You

Elder Law Update

North Carolina Edition

Issue Eleven

April 2008

In This Issue

Medicaid Basics - LAST PART

Dr. Hodges on Hospice

More: How Social Security Benefits Are Calculated

What to Pack in Your Pocket on Your Next Foreign Adventure

This Month's Favorite Link
Check It Out!

The All New, Drastically Revised, All Free: North Carolina Medicaid Guide

Come across an interesting link? Share it with me.

PLEASE VISIT MASON LAW

I WANT TO KNOW

If you have an idea or comment that will help me make this a better newsletter please send it to me. Just click!

Dear Bob,

Many of you have been regularly following our series on Bowtie Bob

Medicaid, which began in December. My initial intent was to run a series until I had covered the topic, then compile the series into a single, readable, downloadable tract. I have received numerous favorable comments, and quite a bit of inquiry as to when I was going to wrap the series up and bless everyone with a single document. The clincher, however, is that I am tired of writing about Medicaid and am ready to move on to other topics.

So . . . the last installment on Medicaid nursing home rules begins below. But it doesn't end there. If you would like to read the whole document, you may follow the link to the Mason Law, PC website and read it there. In addition to being packed full of useful information, you'll be able to find the photos of all your favorite "confused people" featured in the series (yes, believe it or not, a number of you commented on "confused guy at the computer" and "surprised granny" and "aghast guy" . . . "surprised granny" seemed to be the hands down favorite . . . she looks so . . . nice). You'll also find a convenient printer-friendly version of the memo, as well.

All levity aside, I help clients with many stressful situations, but "losing-my-home-to-the-nursing-home" concerns (not the biggest thing to be concerned about, by the way) take the prize. It is my hope that the series will provide an easily readable overview of the topic and lower the stress levels out there a notch or two.

Dr. Hodges is back this month with a piece on hospice care, and hopefully she can dispel some common misperceptions about what hospice does.

Rose Shevlin (below) reminds us that summer travel time is nearly here, and for those heading across the Big Pond she has some "age-less" advice concerning money (as in what to have in your pocket!). One of my favorite commercials involves the little travel gnome who attempts to stick an American plug into a European outlet ("Oh, grow UP!" he says before being blown across the room in a flash). I can attest, as a former European/Middle East hand, that sometimes your 'Merikun plastic won't get you too far when you try to stick it into Le ATM. Rose offers a few good pointers below.

And finally, Social Security Guy Waren Coble is beginning a series on how your Social Security benefit is calculated. As the first 'Boomers begin to ponder early retirement benefits, this could make for timely reading. Warren and I both agree that taking early Social Security benefits may not be too smart. In fact I took a look at this very topic in the March edition of Coastal Senior (Savannah-Hilton Head) in "Ladies, Is Your Husband a Cad?" (if you care to take a look).

Bob Mason
Certified Elder Law Attorney

Certified by the National Elder Law Foundation, recognized by the American Bar Association as the certifying entity for specialization in Elder Law.

MEDICAID BASICS AFTER DEFICIT REDUCTION ACT: Part Last!

Bob Mason

This is the last of a multipart series that jumped into the whacky world of Medicaid nursing home benefits after the Deficit Reduction Act.

This last installment starts below. If you like, you can read the entire document by going to North Carolina Medicaid Explanation - The Basic Rules of Nursing Home Medicaid Eligibility on the Mason Law, PC website.

Previous installments of this series have dealt with Medicaid rules applicable to various assets. The memo now moves on to the much misunderstood topic of "Transfer Penalties".

THE TRANSFER PENALTY

The other major rule of Medicaid eligibility is the penalty for transferring assets. Medicaid has always imposed some sort of restriction on transferring assets before entering a Medicaid application - were it not for such restrictions, anyone could qualify for Medicaid simply by giving assets away at the time nursing home entry became necessary.

Early in 2006 Congress passed, and on February 8, 2006, President Bush signed, the Deficit Reduction Act ("DRA"). DRA mandates tough new restrictions on the transfer of assets made on or after the effective date of February 8, 2006.

DMA announced on August 17, 2007, that implementation of new rules mandated by DRA would begin November 1, 2007 (the "Implementation Date"). There will continue to be many details to hammer out as DMA, county Departments of Social Service and advocates sort through the new Medicaid manual changes. Expect confusion and differing rules interpretations through 2008, perhaps into 2009. The remainder of this memo will refer to the November 1 implementation date of the new DRA Rules as the "Implementation Date".

Read the rest of the memo by clicking HERE.

HOSPICE AND END OF LIFE CARE

Beth Hodges, M.D.

There are certain tasks in medicine that I have always felt to be special: the first examination of a new baby, the first school physical, telling a young couple they are expecting, and caring for a patient at the end of his or her life.

Beth Hodges, MD Most of the first examples listed are happy occasions. The last is sad, but in certain circumstances can nevertheless be a peaceful conclusion to this long adventure we call life. As a physician, I feel I have done my job well if the patient is comfortable and without pain. I also take it a step further--I wish for the family, though no one can take away their pain, to have peace with the inevitable and to have the opportunity to celebrate the life of the beloved they have lost.

In the hospice arena, we call that a "good death." Those with less experience may think all deaths are bad, but I can assure you, there is a difference. A death where the patient suffers, either from pain or air hunger, or a family is torn apart by differences in opinions on or understanding of end of life care, is a bad death. Hospice staffs (doctors, nurses, social workers, chaplains, and volunteers) devote their careers to preventing bad deaths.

Many people think of hospice as only for cancer patients, but in fact anyone estimated to potentially be in their last six months of life is eligible for Hospice services. These days, common diagnoses are cardiac disease, chronic lung disease, adult failure to thrive (weight loss and progressive weakness in someone for unknown reasons), debility after stroke, cancer, and even end-stage dementia.

Hospice involvement can make a tremendous difference in the quality of remaining life for a person, but only 20% of eligible persons ever get referred to Hospice by a physician. Why? Partly because some physicians do not think about hospice services for a noncancer patient, partly out of a reluctance to bring up the subject to a patient or his family for fear the family will feel the physician is giving up on Dad, and sometimes because the physician is simply not aware of how much the family and patient are struggling at home alone.

Hospice does not mean the doctor has given up. On the contrary, as the local medical director for a hospice organization, I have at times had to authorize the discharge of a patient who, through the tender loving care of our staff, has improved to the point that he is no longer appropriate for Hospice services. The philosophy of Hospice is to treat what we can, without employing heroic measures. That means we might treat a pneumonia in a cancer patient who is bothered by all the coughing, but we would not put that patient on life support. The focus is on quality of life, as opposed to quantity.

I would encourage you to think about Hospice for anyone you know who sounds like she fits into the above scenarios. Most hospice referrals come from the families of patients, and may be one of the best phone calls you can make for everyone involved.

Beth Hodges, M.D., is a principal in Hodges Family Practice with offices in Asheboro and Ramseur, North Carolina.

HOW YOUR SOCIAL SECURITY BENEFIT IS CALCULATED
-Warren Coble

Warren Coble

Last month we learned how the base benefit for Social Security Retirement, Disability, and Survivor purposes is determined. That base benefit is also called the Primary Insurance Amount, PIA for short. As we'll see, calculating the PIA may be just the starting point for determining the actual benefit paid.

This month and next month we'll look at some of the factors that affect the actual benefit paid. Some of those factors are applied to the PIA, which then affects the benefit paid. Other factors are applied directly to the benefit to be paid the beneficiary.

The first factor affecting benefits, which is totally within the beneficiary's control, is choosing to receive benefits before full retirement age. Previously, retirement at age 62 reduced the PIA 20%. Full retirement age for individuals born from 1943 through 1954 is age 66. Benefits for retirees are reduced 5/9 of 1% for each month they sign up prior to age 66. The current PIA reduction for age 62 entitlement is now 25% (due to the increase in the full retirement age).

Starting with individuals born in 1955, full retirement age will again gradually increase to age 67 for individuals born in 1960 and later. This will result in the reduction of the PIA to only 70% at age 62. Thus, over the course of a 23 year birth span (1937-1960), Social Security has reduced the amount an individual receives for early retirement (age 62) from 80% to 70%. It should be noted that the reduction percentages are different for retirement, spouse, and survivor benefits.

Cost of living adjustments (COLA's) are the next major issue affecting benefits payable under Social Security. Individuals are eligible for COLA increases starting with the year they become age 62, even if they do not sign up for benefits until full retirement age, or later. Cost of living increases are added to the benefit beginning with the year the individual reaches 62 up to the year they start receiving benefits. The subsequent COLA increases (after entitlement) are added each year in December, and the increased amounts are reflected in the December payment paid in January. The COLA's for 2006 and 2007 were 3.3% and 2.3% respectively.

Next month we will look at other issues affecting the amount of monthly Social Security benefits paid.

Social Security expert Warren Coble welcomes your questions regarding Medicare, Social Security and Senior Life in general! Email Warren by clicking HERE.

Your Next Vacation: What Makes Cents!

-Rose deVries,
Darby Bank & Trust Co.

The plans for your next big trip are finally coming together and the excitement is Rose deVries building, but now it's time to organize the details. When traveling, especially abroad, it is essential to plan and prepare your methods of payment for your expenses. With all the tourist horror stories, some may find that choosing monetary exchange methods is a rather nerve-racking task. But when taking a closer look at each type of travel money and weighing out the pros and cons, you will find it much easier to choose a method that work best for you.

Cash is the most convenient payment option if traveling in your native country - due to ease of acceptance and the perk of having it handy. Another plus is if you are traveling abroad, cash is less expensive to exchange for local currency than other forms of payment. However on the downside, cash is bulky, awkward to carry, easily stolen and irreplaceable.

A traveling trend that has recently become more popular among tourists traveling abroad is the conversion of funds prior to departure. The exchange of currencies before the trip can be necessary if planning to arrive after hours or during holiday when exchange businesses will be closed. Remember, immediately upon arrival there are miscellaneous expenditures such as tips and taxis that will require local currencies.

A great resource for currency exchange is Travelex's My Travel Wallet. It is an online ordering application through which travelers can order international travel cash for delivery direct to their doorstep. They offer competitive foreign exchange rates as well as no commission fees on currency or travelers cheques. Go to the My Travel Wallet link on Darby Bank's homepage, and spend some time researching rates for your destinations. Be sure to compare their rates to that of other currency exchange applications offered by major banks such as Bank of America, or even certain international airports. More than likely, My Travel Wallet will have lower rates and fewer fees.

For instance, Bank of America does not charge a fee for exchanging currency online. However, unlike My Travel Wallet, they do have a 2% service charge on all American Express Travelers Cheques which can be rather pricy when exchanging a few thousand dollars. And for those who choose to exchange their currency at the airport, be prepared to pay an additional convenience fee. Keep in mind that only some airports even offer the service, Savannah Hilton Head International is unfortunately one that doesn't.

Another payment method for consideration is a debit card. There are again both pros and cons to debit cards when traveling either in the US or abroad. For one thing, a debit card can be properly protected, and is more difficult to steal than cash. Also if your debit card is part of a major network, such as Plus or Cirrus, you can use it in many countries to automatically withdraw local currency, with associated fees of course. They are also conveniently small and easy to carry safely. On the other hand, your debit card may not work in all ATM machines at your destination. And if you travel abroad, your debit card probably won't be accepted at stores or restaurants. Also keep in mind that in rural areas, finding an ATM that is part of your network might be difficult. Another hassle associated with debit cards is that PIN numbers are not always transferable in foreign countries. In some countries, ATMs will not process PINs with more than four digits. In others, PINs with zeroes will not work. Worst of all, if your funds run out, you can't get a cash advance with your debit card. You may wish to bring an alternate form of travel money for emergencies.

Similar to debit cards, credit cards have many of the same pros and cons. The main differences are that you can reserve a hotel and/or rental car on your credit card. Fortunately, Visa and MasterCard are accepted at many places around the world and allow cash advances from ATM machines for a fee. But of course, there is always the problem with credit card fraud and the irritating service fees for foreign currency transactions.

Travelers cheques are yet another option and are tailored more for the overseas traveler. They are secure and require a countersignature for use. But if they are stolen, they are not too difficult to replace. Another 'pro' is the ability to buy travelers cheques in some foreign currencies, including the Euro, British pound, Japanese yen and Canadian dollar. The problems associated with travelers cheques are mainly the expenses and inconvenience of planning an itinerary around banking hours to exchange for the local currency. Even more annoying, is that not all merchants or banks will accept travelers checks, even those in their local currency, or they may charge you a fee to accept them.

Many travelers prefer to choose a combination of payment methods, ones that work for their traveling needs and are suitable to their destinations. Before departure, check with your bank and ask about transaction fees and currency conversion charges. If they are too high for your budget, consider switching credit/debit cards for the trip. Plan well and avoid coming back with your own tourist horror story.

Rose de Vries, JD, is Vice President of Private Banking Services for Darby Bank & Trust Co. (offices in Vidalia, Lyons, Pooler and Savannah, Georgia). Rose is based in Darby's main Savannah office. You may email comments and questions to Rose by clicking HERE or by giving her a call at

912-944-2612

The Usual Disclaimer: This newsletter is for general information only. Please do not rely on anything you read in this email as definitive legal advice applicable to you. All situations are different, including yours. Nothing you read in this newsletter is a suitable substitute for professional advice you may receive from your attorney, your accountant, or your tax advisor.

All contents copyrighted 2008 by Mason Law, PC. Contents may be republished with written permission of Mason Law, PC (which permission will usually be given!).