Strategies for Bridging SSDI’s Medicare Waiting Period

Getting benefits through the Social Security Disability Insurance (SSDI) program is a great relief to a person under age 65 who is unable to earn a living because of a disability. Its monthly payments guarantee some degree of financial security.

An added benefit to SSDI is health insurance coverage through Medicare. But there is a precarious two-year gap between receiving approval for disability benefits and becoming eligible for Medicare’s insurance coverage. The practical impact of this waiting period is that numerous SSDI beneficiaries are temporarily both unemployed because of their disabilities and without health insurance. 

Lower-income SSDI applicants may qualify for Medi-Cal, especially if they live in one of the 39 states that have expanded Medi-Cal to include anyone whose income is below 138 percent of the Federal Poverty Level, no disability required.  But this still leaves a large number with higher incomes who can face the life-threatening consequences of going without health insurance during the two-year waiting period. If this is the case for you, what are your options?

First of all, it might be possible to at least narrow the two-year gap by harnessing any delays in getting your case heard by the Social Security Administration (SSA). If, for example, you were on a waiting list for six months before a hearing with an ALJ (administrative law judge, the SSA official who adjudicates SSDI cases), that period might be counted toward the two-year delay in receiving Medicare coverage. In this instance, that would leave an 18-month period to cover.

Another possibility is individual insurance purchased on the exchanges made possible by the Affordable Care Act.  Although coverage can be expensive depending on where you live, be sure to research your options. You may be eligible for government subsidies to help you pay the premiums for an individual health plan if your modified adjusted gross income (MAGI) ranges from 100 to 400 percent of the previous year’s federal poverty guidelines.

The subsidies are tax credits that are available to help middle-income and low-income people afford health insurance when they don’t have access to affordable employer-sponsored coverage or government-sponsored coverage (Medi-Cal or Medicare). Most eligible enrollees take those tax credits in advance, paid directly to their health insurance carrier each month to offset the amount that has to be paid in premiums.

It goes without saying that no one, least of all someone with disabilities, should be without health insurance coverage. With careful planning and research, you may manage to navigate this insurance gap at little or no cost. Be sure to consult with a special needs planner, who can advise you on your qualifications and the laws in your home state.

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Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

Annuities and Medi-Cal Planning

In some circumstances, immediate annuities can be ideal Medi-Cal planning tools for spouses of nursing home residents. Careful planning is needed to make sure an annuity will work for you or your spouse. 

An immediate annuity, in its simplest form, is a contract with an insurance company under which the consumer pays a certain amount of money to the company and the company sends the consumer a monthly check for the rest of his or her life.

In most states the purchase of an annuity is not considered to be a transfer for purposes of eligibility for Medi-Cal, but is instead the purchase of an investment. It transforms otherwise countable assets into a non-countable income stream. As long as the income is in the name of the community spouse, it's not a problem.

In order for the annuity purchase not to be considered a transfer, it must meet the following basic requirements:

1. It must be irrevocable--you cannot have the right to take the funds out of the annuity except through the monthly payments.

2. You must receive back at least what you paid into the annuity during your actuarial life expectancy. For instance, if you have an actuarial life expectancy of 10 years, and you pay $60,000 for an annuity, you must receive annuity payments of at least $500 a month ($500 x 12 x 10 = $60,000).

3. If you purchase an annuity with a term certain (see below), it must be shorter than your actuarial life expectancy.

4. The state must be named the remainder beneficiary up to the amount of Medi-Cal paid on the annuitant's behalf.

Example: Mrs. Jones, the community spouse, lives in a state where the most money she can keep for herself and still have Mr. Jones, who is in a nursing home, qualify for Medi-Cal (her maximum resource allowance) is $128,640 (in 2020). However, Mrs. Jones has $238,640 in countable assets. She can take the difference of $110,000 and purchase an annuity, making her husband in the nursing home immediately eligible for Medi-Cal. She would continue to receive the annuity check each month for the rest of her life.

In most instances, the purchase of an annuity should wait until the unhealthy spouse moves to a nursing home. In addition, if the annuity has a term certain -- a guaranteed number of payments no matter the lifespan of the annuitant -- the term must be shorter than the life expectancy of the healthy spouse. Further, if the community spouse does die with guaranteed payments remaining on the annuity, they must be payable to the state for reimbursement up to the amount of the Medi-Cal paid for either spouse.

All annuities must be disclosed by an applicant for Medi-Cal regardless of whether the annuity is irrevocable or treated as a countable asset. If an individual, spouse, or representative refuses to disclose sufficient information related to any annuity, the state must either deny or terminate coverage for long-term care services or else deny or terminate Medi-Cal eligibility.

Annuities are of less benefit for a single individual in a nursing home because he or she would have to pay the monthly income from the annuity to the nursing home. However, in some states immediate annuities may have a place for single individuals who are considering transferring assets. Income from an annuity can be used to help pay for long-term care during the Medi-Cal penalty period that results from the transfer. In such cases, the annuity is usually short-term, just long enough to cover the penalty period.

In short, immediate annuities are a very powerful tool in the right circumstances. They must also be distinguished from deferred annuities, which have no Medi-Cal planning purpose. The use of immediate annuities as a Medi-Cal planning tool is under attack in some states, so be sure to consult with your attorney before pursuing the strategy described above.

 

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Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

Ability to Withdraw Money Early from Retirement Plan Expires at the End of the Year

 

Ability to Withdraw Money Early from Retirement Plan Without Penalty Expires at the End of the Year

If you are experiencing financial hardship due to the coronavirus pandemic, you may want to consider withdrawing money from your retirement account while you still can. The special exemption allowing early withdrawals without a penalty ends soon. 

Passed in March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act allows individuals adversely affected by the pandemic to make hardship withdrawals of up to $100,000 from retirement plans this year without paying the 10 percent penalty that individuals under age 59 ½ are usually required to pay. This exemption is only for withdrawals made by December 30, 2020.

If you decide to withdraw money from your retirement account, you will still have to pay income taxes on the withdrawals, although the tax burden can be spread out over three years. If you repay some or all of the funds within three years, you can file amended tax returns to get back the taxes that you paid. 

To qualify for the exemption, you must meet one of the following criteria:

• You or a spouse or dependent have been diagnosed with COVID-19

• You or your spouse have suffered financial hardship due to the pandemic, such as a lost job, a job offer rescinded, reduced pay, business closed, or inability to work due to lack of childcare. 

This step should not be taken lightly. Withdrawing money now means your retirement funds will be reduced and limits the retirement plan’s ability to grow. But for some people, it may be the best option to pay bills and avoid running up high-interest credit card debt. 

Contact us

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

Will People with Disabilities Have Priority for a COVID-19 Vaccine?

The COVID-19 pandemic has been particularly devasting to people with disabilities. Recent studies indicate that they are three times as likely to die from the virus as the general population.

But as the pharmaceutical industry moves closer to obtaining approval for one or more COVID-19 vaccines, questions continue about whether the vaccines will be allocated in a way that does not discriminate against people with disabilities, and how affordable they will be.

Vaccines developed by Pfizer and Moderna were both more than 90 percent effective in large clinical trials.  Both companies are now gathering safety data necessary for emergency approval by the Food and Drug Administration. Numerous other vaccines are in various stages of development.

Even if a vaccine is approved, however, there will not be sufficient doses immediately to provide to every American. As a result, government agencies and health care providers will have to make difficult decisions about whom to prioritize when administering the vaccine.  

At the request of the Centers for Disease Control and Prevention, in September 2020 the National Academies of Science, Engineering and Medicine issued a preliminary framework for the distribution of a COVID-19 vaccine. The framework prioritizes essential and front-line health care workers, as well as people living in group homes and other congregate settings.

Echoing concerns earlier in the COVID-19 pandemic about ventilator rationing, disability advocates have pointed out the absence of any express mention of people with developmental disabilities, who they fear will receive lower priority based on outdated assumptions and stereotypes about their ability to survive COVID-19.

In a September 9 letter to the Office of Civil Rights in the Department of Health and Human Services, the Consortium for Citizens with Disabilities (CCD) implored the Department to ensure that the distribution of any COVID-19 vaccine complies with federal anti-discrimination laws.

“Disability status and age should not be used to deny or deprioritize people for a vaccine, such as categorically excluding people with certain disabilities or functional impairments or prioritizing people based on projections of long-term survivability,” the CCD wrote.

The National Council on Disability and the Autistic Self Advocacy Network also submitted comments to the National Academies, expressing similar fears about its framework.  

In addition to distribution concerns, there are questions about whether health insurers will provide vaccine coverage, and if it will be affordable.

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) , Congress mandated in March 2020 that Medicare cover the full cost of any COVID-19 vaccine for Medicare beneficiaries. However, Medicare regulations currently only permit the federal government to cover the costs of vaccines approved through the standard approval process, as opposed to through an emergency use authorization (EUA), which appears to be how the Trump Administration anticipates approving vaccines in the next two months.

On October 28, the Centers for Medicare and Medicaid Services (CMS) released interim final regulations requiring Medicare to cover the full cost to patients of any COVID-19 vaccine, regardless of whether it is approved through an EUA. Coverage will also be free for Medicaid recipients, under the announced policy.

CMS also announced a partnership on October 16 with retail pharmacies CVS and Walgreens to provide vaccines at no cost to seniors and staff in long-term facilities

Contact us

Elise Lampert, Esq,

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

What to Look for When Choosing a Medicare Advantage Plan

As Medicare premiums rise, a Medicare Advantage plan can seem like an attractive option. But if you are considering switching from Original Medicare to a Medicare Advantage plan, you need to know what to look for. 

Medicare Advantage plans are run by private insurers, unlike Original Medicare, which the federal government operates, although the medical providers are private. The government pays Medicare Advantage plans a fixed monthly fee to provide services to each Medicare beneficiary under their care. The plans often look attractive because they offer the same basic coverage as original Medicare plus some additional benefits and services that Original Medicare doesn't offer. 

To compare Advantage plans, go to the Medicare Plan Finder at Medicare.gov. When deciding whether a Medicare Advantage plan is right for you, the following are the main factors to consider: 

• Cost. Since Medicare Advantage plans are offered by private insurers, the cost of the plan varies depending on where you live. While Medicare Advantage plans usually have lower premiums than paying for Original Medicare plus a Medigap plan, they can have higher deductibles and co-pays in certain circumstances, so you need to take those into account when calculating the cost of each plan. Medicare Advantage plans do have a cap on out-of-pocket costs, while Original Medicare does not. Check the annual maximum out-of-pocket costs for the plan. If you have a high level of health costs, a low out-of-pocket maximum may be the best option. 

• Coverage. What coverage does the plan offer? Medicare Advantage plans must cover everything that Original Medicare covers, but some plans offer additional benefits, such as dental, hearing, and vision. Plans may require your doctor to get approval for certain procedures. If the plan administrators disagree with your physician that a procedure is medically necessary, the plan may refuse to pay for it.You will want to find out how the plan is about approving treatments, referring patients to specialists or allowing patients to remain in the hospital if they are not ready to leave. You may want to check with your doctor to find out their experience with the plan and whether the plan frequently overrules the doctor.

• Doctors. Original Medicare does not have any restrictions on which doctor you use, but Medicare Advantage plans are HMOs and PPOs, meaning that not every doctor accepts the insurance. With an HMO, if you visit a doctor outside of the network, you will likely have to pay out of pocket (except in an emergency). With a PPO, you can usually see any doctor you want, but you will pay less for an in-network doctor. You will want to check if your doctor and hospital are part of the plan’s network. The best way to do this is to call your doctor’s office to confirm. 

• Prescription drugs. Most Medicare Advantage plans include prescription drug coverage, so you should check to make sure the plan covers all the medications you take. You should also check if you need any special authorizations for any of your medications or if there any limits on the amount you can get. Other questions include whether your pharmacy is a preferred provider and whether you can get prescriptions by mail. 

• Quality of care. The Medicare Plan Finder includes a rating system that measures how well the plan manages health screenings and chronic conditions as well as how many customer complaints it receives, among other things. The ratings aren’t perfect, but they can give you an idea of plan’s quality. 

 

 

Contact us

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com