Monthly Archives: May 2020

Should Seniors Who Lose Their Job During the Coronavirus Pandemic Claim Social Security Benefits Early?

May 22, 2020

In the wake of the coronavirus pandemic, unemployment is skyrocketing. Seniors who lose their jobs may be tempted to claim Social Security benefits early, but should they, given the resulting reduction in future benefits? The answer depends on your situation, but you may be able to claim and not sacrifice much in terms of future benefits.

While you can claim Social Security benefits as early as age 62, the better financial decision is usually to wait to take benefits as long as you are able. If you take Social Security between age 62 and your full retirement age, your benefits will be permanently reduced to account for the longer period you will be paid. Individuals who file at age 62 this year will receive 72 percent of their full benefit. On the other hand, if you delay taking retirement beyond your full retirement age, depending on when you were born, your benefit will increase by 6 to 8 percent for every year that you delay, in addition to any cost of living increases. This extra income could be very welcome, especially if you live into your 80s or beyond.

Unfortunately, many seniors who lose their job due to the coronavirus pandemic may find it necessary to apply for benefits early, potentially losing hundreds of thousands in future benefits. Before rushing to apply for early retirement benefits, you should consider all of your options. If you are lucky enough to have substantial savings, it may make sense to spend your savings rather than take benefits early. You may also be able to apply for unemployment benefits to allow you to further delay taking benefits.

If you do not have any savings or unemployment benefits to fall back on, your only option may be to claim benefits. However, if you do claim early and then go back to work, you may have the ability to increase those benefits. If you are able to stop the benefits within 12 months of starting, you can withdraw the application, repay the benefits collected, and then still be eligible for the higher benefit amount at full retirement age or older. It is essentially a one-year interest-free loan.

If you take benefits early but are not able to stop the benefits within 12 months of starting, you can still suspend your benefits in order to earn higher benefits. For example, if you start collecting at age 62 but no longer need the income once you reach your full retirement age, you could suspend benefits until age 70. You won’t get a complete do-over, but between your full retirement age and 70 you would earn delayed retirement credits, which would increase your ultimate benefit amount when you collect at age 70.

Whatever you decide, consider all of your options carefully and talk things over with your attorney or financial planner before making any rash decisions.

For a New York Times article about taking benefits early, click here.

How Your Stimulus Check Affects Medicaid Eligibility

May 22, 2020

The coronavirus relief bill includes a direct payment to most Americans, but this has Medicaid recipients wondering how the payment will affect them. Because the payment is not income, it should not count against a Medicaid recipient’s eligibility.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. Individuals earning up to $99,000 ($198,000 for joint filers) will receive smaller stimulus checks. Payments are based on either 2018 or 2019 tax returns.

The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the stimulus payment were considered income, it would likely have to go straight to the nursing home. Since in most states Medicaid recipients cannot have more than $2,000 in assets, there was also concern that the stimulus payments could put many recipients over the asset limit.

In a blog post, the commissioner of the Social Security Administration (SSA) has clarified that the SSA will not consider stimulus payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months. Because state Medicaid programs cannot impose eligibility requirements that are stricter than SSI requirements, the payments should not affect Medicaid eligibility.

Is It a Good Idea to Bring Your Parent Home from the Nursing Home During the Coronavirus Pandemic?

May 22, 2020

With the coronavirus pandemic hitting nursing homes and assisted living facilities especially hard, families are wondering whether they should bring their parents or other loved ones home. It is a tough decision with no easy answers.

The number of coronavirus cases in nursing homes and assisted living facilities across the country continues to grow. A Washington state nursing home was one of the first clusters of coronavirus reported in the United States, with at least 37 deaths associated with the facility. NBC news reported on April 16 that coronavirus deaths in long-term care facilities across 29 states had soared to 5,670. “In New Jersey,” NBC added, “the virus has spread to more than 95 percent of the state’s 375 long-term care facilities, according to state health officials.”

In an effort to contain the virus’s spread, most long-term care facilities are limiting or excluding outside visitors, making it hard to check on loved ones. Social activities within the facility may also be cancelled, leading to social isolation for residents. In addition, long-term care facilities face staffing shortages even in the best of times. With the virus affecting staff as well as residents, facilities are having trouble providing needed care. Assisted living facilities, which are not heavily regulated, may have greater trouble containing the virus than nursing homes because their staff is not necessarily medically trained.

With this in mind, many families are considering bringing their loved ones home. A Harvard epidemiologist is warning that nursing homes are not the best place to house the vulnerable elderly at this time. And a local judge in Dallas has recommended that families remove their loved ones from infected facilities. Before taking this extreme step, however, you need to consider the following questions:

  • Is your family able to provide the care that your loved one needs? Some patients require help with eating, dressing, medication, and going to the bathroom. You need to consider whether you can adequately provide that care at home. In addition to your loved one’s practical needs, you need to think about your physical and emotional stamina. Also, is your house set up to safely accommodate your family member? Are there a lot of stairs? Does the bathroom have rails? If your loved one has dementia, there may be other considerations to take into account.
  • How well can you prevent infection? Will you be better able to prevent infection than a nursing home? If your entire household is homebound, you may be in a good position to prevent bringing home the virus. However, if one or more members of your household is working outside of the home, you will have to take extra precautions to make sure you don’t bring the virus to your loved one. Are you taking the necessary precautions to keep your house and yourself disinfected?
  • Will the resident be allowed to return to the facility when the threat of the virus has abated? If you take your family member out of the nursing home or assisted living facility, the facility may not let your family member back in right away. You should check with the facility to determine if your loved one will be able to return.

Bringing a family member home is a hard decision and it depends on the individual circumstances of each family. For more on the considerations involved, click here and here.

How Low Nursing Home Wages Are Contributing to COVID-19’s Spread

May 22, 2020

In mid-February, a cluster of residents at the Seattle-area nursing home, Life Care Center of Kirkland, came down with a respiratory illness and fever.  On February 28, a 73-year-old female resident tested positive for coronavirus disease (COVID-19).  Over the next month, the coronavirus swept through the 130-resident facility, killing 37 people connected with it.

A subsequent Centers for Disease Control and Prevention (CDC) investigation identified two main contributors to the virus’s rapid spread through the Kirkland nursing home.  One of them was “limitations in effective infection control and prevention” and the other was “staff members working in multiple facilities.”  CDC’s survey of some 100 nearby long-term care facilities found that staff members who worked in more than one facility and/or who worked while sick were among the leading contributors to the facilities’ vulnerability to infection.

Working at more than one facility is a common practice among nursing home workers throughout the country.  “Staff members work in multiple facilities because they do not earn enough money at one facility to support themselves and their families,” says the Center for Medicare Advocacy (CMA).

The Paraprofessional Healthcare Institute reported in 2016 that nurse aides, who provide most of the direct care in nursing facilities, earn “near-poverty wages.”  The median salary at that time was $19,000 a year, with half of workers earning less.  More than a third of them (38 percent) relied on various public benefits, including Medicaid, food stamps, housing subsidies and cash assistance.

When it comes to the spread of infections, low wages are especially dangerous because many of these workers lack paid sick leave.  CMA notes that given their low incomes, many employees work sick.  “If they do not work,” CMA says, “they do not get paid. With low wages, most lack enough savings to fall back on if they are sick and not paid.”

At this point, more than 400 of the nation’s 15,000 nursing facilities have had an outbreak of coronavirus among residents, staff or both, and “[t]here are indications . . . that those reports dramatically understate the situation,” long-term care expert Howard Gleckman writes in Forbes. As of April 2, the Associated Press estimated that “at least 450 deaths and nearly 2,300 infections have been linked to coronavirus outbreaks in nursing homes and long-term care facilities nationwide.”

“The coronavirus pandemic,” the CMA said in a recent article on its site, “brings dramatically into view the problem of allowing facilities to pay workers inadequate wages and to give them inadequate benefits.”

Terming the issue “a national scandal, calling for a national solution,” CMA makes a number of recommendations for raising the wages of nursing home workers and ending what it calls “hidden public subsidies to the nursing home industry” through public assistance paid to its low-wage workers.

CMA suggests that reforms be modeled on legislation introduced but not yet passed in Pennsylvania, the Nursing Home Accountability Act.  Among other things, the Act would guarantee nursing home workers a base hourly wage of $15 an hour, require nursing facilities to provide information to the public on the wages paid to its employees, and have facilities pay an “employer responsibility penalty” for employees who receive public assistance.

CMA is also calling for mandatory paid sick leave policies enacted in the wake of the coronavirus pandemic to be made universal and permanent.