GeriLaw | Robert Fleming, Tucson elder law attorney, and colleagues

Social Security Spousal Benefits

Social Security provides benefits for persons who have worked and earned credits towards retirement.  Individuals may also be eligible for Social Security benefits based on a spouse’s earnings record.  If an individual applies for spousal benefits when the individual reaches his or her own full retirement age, then the individual is eligible for a benefit equal to 50% of the worker’s benefit.  If the individual applies for spousal benefits earlier than his or her own full retirement age, then the individual benefit percentage on the worker’s record is permanently reduced. 

It is also possible for both spouses to receive spousal benefits on each other’s record.  For example, take a couple in which the wife is the lower-earning spouse, and the husband is two years older; full retirement age for both is 65.  The husband’s Social Security benefit will be considerably higher than hers if he delays receiving benefits on his own record until he reaches age 70; likewise, the wife’s spousal benefits on his record will higher if he delays until age 70.  The wife can elect to take Social Security benefits on her own work record at her full retirement age of 65, when her husband is age 67.  At the same time, the husband can start taking Social Security benefits based on the wife’s work record.  He will receive benefits valued at 50% of the wife’s benefit.  He will delay receipt of benefits on his own work record, receiving delayed retirement credits, and will receive a higher benefit when he does start receiving benefits on his own work record.  In our example, let’s say the wife’s benefit on her own record is $800 per month; then the husband would receive $400 per month in spousal benefits.  In most cases, both husband and wife should sign up for Medicare at age 65.

When the husband reaches age 70, he applies for Social Security based on his own work record and receives, for example, $2,000 per month.  Because his own benefits are higher than his spousal benefit, he will receive his own higher benefit, and he will no longer receive the spousal benefit.  The wife can then apply for additional benefits based on the husband’s work record.  She will receive her own benefit of $800 per month first, then spousal benefits of $200 per month to bring her total benefit amount to the spousal benefit limit of $1,000 per month (50% of the husband’s benefit).  If the husband dies first, then the wife’s survivor’s benefit will increase to $1,200 per month; combined with her own benefit, she will receive $2,000 per month (the amount her husband received while he was alive).  If the wife dies first, then the husband will continue to receive his own benefit of $2,000 per month.

What are the advantages of this approach?  First, in our example, the husband will receive $400 per month for the three years until he reaches age 70, or up to $14,400.  Second, by delaying the receipt of his own benefit until age 70, he will receive a larger benefit.  Third, this same delay will result in the wife receiving a larger survivor’s benefit at the husband’s death.

Keep in mind that in our example, if the wife starts taking benefits on her own work record earlier than her full retirement age, then she will not only permanently reduce her own benefit, but she will also reduce the percentage of her husband’s benefit that she will receive during his lifetime and if he dies first.

Andrew H. Hook
Oast & Hook
www.oasthook.com

Medicare Part D Costs to Increase in 2009

A recent Wall Street Journal article highlighted changes in Medicare Part D prescription drug plan premiums in 2009.  Seniors also need to be aware of additional changes in their co-payment costs.  These costs are often the largest out-of-pocket expenses for beneficiaries.

Part D enrollees have been receiving information regarding plan changes for next year.  The ten largest plans expect their premiums to rise an average of 31%, with some increasing by as much as 60%.  In addition, some plans are sharply adjusting co-payments.  Beneficiaries need to review their plans to see what changes might occur.

The fall open-enrollment period is underway for the Part D benefit, with the period ending on December 31st.  Beneficiaries can elect to change plans during the open-enrollment period, although they do not have to.  If a beneficiary’s plan costs are set to increase, the beneficiary may want to research other plans and consider changing plans.  Cheryl Matheis, senior vice president for health strategy at AARP, says, “It always pays to do the search again.  If your plan’s cost is going up, then you really do need to make sure you have the best deal.”

As an example, AARP MedicareRX Preferred, sponsored by United Health Group Inc., the country’s largest Medicare drug plan, expects to increase premiums by 18%.  Additionally, co-payments for brand-name medications, such as Lipitor and Nexium, will increase 21%, according to a five-state study.  Beneficiaries in Humana Inc.’s PDP Enhanced plan will see average premium increases of 51%, average co-payments for generic drugs increase by 75%, and co-payments for preferred brand-name drugs increase by 60%.

Companies must get approval from the Centers for Medicare and Medicaid Services before marketing their drug plans, although the government doesn’t regulate how insurers set premiums and co-payments on Part D plans.  Total out-of-pocket expenses vary depending on location and specific drugs used.  Plans have several tiers of medications that each plan can define differently.  Generally, tier 1 contains generic drugs, tier 2 includes preferred brand-name drugs, tier 3 includes non-preferred drugs, and tier 4 is for specialty drugs.

Beneficiaries can consult the Plan Finder on the Medicare website at www.medicare.gov.  They can enter information regarding the drugs and dosages they take, and compare plans based on premiums, drugs covered, out-of-pocket expenses, and interface with their preferred pharmacy networks.  Consumers can also compare costs of filling a prescription by mail-order or at a local pharmacy.  The Plan Finder also can offer recommendations regarding generic drugs or other brand-name drugs used for the same conditions, so the beneficiaries can discuss these lower-cost alternatives with their physicians.  Beneficiaries can receive assistance from family or friends, or get help from the State Health Insurance Assistance Program.  A list of these programs can be found at www.medicare.gov.

The “doughnut hole,” the coverage gap where consumers usually have to start paying the full cost of their drugs, will open up after beneficiaries have spent a total of $2,700, an increase from $2,510 in 2008.  Beneficiaries must pay for the full cost of their medications from this point until their out-of- pocket expenses reaches $4,350, after which the drug plan will pay most of the costs.  Some insurers will continue to cut back on the supplemental cost of the doughnut hole.

Beneficiaries should carefully review their plans and the new information from their plan providers, so that they can make informed decisions regarding their plan options for next year.

Andrew H. Hook
www.oasthook.com
Oast & Hook

Holiday Blues - Depression in the Elderly

The holiday season is quickly coming upon us. If you are a caregiver for an elderly loved one, you may notice a change in your loved one’s mood as the holidays approach. Perhaps you are one of many who visit their elderly parents and family during the holidays who live some distance away. When you visit, you may notice that loved ones are not as physically active as on prior visits, that they show symptoms of fatigue or sadness, or that they have no interest in the holiday or in their surroundings.

According to the National Institutes of Health, of the 35 million Americans age 65 years or older, about 2 million suffer from full-blown depression. Another 5 million suffer from less severe forms of the illness. This represents about 20% of the senior population – a significant proportion.

Depression in the elderly is difficult to diagnose and is frequently untreated. The symptoms may be confused with a medical illness, dementia, or malnutrition due to a poor diet. Many older people will not accept the idea that they have depression and refuse to seek treatment.

What causes depression in the elderly?

It is not the actual holiday that causes depression, but the fact that holidays tend to bring memories of earlier, perhaps happier, times. Additional contributing factors that bring on depression may be the loss of a spouse or close friend, or a move from a home to an assisted living facility, or a change in an older person's routine.

Depression may also be a sign of a medical problem. Chronic pain or complications of an illness or memory loss can also cause depression. In addition, diet can also be a factor when proper nutrition and vitamins are lacking.

As an example, Selma’s husband died a few months before Christmas.  Her family lived close by and would call or drop in often to check on her.  Selma seemed a little preoccupied and tired, but this was to be expected as she had been the caregiver for her husband for many years.  When the family noticed that her holiday decorations were not out, and that she had abandoned her annual routine of sending Christmas cards, they began questioning her mental and physical well-being.

A trip to her physician confirmed depression, caused by not only the loss of her spouse, but also a vitamin B12 deficiency.  There were both mental and physical reasons for her depression.

Symptoms to look for in depression might include:

• Depressed or irritable mood
• Feelings of worthlessness or sadness
• Expressions of helplessness
• Anxiety
• Loss of interest in daily activities
• Loss of appetite
• Weight loss
• Fatigue
• Lack of attending to personal care and hygiene
• Difficulty concentrating
• Irresponsible behavior
• Obsessive thoughts about death
• Talk about suicide

How do you know if it is depression or dementia?

Depression and dementia share similar symptoms. A recent article on Helpguide.org gives some specific differences:

In depression there is a rapid mental decline, but memory of time, date and awareness of the environment remains. Motor skills are slow, but normal in depression. Concern with concentration and worry about impaired memory may occur.

On the other hand, dementia symptoms reveal a slow mental decline with confusion and loss of recognizing familiar locations. Writing, speaking and motor skills are impaired, and memory loss is not acknowledged as being a problem by the person suffering dementia.

Whether it is depression or dementia, prompt treatment is recommended. A physical examination will help determine if there is a medical cause for depression. A geriatric medical practitioner is skilled in diagnosing depression and illnesses in the elderly. If you are the caregiver of an elderly person it may be beneficial for you to seek out a geriatric health care specialist. For more information on senior health services go to www.longtermcarelink.net/about_senior_health_services.htm.

Treating depression in older people.

Once the cause of the depression is identified, a treatment program can be implemented. Treatment may be as simple as relieving loneliness through visitations, outings and involvement in family activities. In more severe cases antidepressant drugs have been known to improve the quality of life in depressed elderly people. Cognitive therapy sessions with a counselor may also be effective.

As a caregiver or family member of a depressed elderly person, make it your responsibility to get involved. The elderly person generally denies any problems or may fear being mentally ill. You can make the difference and remove the Holiday Blues from seniors suffering from depression.

The Geriatric Mental Health Foundation offers a “Depression Tool Kit.” To read more about this tool kit and depression in the elderly, go to www.gmhfonline.org/gmhf/consumer/depression_toolkit.html.

Andrew H. Hook
Oast & Hook
www.oasthook.com

2009 Elder Law Numbers

There are several figures of interest to seniors and their families for 2009.  They include long-term care spousal standards, annual gift tax exclusion rates, long-term care premium deductibility limits, and Social Security benefit changes.

The Center for Medicare and Medicaid Services (CMS) has announced changes to the long-term care spousal standards that apply to a community spouse.  A community spouse is a person who is not an inpatient in a medical institution or a nursing facility, but is married to a person who is an inpatient in a medical institution or a nursing facility (the institutionalized spouse).  The standards that will change in 2009 include, but are not limited to, the Maximum and Minimum Spousal Resource Standards and the Maximum Monthly Maintenance Needs Allowance (MMMNA). 

The Protected Resource Allowance (PRA) (often referred to as the Community Spouse Resource Allowance, but technically this is incorrect), is the amount of assets that the community spouse is allowed to retain when the institutionalized spouse is eligible for Medicaid.  The PRA is the greatest of either: (1) the Spousal Share (one-half of the total amount of joint countable assets as of the first day of continuous institutionalization for the institutionalized spouse), or (2) the Maximum Spousal Resource Standard at the time of application, or (3) the amount actually transferred to the community spouse as court-ordered spousal support, or (4) an amount determined at a hearing by the Department of Medical Assistance Services (DMAS).  The PRA can be no more than the Maximum Spousal Resource Standard and no less than the Minimum Spousal Resource Standard.  The Maximum and Minimum Spousal Resource Standards increase each year based on changes in the Consumer Price Index.  On January 1, 2009, the Maximum Spousal Resource Standard will increase by $5,160 to $109,560.  (The maximum for 2008 is $104,400.)  The Minimum Spousal Resource Standard will increase by $1032, from $20,880 in 2008 to $21,912 in 2009.

The MMMNA has a minimum allowance amount and a maximum allowance amount.  The MMMNA for 2008 is $1,750, and this amount will remain as the minimum allowance for the first half of 2009.  The maximum maintenance needs allowance for 2009 will increase by $129, from $2,610 in 2008 to $2,739 in 2009.  The community spouse excess Shelter Standard for 2008 is $525, and this amount will remain the same for the first half of 2009. 

The IRS has announced that effective January 1, 2009, the annual gift tax exclusion will increase from $12,000 to $13,000.  This exclusion is the amount that a taxpayer can give to another individual without filing a gift tax return.  The IRS also announced the limitations for 2009 for the deductibility of long-term care insurance premiums from federal taxes.  Premium amounts above the limits are not considered to be a medical expense.  For those age 40 years or less, the maximum deduction is $320; for those more than 40 to age 50, it is $600; for those more than 50 to age 60, it is $1,190; for those more than 60 to age 70, it is $3,180, and for those over age 70, it is $3,960.  In Virginia, premiums that are not deductible on the federal tax return can be taken as a subtraction on the Virginia state income tax return.

For those on Social Security, the cost of living increase for 2009 is 5.8 percent.  The estimated average monthly Social Security benefit payable in 2009 is $1,153.  The maximum taxable earnings is $106,800, and the maximum Social Security benefit is $2,323 per month.  The Supplemental Security Income (SSI) federal payment standard will increase to $674 per month for an individual, and $1,011 per month for a couple.

Andrew H. Hook
Oast & Hook
www.oasthook.com