’s income also must fall below specific limits after certain exclusions and deductions. (Income limitations vary from state to state.) If your resources are over the eligibility limit, you may transfer your assets or spend them down to the resource level required for eligibility. In order to prove you no longer own the resources, you should keep receipts and other records of the ways you spend down your resources. The following assets are NOT counted for SSI eligibility: your home and the land it is on; household goods and personal property that do not exceed $2,000 in value; the full value of your car if it is needed for employment or medical reasons, otherwise up to $4,500 in value; life insurance if the face value is $1,500 or less; money set aside for burial expenses up to $1,500 ($3,000 for couple); burial space; property that cannot be sold. In some cases, SSI recipients are eligible for other low-income assistance programs, such as food stamps. In thirty-eight states, SSI recipients are automatically eligible for health benefits under the Medicaid program. Penalties Your SSI benefits may be reduced under the following conditions; You have unearned income of over $20.00 a month; this income includes Social Security payments, pension, gifts and other unearned money; You are living in the home of a friend or relative; You live in a nursing home. Additionally, an unmarried couple living together may be listed by the Social Security Administration as "holding out as husband and wife." When this happens, and both persons are receiving SSI, their checks will be reduced, if necessary, so that the two checks together will equal the amount that a couple would receive. Applying for Benefits You can call the Social Security Administration’s toll-free number, 1-800-772-1213 and complete an application over the phone, or go to your local Social Security office. If you file an application at a Social Security office, a Social Security representative will assist you with your application. Other agencies such as your Area Agency on Aging may be able to assist you in applying for SSI. Do not delay filing an application if you think you are eligible, because SSI can only be paid from the date of the application. Appeals Process for SSI You should receive a decision from Social Security within 60 days of your application. If you are denied SSI, you may appeal and you may be represented by a person of your choice at any step in the appeals process. Your representative does not necessarily have to be an attorney. You and your representative will receive notices of all decisions on your claim. The first step in the appeals process is called the reconsideration. You must ask for the reconsideration within 60 days of the date you receive notice of the initial decision. Do not delay appealing because the process takes a long time. If you have been receiving benefits and you receive notice that your benefits are being reduced or terminated, you must make the request within 10 days so your benefits will continue during the appeal. A Social Security representative will help with your request. If you are not satisfied with the result of the reconsideration, you may appeal again and ask for a hearing before an Administrative Law judge. Many decisions are reversed after the hearing. You must request the hearing within 60 days of the date you receive notice of the reconsideration decision. Again, you should appeal immediately. Further appeals of the Administrative Law judge’s decision are to the Appeals Council and to federal court. You may want to contact the local Area Agency on Aging or Legal Aid office for assistance with your appeal or questions about SSI. Overpayments It is not uncommon for SSI recipients to receive a notice from the Social Security Administration that they have been overpaid. Do not panic if you receive such a notice. You may not have to repay the money or you may be able to repay as little as $10 a month. You have the right to appeal if you do not believe you were overpaid. If you appeal within 30 days of the date on your overpayment notice, your benefits will continue during the appeal. Even if you did receive the overpayment, you may not have to pay it back if you were without fault in causing the overpayment and you are financially unable to pay it back. You must file a request for waiver of the overpayment with Social Security if you feel the overpayment was not your fault. Your local Legal Aid office may be able to help you get a waiver. Social Security may withhold as little as $10 per month from you checks even if you were at fault. You must talk to a Social Security representative about this. Pensions Introduction For many individuals, pension plans provide an important supplement to savings and Social Security benefits and thus serve as a vital part of retirement income. Consequently, learning about pension plans and how they operate may prove to be a valuable safeguard before and at retirement. A pension plan allows certain workers to defer compensation in order to earn benefits which are received upon retirement. While law does not require employers to provide pensions, approximately half of all private employers and most government agencies offer some type of pension plan that pays benefits to those retired persons who meet certain eligibility requirements. Pension Eligibility A worker must meet eligibility requirements before he or she can participate in a pension plan. Under the Employee Retirement Income Security Act of 1974 (ERISA), an employee must (with some exceptions) be allowed to begin participation in his employer’s pension plan if he or she is 21 years old or older and has worked for that employer for one year or more. ERISA defines a "year" as a 12 month period in which the worker has worked at least 1,000 hours. Once an employee becomes eligible to participate in the pension plan, the worker begins earning pension credits which serve as the basis upon which pension benefits are awarded. The rules of the pension plan will specify how many years of work are required for an employee to become vested. To be "vested" means that you have a legal right to collect the pension when you retire. Usually, it takes between five and seven years of service with your employer to become fully vested. A vested employee does not lose the right to receive pension benefits even if he or she switches jobs, is fired for misconduct, or has a break in service. Types of Pension Plans Generally, there are two types of pension plans: defined benefit plans and defined contribution plans. A defined benefit plan specifies how much in benefits the plan will "pay out" to a retiree. It is the most common type of plan and gives a retired worker a fixed monthly amount as described in the plan. A defined contribution plan specifies how much money the employer, employee, or both will "pay in" to the plan each year for the employee. With this plan, your contributions are fixed but your benefits may vary according to your contributions and what those contributions have earned over the years. There are several types of defined contribution plans including the following: Profit-sharing plans: employer contributes a portion of each year’s profit to the plan; Employee stock ownership plans: employer’s contribution is made in the form of company stock; 401k plans: employee may elect to defer a portion of his or her income and place the money in an individual pension account. The employer may also contribute to the employee’s individual account. Pension Rights In 1974, the Employees Retirement Income Security Act (ERISA) was enacted to increase protection for workers’ pension plans. ERISA sets minimum standards for pension plans, and guarantees that pension rights cannot be unfairly denied or taken from the worker. If you work for a private employer that offers a retirement plan, ERISA requires that pension plan rules be in writing in the Summary Plan Description (SPD). The summary should include the following: who is eligible to participate; how benefits are determined; the age at which you can start receiving benefits; who administers the plan; claims procedures. You have the right to receive this information from the plan office within 30 days of your request for it. In addition to your right to the SPD, you are entitled to receive a statement of your "personal benefit account" which explains how many benefits you have and what benefits you have vested. To be "vested" means that you have a legal right to collect the pension when your retire. Usually, it takes between five and seven years of service with your employer to become fully vested. So, if you leave your place of employment after you are fully vested, all of your benefits are still yours. If, however, you leave before becoming fully vested, you lose the unvested portion of your pension benefits. Under ERISA, employers are prohibited from discharging an employee for the purpose of preventing the employee from receiving a pension. If this happens to you, you have the right to file suit in federal court. You will have to prove that the motivating factor for the discharge was the employer’s intention to prevent payment of your pension benefits. You could potentially recover lost wages and benefits, plus attorneys’ fees. Breaks in Service A break in service (time away from work) may have the effect of canceling pension credits earned prior to the "break." Therefore, it is important that you learn and understand the break in service rule of your pension plan. Under ERISA, an interruption in employment cannot count as a break in service unless the worker has worked less than 500 hours during the year. If a break in service occurs, the worker loses previously earned credits only if the number of consecutive years of break is as great or greater than the number of years of credited work prior to the break. Fully vested benefits are not lost by any break in service. Benefits for Workers’ Spouses For workers who retire after January 1, 1976, most pension plans must provide for a "joint and survivor annuity." This means that the employee can select to have higher benefits that stop at his or her death or a lesser benefit that continues for as long as either the worker or his/her spouse is alive. The amount paid to the surviving spouse can be as low as one-half of the amount the couple received while both were living. The Retirement Equity Act of 1984 (REA) contains several provisions affecting the rights of homemakers, widows, divorced women and working wives to receive private pension benefits after their spouse’s death. (Note: REA is sex neutral and can help men as well.) The REA requires that both spouses give written consent in a notarized form before survivor’s benefits can be waived. Protection of Pension Funds Under ERISA, a worker is protected from loss of benefits due to the employer’s going out of business, acquisition of the worker’s company by a new employer, or amendment or termination of the pension plan. Additionally, ERISA requires the trustees of the pension plan to do the following: discharge their duties solely in the interest of the pension plan beneficiaries (employees); act carefully, skillfully, prudently, and diligently in administering the pension plan; diversify the pension trust fund investments to avoid large losses; operate the pension plan in accordance with the plan rules. The Federal Pension Benefit Guaranty Corporation (PBGC) guarantees payment of vested retirement benefits under most defined benefits plans in certain situations, such as a company’s bankruptcy. Benefits above a set level are not insured. (Note: Defined contribution plans do not get this protection.) Appeals If your pension application is denied, you have the right to be notified in writing of the specific reasons for the denial. You also have the right to a full review of the denial by the trustees. If you feel you have been wrongfully denied pension benefits, you should promptly seek legal assistance to determine whether an appeal is in order. In the event of an appeal, documentation of communications with your pension plan administrator will be very helpful. Therefore, it is very important that all your communications with your pension plan administrator be put in writing and sent via certified mail, return receipt requested. Veterans Benefits Issued subject to a review of eligibility, numerous benefits are offered by the federal government to qualified veterans. These benefits include medical and dental care, compensation for service-connected disabilities, pensions, treatment for alcoholism and drug addiction, home and education loans, life insurance if retained upon discharge from active duty, and limited burial benefits. Medical care is also available on a priority basis to veterans with nonservice-connected disabilities. Additionally, medicines and hospital care may be available, subject to a means test which considers financial and insurance status, on a priority basis to veterans with nonservice-connected disabilities. Eligibility To be eligible for service-connected pension benefits, the veteran must have been disabled by injury or disease incurred in or aggravated by active service in the line of duty. The disability can be the result of injury, disease or the result of Veterans Administration (VA) health care. The amount of disability compensation is based on the degree to which the veteran is disabled by the service-connected condition. The minimum rating to receive compensation is 10 percent disabled. Veterans may be eligible for nonservice-connected pension benefits if they meet the following eligibility criteria: Veteran is permanently and totally disabled so that gainful employment is impossible; Veteran has served at least one day during a period of war; and Veteran meets the prescribed income and net worth limitations. Dependents of a disabled veteran may also be eligible for benefits. A veteran’s spouse, widow or widower, child, and dependent parents may be able to get medical care, education benefits, home loans, pensions, and death benefits. Additionally, spouses and parents of veterans may get an allowance for nursing home expenses or for the expenses of a caregiver if the relative is helpless. Relationship of VA Income to Social Security Benefits Your Social Security Disability Insurance (SSDI) or Retirement Benefits will not be reduced if you receive service connected VA benefits. However, if you receive Supplemental Security Income (SSI), your VA benefits will be considered income. Therefore, in order to avoid overpayment, be sure to report all VA income to SSA if you receive SSI. If you receive a non-service-connected pension, you must report all income and changes in income to the VA. A pension is reduced by receipt of SSDI or Social Security, but it is not reduced by SSI. Applying for Benefits To apply for benefits, contact your local office of the Department of Veteran Affairs by calling 1-800-827-1000. Right to Appeal Should a veteran disagree with a USDVA decision regarding the application for benefits, the decision can be appealed to the Court of Veterans Appeals. Appellate assistance may be obtained from a regional office Department of Veteran Affairs. An attorney may assist with an appeal, but federal law restricts attorneys’ fees for such representation to ten dollars. If legal assistance is needed and cannot be readily found, a local legal services office or a lawyer referral service might be helpful. Various independent veterans’ organizations such as the American Legion, Veterans of Foreign Wars, and the Vietnam Veterans of America may also be of assistance in the preparation of a claim application or with an appellate review. The Food Stamp Program Introduction With food costs rising ever higher, millions of older Americans on fixed incomes have difficulty obtaining food "basics" necessary for a proper diet. If you meet the income guidelines, the Food Stamp Program may be able to help you stretch your food budget. As the name suggests, the Food Stamp Program, administered by the Federal Government, provides coupons redeemable for food, as well as plants and seed to grow food. The Food Stamp Program explicitly excludes by regulation such non-food items as alcoholic beverages, pet food, vitamins, medicines, tobacco and cigarettes. Food Stamp Myth Many think that the Food Stamp Program is only designed to help the desperately poor. This is not true. Households may earn moderate amounts of income per month and still be eligible for food stamps. Recipients of food stamps also may own a car, a home of any value, as well as income-producing property, subject to the restriction of the law. Individual recipients can possess up to $2,000 in resources, and households with at least one member who is 60 or older may have resources valued to $3,000 or less (personal belongings and household items are not considered "resources"). Limits are not set on resources in households whose members all receive either public assistance, such as Aid for Dependent Children (ADC) or Supplemental Security Income (SSI). Such households are eligible for food stamps without other limitations applying. However, there are limitations for those individuals who receive ADC or SSI but live with other members of the household who do not receive such assistance. ADC or SSI recipients in such "mixed households" are granted exemption of resources through a means test. Applying for Food Stamps To apply for food stamps, you must contact your local food stamp office. To find out where that office is, you can call your local Area Agency on Aging. If your household has little or no money and needs help right away, let the food stamp office know. You may be eligible under the "expedited service" rules to receive food stamps within five days of the application date if you are classified as homeless or as a member of a low-income family. After you have turned in your application, a worker will hold a confidential interview with you or another member of your household at the DSS office. If no one in your household can go, an adult friend or relative who knows your circumstances may go for you. If you are 65 or older, disabled or suffer other hardships, and cannot go to the food stamp office, let the office know. A worker will arrange to interview you at home or by telephone. Eligibility You must reside in the area and be a U.S. citizen or lawfully admitted alien, and register for work unless you are over 60 or meet other exemptions. All households may have up to $2,000 worth of resources such as cash, checking and savings accounts, stocks and bonds, and land and buildings not used to produce income. Households with at least one member who is 60 or older may have up to $3,000. Bring proof of countable assets to the interview to expedite your case. In most cases, your house and surrounding lot, one car, household goods and personal belongings, and life insurance policies will not be counted as resources. You must provide proof of your Social Security number. A "household" is defined as: a person or group of persons living alone, or a person or group of persons living with others but usually purchasing and preparing meals separately, or a group of individuals who live together and customarily purchase food and prepare meals together. Only households with net monthly incomes below the allowable limits may qualify for food stamps. These limits go up with increases in the size of the family and are adjusted twice yearly to reflect changes in the cost of living. Persons who are caretakers of minor children may apply for and receive food stamps as separate households and share the same residence. Persons with earned income must file monthly report forms with the local Food Stamp office. All persons, except for those who are disabled or elderly, will have their allotted food stamps determined retrospectively. For example, a person’s income and expenses for March will determine the allotment for May. You may prove your income by recent pay stubs, information given by your employer, pension information, and benefit letters from the Social Security or Veterans Administration. Check with your local Food Stamp office to determine current allowable income for your household. After adding income of all members of the household, the worker can subtract certain deductions such as standard deduction for every household ($134), a 20 percent deduction for earned income, dependent care (including care for disabled adults), and high housing costs. Proof of these expenses may include bills or records of payment of rent or mortgage, house insurance, property taxes, electricity, gas, oil, sewerage, telephone, and water. If you are eligible for food stamps, you should receive your stamps no later than 30 days from the date you first applied. If you do not qualify, a written notice will explain why. If your local office requires you to pick up your stamps but you cannot, arrange to have someone that you have named pick them up for you. Be sure to report any changes in your household’s circumstances by calling your case worker or sending in the form provided by the food stamp office. If you receive extra food stamps because you have not reported a change, you will owe the Food Stamp Program the value of these stamps. What to Do If Refused If you think that your application has been wrongly denied or that you have not received the right amount of food stamps, you should tell the food stamp office right away. If they disagree with you, you have the right to request a review by a hearing officer. You may have a friend or relative attend the hearing with you, or you may wish to obtain the services of a legal aid or private attorney. In some cases, you can continue to receive your regular allotment of food stamps while you await the hearing officer’s decision. If the hearing officer decides in your favor, you will receive the correct amount of food stamps. If the decision is in favor of the food stamp office, you will be asked to repay the value of any stamps you were not entitled to receive. Federal Tax Relief Federal Income Taxes Certain types of income are taxed, while others are not. For example, gifts and interest earned on certain municipal bonds are not taxed. Salary and wages, payments from a pension plan, and investment income are forms of income which are taxed. If your income exceeds a certain level, your Social Security payments may be taxable for federal income tax purposes. Included in the instructions for the IRS Form 1040 is a worksheet that will help you figure whether any part of your Social Security payments is taxable. When you file an income tax return, you are allowed a personal exemption, unless you are eligible to be claimed as a dependent by someone else. In some instances, you are allowed additional exemptions if you provide primary support for a dependent (such as a parent, child, or grandchild). Federal Income Tax Credit You may be eligible for a 15 percent tax credit if your income does not exceed the specified level, and: you were 65 years of age before the close of the tax year; or you are permanently and totally disabled. This credit will reduce the tax you owe, but it will not result in a refund. Contact your tax advisor or local IRS office if you think you may be eligible for the federal tax credit. Earned Income Credit You may be eligible for the Earned Income Credit if you are working and you have a child or grandchild who lives with you. The tax credit is available to anyone who maintains a home for himself and a child who is either under the age of 19, a student, or disabled. The credit is available only if you have less than the specified level of income. Earned income for this tax credit includes salaries, tips, and earnings from self-employment. Pension and annuity payments are not included. This tax credit may reduce the tax you have to pay and may even result in a refund. Taxpayers Who are Blind or Older Than 65 Years For taxpayers who elect not to itemize their deductions, an additional standard deduction is available for individuals who are blind or over the age of 65. The additional standard deduction is available in addition to the basic standard deduction available to all non-itemizing taxpayers. Individuals who are both blind and over the age of 65 may claim two additional standard deductions. While the amount of the additional standard deduction generally changes each tax year, the additional standard deduction for tax year 1997 was $1000 for unmarried individuals and $800 for married taxpayers. You may be eligible to claim the additional standard deduction for blindness if either: Your central visual acuity doesn’t exceed 20/200 in your better eye with correcting lenses; or Your field of vision is limited such that your visual field extends no more than a 20 degree angle. You may be required to submit a statement from your physician certifying the degree of your visual impairment. Consult your tax preparer for further information about qualifying for the additional standard deduction for blindness. Medical Expenses If you itemize your deductions on your tax return, you should consider your medical and dental expenses. Medical expenses are deductible if they account for more than 7.5 percent of your adjusted gross income. Deductible medical expenses include the following: doctor and hospital bills health insurance costs (Note: Medicare Part B premiums are deductible; the basic cost of Medicare Part A is not deductible unless voluntarily paid by the taxpayer for coverage.) prescription medicines and drugs hearing devices and glasses nursing help equipment (such as elevators for the physically disabled) transportation costs to and from medical care long term care and nursing home expenses, if the home is necessary for medical care. For more information, contact your local IRS office or your tax advisor. Sale of Principal Residence The Taxpayer Relief Act of 1997 repealed the one-time $125,000 exclusion of income from the sale of a principal residence by taxpayers age 55 or over. The Taxpayer Relief Act replaces this provision with an exclusion of up to $250,000 (or $500,000, in the case of married taxpayers filing a joint return) of income realized on sale or exchange of a principal residence by taxpayer regardless of age. To be eligible for the exclusion, a taxpayer must have owned the residence and occupied it as a principal residence for at least two years before the date of sale. The exclusion is not a one-time exclusion, but is generally available no more frequently than once every two years. Medical Savings Account (MSA) The Balanced Budget Act of 1997 creates a new type of Medical Savings Account (MSA) for individuals on Medicare. For tax years beginning after December 31, 1998, Congress has authorized a four-year pilot program that permits eligible seniors to establish MSAs called "MedicarePlus Choice MSAs." These MSAs must be used in conjunction with a MedicarePlus Choice MSA health plan, which requires a certain deductible to be satisfied before a senior citizen’s medical expenses are reimbursed. The Secretary of Health and Human Services will make tax-free contributions to the MSA from Medicare trust funds equal to the deductible amount under the account owner’s MedicarePlus Choice MSA health plan coverage. The account owner can use the MSA to pay for qualifying medical expenses, with no tax imposed on withdrawals for such purposes. MedicarePlus Choice MSAs are a test program and will be available to the first 390,000 eligible seniors who enroll. The pilot program ends December 31, 2002. Long Term Capital Gains The top tax on long term capital gain is reduced by the Taxpayer Relief Act of 1997 from 28 percent to 20 percent (to 10 percent for taxpayers in the 15 percent bracket). There are holding period rules, so consult your tax advisor. Estate and Gift Tax Exemption Under the Taxpayer Relief Act of 1997 the estate and gift tax exemption excludes up to $625,000 of a decedent’s estate for decedents dying, or gifts made, in 1998, $650,000 in 1999 and $675,000 in 2000 and 2001. More increases will occur in later years, with the exemption topping out at $1 million dollars in 2006. Other Important Tax Changes Other important changes in the federal tax structure will affect individuals, families, businesses, and investors. Consult your tax advisor. Section B: Health Care Medicaid Introduction Medicaid is a cooperative federal-state program which provides health care services to the poor of all ages. The program is administered by state agencies, and thus the regulations governing Medicaid vary from state to state. At the federal level, Medicaid is administered by the Health Care Financing Administration (HCFA). Medicare and Medicaid are frequently mistaken for one another, but the programs serve two different populations. Note the following differences between Medicaid and Medicare: Medicaid is a joint state and federal program for public assistance recipients and other medically indigent adults and children. Medicare is a federal medical benefits program that is financed through the Social Security system and is primarily for the elderly. Medicaid was designed to meet the medical needs of the poor, and therefore, the elderly must often deplete a major part of their assets before they are eligible for Medicaid benefits. Coverage For older persons, there are three primary coverage groups under Medicaid: 1) Special Low-Income Medicare Beneficiaries (SLMB), for whom Medicaid pays the monthly Medicare premium; 2) Qualified Medicare Beneficiaries (QMB), for whom Medicaid pays Medicare coinsurance, deductibles, and premium costs; and 3) those individuals who have been found eligible for the full range of Medicaid services. The range of services may vary from state to state, but generally includes the following: Medicare Part B premiums, deductibles, and coinsurance; Inpatient hospital services with limitations and deductibles; Outpatient hospital and rural health clinic services; Nursing home care; Physician services; Transportation; Long-term care alternatives, such as home personal services; X-ray and laboratory services; Home health care services; Clinic services; Prescription drugs; Medical supplies and equipment in limited circumstances; Physical therapy and related services; and Emergency hospital services. Eligibility Only identified groups of individuals are eligible for Medicaid assistance. You must be age 65 or greater, disabled by Social Security’s standards of disability, or a member of a family with children that is medically indigent. If you are a recipient of Supplemental Security Income or an Auxiliary Grant, you may be eligible for Medicaid. Your eligibility also depends on the amount of your available income and assets. Resource Limitations In determining Medicaid eligibility, resources are categorized as either countable or non-countable. Countable assets are used to determine Medicaid eligibility and include those assets for which there is a meaningful possibility that they could be sold or otherwise converted into cash. Among the assets that count are bank accounts, stocks, Individual Retirement Accounts, deeds of trust, or real property other than the home. Non-countable assets are those assets which are not counted in determining the resources available to a person for purposes of qualifying for Medicaid treatment. Non-countable assets include the following: your home; personal effects, including clothing, jewelry, photographs; household furnishings, such as furniture, paintings, appliances and electronics, which are exempt only while being used in the applicant’s home; one automobile; property essential to the institutionalized person’s self-support; some life insurance policies; burial funds and cemetery plots. Transfer of Assets When an individual applies for Medicaid, he or she will be asked to disclose any property transfers made within the last 60 months prior to application. Intentional reduction of assets in order to qualify for Medicaid, by putting assets into a trust, giving it away, or otherwise disposing of it without receiving compensation of a like value can cause ineligibility for Medicaid coverage of long-term care services. The penalty period is dependent on the value of the asset transferred, how long ago the transfer occurred, whether compensation was received, and other factors. Therefore, before any transfer of assets is made, consultation with an attorney knowledgeable about Medicaid matters is suggested. Medicaid and Long Term Care Medicaid is the largest single payer of long-term care services. Many individuals of substantial means eventually spend their money and then seek coverage through the Medicaid program, particularly since there are so few long-term care insurance policies in force. Medicaid covers care in nursing facilities and in community alternatives allowed by waivers to federal rules. It is important to advise a nursing home or home for adults at time of admission planning if you expect to apply for Medicaid within six months of entering, because screening must be done in order to verify that the intended care is medically appropriate. If you are single and require long-term care, you will most likely be expected to pay a portion of your income toward your cost of care, retaining an amount for personal needs, with Medicaid making up the difference each month. For married people, if a spouse is institutionalized, income assets are treated differently in order to prevent the spouse at home from becoming impoverished. Appeals If you feel you have been unfairly denied Medicaid eligibility, you have the right to appeal the denial. The required timeframe within which you must make your appeal varies from state to state. In making the choice to appeal, you may wish to obtain the advice of legal counsel. Conclusion Medicaid rules are very complex, and detailed rules exist for such items as what constitutes countable income and assets, when property transfer is a potential bar to receipt of services, and whose income and resources will be used against what financial standards. For specific guidance, particularly regarding estate planning and long-term care, you may wish to contact an attorney who practices in the area of elder law. Medicare Introduction Signed into law in 1965, Medicare is a federal health insurance program for people 65 years of age and older. While it is the primary source of publicly funded health care for the elderly, people with permanent kidney failure and certain younger disabled people are also eligible to receive Medicare benefits. The program is administered by the Health Care Financing Administration (HCFA) which works with the Social Security Administration in enrolling people in Medicare and in collecting Medicare premiums. Two Parts of Medicare Medicare has two parts: (1) Part A, which is hospital insurance and (2) Part B, which is medical insurance. Most people qualify at age 65 and can receive the benefits of Part A. There is no monthly premium for Part A, but there is a monthly premium for Part B benefits. You can enroll in Part A without enrolling in Part B. Applying for Medicare To receive any Medicare benefits, you must apply at a local Social Security office. You will not receive benefits unless you apply for them. If you do not enroll within one year of reaching age 65, the premium will be increased by 10 percent and you may only sign up during the first quarter of each subsequent year. Medicare Part A: Hospital Insurance Medicare Part A helps pay for covered services received in a hospital or skilled nursing facility following a hospital stay, or from a home health agency or hospice program. You are eligible for Part A if: You are 65 or over or qualify for Social Security retirement benefits, or Railroad Retirement benefits, OR You are disabled and have been receiving Social Security disability benefits or Railroad Disability benefits for the past 24 months, OR You are receiving dialysis or need a kidney transplant because of permanent kidney failure, OR You are age 65 or over and do not meet any of the above requirements, but you pay a Medicare premium. Inpatient Hospital Care From the first day through the 60th day in a hospital during each benefit period, Medicare Part A pays for all covered services except the first $760 (in 1997), which is the deductible. From the 61st day through the 90th day, Part A pays for all covered services except a $190 per day copayment. If you are in the hospital for more than 90 days in a benefit period, you can use your "reserve days" to help pay the bill. For a reserve day, Medicare pays all covered costs except for daily coinsurance of $380 (in 1997). You have a lifetime supply of 60 reserve days. So, for days 91 through 150 of a hospital stay, Medicare Part A will cover all but $380 per day. There is no coverage for days 150 to 365 for an inpatient hospital stay. Skilled Nursing Facility Care A skilled nursing facility is different from a nursing home. It is a facility that primarily furnishes skilled nursing and rehabilitation services. (Note: Many nursing homes have specialized skilled care units.) Skilled care is to be distinguished from basic personal or custodial care such as assistance in walking, getting in and out of bed, eating, dressing, bathing and taking medicine. Medicare Part A will not pay for custodial care if that is the only kind of care you require. Medicare Part A helps pay for a skilled nursing facility stay to a maximum of 100 days in each benefit period, but only if you need daily skilled nursing care or rehabilitation services for that long. In each benefit period, Part A pays for all covered services for the first 20 days in a skilled nursing facility. For days 21 through 100, Part A pays for all covered services except for $95 a day (in 1997). You are responsible for all charges beginning with the 101st day. Home Health Care Medicare will pay for all medically necessary covered home health services. Medicare pays for visits by a Medicare-approved home health agency. In order to qualify for coverage, you must: need intermittent skilled nursing care, physical therapy, or speech therapy, be confined to your home, be under a doctor’s care. A hospital stay is not needed to qualify for the home health benefit, and you do not have to pay a deductible or coinsurance for home health services. Hospice Care Medicare covers the following hospice services: Physician services Nursing care Medical appliances and supplies Drugs (for pain and symptom relief) Short-term inpatient care Medical social services Physical therapy, occupational therapy and speech/language pathology services Dietary and other counseling. Medicare Part B: Medical Insurance Medicare Part B pays for many medical services and supplies, but most importantly, it provides coverage for your doctor’s bills. The full range of benefits includes: Physician’s services Outpatient hospital services X-rays and laboratory tests Certain ambulance services Durable medical equipment, such as wheelchairs and hospital beds, used at home Services of certain specially qualified practitioners who are not physicians Physical and occupational therapy Speech/language pathology services Partial hospitalization for mental health care Mammograms and Pap smears Home health care if you do not have Part A Part B generally does not cover outpatient prescription drugs, although there are some exceptions. Medicare Part B costs $43.80 per month in 1997. After a $100 deductible is met, Medicare pays 80 percent of the Medicare-approved covered services. You are responsible for the remaining 20 percent, which is called coinsurance. Medigap and Supplemental Insurance Introduction Because Medicare has significant gaps in coverage, Medicare beneficiaries may choose to purchase a supplemental health insurance policy. Such policies may be purchased to cover items like prescription drugs, the Medicare Part B coinsurance, and custodial nursing home care. There is a variety of private supplemental insurance policies available to help pay health care expenses. You may choose from the following types of coverage: Medigap Policies: provide coverage for some services not covered by Medicare; Managed Care Plans: plans which allow you to purchase health care services for fixed charges; Long Term Care Insurance: policies which pay for nursing home or home care; Continuation or conversion of an employer-provided or other policy you have when you reach 65; Hospital indemnity policies: policies which pay for each day of inpatient hospital services; and Specified disease policies: policies which pay only when you need treatment for the insured disease. Medigap Medigap insurance is specifically designed to "fill in the gaps" of Medicare coverage. In order to make it easier for the consumer to choose the appropriate Medigap policy, the National Association of Insurance Commissioners (NAIC) devised and promulgated ten standard Medigap packages of benefits which are labeled "A" through "J". Each package incorporates different benefits. (See chart, page 25) All states (except Minnesota, Massachusetts, and Wisconsin) limit the number of different Medigap policies that can be sold to no more than the 10 standard Medigap plans. Insurers are prohibited from checking on the health of Medicare applicants 65 or older for six months after they sign up for Medicare Part B. No company can require a holder of a Medigap policy to switch to one of the new plans and companies are now prohibited from selling a new policy to a person who already has one, unless it is to replace an existing plan. Description of Medigap Packages Plan A is known as the Basic Plan, and must be included in every Medigap policy now offered for sale. Plan A includes all coinsurance for a hospital stay for the 61st to the 150th day, all charges for an extra 365 days in the hospital and also takes care of the deductible under Part A for the first three pints of blood. Medicare Part B pays 80 percent of the physician’s allowable charges. For those who have this coverage, Plan A also pays the remaining 20 percent. All plans except Plan A cover up to 100 days in a skilled nursing facility, as well as the Medicare Part A deductible. All plans except A and B cover emergency care in foreign countries. The Part B deductible is covered by Plans C, F, and J. Plans F, I, and J cover 100 percent of Part B excess charges over approved charges (for physicians who do not accept assignment) and Plan G pays 80 percent of these. Plans D, G, I, and J pay for at-home care after a hospital stay. Preventive medical care is covered by Plans E and J, and prescription drugs are covered by Plans H, I, and J, with a $250 deductible, a 50 percent coinsurance and limit of $3,000 for Plans I and J and $1,250 for Plan H. Most companies do not offer all nine "add-ons" (B-J). Companies do not charge the same premiums for the same coverage. Some companies are doing individual underwriting of the risk. It is important to comparison shop and make sure you understand what you do not get from Medicare and what you do get from the Medigap policy you are considering. Ten Standard Medicare Supplement Plans A B C D E F G H I J Basic Benefit Basic Benefit Basic Benefit Basic Benefit Basic Benefit Basic Benefit Basic Benefit Basic Benefit Basic Benefit Basic Benefit Skilled Nursing Coinsurance Skilled Nursing Coinsurance Skilled Nursing Coinsurance Skilled Nursing Coinsurance Skilled Nursing Coinsurance Skilled Nursing Coinsurance Skilled Nursing Coinsurance Skilled Nursing Coinsurance Part A Deductible Part A Deductible Part A Deductible Part A Deductible Part A Deductible Part A Deductible Part A Deductible Part A Deductible Part A Deductible Part B Deductible Part B Deductible Part B Deductible Part B Excess (100%) Part B Excess (80%) Part B Excess (100%) Part B Excess (100%) Foreign Travel Emergency Foreign Travel Emergency Foreign Travel Emergency Foreign Travel Emergency Foreign Travel Emergency Foreign Travel Emergency Foreign Travel Emergency Foreign Travel Emergency At Home Recovery At Home Recovery At Home Recovery At Home Recovery Basic Drug Benefit ($1,250 Limit) Basic Drug Benefit ($1,250 Limit) Basic Drug Benefit ($3,000 Limit) Preventive Care Preventive Care Managed Care Introduction One of the most difficult decisions a retiree must make is choosing a health care plan. There are numerous, often confusing, health care plan options to consider. These options range from traditional fee-for-service plans to the rapidly growing managed care plans. Fee-for-Service Plan Under this traditional health care plan, the individual can choose any licensed physician and use the services of any hospital, health care provider or facility. Generally, a fee is paid each time a service is used. For Medicare beneficiaries, Medicare pays a share of the hospital, doctor, and other health care expenses. The beneficiary is responsible for certain deductibles, coinsurance payments, all permissible charges in excess of Medicare’s approved amounts, and all services not covered by Medicare. Some of these out-of-pocket expenses may be covered by supplemental "Medigap" insurance. Managed Care The term "managed care" is used to describe health care systems that integrate the financing and delivery of appropriate health care services to those individuals covered by the plan. The goal of managed care is to decrease the costs of health care without sacrificing the quality of care. Managed care systems may pursue this goal through the following mechanisms: Establishing a limited network of providers who agree to fixed payments based on the number of members enrolled in the plan. This arrangement is called capitation and is designed to encourage providers to care for patients efficiently and to promote healthy behavior so expensive treatment is less often necessary. Requiring enrollees to consult a primary care physician who coordinates care and makes any necessary referrals to specialists. Using a "utilization review" process in which a group of health care professionals determine the appropriateness of care. Health Maintenance Organization (HMO) A Health Maintenance Organization (HMO) is a type of managed care system which provides comprehensive medical care to its members on a pre-paid basis. Through its network of contracted family physicians, specialists, hospitals and other health care providers, an HMO manages the delivery of health care for its members. The beneficiary usually must obtain health services from the professionals and facilities that are part of the HMO. These services may be provided at one or more centrally located health facilities or in the private practice offices of the doctors and other health care professionals affiliated with the plan. While many HMO plans do not charge a monthly premium, some plans may require enrollees to pay a monthly premium which typically ranges from $50 to $75 per month. Additionally, HMO plans may require a small copayment for each appointment and drug prescription. Usually, there are no additional costs to the enrollee no matter how many times he or she visits the doctor, is hospitalized, or uses other covered services. Managed Health Care Plans for Retirees Medicare Risk HMOs: Under these plans, you must receive all covered care through the plan or through referral by the plan. If you go outside the plan for service, neither the plan nor Medicare will pay for those services. You will be responsible for paying for the entire bill out of your own pocket. There are exceptions to this restriction in the event that you need emergency or urgent care. Medicare Risk HMOs will cost you the least money but limit your choices of doctors and services the most. Medicare Cost HMOs: Under these plans, you have more flexibility to visit health care providers outside of the plan. If you go to providers affiliated with the plan, you pay only the applicable copayments. If you go to providers outside of the plan, Medicare will pay for its share of the approved charges, but the plan probably will not pay its share. You will have to pay for Medicare’s coinsurance, deductibles, and other permissible charges, just as if you were receiving care under the fee-for-service system. These plans are good choices for those who travel frequently or live outside the plan’s service area during part of the year. Medicare Cost HMOs may cost more but will give you more choices of doctors and services. Preferred Provider Organizations (PPOs): Under these plans, individuals select a primary care provider (PCP) when they enroll and are encouraged through benefit design to use this PCP as the first stop for all care. The PPO establishes a contracted fee with physicians and hospitals that is usually discounted from regular charges. Enrollees have the flexibility to select non-network providers, but they will not receive the PPO discounted rates for service. Preferred Provider Organizations are the closest to traditional fee-for-service Medicare, with large numbers of doctors and providers to choose from. Point of Service Plans: The point of service plan is an option under Medicare Risk HMOs. Under these plans, the enrollee is permitted to receive certain services outside the plan’s provider network and the plan will pay a percentage of the charges. The enrollee is expected to pay at least 20 percent of the bill in return for this flexibility. A Point of Service Plan may be a good option if you travel often, have homes in more than one state, or want to continue seeing your own specialist. However, be careful as some of these plans require you to sign away your right to appeal HMO decisions. Advantages and Disadvantages of Managed Care Plans In making a decision to enroll in a managed care plan, you may want to consider the following advantages and disadvantages: Advantages Provision of increased preventive care because of better preventive benefit coverage and increased screening and early treatment. Increased quality of care due to coordination of services. Decrease in out-of-pocket expenses (as compared to fee-for-service plans). Provision of services and items which are not covered at all under traditional fee-for-service Medicare. (For example, most Medicare HMOs provide significant coverage for prescription drugs.) The need for Medigap insurance to supplement your Medicare coverage will be eliminated. Disadvantages Less flexibility to use the services of specialists and less follow-up care (as compared to fee-for-service plans). Requirement of prior approval by your primary care physician for elective surgery, medical equipment and services provided by specialists. Lower levels of satisfaction with patient-physician interpersonal relationship. It can take up to 30 days to disenroll. A major concern regarding managed care is that HMOs have incentive to refuse authorization of needed care. Because HMOs receive a set monthly fee from Medicare, the HMO could increase its profits by refusing to authorize care. Questions to Ask You should ask the following questions about the HMO you may be considering for enrollment: How long has the HMO plan been in business? What has been the turnover rate of the network’s physicians during the past five years? What is the average waiting time for appointments? If I do not like my assigned physician, can I change doctors? What percentage of the network’s doctors are board certified? What is the plan’s annual disenrollment rate? What percentage of enrolled patients have filed appeals in the last year? What percentage of appeals were ruled in favor of the patient? Additionally, get information about the health care providers and facilities affiliated with the plan. Note whether the plan’s providers are in a location convenient to you and whether transportation is available at all hours to get you to them. How to Enroll in a Managed Care Plan You can obtain the names of managed care plans in your area by calling your state insurance counseling office or by calling Medicare at 1-800-638-6833. Most plans have continuous enrollment, so you can join at anytime. All plans that have contracted with Medicare must have an advertised open enrollment period of at least 30 days once a year. Long Term Care Insurance Introduction Long-term care coverage is an insurance product which first appeared in the early 1980s. Different policies are available to cover custodial care in the nursing home, home care, and care in a skilled nursing facility if Medicare benefits are unavailable. When shopping for long term care insurance, it is very important to carefully examine and compare policies in order to avoid duplicating any existing coverage provided by other insurance policies. Coverage Medicare does not pay for custodial long-term care and will only pay limited benefits for home health and for skilled nursing home care as a transitional phase between the hospital and ultimate return to the home. Some Medicare supplement insurance policies (Medigap) will pay for limited skilled nursing home care. While nearly half of Americans who turn 65 will eventually enter a nursing home, many will have nursing home stays of less than 100 days. Many others will have to pay someone to help them continue living in their home. Long-term care insurance can provide the means to pay for required care not covered by Medicare or Medigap. Federal Income Tax Advantages You should consult your tax advisor about a recently passed federal health insurance law that provides tax incentives to encourage people to purchase long-term care insurance. As of 1997, the cost of long-term care insurance may be deductible from federal income tax. Considerations When Buying a Policy As in the case of all applications for insurance, it is the responsibility of the prospective policyholder and not the agent to make sure that the application is accurately completed. Failure to reveal what may appear at the moment to be an insignificant medical problem could possibly void the policy. Be sure that policy coverage is adequate. Some policies only cover licensed nursing homes. You should be sure that your policy covers skilled, intermediate and custodial care. If another level of care such as home health care or adult day care is desired in place of or in addition to other types of care, make sure the policy provides for it. Watch the restrictions, many of which are common. Recent studies indicate that if prior hospitalization is required in order to activate the policy, there is more than a 50 percent chance of never collecting any money from the insurance company. If only skilled care will be reimbursed, either wholly or partially, there is a 45 percent chance of noncollection. Then there are waiting or elimination periods. If such periods are 90 days or more, the same studies indicate that there is a 30 to 40 percent chance of not collecting. Be sure that the benefits are in line with local nursing home and home care costs. Currently, the cost of nursing home care is $30,000 annually across the United States, and in major metropolitan areas, the average escalates to $60,000. The policy should also provide in some manner for inflation protection, even if the premium is raised proportionately. The maximum dollar benefit under the policy should be scrutinized. Obviously, lifetime policy duration is advisable. Renewability should be guaranteed. Make sure that preexisting conditions are covered and that the type of facility you would want to enter is covered. For example, retirement communities often do not qualify under many policies. Normally, at a minimum, all levels of care in a licensed Nursing Facility, Home Care and Respite Care are what the average person considering this type of insurance wants covered. Some policies provide for a return of premium in the event of death prior to a given age, such as 70. Be sure that there is no exclusion for Alzheimer’s Disease and other organic brain disorders (cognitive impairment). As a matter of fact, check all exclusions carefully. The National Association of Insurance Commissioners in December 1990 issued guidelines for the various states in connection with the regulation of long-term care insurance. However, there is no substitute for careful investigation to make sure that the policy you acquire will meet your needs when the time comes. Companies offering long-term care insurance should have toll free numbers where you can contact specialists in the area at the home office, and it is recommended that you take advantage of this service. The agent can give you the number. Eligibility To be eligible for benefits, the insured is normally required to need assistance in at least two and perhaps three of what are known as ADLs --Activities of Daily Living. ADLs include eating, bathing, dressing, transferring positions, and toileting. If the policy requires more than three, it should be avoided. Qualification is usually determined independently or by the insurer. Conclusion In conclusion, it should be noted that premiums rise very rapidly as the insured gets older, and many policies require medical underwriting. As a result, it is important that long-term care insurance be considered at an early age. At this writing, the cost of a good long-term care insurance policy and a Medigap policy at age 65 are about the same. Each individual must decide for himself or herself whether either, neither or both Medigap and long-term care insurance are appropriate. It is also important to make sure that coverage is not duplicated by Medicare, Medigap or long-term care insurance in case you have one or all of them. For additional information, contact your state’s health insurance counseling program. The following resources are also available to assist you: Before You Buy: A Guide to Long-term Care Insurance (D12893) Making Wise Decision for Long-Term Care (D12330) A Handbook About Care in the Home (D955) For these three publications, contact: AARP Fulfillment 601 E. Street, N.W. Washington, D. C. 20049 (Specify Publication Number) A Shopper’s Guide to Long-Term Care Insurance For this publication, contact: National Association of Insurance Commissioners 120 W. 12th Street, Suite 1100 Kansas City, MO 64105-1925 Alzheimer’s Disease Introduction Alzheimer’s Disease (Alzheimer’s) is a type of dementia. Dementia is the term used to describe a serious decline of intellectual function, including memory, the ability to think and behavior. The primary organ affected by this disease is the brain, specifically the areas involving cognitive function and memory function. Mild memory problems, including difficulty recalling names or retrieving information are seen with normal aging. Memory may be affected by multiple small strokes, Parkinson’s Disease and a variety of medical illnesses and medications. Recent estimates put the number of Americans suffering from Alzheimer’s at 4 million. The prevalence of this disease rises with age, with approximately 47 percent of individuals affected by age 85. Alzheimer’s and related dementia have a tremendous impact on the spouse and on the family caregivers (who are often referred to as the "hidden victims" of the disease). Alzheimer’s indeed affects the entire family. It is important that caregivers get support because the stress of caring for someone with Alzheimer’s disease is often mentally and physically draining for caregivers. When the caregivers become ill, they are no longer able to care for the patient, resulting in institutionalization of Alzheimer’s patients. Symptoms The onset of Alzheimer’s usually is gradual, beginning with minor memory problems and progressing to significant memory loss. Alzheimer’s may also cause visio-spatial difficulties, poor judgment, personality changes, or other evidence of impaired brain function. In turn, this decline in mental function leads to behavioral and emotional changes, loss of ability to care for oneself, and ultimately death due to physical deterioration. Alzheimer’s affects each individual differently. Therefore, the number and degree of symptoms, as well as the course of the disease, may vary from person to person. Eventually, Alzheimer’s leaves its victims totally unable to care for themselves. Symptoms you may notice in an individual with Alzheimer’s include problems remembering recent events, difficulty in performing familiar tasks, confusion, personality changes, behavior changes, impaired judgment, difficulties in finding words, in finishing thoughts, or in following directions. Be particularly alert for depression, which often occurs early and is hidden or "masked" in Alzheimer’s patients. If it is suspected, seek professional help. Services Available Caregivers for the Alzheimer’s patient will need support and assistance in giving that care. There are many people who can help - family and friends, health care professionals, Alzheimer’s Association Chapter members, and others. Specialized programs and services can make life easier and more enjoyable for the caregiver and the person with Alzheimer’s. For example, individuals with Alzheimer’s may forget or refuse to eat. Meals on Wheels is a helpful program, but someone may have to be at home to accept delivery and supervise the eating. It is important that an individual with Alzheimer’s receives help from people who are trained to help those with Alzheimer’s. Healthcare Services If you suspect that someone you know has Alzheimer’s, it is important to contact your family physician or nearby teaching hospital for a physician referral. A comprehensive evaluation involving physicians, nurses, neurologists, and social workers can assist families in developing comprehensive plans of care for patient and family. Medical professionals can also evaluate the patient for other medical problems that may be causing or contributing to the dementia. It is important to have one primary care physician. That physician can provide continuing care for the person with Alzheimer’s, and in providing that care, treat other illnesses that arise, prescribe medications, answer questions, and provide caregiver support. When needed, the caregiver may seek a second opinion from a physician specially trained in managing Alzheimer’s disease. A physician may also suggest that you consult a geriatric psychiatrist to help manage the behavior, depression, and personality changes that often accompany the disease. Nurses involved with Alzheimer’s patients or Alzheimer’s support group members can teach family members the ongoing practical care of a person with Alzheimer’s. A family may also want to consult an attorney experienced in medical assistance law or the local Social Services Agency to advise them on their rights to government financial support through Medicare, Medicaid, Social Security, disability, or veterans benefits. Rest for the Caregiver The job of caring for a person with Alzheimer’s can be overwhelming. It is important that the caregiver take an occasional break, away from hands-on caregiving. Remember that asking for help will allow you to care for your loved one longer. There are several options for the caregiver to have some time away from caregiving. These options provide for care for the Alzheimer’s patient for a few hours, a few days or even on a permanent basis. Day to Day Assistance for the Caregiver in the Home If you would like the Alzheimer’s patient to remain in the home, you may contact visiting nurses, home health aids, and paid companions to provide service in the home. These individuals provide services that may include health care, personal care, shopping, cooking, or housework. Make sure that the person providing the home care is familiar with Alzheimer’s so that they can provide special care. Day to Day Assistance Outside the Home Adult daycare programs provide people with Alzheimer’s several hours a day of structured recreation and mental stimulation. In an adult day care program, people with Alzheimer’s can interact with others, exercise, listen to music and engage in other activities. These activities can give them an opportunity to enjoy life and can be extremely beneficial to the patient and the family. Short Term Assistance for the Caregiver Certain hospitals, nursing homes and residential facilities offer short-term stays for the Alzheimer’s patient. This service, often called "Respite Care" provides full-time care of the Alzheimer’s patient within the facility, for a period of days or weeks. When the Alzheimer’s patient is in Respite Care, the caregiver has a chance to take a vacation, or just to get some relief from the stress of caregiving. Long Term Assistance As Alzheimer’s disease advances and symptoms worsen, the family of the Alzheimer’s patient may have to decide to make other living arrangements for the victim. Placing a family member in a nursing home or other long-term facility for any reason is a difficult decision and yet, at some point, it may be the most responsible decision that can be made. Some nursing homes specialize in the care of persons with Alzheimer’s, offering so-called Alzheimer’s or Special Care Units. A word of caution: be certain the program that you choose is in fact one of substance with high-quality personnel. It may be beneficial for you to actually visit the program and see it in action. If a person with Alzheimer’s is terminally ill, he or she may be accepted in a hospice program. Resources for Families Alzheimer’s affects families physically, emotionally, financially and socially. Many families find that other problems become magnified under the stress of caregiving and that they need help, support, or advice, in areas not directly related to the illness. Although you may receive support from families, neighbors, and clergy, it may be advisable to seek outside assistance. The Alzheimer’s Association often receives phone calls from families of Alzheimer’s patients who have questions about what can be done to protect the future security of the patient and/or his family. The Alzheimer’s Association has chapter and peer support groups in cities across the country, and provides the support families need. In addition to providing support and guidance, many chapters offer educational literature, consumer information and workshops for caregivers and professionals. There is also a Wanders Alert program which sets up a file with photographs of the Alzheimer’s patient, which can be of assistance if the patient becomes lost. Call your local Alzheimer’s Association chapter for more information. Legal Considerations for Alzheimer Patients As soon as Alzheimer’s is suspected, the family and the patient should meet with a knowledgeable attorney to plan for legal and financial complications. This is important because during the early stages of the disease, the Alzheimer’s patient may be capable of participating in legal and financial planning to protect the future management of his or her life and assets. When meeting for a legal consultation, it may be helpful to have the following documents: executed wills and trusts, prior tax returns, health and life insurance policies, pension information, deeds, mortgages, bank accounts and information about other financial investments. Below are several legal issues which should be considered. Wills Living Wills Power of Attorney Conservatorship Guardianship of Person Trusts Abuse Issues Section C: Long Term Care Nursing Homes What Is a Nursing Home? A nursing home is a long-term care facility designed for people who need less care than a hospital provides, but for whom adequate services are not reasonably available in the home or community. It is designed for those needing long-term nursing or convalescent care due to aging or prolonged illness or injury. This care might include, for example, administering medicines, preparing special diets, rendering treatments prescribed by a doctor and total nursing care. Generally, the services offered by nursing homes include medical and nursing care, meals, laundry, and housekeeping. Additionally, quality facilities offer dietary, pharmacy, recreational and social services, plus occupational therapy, physical therapy, and speech therapy. Nursing Home Staff Many people are involved in providing services to the residents of nursing homes. Some of these people include the following: Administrative Staff: Includes an Administrator, Director of Admissions, Director of Personnel, and Finance Director; these people are responsible for the overall operation of the nursing home. Medical Director: Is the physician responsible for overseeing the delivery of medical care to all residents in the nursing home. Nursing Staff: Includes a Director of Nursing (who is usually a registered nurse), the Assistant Director of Nursing, Registered Nurses (RNs), Licensed Practical Nurses (LPNs), and nursing assistants; generally, the Director of Nursing and Assistant Director of Nursing supervise the work of the nursing staff. The registered nurses and licensed practical nurses provide medical treatments, administer medications, and provide written documentation of medical care. The nursing assistants provide custodial care to patients (for example, bathing, feeding, and toileting.) Therapists: Includes physical, occupational, recreational, and speech therapists who help residents maintain their physical and functional status. Social Services Staff: Includes social workers who help residents cope with emotional and psychological issues. Activities Director: Provides therapeutic recreational programs which are designed to meet the assessed needs of the nursing home residents. Dietary Staff: Includes a food service director and dietary assistants. The food service director manages the meals program, guaranteeing that dietary requirements are met for the nursing home residents. Dietary assistants are involved in the preparation and delivery of meals. Financial Assistance Medicare You can receive financial assistance from Medicare for a certain number of days of care in a skilled nursing facility per spell of illness if you qualify for Medicare benefits. This is provided under Medicare hospital insurance (Part A). There are deductibles and coinsurance amounts that must be paid and there may be conditions for qualification. Generally, Medicare does not cover many nursing home expenses. Medicaid Medicaid, the program which is jointly administered by the federal government and the state, also pays for care in most nursing home facilities. A physician must certify the level of care needed, and you must be eligible for Medicaid benefits. Make sure that the nursing home will retain a resident whose funding source may switch from private or Medicare funds to Medicaid funds. Veterans Benefits The Veterans Administration may provide assistance for nursing home expenses to some veterans. Assistance may also be available to some children and surviving spouses of veterans. In order to receive these benefits, however, you must choose a nursing home that is under contract with the Veterans Administration. Contact your local VA office for more information. Private Health Insurance Some private health insurance plans provide for limited nursing home coverage. If you are covered by private insurance policies, you should talk with the carrier or your insurance agent to find out specifically what nursing home care is covered. Most private insurance policy coverage is contingent upon the physician’s documentation of the need for skilled nursing care (as with Medicare coverage.) Thus, while many persons expect their private insurance to pick up where Medicare leaves off, this is often not the case. Guarantors and Responsible Parties Any agreement between a nursing home and a prospective resident (or the resident’s family) for the provision of care in return for payment of some kind is a contract, and any written statements should be read and understood before being signed just as in any other contract. Guarantors, responsible parties, or cosigners for these contracts are bound to make good the debts of the nursing home resident should he or she not be able to pay. If you are considering becoming a guarantor or responsible party, (for instance, son or daughter) you should take special care to understand exactly what obligations you may have to take on. Nursing Home Regulation Nursing homes are regulated by both state and federal laws. While state laws vary, all nursing facilities must be licensed under state law. States usually inspect nursing homes once a year. More than eighty percent of nursing homes participate in Medicare or Medicaid, and thus are required to meet federal certification standards on quality of care, quality of life and residents’ rights. Resident Rights When you enter a nursing home, you must comply with reasonable rules of the facility and you must respect the rights of staff and other residents. However, you do not surrender your basic civil rights when you enter a nursing home. While institutional care may place limitations on your privacy and lifestyle, you should expect care that is compassionate, dignified, and high quality. The federal Nursing Home Reform Amendments of 1987 provides the following rights to residents: Right to information - Nursing homes must provide: written information about your rights, including personal funds, the right to file a complaint and how to contact the ombudsman and the state survey agency; written information about the services included under their basic rate and any extra charges for additional services; advance notice of any changes in room assignment or roommate; an explanation of your right to make a health care advance directive and information about their policies on complying with advance directives (see Advance Directives); information about eligibility for Medicare and Medicaid and the services covered by those programs. upon reasonable request, the facility must provide the results of the most recent survey (inspection) of the facility. Self-determination rights - Residents have the right to: choose a personal physician; be informed in advance about any changes in care and treatment which could effect resident well being; participate in changes in care and treatment or planning care and treatment; voice complaints about care without fear of discrimination or reprisal for voicing concerns; participate in resident and family groups. Personal and privacy rights - Residents have the right to: participate in social, religious, and community activities that do not interfere with the rights of other residents; privacy regarding accommodation, medical treatment, written and telephonic communications, visits, and meetings of family and resident groups; confidentiality regarding medical and personal records. Visitation rights - Nursing homes must permit immediate access to a resident: by personal physician and representatives from state and federal agencies, including the ombudsman program; immediate family or other relatives, if resident consents; by others with "reasonable" restrictions. Involuntary transfer and discharge rights - Residents may only be transferred or discharged under the following conditions: the resident’s welfare cannot be met in the facility; the resident’s health has improved so that nursing care is no longer needed; the health and safety of individuals in the facility are otherwise endangered; the resident has failed, after reasonable notice, to pay for care; the facility ceases to operate. Protection against Medicaid discrimination - Nursing homes that participate in the Medicaid program must: have identical policies and practices regarding services to residents regardless of the source of payment; provide information on how to apply for Medicaid; not require a third-party guarantee of payment to the facility; in the case of a Medicaid recipient, not charge, solicit, accept, or receive gifts, money, donations or other considerations as a precondition of admission or continued stay in the facility; not require, request, or encourage residents to waive rights concerning Medicaid. Choosing a Facility Choosing a facility deserves much care and attention. "Shopping" might include the following: Consider the alternatives first when independent living becomes difficult for an older person. Examine the possibilities for adult day care, senior citizen housing and homemaker/home health care services in your area by calling your local area agency on aging. Include the prospective resident in all decision making, if possible. It might be helpful to jointly make a list of desirable characteristics, including personal touches, and a list of unacceptable characteristics. Determine the level of care needed by consulting with the personal physician and the prospective resident. Plan a means of financing the care. Seek advice from the local Social Services Administration to find out whether the stay can be covered by Medicare or Medicaid. Consult with an insurance agency or former employer to determine whether the stay is covered by the individual’s personal health insurance or pension plan. Make a list of appropriate facilities in your area. To get information about nursing homes or assisted living facilities, call your local area Agency on Aging. Find out about the homes or assisted living facilities on your list by consulting with the hospital social worker if the person is coming from the hospital, and with physicians, clergy and friends. Call the homes or assisted living facilities to see if they have openings, whether there is a waiting list and, if so, how long. Check the level of care offered. Match the level of care required by the prospective residents with the level of care that the facility is licensed to offer. If the facility is a nursing home, determine whether the home is certified for Medicare or Medicaid. Make appointments to see the homes or assisted living facilities. Select the two or three most attractive homes or assisted living facilities in terms of quality and level of care provided, reputation and location. Request an appointment to tour the home and to talk with the admissions director. If possible, plan your visit with the morning activity and the midday meal. Talk to the residents and, if any are present, to visiting family members and friends. Questions to Ask When considering a facility, ask questions and make observations: Does the nursing home have a current license? At what level of care are nursing services available? Are staff or family physicians and other medical services readily available to residents? Can a personal physician or nurse come to the facility? Is there a well-organized activities program with provisions for regular input? What facilities and staff are available for rehabilitation and physical therapy? What are visiting hours? Does the home or assisted living facility have continuous in-service education for staff? Does the home or assisted living facility serve attractive, nutritious meals, or special diets that are planned by a Registered Dietitian? In assisted living facilities, will you be able to prepare your own meals if you