Monthly Archives: May 2018

Trump expected to hit Medicaid, Medicare with spending cuts package

May 31, 2018

April 27, 2018

President Donald Trump

President Donald Trump

Congressional leaders say the Trump administration is preparing to propose up to $25 billion in federal  spending cuts, which will hit Medicaid and other safety net programs.

The so-far unreleased White House plan would call on Congress to rescind funding already enacted, and it would be submitted next month, Reuters reported Thursday.

Rep. Tom Cole (R-OK) told reporters the administration was originally considering $60 billion in mid-year cuts. He said the president’s team is considering slicing mandatory adjustments that “Democrats probably wouldn’t like.” Mandatory programs include Social Security, Medicare and Medicaid.

Those cuts would be unrelated to a two-year budget deal enacted in February as the federal government approached its third shutdown of the fiscal year.

But they align with Trump’s previous budget proposals, which both called for reducing mandatory program spending — including slashing $800 billion from Medicaid over 10 years.

Cole and other senior House Republicans warned the White House against rescinding money from Democrat-backed programs while largely sparing Republican priorities such as defense.

Cuts could be politically damning as midterm elections near, some observers believe.

On Thursday, the head of the Democratic Congressional Campaign Committee told Bloomberg Law that Democrats plan to make healthcare a central theme during this fall’s races.

Those comments focused on efforts to attack Republicans for their efforts to repeal Obamacare. But Republicans have noted in the past few months that 2018 would not be the time to tackle entitlement reform, possibly because of the popularity of Medicare and Medicaid benefits among many voters.

Senate Majority Leader Mitch McConnell (R-KY) has has said he is opposed to reopening the fiscal 2018 budget.

Long-Term Care Expenses Growing As A Worry For Retirees

May 31, 2018

Long-term care and overall medical expenses are growing as financial worries for retirees. Nearly half of seniors have little or no confidence they have enough money for nursing homes and other long-care.

That worry grew to 49% this year, up from 45% last year, in the annual retirement confidence survey released today by the Employee Benefit Research Institute (EBRI), a non-partisan Washington think tank.

Twice as many retirees requiring long-term care in the last five years said the expense was much higher than expected compared to the elderly who haven’t needed the intense medical assistance (22% versus 11%).

For overall medical care, the share of retirees who told EBRI they have little or no confidence they will be able to pay the bills climbed to 30% in 2018, from 23% in 2017.

Much of the talk about retirement is on spending down assets—the IRS requires yearly withdraw after age 70 ½ from traditional (non-Roth) IRAs, 401(k)s and other defined contribution retirement plans.

However, twice as many retirees told the EBRI researchers they are trying to build up assets than gradually depleting them (25% versus 11%).

Close to half of retirees who were in a defined contribution plan said they rolled it over when they retired (44%) against 29% who said they kept the money in workplace retirement savings plans. Only 8% said they cashed it out and spent it.

About a third of retirees said they moved their money out of a workplace retirement savings plan because a financial professional told them that was the smart thing to do.

The survey, which included adults in the workforce as well as retirees, had a message to the young from the old:

Don’t expect to get a big help in retirement from on-the-job savings programs and working during the so-called “golden years.”

Nearly one of every two retirees said workplace savings vehicles such as 401(k)s and 403(b)s are providing no money for them in retirement compared to four of every five workers who said they expect to get major or minor financial help from the plans.

Likewise, only 26% of retirees said from experience that working in retirement is providing a minor or major source of income while nearly two-and-a-half times of workers (68%) are anticipating it will.

Some workers may be guilty of having a false sense of confidence they will be gainfully employed late into life, the researchers cautioned. They noted workers expect to retire later than retirees actually do.

Retirees are overwhelmingly secure in their ability to pay basic expenses, but the number has declined over the past year to 80% from 85%.

The results are based on an EBRI poll of 1,040 retirees and 1,002 workers 25 and older between January 3 and 16 of this year. The margin of error is plus or minus 3.16 percentage points for all workers and 3.1 percentage points for all retirees.

The Never-Ending Misuse of Antipsychotics In Nursing Homes

May 31, 2018

In response to a generic question about post-market drug surveillance posed during a February 2007 House Energy and Commerce Committee hearing, Dr. David Graham, then associate director of science and medicine in the Food and Drug Administration’s (FDA’s) Office of Surveillance and Epidemiology, stated: “I would pay careful attention to antipsychotic medications. … The problem with these drugs are that we know that they are being used extensively off label in nursing homes to sedate elderly patients with dementia … . It is known that the drugs don’t work in those settings. … But the fact is, is that it increases mortality perhaps by 100 percent. It doubles mortality. So I did a back-of-the-envelope calculation on this and you probably got 15,000 elderly people in nursing homes dying each year from the off-label use of antipsychotic medications for an indication that FDA knows the drug doesn’t work. This problem has been known to FDA for years and years and years.”

Despite this candid and somewhat remarkable admission, nothing happened in response. Sadly, that indifference is not surprising; the problem of antipsychotic drug misuse in nursing homes has been raised to policy makers going back six decades.

For example, in 1975, the Senate Special Committee on Aging published a series of papers collectively titled “Nursing Home Care in the United States: Failure in Public Policy.” Included in the committee’s description of ongoing “scandal and abuse” in nursing home care dating back to the 1950s was a finding that “perhaps most disturbing is the ample evidence that nursing home patients are tranquilized to keep them quiet and to make them easier to take care of.”

Eleven years later in 1986, the Institute of Medicine (IOM) revisited nursing home care quality, producing a report titled, “Improving the Quality of Care in Nursing Homes.” Citing the misuse of antipsychotic drugs among many factors, the authors concluded that “over the past 15 years many studies of nursing home care have identified both grossly inadequate care and abuse of residents.”

One year after the IOM report was published, the Nursing Home Reform Act of 1987 was signed into law. The law established survey, certification, and enforcement processes intended to ensure, in part, residents’ care quality and quality of life. The law also created a nursing home residents’ “bill of rights” that included the right to be free from abuse and mistreatment, the right to self-determination, and the right to be fully informed.

Reform legislation, however, did not dampen the use of antipsychotics, for example, Haldol, Seroquel, and Risperdal, among others. Misuse continued unabated. For example, a 2011 report by the Department of Health and Human Services’ Office of Inspector General found that in 2007 14 percent of Medicare nursing home residents had claims for an antipsychotic drug and 83 percent of these claims were for off-label use, or use for which there was no clinical indication. By 2010, the Centers for Medicare and Medicaid Services (CMS), the agency largely responsible for enforcing the Nursing Home Reform Act, reported nearly 40 percent of nursing home residents who had no diagnosis of psychosis received antipsychotic medications.

They Want Docile

With decades of documented abuse and more than one million Americans older than age 65 currently residing in 15,000 nursing homes, two-thirds of whom are women, and with a rapidly aging population that is projected to triple the number of adults with dementia, it is not surprising that the Human Rights Watch (HRW) has now weighed in on the problem. In 2016 and 2017, the HRW, whose mission is to uphold human dignity and advance the cause of human rights, visited 109 nursing homes in six states with the highest number of nursing home residents and the highest proportion of residents on antipsychotic medications, that is, California, Florida, Illinois, Kansas, New York, and Texas. The organization also interviewed more than 320 nursing home residents, facility staff and administrators, and various experts in the field and made a detailed analysis of CMS’s regulatory enforcement efforts. Its overarching conclusion is made evident in its February report’s title, “ ‘They Want Docile:’ How Nursing Homes in the United States Overmedicate People with Dementia.”

“Nursing facilities in the US,” the HRW report found, “use antipsychotic medications on a massive scale.” The HRW estimated on an average week nursing homes administer antipsychotic drugs to more than 179,000 residents who do not have a diagnosis for which antipsychotic medications are approved. The report cites CMS’s own data that estimates 16 percent of long-stay nursing home residents, or those residing in a nursing home for more than 100 days, received an antipsychotic medication without one of three exclusionary diagnoses: schizophrenia, Huntington’s disease, or Tourette’s syndrome.

The impetus or motivation for misuse is obvious: convenience. These drugs can control behavioral and psychological symptoms associated with dementia, for example, aggression, agitation, irritability, and wandering. As one 62-year-old woman who was administered Seroquel without her consent, the medication was mixed in with her food, told the HRW, “[It] knocks you out. It’s a powerful, powerful drug. I sleep all the time. I have to ask people what the day is.” With residents effectively narcotized, nursing homes, of which 70 percent are for-profit, are able to significantly reduce staffing levels. The report states that, “the conditions in about 20 of the 109 facilities visited, across all six states, were disturbingly grim … many facilities visited on weekends appeared to be severely understaffed … [we] encountered residents who desperately needed an aide to help them use the bathroom.”

Particularly disturbing is the fact that these drugs carry severe potential side effects including blood clots, diabetes, dyskinesia, fall risk, irreversible cognitive decompensation, pneumonia, severe nervous system problems, stroke, visual disturbances, and, again, death. This explains why these drugs have come with an FDA black-box warning label since 2008 cautioning their use for patients with dementia-related psychosis. While the report notes FDA studies that found the use of antipsychotics almost doubles the risk of death in older people with dementia, a 2015 study published in JAMA Psychiatryfound mortality risk may actually be higher and increases with the dosage.

The HRW also found that these medications are frequently administered without residents’ or their families’ or surrogates’ free and informed consent or, again, even without their awareness. (The Nursing Home Reform Act does not provide for express, written informed consent.) The HRW report identified several variations on this theme. In addition to secretively administering antipsychotics, the report found nursing homes do not identify the drug as an antipsychotic; claim the resident would get hurt without such medication; guilt the family into agreeing to consent; fail to note potential side effects or risks; threaten discharge; schedule a meeting after administering the antipsychotic claiming they tried to contact the family member or surrogate; or argue they do not know what the consent process is. All these techniques are perversely reinforced by CMS’s decision last year to reverse the agency’s policy on binding arbitration. In 2016, the agency argued that arbitration agreements have a deleterious impact on the quality of nursing home care by effectively reducing accountability. However, last year CMS reversed its decision and allowed nursing homes to deny admission to those refusing to sign an arbitration agreement.

In 2012, CMS did create a voluntary program titled the National Partnership to Improve Dementia Care in Nursing Homes. Last fall, the agency reportedpartnership efforts had reduced the national prevalence of antipsychotic use in long-stay nursing home residents without psychosis from 24 percent in 2011 to 16 percent in 2016. While these results are encouraging, there has been no formal evaluation of the program, so it is unclear whether this reduction is due to the partnership or the result of increased industry attention.

The HRW also found “several significant shortcomings in nursing home enforcement of federal regulations” relative to the misuse of antipsychotics. For the 30-month-period ending June 30, 2017, of the 7,000 deficiency reports related to antipsychotic drugs, the HRW found that less than 2 percent were categorized by state health officials as higher-level or level 3 or level 4 deficiencies, or as “actual harm” or “immediate jeopardy” respectively. “This apparently systematic underestimation of the severity or harm,” the HRW wrote, “appears to point to woefully inadequate enforcement and protection of nursing home residents’ rights.” Similarly, the HRW also found that 80 percent of fines assessed in all states for this same time period were less than $10,000. Because financial penalties were trivial to modest, those nursing homes fined for antipsychotic use-related deficiencies had in the following year no statistically significant difference in the rate of change in antipsychotic drug use than those nursing homes not fined. The HRW concluded bluntly, “CMS is not using its full authority to force them [nursing homes] to improve their performance.”


In light of 60 pages of findings, the report makes numerous federal and state-level recommendations. Thematically, the HRW emphasized ensuring adequate staffing, free and informed consent, regulatory enforcement, and transparency measures. For example, the HRW recommends that Congress reintroduce 2015 legislation (HR 952) that would have required at least one registered nurse to be on duty at all times. The HRW also recommends the full implementation by CMS of Section 6106 of the Affordable Care Act, which requires nursing home staffing data be publicly reported. For unexplained reasons, CMS has to date failed to accomplish this task. States should pursue similar policy goals.

Concerning informed consent, the HRW encourages regulators to develop and disseminate, including publicly posting, shared decision-making tools. Regulators should also maximize the use of advanced directives, conduct targeted public service campaigns, and make informed consent a nursing home ombudsman program priority. Again, states should take the lead. In 2009, the California legislature to its credit passed related legislation; however, it was vetoed by then-Governor Arnold Schwarzenegger.

Based on the HRW’s profiling, Kansas, the state that ranks worst in the nation in misuse of antipsychotics in nursing homes, has recently introduced legislation, HR 2704, that would require nursing homes obtain written consent from nursing home residents or their guardians prior to administering medications. Successful passage is unlikely since the bill is opposed by both the Kansas Medical Society, which represents state physicians, and the Kansas Hospital Association. It appears that none of the remaining five states the HRW profiled are attempting to legislate similar informed-consent reforms.

The HRW identifies numerous enforcement opportunities. As suggested above, CMS should begin to use its full enforcement authority. For example, inappropriate use of antipsychotics should automatically be reported as level 3 or 4 violations and create an explicit or discrete reporting tag (so called f-tags), identifying the misuse of antipsychotics. Make publicly available enforcement data at the nursing homeownership-level, and use the full weight of law: not only the Nursing Home Reform Act but also all protections and authority under the Americans with Disabilities Act, the Civil Rights of Institutionalized Persons Act, the False Claims Act, the Food, Drug and Cosmetic Act, the Older Americans Act, and others. Although the US has signed but not ratified the international Convention on the Rights of Persons with Disabilities, which protects the disabled from cruel, inhuman, or degrading treatment or punishment, the US should honor it.

It appears unlikely that any of these recommendations will be effectively acted upon at least in the near term. It is encouraging that this past fall CMS’s national dementia partnership announced a goal to reduce the misuse of antipsychotics among long-stay nursing home residents by an additional 15 percent by 2019. Yet, in the partnership’s most recent report dated June 3, 2016, there is no mention of greater or more accurate regulatory deficiency enforcement nor any mention of, for example, sanctions.

Moreover, last year the administration placed an 18-month moratorium on imposing civil monetary penalties on nursing homes. Included on the moratorium list of things for which nursing homes cannot currently be penalized: the misuse of psychotic medications. CMS explained the moratorium by stating, “providers are spending time complying with regulations that get in the way of caring for their patients.” The moratorium comes on the heels of several other actions taken by CMS to reduce nursing home regulatory oversight. In addition to its reversal last June on arbitration as noted above, the agency issued a memo in July recommending to state agencies that in surveying nursing homes they issue one-time fines instead of daily fines for noncompliance that began prior to an inspection. Then in October, an agency memo recommended that CMS regional offices not levy fines against nursing homes for one-time mistakes.

“Care for older persons in need of long-term attention,” the Senate Special Committee on Aging concluded in 1975, “should be one of the most tender and effective services a society can offer to its people.” It’s not. The HRW report provides the latest evidence that despite more recent industry improvements nursing homes remain our most troubled and troublesome health care provider. Sadly, tragically, Dr. Graham’s estimate of annual deaths via the misuse of antipsychotics continues apace.

Come aboard the cannabus: More seniors taking trips to get weed

May 31, 2018

(CNN) — An 86-year-old man in a bright yellow sweatshirt and matching baseball cap grips his walker tightly. He stands near the door of a large bus, the charter name American stretching over his shoulder. He greets neighbors and trades jokes with an official-looking woman, clipboard at the ready, checking people in as they board.

They spot an older woman in black running toward them, her purse bouncing behind her. “Chin,” the woman gives her last name when she stops, a little out of breath. “I worried you’d leave without me, and I definitely didn’t want to miss this.” Seniors check in with Kandice Hawes before boarding a charter bus to a medical marijuana dispensary. Seniors check in with Kandice Hawes before boarding a charter bus to a medical marijuana dispensary.

She joins about 50 seniors from Laguna Woods Village, an active-lifestyle community in Orange County, California, for people 55 and older, who are alreadyaboard the bus and ready for a new adventure. Many say they saw an ad for the free senior shuttle in their local paper.
They aren’t catching a ride to bingo, nor are they headed to walk at the mall. Instead, this special charter comes to the community once a month to spare these seniors a half-hour drive to Santa Ana. Their destination: Bud and Bloom, a store that organizes the shuttle and bills itself as a senior-friendly medical marijuana dispensary. Some nicknamed the charter “the cannabus.”

This is the first trip for the energetic man in yellow, John Lustig, and his spouse, Anne, who knits next to him on the bus. He fell and hurt his back and uses the walker for balance. “I’ve been having unpleasant back pain, and the medications weren’t doing it, so I thought, at 86, I would give cannabis a try,” Lustig says. Anne Lustig knits as she rides with her husband to the marijuana dispensary. Anne Lustig knits as she rides with her husband to the marijuana dispensary.

The retired librarian’s doctor gave him a shot for the pain, but it hasn’t worked well, and his wife said the opioid he’s on doesn’t always work, either.

A lot of other riders expressed reluctance about opioids, worried that they’ll feel unmotivated. The group takes the “active” description of their senior community seriously: There are horse trails, pools and tennis.

Lustig hopes cannabis will help. Asked what neighbors will think, he jokes, “I don’t give a damn.

“If I can help them lift something because my back is OK again, I think they would even help pay for the trip.”

On board, the festive atmosphere is punctuated by the buzz of neighbors getting to know each other. One woman looks over a long handwritten shopping list. She’s gathered neighbors’ requests, and the list is four pages long. Others hand iPhones across the aisle, showing off photos of grandkids and great-grandkids. Many laugh and share stories, learning that they have at least one thing in common: If they’ve tried the drug before, it was a grandson who introduced them to it. The shuttle riders carry long lists of dispensary requests for friends. The shuttle riders carry long lists of dispensary requests for friends.

“My grandson gave me a block of this chocolate,” says a woman with an old Hollywood style coif and a sensible knit vest, a glasses chain around her neck. She asks that her name not be used, saying her children would be mortified. “I couldn’t see straight for hours. It made me feel so weird, but I hear that there is some you can get that won’t get you high. I’m interested in that. I’ve got arthritis.

Arthritis, pain, insomnia, lack of appetite: All problems familiar to seniors and problems medical marijuana may address. As a result, seniors are one of the fastest-growing demographics to show interest in weed, a study showed.

Kandice Hawes, who was checking people in with the clipboard, is a longtime legalization advocate hired by Bud and Bloom. She said that since she’s been coordinating the senior shuttle, she’s seen a shift in attitudes, especially after marijuana became legal in all forms in California in January. Seniors, she finds, are particularly curious. “We usually have a happy bunch who want to learn something new and to try out new things,” she said.

Scientific studies are still limited due to the Schedule I classification of the drug, which means it’s illegal on the federal level and is considered to be of no medical value. However, the evidence is starting to show otherwise. The seniors on board the “cannabus” — many new to the drug, many like the Lustigs — want to find out whether it will work for them.

Weed has already fixed a huge health issue for Christy Diller, who is going to be 80 in a few months. She’s been using it for a couple of years. Christy Diller, right, says marijuana brownies help her sleep and relieve her arthritis pain. Christy Diller, right, says marijuana brownies help her sleep and relieve her arthritis pain.

“I’ve got rheumatoid arthritis really bad. That’s why I’m taking the marijuana,” Diller said. She eats a marijuana brownie every night, about two hours before she goes to bed. Before marijuana, she’d get about only two hours of sleep a night. “I was like a walking zombie, and that was almost every day.” Now, with her brownies, she gets a full night’s rest.

Today, she’s on the bus to buy mint lozenges. She bought some a few months ago, on another shuttle ride, and found that they helped when the brownies weren’t enough. Some friends have given her a hard time about using marijuana, but she doesn’t care what they think.

“I think it is great. I think older people that have a lot of pain should use the marijuana, you know. When nothing else helps, then use it,” Diller said. “For me, nothing else helped me anymore, so I used the marijuana. It got a little better. It didn’t get much better, but it got better. So I can at least get some steps already, and I can walk. I could not even walk before.” Christy Diller browses at the medical marijuana shop. Christy Diller browses at the medical marijuana shop.

The bus passes through an industrial area and pulls up alongside a set of nondescript concrete buildings. The only thing distinguishing the Bud and Bloom dispensary is a bright green cross in the window and a large man in black, with the air of a bouncer, standing at the door for security.

Inside, the seniors must show an ID and fill out city-required paperwork. At a desk that resembles the check-in area at a doctor’s office, they have to state whether they are there for medical or recreational purposes. “If you have a doctor’s recommendation, you get a 10% discount here,” the clerk tells Diller. “And if you are over 55, you also get a seniors discount.”

Part of the group goes to the back of the building, where there is an information fair. Vendors sell weed wares and services. The Lustigs seem intrigued by a mixture that goes in your morning coffee, and they get a massage from a woman who rubs cannabis oil onto their backs. Donald Wright, who describes himself as the senior brand ambassador for a cannabis product, explains it to some of the seniors. Donald Wright, who describes himself as the senior brand ambassador for a cannabis product, explains it to some of the seniors.

Christina Espiritu, founder of the 420 Foodie Club, speaks with a group of seniors as they eat sandwiches in metal folding chairs. “How many of you have ever cooked with marijuana?” Espiritu asks. A few hands shoot up.

“Do you remember what you made?” she asks.

“Brownies, of course,” shouts a woman, laughing, at the front.

“Did you like them?” Espiritu asks.

“No, they tasted like dirt,” the woman responds.

“Well, we can teach you about how you can make marijuana into butter. I promise that tastes a lot better,” the instructor tells the class. Anne Lustig gets a massage with cannabis oil. Anne Lustig gets a massage with cannabis oil.

Other seniors ask about creams on display. “These do different things for different times of day,” says a man with a million-dollar smile who looks like he should work at a high-end cosmetics counter. “The bliss from this is very uplifting, meant for a mood enhancement. It is quite energetic at times, but it is meant to elevate your mood and make you feel good. The other is great for sleep. Even Time magazine wrote about it. There’s satisfaction guaranteed.” One woman waits to check out by a display of medical cannabis potato chips. One woman waits to check out by a display of medical cannabis potato chips.

In the store, a group looks around what could pass for a posh hotel spa rather than a hippie-era head shop. On displays of modern furniture and glass cabinets are cannabis products in every imaginable variety: weed popcorn, potato chips, mints, gummies, lip gloss and the more traditional glass bongs and rolled joints. “These are a little fancier than what we used in the ’60s,” one man tells his wife as they look over bongs. Bongs for sale at the dispensary "are a little fancier than what we used in the '60s," one man said. Bongs for sale at the dispensary “are a little fancier than what we used in the ’60s,” one man said.

Clerks and an on-site pharmacist are ready to answer any questions.

“I do have the oil,” a clerk tells the Lustigs. “It would work really well for your back pain. But that’s only if you have someone who can assist you.”

John Lustig pats the hand of his wife of 64 years with a mischievous grin, and she nods that she will help. “How do you know how much to apply?” he asks the clerk.

“It’s very personal. You will have to test the waters,” the clerk replies. “The thing about our topicals is, it’s not intoxicating.” John and Anne Lustig learn about cannabis lotions at the dispensary. John and Anne Lustig learn about cannabis lotions at the dispensary.

“Do you have your exit bag?” a nearby clerk asks as Diller checks out. An exit bag is a secure envelope required by state law for all dispensary purchases.

“Oh, you have to bring that every time?” she asks.

“You have to bring them back every time. It is just the law. It’s a dollar.”

“Oh, dear. A dollar is a dollar for we seniors,” Diller says.

One of the drawbacks of marijuana as medicine: It can be expensive. Diller’s tiny box of mints costs $24.49. The clerk blames taxes, and since marijuana is illegal at the federal level, it’s not something Medicaid or insurance covers, even with a doctor;s recommendation.

Though disappointed about the expense, Diller still thinks the benefits are worth it. “For me, it’s a miracle,” she says. “Although the cream can smell pretty bad. I went to my daughter one time. She said, ‘You smell horrible. What do you have on?’ I said ‘marijuana.’ My daughter laughed and said ‘whatever works.’ ”

A few weeks after their shopping trip, Anne Lustig said they aren’t completely sold on marijuana. Before she uses it, she wants to do more research. “Honestly, I haven’t given it a chance yet,” she said, though she rubbed some of the liquid on her husband’s back. “I do think that may have helped, at least a little bit.

“We will have to see. As my husband always says, ‘getting old is not for sissies.’ “

How the New Tax Bill Will Impact Older Americans

May 31, 2018

By David M. Goldfarb, Esq., and Hyman G. Darling, CELA, CAP
Published May 2018

Last year’s $1.45 trillion tax re-write is certain to impact older Americans, but how?

The Urban Institute’s Tax Policy Center estimates that the new law will reduce taxes on average for all income groups in both 2018 and 2025. A few will see their taxes increase, more over time due to the inclusion of “chained-CPI,” which grows more slowly than the standard inflation rate. Many more could see an increase after 2025 when much of the individual tax provisions expire.

Today, many seniors do not pay any tax and will not under the new law. That’s because a large number of older adults rely almost entirely on Social Security, which is exempt from taxation at lower levels of income.

Older households that do pay taxes tend not to itemize deductions. A major aspect of the tax rewrite was to limit the number of households that itemize and to reduce their impact overall. It’s likely therefore that as a group they will see a modest benefit, particularly early on, from the tax cuts.

So, whose taxes could increase among older adults? Major itemizers, which are more often those in places with high state and local income and property taxes.

Thankfully though, the new law does not make as radical of changes to limiting itemized deductions as originally proposed.

For instance, the National Academy of Elder Law Attorneys, AARP, and a number of other advocates fought to save the medical expense deduction. Ending the deduction would have caused serious harm to many seniors who have high medical or long-term care costs.

Thanks to the outcry, the final legislation not only keeps the medical expense deduction, but temporarily expands it for two years.

Rethinking “Bunching” with the New Tax Law
When planning for seniors, major changes to focus on include new the tax rates and brackets, increases to the alternative minimum tax (AMT), and the impact of doubling the standard deduction. One important planning tool going forward will be “bunching deductions.”

With the shift of income to different brackets, it is important to at least consider what bracket a person will be in and whether to bunch deductions in one year as opposed to taking the standard deduction. Given the elimination of the personal exemption, the doubling of standard deductions, and a $10,000 cap on state and local tax (SALT) deductions, the taxpayer may not have significant medical deductions together with SALT deductions when added to charitable contributions and mortgage interests to file an itemized deduction schedule. This will certainly have a bearing on both the federal tax return as well as on the state tax return as in some states, itemized deductions may not be taken on the state tx return unless they are taken on the federal return.

Similarly, the AMT has increased to $70,300 for a single person and $109,400 for a married couple. These amounts now phase out when a single taxpayer reaches $500,000 and a married taxpayer reaches $1 million. Again, with limitations on itemized deductions, the AMT may also not be as critical to those payers who do not itemize.

Given the difficulty in itemizing deductions, “bunching” expenses becomes a greater consideration. The benefit of “bunching” would be that in a year where a person may not have sufficient expenses that will allow them to itemize — such as charitable expenses and real estate taxes — perhaps they should be bunched into one year.

For instance, a taxpayer could pay all of their real estate taxes for 2018 in 2018, and if the fiscal tax year for the city or town they live in begins in 2018 for 2019, the taxes could be paid also in 2018. Charitable deductions for 2018 would also be paid in 2018 as well as having pledges or proposed charitable contributions for 2019 paid in the same year. Therefore, the itemized deductions will be taken in 2018, but perhaps not in 2019. This process would be repeated in 2020, 2022, etc. Keep in mind that many of the changes that were enacted expire at the end of 2025 unless extended. Attorneys should keep up on the law when considering this procedure.

Charitable Gifts Made from IRAs
Also, a taxpayer over the age of 70.5 with their primary income from their IRA and Social Security may be required to pay income taxes on a portion of their Social Security. If their charitable contributions are not deductible, they should consider having the charitable gifts made directly from their IRA to the charities. Their gifts qualify for the minimum required distribution, but the amounts will not be taxable.  This reduces the amount of income considered for 1) taxation, 2) the inclusion of Social Security benefits as part of taxable income, 3) calculating Medicare Part D income- related monthly adjustment amounts, and 4) qualifying for public benefits.

Assessing the Broader Impact of Legislation
Many aging advocates opposed the legislation not for reasons related to direct taxes, but its broader consequences. One risk already averted was the automatic cuts to Medicare under the budget rules. To avert those cuts, many Democrats joined Republicans to waive those rules. Yet more concerns remain:

• Destabilization of the individual health insurance market. The end of the individual mandate threatens to raise taxes and undermine health coverage for many people. Those aged 55-64 often have high health costs, meaning some could be less economically secure and less healthy as they enter traditional retirement age, as a result.

• Pressure on states to cut spending. The law caps state and local tax deductions to $10,000. Unless states find a work around, it could undermine the ability of states to finance key programs, such as Medicaid.

Decline in charitable services. By doubling both the estate tax threshold and the standard deduction, households will have less incentives to donate to charity. Many seniors rely on non-profits for a wide range of services. Fewer donations mean fewer services available to seniors.

Legitimizing chained-CPI for Social Security. In the past, entitlement reformers have offered chained-CPI as a means to increase trust fund solvency by cutting cost-of-living increases to beneficiaries. Some advocates fear the use of it in the tax code will add new legitimacy towards applying it to Social Security.

Renewed calls to cut entitlements. Some worry that the decline in revenues will increase pressure to cut entitlement programs. CBO already gives entitlement reformers plenty of ammunition about U.S. debt, in part by assuming average interest rates will spike to 4.7% in the future and health expenditures will grow 1.0% faster than GDP indefinitely. In addition, Social Security’s actuaries project that the combined trust fund is set to lack sufficient funds to pay out all claims starting in 2034. As long these projections continue, pressure to cut entitlements will continue.

A primary impetus of the tax bill was to lower taxes for corporations and move to a territorial system, where U.S. companies don’t need to report offshore income. Will it really raise wages as Republicans suggest? Or will it lead to greater off-shoring, more stagnant wages, and increased inequality? Its potential impact on the economy and the political consequences that result could ultimately be the most important of all. It’s also the hardest to predict.

About the Authors
David Goldfarb, Esq., is NAELA’s Public Policy Manager. NAELA President Hyman G. Darling, CELA, CAP, is a NAELA Fellow. This article was first published in the March-April 2018 issue of Bifocal.

Health insurers seek big rate hikes for 2019

May 31, 2018

By Shelby Livingston  | May 7, 2018
Health insurers are seeking lofty rate hikes for 2019 individual coverage as they grapple with new obstacles in the Affordable Care Act marketplace, including the zeroed-out mandate penalty and the potential influx of skimpy insurance policies.

Maryland and Virginia are the first states to announce the rates filed by insurance companies for 2019 plans. The requests, though not final, offer an early look at what other insurers may be planning across the country.

In Maryland, the two insurers selling individual insurance plans on the ACA marketplace are asking for an average rate increase of about 30% for 2019 coverage. That would amount to an average monthly premium of about $592 per member, compared with $449 per month in 2018.

Nearly 212,000 people are insured in individual plans on and off the exchange in Maryland this year.

Maryland Insurance Commissioner Al Redmer said Monday that those rates could come down if the federal government approves the state’s soon-to-be-submitted application for a 1332 waiver and reinsurance program to subsidize the medical claims of high-cost patients, though he wouldn’t speculate as to how much.

“We are at a place in the individual market where any increase at all creates stress in the marketplace,” Redmer said during conference call with reporters. “We have over the last number of years seen losses that are unsustainable which have resulted in premium increases that are unsustainable. We have folks in Maryland that are struggling, that are trying to do the right thing and they are paying more for their health insurance than they are for their mortgage.”

CareFirst Blue Cross and Blue Shield requested an average rate increase of 18.5% for its HMO plan and 91.4% for its PPO plan. The bulk (90%) of CareFirst’s 138,000 Maryland individual plan members are enrolled in HMO coverage. Kaiser Foundation Health Plan, which covers 73,700 individual members in the state, asked Maryland regulators for a rate increase of 35%.

CareFirst CEO Chet Burrell on Monday said rate requests in Maryland could be reduced by as much as 20% to 30% if a reinsurance program is approved.

Burrell said CareFirst’s requested rate hikes are necessary because the pool of people signing up for individual insurance plans continues to shrink and grow sicker. Enrollment in Maryland’s individual market has fallen to 211,000 in 2018 from 243,000 the year before, and will likely continue to decrease in 2019.

As rates have increased over the years, healthier enrollees opted to forgo coverage, leaving the sicker, costlier members behind. Trump administration actions, including the 2019 zeroing out of the mandate penalty, only exacerbated the problem by undermining enrollment of younger, healthier members, Burrell said. CareFirst expects to have lost about $476 million on individual plans in Maryland through 2018. In Virginia, the company has lost $59 million but expects to break even in 2018.

“The rates, as high as they’ve been and as steeply as they have increased, have not kept up with how costly it is to take care of people who are as sick as the population involved,” Burrell said.

About 5% of CareFirst’s requested rate hikes can be attributed to the zeroing out of the individual mandate penalty, according to the Maryland insurance department. Kaiser didn’t specify how much of its rate request was driven by the individual mandate penalty. And neither of the two Maryland insurers raised rates because of the federal administration proposal to expand access to skimpy short-term medical plans, likely because Maryland caps the sale of those plans to three months—the current federal limit.

Meanwhile, Virginia insurers asked for a wide range of rate increases. CareFirst is seeking a 26.6% rate hike for its HMO plans in the state, and 64.3% for its PPO plans for the same reasons as its Maryland rate increase requests.

Cigna Corp. filed for a 15% increase; Kaiser asked for a 32.1% increase for its individual plans; and Piedmont Community HealthCare requested an 18.3% rate increase.

Some Virginia rate requests were lower. Anthem’s HealthKeepers subsidiary asked to increase 2019 rates for its on- and off-exchange plans by 5.6% on average, while Optima is seeking to lower rates by an average 1.9%.

Last year, individual insurance rates went up about 30% over 2017 rates largely because of the pervasive uncertainty over the future of the exchanges as congressional Republicans worked to repeal and replace the ACA. The Trump administration’s decision to stop making cost-sharing reduction payments in the fourth quarter of 2017 also led to large premium increases for 2018 coverage, but actuaries say that was a one-time adjustment and won’t affect 2019 rates.

Though repeal efforts fell flat, questions remain about how many people will enroll in individual coverage in 2019 and how sick and costly that population will be. The elimination of the individual mandate penalty and the extension of short-term medical plans to a maximum of 364 days will likely be the biggest drivers of 2019 rates.

The Congressional Budget Office projected that premiums for the most popular silver plans on the ACA exchanges would jump an average 34% next year. The left-leaning Urban Institute has estimated that eliminating the individual mandate penalty, along with expanding short-term medical plans, would increase individual premiums 18.2% on average in states that do not restrict short-term plans.

Brookline Nursing Home Subject to 93A Claim

May 31, 2018

By Harry S. Margolis, Esq.

The U.S. District Court for Boston has ruled that the estate of a deceased resident of the Brookline Health Care Center (BHCC) can pursue its claim that the facility violated the Consumer Protection Act, often referred to by its statutory reference, 93A.

Sarah Theresa Libby died after choking at BHCC on May 7, 2014. This occurred “when she was left unsupervised to eat in the dayroom of the nursing home in which she resided.” Mrs. Libby’s estate brought suit for wrongful death in Estate of Sarah Theresa Libby v. Park Marion and Vernon Streets Operating Company (U.S. Dist. Ct. Boston, C.A. No. 17-10843-JGD) for negligence and violation of the Consumer Protection Act. The 93A claim carries with it the threat of treble damages and the facility being responsible for the plaintiff’s legal fees.

BHCC moved to dismiss the 93A claim, arguing that the allegations about its lack of care at worst amount to negligence and not an unfair business practice which would implicate the Consumer Protection Act.

What Happened

Ms. Libby was known to be at risk for aspiration. On the day she died, she was seen, according to the complaint filed in this action “holding her chest and in distress. A nurse’s note later in the day said that Ms. Libby was seen holding her neck and tapping on her chest; and that she became unresponsive as she was being assessed by staff.” An ambulance was called.

When ambulance personnel attempted to insert an endoctracheal tube, they “had to remove a silver dollar sized piece of food before they were able to successfully intubate her.” Ms. Libby was pronounced dead upon her arrival at Beth Israel Hospital. The cause of death was “respiratory distress, secondary to aspiration.” An autopsy revealed “a large volume of undigested food in her stomach and evidence of recent aspiration in her left lung.”

The Legal Issue

The complaint alleges that what happened to Ms. Libby was not the result of mere negligence, the failure to properly supervise her eating, but the result of a business practice of understaffing the facility. It argues further that such understaffing is deceptive in that it’s in conflict with BHCC’s marketing material which advertises the excellence of the care it provides.

The Court here agrees, finding:

The plaintiff has provided sufficient facts to support a practice of understaffing by BHCC, as evidenced by Ms. Libby’s unsupervised fall on April 8, 2014 and her unsupervised choking incident on May 7, 2014; a link between the understaffing and decedent’s death; a plausible inference that BHCC understaffed its facility in order to maximize profits; and a misrepresentation on the part of BHCC as to the quality of the care at its facility as related to staffing. These allegations do not constitute mere negligence but concern the “entrepreneurial and business aspects of providing medical services.”


As a result, the case is permitted to proceed to trial on both the underlying negligence claim and the claim for punitive damages and the defendant paying the plaintiff’s legal fees. This does not mean that the estate will be able to prove it’s case, just that as a legal matter that the allegations if proven would constitute a violation of the Consumer Protection Act. One wonders when the case will actually come to trial given that it’s already more than four years after Ms. Libby’s death. The wheels of justice do indeed grind slowly.

Read more on consumer protections for Massachusetts nursing home residents.

Tailoring a Will and Power of Attorney for Multiple States

May 31, 2018

If you own property — whether houses, bank accounts, or vehicles — in more than one state, do you need estate planning documents for each state? The answer is probably no, but you need to do some planning if you want to avoid going through probate in each of the states.

A lawyer can generally draft a will that is generic enough to be probated in any state except Louisiana, which has very specific rules. However, real property in another state is subject to probate in that state even if you don’t live there. If you aren’t careful, your estate may have to go through probate in every state you have property in.

To avoid multiple probate actions, you may want to use probate avoidance techniques for the property that is out of state. If your estate is under the estate tax limit and you don’t have family complications, you may hold your property jointly with your spouse. Joint property will pass to your spouse without going through probate. If holding property jointly won’t work, you can put your property into a revocable trust. Property in a revocable trust will pass to whoever is named in the trust. It does not come under the jurisdiction of the probate court and its distribution won’t be held up by the probate process.

A power of attorney — which allows a person you appoint to act in your place for financial purposes if you ever become incapacitated — is an important estate planning document for anyone, including individuals with property in multiple states. One power of attorney should work in multiple states as long as it is written generally enough, but states may have different rules for what makes a valid power of attorney. State laws usually recognize a valid power of attorney created in another state, but you should check with an attorney in the state to make sure it will be recognized. Even if the power of attorney complies with state law, a bank may not accept it. You should let the bank know about your power of attorney and make sure there are no specific forms that the bank requires.

Contact your attorney to make sure your estate planning documents will work in multiple states.

Medicare costs could rise by more than 200 percent for these retirees

May 31, 2018

These retirees may see their Medicare costs rise by more than 200 percent from CNBC.

This year, high-income retirees can expect to shell out even more money to cover their Medicare premiums.

That’s because as of 2018, there is a shift in the income brackets that are used to determine how much older Americans will pay for their Medicare Part B and Part D coverage, according to a recent analysis by HealthView Services, a provider of health-care cost projection software.

Medicare Part B covers preventive services and doctor visits, and Part D covers prescription drugs.

These surcharges could take a bigger bite out of present and future retirees’ income than they may have expected. More from Fixed Income Strategies: How to avoid the Social Security check blues These Social Security myths can wipe you out Few are prepared for this $280K retirement expense A 55-year-old couple, where each spouse earns $70,000, could anticipate seeing their lifetime Medicare surcharges rise by almost $122,000 due to changes to how the health-care program charges its beneficiaries, HealthView Services found.

You are eligible for Medicare at 65, so this hypothetical couple has 10 years until they qualify.

The highest earners may end up paying 200 percent more for Parts B and D compared to someone in the first bracket.

“The fear is that things will continue along these lines where future retirees will be responsible for more and more of their medical costs and will be receiving less in terms of compensation,” said Ron Mastrogiovanni, CEO of HealthView Services.

Here’s what’s driving your Medicare costs.

CMS Administrator: Long way to go on pricing transparency from CNBC.

“DocFix” bump

A 2015 bill, known as the Medicare Access and CHIP Reauthorization Act or “DocFix” law, tweaked the way premiums are determined for high-income people.

It lowers the ranges for the third, fourth and fifth income brackets, bumping some retirees into the next bracket, which raises their Medicare costs.

These changes began to take effect for premiums charged in 2018.

How much you pay this year for Medicare Parts B and D is determined by your 2016 modified adjusted gross income.

In 2018, premiums for Medicare Part B are $134 a month for singles with a modified adjusted gross income of $85,000 or less in 2016 ($170,000 for married joint filers).

Beyond those income levels, premiums begin to increase. See below. Meanwhile, Part D beneficiaries also pay additional expenses on top of their plan premiums if their 2016 MAGI exceeded $85,000 ($170,000 if married). This chart shows 2018 costs. Finally, the chart below depicts how the MAGI brackets changed for Medicare, following the “DocFix” tweaks and where the new income thresholds are in 2018.

Budget changes

The Bipartisan Budget Act of 2018 made another change to Medicare, which will take effect in 2019.

Starting that year, individuals with incomes exceeding $500,000 ($750,000 for couples) will pay higher Medicare surcharges — 85 percent of their program costs, up from 80 percent under current law, according to the Medicare Rights Center, a consumer advocacy group.

Managing your income

Higher-income retirees can attempt to rein in their Medicare premiums by planning out their income sources prior to applying for the program.

For instance, income from a Roth IRA and Roth 401(k) plan doesn’t count toward your modified adjusted gross income , and thus won’t raise your Medicare premiums.

An added bonus: You don’t have to take required minimum distributions from Roth IRAs at 70½. Traditional IRAs and 401(k) plans are subject to this requirement.

Make sure you don’t convert your savings to a Roth in the two years before you apply for the program — the amount converted is considered taxable income and will count toward your MAGI.

Other savings sources that aren’t counted in Medicare means testing include health savings accounts and the cash value of a permanent life insurance policy.

Health savings accounts, or HSAs, work alongside high-deductible insurance plans. They grow tax free, and investors can take tax-free withdrawals as long as they’re using the money for qualified medical expenses.

You can’t stash additional funds in an HSA once you’re on Medicare, but you can still tap your savings in retirement.

“The key is to work with an advisor and look at the right mix of products, stocks, bonds, insurance and Roth accounts so that you don’t get hit by these surcharges,” said Mastrogiovanni.

Anxiety in middle age linked to dementia later

May 31, 2018

(Reuters Health) – People with moderate to severe anxiety in middle age may be more likely to develop dementia as they get older, a recent study suggests.

Researchers examined data from four previously published studies that tracked a total of almost 30,000 people for at least a decade. In each of the smaller studies, there was a clear connection between anxiety in midlife and dementia later on, researchers report in BMJ Open.

“If people are living with moderate to severe anxiety we would encourage them to seek help,” said senior study author Natalie Marchant of University College London in the UK.

“Therapies already exist that have been shown to be effective for treating anxiety (for example talking therapies and mindfulness-based interventions), and while we do not yet know whether they would also reduce risk of developing dementia, alleviation of anxiety symptoms and stress would be a definite benefit to (the) patient,” Marchant said by email.

The study wasn’t a controlled experiment designed to prove whether or how anxiety might directly contribute to the development of dementia. Researchers were also unable to formally pool all the data from the four smaller studies, so they couldn’t calculate the magnitude of the increased dementia risk associated with anxiety.

It’s possible dementia might follow an anxiety diagnosis in middle age because moderate to severe anxiety appears to increase stress hormones, and chronic elevation of these hormones may consequently damage brain regions such as those associated with memory, Marchant said.

Scientists don’t yet know whether treating anxiety, and thus reducing the chronic elevation of these hormones, would reduce risk for dementia, Marchant added.

Anxiety can also be a symptom of dementia, and that makes it difficult to firmly establish whether it’s also an independent risk factor for dementia, said Dr. Costantino Iadecola, director of the Feil Family Brain and Mind Research Institute at Weill Cornell Medicine in New York City.

“Anxiety disorders need to be treated in their own right, independently of potential associations (causal or not) with cognitive impairment later in life,” Iadecola, who wasn’t involved in the study, said by email. “I would stress the importance of treating anxiety disorders as an essential step in maintaining mental health, not because of possible links to dementia, which remain unproven.”

The current study isn’t designed to explain how anxiety and dementia might be connected, Iadecola added.

“We cannot say with confidence that anxiety is a cause (risk factor), an early manifestation of the dementia, or only coincidentally associated with it,” Iadecola added.

SOURCE: BMJ Open, online April 30, 2018.

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