Medicare, Social Security, and Disability Planning

What Does Medicare Cover?

Medicare provides insurance to people who are over 65 years old, people who are disabled, and people with permanent kidney failure. Medicare serves as secondary insurance, to cover hospital care and medical care not covered by other insurance. Medicare has two parts: Hospital Insurance (Part A) and Medical Insurance (Part B).

Medicare Part A provides coverage for inpatient hospital services, skilled nursing facilities, hospice care, and home health services. This insurance helps pay for medical care and services provided by Medicare-certified hospitals, skilled nursing facilities, hospices, and home healthcare agencies.

Coverage for care in hospitals is measured in benefit periods and there is no limit to the number of benefit periods an individual is entitled to under the program. Medicare will help pay for 90 days of inpatient hospital care in each benefit period. Medicare will also contribute to care in a skilled nursing facility and home health care, if the individual meets certain requirements. The only type of nursing home care Medicare pays for is skilled nursing facility for rehabilitation, usually after a hospital stay.

Medicare Part B helps pay for the cost of physician services, outpatient hospital services (including emergency room visits), ambulance transportation, diagnostic tests, laboratory services, some preventative care, outpatient therapy services, some medical equipment and supplies, and other health services. Medicare Part B pays 80 percent of approved charges for most covered services. Medicare does not pay for routine physical examinations, dental care, cosmetic surgery, hearing aids, eye examinations, or eyeglasses.

The recently enacted Medicare Prescription Drug Improvement and Modernization Act of 2003 authorizes the implementation of the Medicare-Approved Drug Discount Card Program. This program is designed to help people with Medicare with the cost of prescription drugs. Individuals have been able to enroll in a Medicare-approved prescription drug discount program since the spring of 2004.

A key part of the Medicare-approved prescription drug discount card program is a subsidy of up to $600 a year for eligible lower-income beneficiaries. Individuals whose income is less than $12,124 each year or married couples whose income is less than $16,363 may qualify for this special help.

In addition, supplemental insurance, Medigap, is available to help to pay out of pocket expenses not covered under Part A and B. There are 10 standard Medigap policies, and each offers a different combination of benefits designed to fit the individual's needs.

There are six basic Medicare options; however, the availability of these plans depends on your locality. Only Original Medicare is available across the United States. There are several questions you should address when choosing a plan:

• Do you need to see specialists?
• Do you travel and need healthcare away from home?
• How big is your budget?
• Are you eligible for Medicaid?
• Do you have healthcare coverage from a former employer?
• Do you need prescription drug coverage?

An elder law attorney can help answer your question about Medicare coverage, and fit it into an overall estate planning structure that makes the most sense for you and your family.

Disability Planning

In planning for a person with disabilities, care must be taken to ensure that any gifts that a family member or close friend may want to give such person do not operate to prevent the person from getting or continuing to get any special benefits that he or she is currently receiving.

Many persons with disabilities receive financial assistance from the government. Social Security, Supplemental Security Income (SSI) and Medicaid offer funds to help pay for care and living expenses for many persons with disabilities. Any assistance provided is on a “as-needed” basis; specifically, if an individual receives money from another source, their government benefits may be reduced to compensate for the other money received. When giving a gift to a person with a disability, it is important to ensure that such gift will not jeopardize their eligibility for much needed benefits.

Supplemental Needs Trusts are specifically engineered to avoid this by providing trust funds to pay for only items that supplement the lifestyle of the person with the disability, rather than provide support. If you are interested in a Supplemental Needs Trust for an individual that you care about, here are some things to consider:

• What is your main goal in protecting your estate?
• What is the average cost of the loved one’s needs above and beyond what their current benefits will pay for?
• How much support must you give to other members of your family?
• Who would you name as Trustee?
• What limits would you place on your Trustee’s power, if any?
• How would you like funds to be withdrawn from the Trust?
• How would you fund the trust?

The government allows these types of trusts because of the public policy considerations behind them, but primarily because Medicaid benefits often do not cover all of the needs of a disabled person. Assets can be placed in a disability trust to supplement a disabled person’s benefits, however, the trust assets remaining at a beneficiary’s death must first be used to repay any benefits paid by the state of Colorado through Medicaid to the person with a disability. Once this is repaid, the remaining amounts may be distributed to the disabled person’s family.

Legal Questions about Your Social Security Benefits?

We also help people collect the disability and retirement benefits under Social Security. If you suspect a social security claim has been denied unfairly, we can represent you to get the disability or retirement benefits you rightfully deserve.

Medicare and Social Security benefits should always be considered in estate planning. Any disabilities of a beneficiary must also be taken into account.

At The Hughes Law Firm, our attorneys have the experience and knowledge to give you sound advice on how to fit Social Security and/or Medicare payments into your estate plan. We can also give you the advice you need to prevent a loved one from losing benefits as a result of your generosity. Please contact us regarding legal problems or concerns you may have about Disability Planning, Medicare or Social Security benefits.

We offer complimentary initial consultations; a published, no-surprises, competitive schedule of fees; and special privileges and discounts for members of credit unions and other organizations that sponsor our group legal services plan.

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