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Cohabiting Seniors – Protect Your Rights
More and more seniors are living together without getting married. According to U.S. Census data, the number of cohabiting seniors nearly doubled between 1989 and 2000. For some seniors, marriage isn’t financially worth it‚ they don’t want to lose their former spouses’ military, pension, or Social Security benefits. Other seniors don’t want to have to pay their partners’ medical expenses or deal with the objections of children worried about their inheritance.
There are risks to cohabiting without marriage, however. You have no rights with regard to your partner’s health care decisions. In addition, in some states, you may be considered “common law” married by a court after you die, or your estate may be subject to a “palimony” or “property pooling agreement” claim, possibly causing a dispute between your partner and your children. If you and your partner plan to live together without getting married, you can take a number of steps to ensure that you, your partner and your children are protected and your wishes are followed.
•Sign a cohabitation agreement. If you live in a state that recognizes common law marriage or even if you don’t (some courts have recognized the rights of unmarried partners who lived together in non-common law states), you may want to enter into a cohabitation agreement with your partner. The agreement can state your intentions not to marry or to make any claims against each other. It can also specify the division of household expenses and what will happen to your house in the case of death or breakup. You should consult a lawyer for assistance in drawing up an agreement.
•Provide access to health care decision making. If you are not married, you have no right to participate in your partner’s health care decisions or even, in some circumstances, to visit your partner at the hospital. To avoid this situation, you need several documents. You can sign a Health Insurance Portability and Accountability Act (HIPAA) medical release to allow each other access to the other’s medical information. In addition, you should have a health care proxy and/or a durable power of attorney for health care, naming your partner as your agent to make health care decisions. For more information on medical directives, click here.
•Sign a durable power of attorney. A power of attorney allows your partner, or whomever you appoint, to make financial decisions for you if you become incapacitated. Without a power of attorney, the court will have to appoint a conservator or guardian to make those decisions and the judge may not choose the person you would prefer. For more on this, click here.
•Update your will. Your will should be clear about what happens to your possessions when you die, including your house and its contents. It is particularly important to specify what will happen to your house if it is owned by only one partner.
•Think about the tax consequences of gifts. Married couples can leave each other as much as they want without paying estate taxes; unmarried couples cannot. If you want to leave money to your partner, consult an estate planning attorney or tax expert to find ways to limit estate taxes. For more on estate planning, click here.
•Look into registering as domestic partners. Some cities and states have domestic partnership laws, which may allow unmarried couples to take advantage of their partners’ health insurance or to participate in health care decisions.
What Is the CLASS Act Doing in a Deficit-Cutting Package?
We all know that President Obama and Congressional Republicans are locked in a battle over raising the nation’s debt limit. Republicans are refusing to agree to a rise (something they approved many times during the Bush Administration) without trillions of dollars in spending cuts. President Obama says he is willing to make some significant cuts but he wants them accompanied by a hike in taxes on the rich and corporations, something Republican hard-liners will not accept.
Along comes the “Gang of Six,” three Democratic and three Republican senators who have hammered out a compromise deficit-cutting proposal that is gaining some traction and that the President has praised in principle. But listed among the cuts the Gang would make is the CLASS Act, the late Sen. Edward Kennedy’s final legislative initiative. Enacted as part of the health reform law, CLASS is on track to set up a voluntary, self-funded national long-term care insurance program that will help millions of American families cope with their own impending financial crisis – caring for frail elderly parents and other disabled relatives.
The strange thing is that the CLASS Act would actually reduce the deficit for at least a decade – to the tune of $83 billion as premium payments roll in and few benefits are paid out, according to the Congressional Budget Office. There is some disagreement about whether the program can be ultimately sustainable, but the law states that if it isn’t, it will be shut down. So it’s fairly deficit neutral even in the worst-case scenario.
“Repeal the Class Act? What’s that doing in a deficit-reduction program?” said Barbara Manard, vice president of LeadingAge, an association of non-profit groups that provide services to the elderly and that is a key CLASS Act backer, quoted in a New York Times blog. “It’s totally bizarre. It’s desperately needed, people like it, and getting rid of it actually increases the deficit. It’s a lose-lose-lose proposition.”
It’s no surprise that many Republicans would take this opportunity to try to eliminate the CLASS Act. After all, it establishes another government program, even though in this case it’s not an “entitlement” program like Medicaid or Medicare. But it is alarming that Democrats like Illinois’ Sen. Dick Durbin, a member of the Gang of Six, would agree to kill it.
As Howard Gleckman, a fellow at the Urban Institute, has pointed out, “Congress can repeal CLASS, but it can’t slow the aging of America and the growing need to provide personal care for the frail elderly or others with disabilities.”
LeadingAge is hosting a call-in day on Tuesday, July 26, to ask members of Congress to “Save CLASS.”
For more on the CLASS Act, click here.
Supreme Court Medicaid/Medi-Cal Case Could Determine Recipients’ Ability to Sue States
As previously reported, the U.S. Supreme Court will hear a consolidated appeal of three California Medicaid cases. In California, the federal Medicaid program is referred to as Medi-Cal. The case could have implications for Medicaid recipients’ ability to sue their state. It involves several health care providers in California who sued the state to try to stop it from reducing its Medicaid reimbursement rate. The Supreme Court has agreed to hear the case to decide whether outside groups, such as hospitals, providers, or Medicaid recipients, have the right to sue when they believe the state is violating federal law.
In 2008, the California legislature and governor cut reimbursements rates for dentists, health clinics, pharmacies, physicians and other medical providers by 10 percent. Several providers filed separate lawsuits against the state, arguing the lower rate would negatively affect Medicaid beneficiaries’ access to care. The state claimed only the federal government can enforce Medicaid regulations and that health care providers and patients may not sue the state for violating federal Medicaid rules. The 9th Circuit ruled against the state in three cases (Maxwell-Jolly v. California Pharmacists, Maxwell-Jolly v. Independent Living Center, Maxwell-Jolly v. Santa Rosa Memorial Hospital). The three cases have been consolidated before the Supreme Court.
While the case before the Court involves providers, the decision could have ramifications for Medicaid recipients. In an article in Kaiser Health News, Sara Rosenbaum, chairwoman of the Department of Health Policy at George Washington University, said that if California wins, Medicaid recipients wouldn’t be able to sue states to compel them to fulfill an array of duties under the law, such as conducting “fair hearings” for enrollees deemed ineligible.
The case is causing controversy within the federal government. While the Department of Health and Human Services supports the Medicaid providers’ right to sue, the Department of Justice filed an amicus brief in support of the state. It is very rare for two federal departments to be on opposing sides of an issue. For more information on the dispute, click here.
The Supreme Court is scheduled to hear arguments in the fall.
The Veterans Appeals Improvement Act of 2011
This May 31st, 2011, The House of Representatives did something for veterans that should help those who file an appeal for a denied claim. Often, when a claim is denied, the veteran recomposes the information they’re submitting, and presenting any new evidenced for the validity of their claim and the reasons why they deserve VA health care or compensation.
This new evidence was previously sent to a regional office for review. Now, any new evidence presented will be sent directly to the Board of Veterans Appeals, and this Board is required to directly view the evidence and take it into consideration. This means that they won’t be having some other disinterested person read your appeal evidence, and give a poor recommendation.
The bill still has to be voted on by Congress, but with a House passing vote of 419 yes, 1 no (Michigan Republican Representative Justin Amash), and 11 non voting, the future of this bill looks encouraging.
This is the actual text, amazingly short for Congressional legislation!
“H.R. 1484
“SEC. 2. WAIVER OF REGIONAL OFFICE JURISDICTION OVER INCORPORATION OF SUPPLEMENTAL EVIDENCE INTO PREVIOUSLY SUBMITTED CLAIMS.
“(a) Waiver- Section 7104 of title 38, United States Code, is amended by adding at the end the following new subsection:
‘(f) If a claimant or the claimant’s representative submits new evidence in support of a case for which a substantive appeal has been filed, such evidence shall be submitted to the Board directly and not to the agency of jurisdiction, unless the claimant or the claimant’s representative requests that the evidence be reviewed by the agency of jurisdiction before being submitted to the Board.’.
“(b) Effective Date- Subsection (f) of section 7104 of title 38, United States Code, as added by subsection (a) of this section, shall apply with respect to evidence submitted on or after the date that is 90 days after the date of the enactment of this Act.”
Passed the House of Representatives May 31, 2011.
Court Determines Delay in Processing Claims Violates Veterans’ Rights (U.S. Court of Appeals, 9th Circuit)
There are approximately 25 million veterans in the United States. Roughly 25% are enrolled for health care with the VA, whose mission is to fulfill Lincoln’s promise to care for those who bore the battle. Among health threats to veterans, they face a heightened risk of suicide, approximately 3.2 times higher than the general population. On average, 18 veterans commit suicide each day, with another 1,000 attempting suicide each month. The VA is obligated to provide mental health treatment for veterans, but delays, often as long as four years, leave them in danger. Frequently they die before their claims are adjudicated, rendering their claims moot.
Responding to this crisis, two non-profit organizations, Veterans for Common Sense and Veterans United for Truth, sought injunctive and declaratory relief to remedy the delays in (1) the provision of mental health care and (2) the adjudication of service connected death and disability compensation claims by the VA. These groups, filing on behalf of a putative class of all veterans with Post Traumatic Stress Disorder (PTSD) in need of medical services, asked the Ninth Circuit to decide whether delays in adjudicating claims violate Veterans’ due process rights to receive care and benefits they are guaranteed by statute. In a 104 page opinion, the Ninth Circuit agreed. Initially, the Court indicated that this case is one where the political branches of government failed to act in a manner consistent with the Constitution. The Court found that inaction by both Congress and the Executive branch forced its hand.
The Ninth Circuit found that the Constitution affirms that the People have enforceable rights under the Constitution and that one such right is to be free from unjustified governmental deprivation of property – including the health care and benefits that laws guarantee veterans upon completion of their service (e.g., 38 U.S.C. § 1710). Describing delays within the VA as “unchecked incompetence,” the Court indicated that there comes a time when the judiciary must step in to enforce these rights.
The Veterans Health Administration (VHA), one branch of the VA, is charged with providing health care to veterans. Veterans who have served the required length of service have a statutory right to care, including medical examinations, treatment and rehabilitative services. The VA is also required to provide readjustment counseling and related mental health care services to eligible veterans. The law provides that the VA must provide a mental health assessment as soon as practical, but not later than 30 days, after receiving a request. If the examining physician or psychologist determines that care is needed, then mental health services “shall” be furnished.
Recognizing the needs of veterans, in July 2004, the VA developed and adopted a five year Mental Health Strategic Plan to improve the provision of mental health care services. One of its core purposes was to reduce the incidence of suicide among veterans. Unfortunately, the plan has not been fully implemented and even where implemented, its measures have fallen short of the expressed goals. An OIG report indicated that following a referral for depression, only 40% of VA facilities offered a same day evaluation; 24.5% reported a waiting period of 2 to 4 weeks and 4.5% reported waiting periods of 4 to 8 weeks. The waiting periods were longer following a referral for PTSD.
Similar delays exist when applying for benefits through the Veterans benefits Administration (VBA). The law requires the VBA to assist veterans applying for benefits. In addition to assistance in gathering documents, the duty to assist includes providing a medical exam for veterans diagnosed with PTSD. Veterans receiving care at a VHA facility may be required to undergo a compensation and pension examination which may result in a contrary diagnosis. The examination results determine the level of disability assigned, which determines the compensation rate for disability benefits.
During the pendency of the application process, the veteran is statutorily barred from paying a lawyer for representation and must rely on pro bono assistance. Of the 400,450 claims pending on April 12, 2008, it was estimated that approximately 11% lead to a Notice of Disagreement, which initiates the appeal process. While veterans are subject to forfeiture of their appeal rights for delay in responding, there are no such time limits on the VBA. Veterans experience long delays in the adjudication of their death and service-connected disability claims. On April 12, 2008, there were 101,019 rating-related claims which had been pending for over 180 days. Where a Notice of Disagreement is filed, the administrative process extended those delays; on average, it took 573 days for a case to be certified to the Board of Veterans’ Appeals.
The average time for a direct appeal to the Board was a mere 336 days without a hearing and 455 days when a hearing is requested. For veterans who file a notice of disagreement following the regional office’s issuance of an initial decision, the average length of time from the initial filing of the notice of disagreement through the date of decision by the Board was 1,419 days. Approximately 40% of Board decisions remand the case for further proceedings where it takes an average of 499.1 days to return to the Board; in PTSD cases, the average time is an additional 563.9 days. During the six month period from October 2007 to April 2008, 1,467 veterans died during the pendency of their appeal.
On appeal, the Ninth Circuit held that sovereign immunity did not bar the claims related to the VHA. Because the veterans did not seek money damages, immunity was statutorily waived. The Court affirmed dismissal of claims under the APA because there was no allegation of a “discrete” agency action (as opposed to system wide delays) the VA was required to take. Similarly, the Veterans Judicial Review Act did not bar review of the veterans’ constitutional claims. Although the Court found that it ability to grant the specific relief requested by the veterans was limited, it could hold that hold that their Due Process rights had been violated. The Court agreed that the delay in the provision of care, particularly where veterans are suicidal, is tantamount to a denial of care, with care being a property right. In addressing the due process issue, the Court found the system so flawed that “any” additional procedure designed to safeguard veterans’ rights would produce a meaningful improvement in their situation. The issue was remanded for determination of those safeguards necessary to protect veterans’ rights.
Similarly, the veterans were denied due process relating to their VBA claims. The “property interest in their service-connected death and disability compensation could not be more vital — many recipients of such benefits are totally or primarily dependent upon that compensation for their financial support and the support of their families.” Given the number of veterans who die during the pendency of their claim, the court found the private interest in enforcing this interest was strong. Although the VA argued its process was adequate and was attributed to prioritization in processing initial claims, the Court found that delays appear to be the result of gross inefficiency, not resource constraints. Having found a denial of due process rights, the issue was remanded with instruction that the Court conduct a hearing to determine what procedural protections are most appropriate to permit the appeals of veterans to be expedited in an efficient manner.
Before concluding, the Court considered whether the fee limitation for attorneys is appropriate. The Court noted that it is designed to create a non-adversarial process at the regional office level. Congress imposed the duty to assist veterans as the trade-off for this limitation. The veterans failed to make a strong showing that the current system carries with it a high probability of error or that a more formal system would decrease the probability of error. Accordingly, the district court’s finding that restricting the veterans’ right to involve a paid attorney at the regional office level did not violate due process rights was upheld.
Veterans for Common Sense et al. v. Shinseki, 2011 U.S. App. LEXIS 9542 (May 20, 2011)
State Laws Create Obstacles to End-of-Life Planning, Study Finds
Despite well-publicized cases like that of Terri Schiavo, most Americans still do not have “advance directives” that give caregivers instructions on the kind of care they would like to receive should they become terminally ill or permanently unconscious.
This should not be a surprise, according to a new study published in the January 17, 2011, issue of the Annals of Internal Medicine by researchers who looked at advance directive laws nationwide. Each state has its own laws on advance directives, but the researchers found that all states erect barriers that make it difficult or impossible for individuals — particularly the isolated elderly and terminally ill — to complete advance directives.
“Advance directives” is an umbrella term for documents that allow individuals to communicate their end-of-life wishes if they are unable to do so themselves. Also known as medical directives, these documents typically include a “living will” that gives instructions regarding treatment if the individual becomes terminally ill or is in a persistent vegetative state, and the designation of a health care proxy (also called a health care power of attorney), someone to speak on the individual’s behalf and ensure that her wishes will be carried out. Continue reading
National Fiscal Responsibility and Reform
Followup No. 2 – This series is found at www.mikecooperlaw.com/blog. The opening entry was February 16, 2011. The second entry was February 27, 2011.
I said we’d start this entry with the following in mind, “The greatest engineer can only drive the train where track has been laid.” If you’ve caught up on the fundamentals as I suggested, you may know that President Bill Clinton and a Republican Congress forged an agreement that balanced the federal budget for four years. That’s old news, but it’s good news, because it means track has been laid – elected officials of opposing parties can balance the federal budget and keep it that way for years on end.
Here’s the bad news – it’s not happening this time. Minor adjustments won’t work, because the problem is no longer minor. What’s happening is well described by Jim Toedtman, Editor, in the March 2011 issue of the AARP Bulletin:
“Today, both parties are playing chicken, hoping to force the other into a suicidal if courageous act of deficit cutting. In the meantime, interest on the national debt costs the average American household an astonishing $2,000 a year.”
In other words, what’s required goes beyond what politicians are able to do, and, unfortunately, the fact that fiscal reform must be accomplished does not mean that it’s going to be accomplished.
Politically, what we see is a charade. Let’s talk about the train again, and refer to our elected officials as the passengers. They are moving from car to car for various meetings, some open and some behind closed doors. They are shouting across the aisles at each other. They are one minute, “Heave!” the next minute, “Ho!” the next minute, “Hurrah!” and the next, “Fie and foul!”
Same old, same old. Whereas, this time, it’s perfectly clear that they need to get out on the front of the train and LAY SOME NEW TRACK.
Why can’t they? It’s not a mystery. Henry Adams was the grandson of a President and the great-grandson of a President, a Harvard history professor and a marvelous author. Nearly a hundred years ago, in two novels, The Education of Henry Adams, and Democracy, he told it simply:
“Politics, as a practice, whatever its professions, has always been the systematic organization of hatreds.”
So, as a practice, politics is not well suited to the systematic organization of a successful national fiscal policy. You can see this easily by looking for the elected officials, recent past or present, who are standing up saying, “We are the ones who caused this.”
What Is Asset Protection Planning?
Asset protection planning is about protecting your assets from creditors — and it is not just for the super-wealthy.
Anyone can get sued. Lawsuits can stem from car accidents, credit card debt, bank foreclosures, or unhappy customers, among many other things. If someone wins a money judgment against you, your family could become bankrupt trying to pay it off. To keep your assets away from creditors, you need to move them somewhere where creditors can’t reach them. Asset protection techniques may include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling various assets, or using limited liability companies or family limited partnerships, and those are just some of the techniques.
To develop an asset protection plan, you need to talk to your attorney. Your attorney can discuss your short- and long-term financial goals and help you create a plan that will work for you.
It is important to note that asset protection planning only works if you act before you are sued. Under the law, you may not defraud current creditors. If you are already being sued or if you know you are going to be sued and you transfer assets so that creditors can’t reach them, the court will reverse the transfer. That is why it is a good idea to put a plan into place now — before it is too late.
Anyone can have a lengthy stay in a nursing home, whether expected or not. Asset protection techniques may also be useful in this context. Consider California’s Medi-Cal program. It will pay for a person’s nursing home care, but only if the person qualifies. You can have substantial income and still qualify. You can have substantial assets and still qualify.
However, the applicable and lawful asset protection strategies that exist for this kind of planning must be implemented before making an application for Medi-Cal long term care benefits — the longer in advance the better. You should talk to your attorney about this important area of law in order to understand it and to be prepared when and if the need for long term care arises.
AARP Sues Government Over Reverse Mortgage Foreclosures
Charging that reverse mortgage borrowers were caught in what amounts to a regulatory bait and switch, the AARP’s legal arm is suing the Department of Housing and Urban Development (HUD) on behalf of three now-deceased borrowers’ surviving spouses who are facing imminent foreclosure and eviction from their homes.
The case involves the spouses of individuals who took out a Home Equity Conversion Mortgage (HECM), which are the most widely available reverse mortgage and are administered by HUD. A reverse mortgage allows homeowners who are at least 62 years old to borrow money on their houses. The loans do not have to be repaid until the last surviving borrower dies, sells the home, or permanently moves out.
The borrowers in the AARP case all died, leaving their spouses, who were not listed on the loan documents, living in the mortgaged homes. Because of the housing downturn, the homes are now worth less than the balance due on the reverse mortgage. None of the three spouses — residents of Indiana, New York and Maryland — can obtain loans for more than their homes are worth and so are facing eviction.
Since 1989, HUD rules governing reverse mortgages have stated that a borrower or heirs would never owe more than the home was worth at the time of repayment. But at the end 2008, the Bush administration abruptly changed this policy and said that an heir — including a surviving spouse who was not named on the mortgage — must pay the full mortgage balance to keep the home, even it if exceeds the value of the property. This, AARP says, violates existing contracts between reverse mortgage borrowers and lenders.
“HUD has illegally and without notice changed the rules in the middle of the game at the expense of vulnerable older people,” said Jean Constantine-Davis, a senior lawyer with the AARP Foundation, the organization’s charitable unit.
A spouse might not be named on the mortgage for a number of reasons: one spouse may have taken out the reverse mortgage before the marriage, or one spouse may be under age 62 and ineligible, or, more likely, lenders often encourage the younger spouse not to be named as a borrower because then the loan amount can be bigger. AARP notes that, perversely, under HUDs current rule a stranger can purchase the property for its current appraised value, but a surviving spouse cannot. The policy also negates a key purpose for which borrowers pay for insurance, AARP adds, pointing out that reverse mortgage borrowers have always paid insurance premiums to protect against going “underwater” — owing more than their homes are worth.
The suit charges that HUD is ignoring another provision of the HECM program that protects a surviving spouse from being arbitrarily displaced from the home upon the death of the borrower.
“This is shameful and we intend to make HUD honor the representations and promises they made to borrowers when they signed up for these government-insured loans,” Steven A. Skalet, of Mehri & Skalet, the law firm pursuing the case for the AARP Foundation. The case was filed in Federal District Court for the District of Columbia. HUD had no comment on the pending litigation.
Nearly one-quarter of all mortgaged homes are underwater, according to CoreLogic, a housing data firm.
For AARP’s news release on the lawsuit, click here.
For a New York Times article on the case, click here. For excellent analyses by the Times and Reuters, click here and here.
For more on reverse mortgages, click here.
