Retiring Earlier Than Planned?

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Couple hiking

At a glance: Stay calm and focus on what you can control. Make sure you have health coverage. Figure out if you are financially ready to retire, and if you are, whether it’s really what you want. 

Whether you had a written retirement plan or not, you probably drew a mental picture of how your retirement would look—and had a general idea when it would begin.

But plans don’t always go according to . . . well, plan. You’re not alone if you find yourself unexpectedly retired. In fact, over 50% of retirees exit the workforce earlier than expected because of unforeseen circumstances: layoffs, buyouts, or a health issue that strikes them or a loved one.

While retirement may have been out of your control, here are a few tips to manage what you can control.

Step #1: Stay calm

You will most likely be feeling a range of emotions that make it difficult to think straight. You may be overwhelmed by worry and stress—and more.

Kevin was suddenly let go from his new job 6 months after moving his family across the country and buying a new house. It was quite a shock. He was angry. He felt betrayed.

Your emotions will take time to process—and that’s okay. While you work through them, do not take any actions in the heat of the moment that you might regret later.

Do you have a cash reserve that can help for a few months and provide separation from those initial emotions? If not, and you feel like you must “do something” to regain control, focus on cutting your spending wherever its the quickest way and as early as possible.

Step #2: Focus on health coverage

If your health coverage remains unaffected—for example, maybe you are covered through a spouse’s plan or you are enrolled in Medicare—you can skip this step. But if your health insurance ended with your employment, insurance coverage is likely your most pressing need.

If you are age 65 or older but have not enrolled in Medicare, you will need to take care of this right away. You technically have 8 months from the date your coverage ended to enroll in Medicare without penalty and having no health insurance is rarely a good idea.

If you are not age 65 yet but you are married or in a domestic partnership, your best option may be to obtain coverage through your partner’s health plan. You generally have 30 days to make this happen outside open enrollment season.

If Medicare and a spouse’s plan are not options, you will need to buy your own insurance. Some options you may want to evaluate include:

  • Insurance through COBRA (Consolidated Omnibus Budget Reconciliation Act). This federal law allows you to stay on your employer’s health care plan for up to 18 months. It can be expensive, but you will have the same coverage you had while working.
  • High-deductible health plan (HDHP). This might be a better option if you are in excellent health—HDHPs generally only cover “catastrophic” health care needs.
  • Plan purchased through your state insurance exchange. Compare the prices with COBRA premiums. Under the Affordable Care Act (ACA), you may be eligible for a subsidy.

If you do need to enroll in an individual plan and it’s outside the open enrollment period, you have 60 days from the day you lose your former coverage.

Step #3: Take stock of your financial situation

Once you take care of your health insurance, you will need to evaluate how much money you have available to spend for the rest of your life—and whether it’s enough.


What do you have?

First, consider any benefits you are due. Depending on the reason for your sudden retirement, you may be eligible for disability payments or unemployment insurance.

If you are at least age 62, you are probably eligible for Social Security, but consider that option carefully. If you are definitely not going to continue working and you have no other income, starting your benefits may make sense. But beginning before your full retirement age will lock you into a lower level of payments for the rest of your life. And if you end up returning to work, your benefits will be reduced until you do reach full retirement age.

For now, simply find out what your benefit amount will be, if needed. Use the Retirement Estimator tool on the Social Security Administration website. Remember to consider what your benefit might be if you took benefits on your spouse’s record.

You will also want to consider any other income sources, like an annuity, a rental property, or pension payments from a previous job. (And don’t forget your spouse’s income, if applicable.) Find out when any annuity or pension payments start and how much you will receive.

If you are at least age 59½, you will also have full access to your retirement savings—money in 401(k)s, 403(b)s, and IRAs. But again, do not tap into these accounts too soon. Your retirement might last longer than you planned, and the longer you leave that money alone to grow, the better.

What do you need?

The other half of the equation is, of course, the money you are actually spending.

Many retirement calculators use a general guideline to estimate how much you need to save for retirement—assuming, for example, you will spend 80% of your pre-retirement money. But that’s only a rule of thumb. Depending on your situation, you might not need that much money.

Here are a few factors to consider:

Now that you are not going to a job every day, will you spend less on transportation? Clothing? Dining out?

Can you downsize your home? Move to an area with a lower cost of living?

Are there services you previously paid someone else that you can now do yourself? Housecleaning, dog walking, landscaping, and home/car maintenance might be expenses you can eliminate.

What other discretionary expenses could you do without?

Once you know how much money you have and how much money you need, you will be able to assess whether your financial situation is dire, iffy, or perfectly fine.

If you’re under age 59½

You might still have options for using your retirement money without penalty, if needed.

If you own a Roth IRA or Roth 401(k) and you’ve had the account for at least 5 years, you can withdraw your contributions without paying penalties or taxes. (This only applies to contributions—you will still owe taxes and penalties on any earnings if you withdraw them before age 59½.)

If you only have traditional retirement accounts, you can access the money through substantially equal periodic payments (SEPPs), a method of withdrawing money that exempts you from early withdrawal penalties. Note that once you start SEPPs, you will need to keep taking withdrawals until age 59½ or for 5 years, whichever is longer.

Step #4: Decide how to move forward

In the best-case scenario, your resources will exceed your expenses and you will not have to worry about working. That’s what happened to Kevin. He and his wife had done a great job saving, they were in a solid financial position and they actually could retire.

In the end, Kevin discovered he still wanted to work, and he found a new position. You may want to consider that, too. There’s a lot to be said for staying busy and continuing to save for the day you do decide to retire.

In an alternative—maybe more likely—scenario, you may not have enough money to live the retirement you envisioned. In that case, you will have to make some choices.

Assuming you are healthy, can you go back to work, even part-time? Do not rule out unconventional options, like working as a freelancer or consultant, teaching at a local community college, or finding occasional gigs through a service like Uber.

And if working is not possible [from a financial perspective] it’s still best, if you can, to keep a steady income stream. However, if this is not an option or you still need more income, try to get by with just Social Security for now and keep growing your retirement money.


Shedding New Light On Hospice Care

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Woman and caregiverEarlier this year, Kathy’s 86-year-old mother was hospitalized in Colorado after a fall. As she rushed to her side, Kathy asked for a consultation with a palliative care nurse.

“I wanted someone to make sure my mother was on the right medications,” Kathy said.

For all her expertise — Kathy Brandt advises end-of-life organizations across the country — she was taken aback when the nurse suggested hospice care for her mother, who has advanced chronic obstructive pulmonary disease, kidney disease and a rapid, irregular heartbeat.

“I was amazed — really?” Kathy said, struggling with shock.

It’s a common reaction. Although hospices now serve more than 1.4 million people a year, this specialized type of care, meant for people with six months or less to live, continues to evoke resistance, fear and misunderstanding.

“The biggest misperception about hospice is that it’s ‘brink-of-death care,’” says Patricia Mehnert, a longtime hospice nurse and interim chief executive officer of TRU Community Care, the first hospice in Colorado.

In fact, hospice care often makes a considerable difference for those with months to live. “When someone is further out from death, we can really focus on enhancing their quality of life,” says Rachel Behrendt, senior vice president of Hospice of the Valley, which serves the Phoenix metropolitan area.

New research confirms that hospice patients report better pain control, more satisfaction with their care and fewer deaths in the hospital or intensive care units than other people with a similar short life expectancy.

What should seniors and their families, the largest users of hospice care, expect? It’s fairly well understood that patients forgo curative therapies in favor of comfort care when they enter hospice. Here are additional features:

Four Levels Of Care

Hospice providers are required to offer routine care in patients’ homes (this includes seniors who reside in assisted living or nursing homes); continuous care at home for people with out-of-control symptoms such as pain or breathing problems; inpatient respite for families that need a break from caring for a loved one; and general inpatient care for medical crises that cannot be handled in any other setting.

With continuous care, a nurse must be on-site in the home for at least eight hours a day, helping to bring symptoms under control. Usually, this will happen in one to three days. Respite care has a maximum limit of five days.

Some hospices have their own general inpatient facilities and “it’s a common misconception that patients are sent to inpatient hospice to die,” says Jean Cohn, clinical manager at Montgomery Hospice’s inpatient facility, Casey House. “In fact, we’re frequently fine-tuning patients’ regimens in inpatient hospice and sending them back home.”

Intermittent Care At Home

Routine care at home is by far the most common service, accounting for about 94 percent of hospice care, according to the latest report from the National Hospice and Palliative Care Organization.

While services vary depending on a patient’s needs, home care typically involves at least one weekly visit from a nurse and a couple of visits from aides for up to 90 minutes. Also, a volunteer may visit, if a patient and family so choose, and social workers and chaplains are available to address practical and spiritual concerns.

Hospices will provide all medications needed to address the underlying illness that is expected to cause the patient’s death, as well as medical equipment such as hospital beds, commodes, wheelchairs, walkers and oxygen. Typically, there is no charge for such gear, although a copay of up to $5 per prescription is allowed.

What families and patients often do not realize: Hospice staff will not be in the home every day, around the clock. “Many people think that hospice will be there all the time, but it does not work that way,” Brandt says. “The family is still the front line for providing day-to-day care.”

In assisted living, patients or their families may have to hire nursing assistants or companions to provide supplemental care, since hands-on help is limited. In nursing homes, aides may visit less often, since more hands-on help is available on-site.

Self-Referrals Are Allowed

Anyone can ask for a consultation with a hospice. “We get many self-referrals, as well as referrals from family and friends,” says Behrendt of Hospice of the Valley. Usually, a nurse will visit and do a preliminary assessment to determine if a person would qualify for hospice services.

To be admitted, two physicians — the patient’s primary care physician and the hospice physician — need to certify that the person’s life expectancy is six months or less, based on the anticipated trajectory of the patient’s underlying illness. And re-certification will be required at regular intervals.

A Person Can Choose Their Physician

A person has a right to keep their primary care physician or they can choose to have a hospice physician be in charge of their medical care.

At JourneyCare, the largest hospice in Illinois, “we prefer that the patient retains their primary care physician because that physician knows them best,” says Dr. Mark Grzeskowiak, vice president of medical services.

These arrangements require close collaboration. For instance, if a nurse observes that a patient with heart failure is experiencing increased shortness of breath, JourneyCare staff will get in touch with that patient’s primary care physician. The physician is responsible for altering the treatment plan; the hospice is responsible for implementing that plan and giving clear instructions to the patient and family.

Concerns About Medications

“There’s a misconception that a person is going to be medicated to a highly sedated state in hospice,” says Dr. Christopher Kerr, chief executive officer and chief medical officer for Hospice Buffalo Inc. in upstate New York. “The reality of our primary goal is to increase quality wakefulness. Managing these medications is an art and we’re highly experienced.”

Family caregivers are on the front line since they are responsible for administering pain medications such as morphine. “Absolutely, there’s a great deal of fear and anxiety around all the issues associated with giving medications,” says Cohn of Montgomery Hospice. “We try to reassure caregivers that the doses we start with are very small, monitor how the patient reacts, and go deliberately slow.”

Because most hospice stays are short — the median length is only 17 days — and because the diversion of painkillers from people’s homes is a risk, doctors have begun writing prescriptions for a week or two at a time, says Judi Lund Person, vice president of regulatory and compliance for the National Hospice and Palliative Care Organization. If concerns exist, hospices can have a lockbox for medications sent to the home.

Discharges Are Possible

Estimating when someone is going to die is an art, not a science, and each year hundreds of thousands of hospice patients live longer than doctors anticipate.

If physicians can document continued decline in these patients — for instance, worsening pain or a noticeable advance in their underlying illness — they might be able to re-certify them for ongoing hospice care. But if the patient is considered stable, they will be discharged, various experts say.

In 2015, nearly 17 percent of hospice patients were so-called live discharges, according to a report from the Medicare Payment Advisory Commission. Two days before a discharge, hospices are required to give the patient or family members a Notice of Medicare Non-Coverage. Expedited appeals of discharge decisions can be lodged with a Medicare quality improvement organization.

There are no regulatory requirements governing what hospices should do to facilitate live discharges. Some hospices will spend weeks helping patients make arrangements to receive medications, medical equipment and ongoing care from other sources. Others offer minimal assistance.

At The Very End

Almost 1 in 8 hospice patients do not get visits from professional staff during their last two days of life, according to a study published in JAMA Internal Medicine last year. And this can leave families without needed support.

Some hospices have responded by creating programs specifically for people who have a very short time left to live. “We’ve put together a special team for people who are expected to live 10 days or less because that requires a different kind of management,” says Ann Mitchell, chief executive officer of Montgomery Hospice. “Instead of a nurse for every 15 patients, a nurse on this team will have five to six patients and a social worker is available seven days a week.”

“One-third of our patients are here for less than seven days and often we receive them in a crisis,” says Kerr of Hospice Buffalo. “We’ve had to re-purpose our services to address the urgency and complexity of these patients’ needs and that means we have to be ever more present.” Across the board, Hospice Buffalo requires that patients be seen within 24 hours of an expected death.

Dentistry Advocates Aim for Medicare Benefits

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Dentist Photo

Carolyn Thompson’s tight-lipped smile hides a health care problem the 81-year-old retired nurse cannot afford to correct and that Medicare will not cover.

She needs dentures. Her missing bottom teeth make chewing difficult, so she avoids most of the fresh fruits and foods that provide valuable nutrients. Thompson has not seen a dentist for many years.

“While working I always took care of my teeth, but in the last couple of years have found it difficult to pay for care,” said Thompson.

Thompson’s predicament is common. About 1 in 5 people 65 and older have untreated dental problems. But Medicare rarely covers dental care and fewer than half of elderly Americans see a dentist even once a year — often because they cannot afford to — according to a Johns Hopkins University study published in Health Affairs last year. Just 12 percent of Americans over 65 have dental insurance, that study reported.

Dental benefits were not recognized as a priority when Medicare was enacted in 1965. Back then, nearly half of Americans ages 65-74 had lost their natural teeth; today, 87 percent in that age group still have some or all of their teeth, according to the American Dental Association.

Research shows that untreated dental problems can exacerbate health problems such as diabetes and heart disease, leading to costlier bills for Medicare. That’s why a nonprofit think tank devoted to improving oral health is working toward an audacious goal: Medicare-paid dental care for America’s seniors.

The Santa Fe Group’s objective looks daunting in post-election Washington, where repealing the Affordable Care Act and cutting federal health spending are priorities for both the Trump administration and Congress’ Republican leadership.

Moreover, the costs of expansion would be significant. Such a benefit would likely be heavily used in an aging America whose 65-and-older population is projected to grow at least 30 percent by 2030. Also, while dentures were (and are) relatively inexpensive, newer techniques to preserve natural teeth, such as dental implants, are costly.

The Santa Fe Group’s members include academics, dental industry executives and former government officials. Among the sponsors are Colgate-Palmolive, DentaQuest and Henry Schein.

Santa Fe understands the uphill climb for coverage, but its sights are set on on its strategy to start building public demand for a Medicare dental benefit spearheaded by Dr. Claude Earl Fox, a former senior health official in the Clinton administration.

“We have a long road to go, but we think it’s doable and there will be a growing audience for this,” said Fox, who worked as a professor at both Johns Hopkins and University of Miami medical schools after his career in federal government.

The Johns Hopkins study estimated a dental benefit could cost from $4.4 billion to $16.2 billion a year, depending on what is covered, how much seniors pay out-of-pocket and the level of premium subsidies provided to low-income beneficiaries.

“Most of the talk in Medicare reform is how do we reduce cost rather than expand costs, and adding a dental benefit can make people [on Capitol Hill] very nervous,” said Amber Willink, the study’s lead author and assistant scientist at the Johns Hopkins Bloomberg School of Public Health.

Prescription drugs were the last major benefit Congress added to Medicare. That was in 2006 after more than a decade of pleading from advocates.

Without Medicare to help, seniors have few options to get comprehensive coverage. Private coverage is typically too expensive for many seniors.

Medicare Advantage, private plans that cover about one-third of seniors, sometimes offer a limited dental benefit for additional costs but typically only for a small network of dentists.

“It is important to show a benefit can be structured to save money for Medicare,” Fox said.

Supporting evidence from large studies is limited, however. It is uncertain whether the Congressional Budget Office — the official scorekeeper on federal legislation — would agree with the dental industry’s savings estimates from a Medicare benefit.

Politics aside, some advocates point to firsthand experiences to show that older adults’ health improves with regular dental care.

A retirement community in Alabama, which includes a nursing home and an assisted-living facility, added a dental clinic in 2012. Pneumonia rates dropped soon after, said Lillian Mitchell, a dentist who oversees the office and is the director of geriatric dentistry at the University of Alabama, Birmingham. Mitchell and other faculty oversee dental students who treat patients at the clinic.

“Taking care of oral health affects their overall health by reducing inflammation that has been linked to heart disease, diabetes and other chronic conditions common to the elderly,” Mitchell said.

The clinic’s services cost about half the price of private dentists.

Patients say easy access to the clinic in the building where they live makes a big difference. “This is such a comfort knowing we can go to the dentist without having to leave the facility,” said Peggy Batcheler, 87, a former nursing professor. “We feel so fortunate.”

The Santa Fe Group hopes to draw the American Dental Association, AARP and other seniors’ groups into its campaign for a Medicare dental benefit.

“It is not our No. 1 issue, but it is on top of our conversation list,” said Joseph Crowley, a Cincinnati dentist and president-elect of the American Dental Association. He is very optimistic.


Does Your Insurance Cover Alzheimer’s Care?

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Senior man sitting on a wheelchair with caregiverOne in eight individuals 65 and older suffers from Alzheimer’s disease –quite a sobering statistic for the growing number of baby boomers rapidly crossing that age threshold. And the costs can be an “overwhelming financial burden,” says Carol Steinberg, executive vice-president of the Alzheimer’s Foundation of America.

Private and government insurance programs may cover some costs. Here’s a primer on your options.


Many people are shocked to discover that Medicare does not cover the long-term custodial care that Alzheimer’s patients need. Custodial care is the non-medical care associated with activities of daily living, such as bathing and dressing.

Medicare does cover limited care in a nursing facility or at home. For home care, the patient must require skilled-nursing care or physical or occupational therapy to help with the recovery from an illness or injury — not to help an Alzheimer’s patient with daily-living activities. “One of the most difficult situations is when a loved one needs personal or custodial home care, but Medicare will only cover that if there is some type of skilled-care need,” says Frederic Riccardi, director of programs and outreach for the Medicare Rights Center, an advocacy group.

At-home services in most cases can be provided for fewer than seven days each week or less than eight hours each day over a period of 21 days or less. Limited custodial care could be provided during these visits — perhaps if an Alzheimer’s patient treated by a registered nurse for a broken hip needs help bathing. Medicare pays the cost of a skilled-nursing facility, but only to provide continuing treatment following a hospital stay of at least three days. Skilled care in a facility is limited to 100 days.

While Medicare offers little by way of custodial care, it does provide diagnostic and medical treatment that Alzheimer’s patients need. The new annual wellness physical exam, which is free and part of the health care law, includes testing for cognitive impairment. “This is a critical, yet hardly known, provision,” Steinberg says. Medicare also covers visits to a geriatric assessment clinic.

Alzheimer’s patients and their families need to carefully choose a Medicare Part D prescription-drug plan or private Medicare plan. Alzheimer’s medications are generally covered under Part D, but plans vary regarding co-payments. The Alzheimer’s Association offers a guide about coverage for common Alzheimer’s drugs.

If you choose a Medicare Advantage plan, make sure your neurologist and other physicians you see often are covered as in-network providers. Otherwise, you will pay higher out-of-pocket costs or ask about Medicare supplement plans.

Long-term-care insurance

These policies provide coverage for the custodial care that Alzheimer’s patients usually need. Benefits typically trigger if the patient needs help with at least two activities of daily living or if a doctor provides evidence of cognitive impairment. Because most people with Alzheimer’s receive care in their own homes, look carefully at the policy’s home-care requirements. Typically, a patient must wait 60 or 90 days before benefits begin. But policies differ on when the clock starts ticking, which could be a big headache for caregivers. 

Some long-term care insurance policies start the 60-day waiting period on the day the doctor certifies the cognitive impairment — and benefits trigger 60 days later. But other policies count only the days a patient receives care from a qualified caregiver during the waiting period. If the caregiver visits two days a week, the policy only counts those two visits toward the 60-day waiting period — and benefits will not trigger for 30 weeks. In the meantime, the family has to pick up the tab for the caregiver.

Before you hire a caregiver, check the policy’s fine print on the type of caregiver the insurance company will cover. Some policies pay for any caregiver who is not a family member, while others only pay for licensed caregivers who work for an agency. Some families who hire an unlicensed caregiver later discover that the caregiver doe not qualify under the policy.

Do not expect a policy to pick up round-the-clock home care. Daily coverage is based on the daily benefit. A policy with a $200 daily benefit, for example, will likely cover the cost of eight to ten hours of a home health aide. If a family caregiver cannot fill in the gap, a nursing home may be a better option.

You cannot use more than your daily benefit in a day, but you can stretch your daily benefit over longer periods. Say you choose a benefit period of three years, at $200 a day. If you only use $100 a day, your coverage can last for six years. Some policies cover adult day care, which can cost a lot less than daily caregivers. “Many adult day services specialize in care for those with Alzheimer’s disease and similar disorders,” says Kathy O’Brien, senior gerontologist with the MetLife Mature Market Institute.

An alternative and more cost-effective option for long-term care insurance in today’s expensive health care environment is a short-term custodial care policy.


This program, whose costs are shared by federal and state governments, is the primary payer of long-term-care services for the elderly. Unlike Medicare, it provides custodial care for Alzheimer’s patients. Custodial care typically is provided in Medicaid-eligible nursing homes, but many states’ Medicaid programs now pay for home care and sometimes adult day care or care in assisted-living facilities, says O’Brien.


The downside: You need to be virtually impoverished to qualify. Many people end up qualifying after spending their retirement savings on care. While state laws differ, generally you cannot have more than $2,000 in countable assets, including investments. A spouse who lives at home can generally keep about $113,000. You’re allowed to keep your home, car and assets in certain kinds of trusts. (Visit to find eligibility requirements in your state.)

To protect more of your assets, you can buy a state-approved long-term-care policy that is “partnership” eligible. The policy would allow you to qualify for Medicaid without having to spend almost all of your money first. For example, if you buy a partnership policy that covers $200,000 of care, you would pay out of pocket until you have $200,000 left and still qualify for Medicaid. Go to the National Clearinghouse for Long Term Care Information to see if your state allows these policies.





When Medicare Does Not Alleviate Enrollment

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Cute couple smilingCindy Hunter received her Medicare card in the mail last Spring and she did not know much about Medicare. She and her husband, retired teachers who live in a Philadelphia suburb, decided she did not need Medicare because she shared her husband’s retiree health insurance plan. 

We were so thankful we had good insurance,” she said. So she sent back the card, telling officials she would keep Medicare Part A, which is free for most older or disabled Americans and covers hospitalization, some nursing home stays and home health care. But she turned down Part B, which covers doctor visits and other outpatient care and comes with a monthly premium charge. A new Medicare card arrived that said she only has Part A.

When Stan Withers left a job at a medical device company to become vice president of a small start-up near Sacramento, California, he took his health insurance with him. Under a federal law known as COBRA, he paid the full cost to continue his coverage from his previous employer. A few years earlier, when he turned 65, he signed up for Medicare’s Part A. With the addition of a COBRA plan, he thought he didn’t need Medicare Part B.

Hunter and Withers now know they were wrong and are stuck with medical bills their insurance will not cover. Hunter called it “an honest mistake” and said there was nothing in the written materials she and her husband received indicating that if they had Medicare Part A, his retiree coverage could not replace Medicare Part B. Withers had no idea he made a bad choice.

Thousands of seniors unwittingly make similar mistakes every year, believing that because they have some type of health insurance, they do not need to worry about signing up for Medicare Part B. Generally, insurance other than that provided by a current employer will not exempt them from Medicare’s strict enrollment requirements. Seniors’ advocates and some members of Congress want to fix the problem, backed by a broad, unlikely group of unions, health insurers, patient organizations, health care providers and even eight former Medicare administrators.

Medicare’s Part B enrollment rules have not changed since the program was created in 1965. Seniors can enroll only when they first become eligible — usually three months before and after the month they turn 65 — or when their job-based insurance ends. If they miss this opportunity, they have to wait until the months of January through March to enroll and then coverage only begins July 1. Most will not be allowed to buy any other health insurance policy during that time.

And if they delay signing up for 12 or more months after becoming eligible, many will be hit with a permanent penalty added to their Part B monthly premium. In 2014, about 750,000 beneficiaries paid late penalties, raising their Part B premiums an average of 29 percent, according to the Congressional Research Service.

“The rules have not changed, but our lives have,” said Joe Baker, president of the Medicare Rights Center, an advocacy group that is leading the effort to update the enrollment process. When Medicare began, the government wanted seniors, especially younger and healthier people, to sign up quickly and so the deadlines and late penalties were incentives to get them in the program.

But these days more seniors work past the Medicare eligibility age, get health insurance through their employer or their spouse’s, or have individual health insurance coverage, Baker said. The problem is not that people are going without insurance. “The confusion that we really see is with how Medicare interacts with other insurance coverage,” he said.

Hunter, 62, became eligible for Medicare earlier than 65 because she gets Social Security disability benefits. She’s receiving two chemotherapy drugs to control ovarian cancer. This fall her oncologist’s office told her there’s “something going on with your insurance,” she recalled. After many calls to her husband’s retiree plan, Social Security, Medicare and even her congressman, she learned that her insurance would only pay a share of the bills for her treatments after deducting the amount the insurer said was Medicare’s responsibility. “But Medicare isn’t paying because I don’t have Part B,” she said. So Hunter is responsible for that portion.

Withers thought the health plan he purchased through his old employer would count as job-based coverage, but COBRA is not a substitute for Medicare Part B, a point no one mentioned when he submitted his paperwork. He should have signed up for Part B when he left his previous job.

“How could there be a rule that no one knows about?” Withers asked.

In addition, the private plan has refused to pay thousands of dollars in medical bills because the company argued that he should have had Part B and those are Medicare’s responsibility.

Confusion over COBRA is just one of many reasons that people miss their opportunity to enroll in Part B. Others think, incorrectly, that getting Veterans Health Administration benefits, job-based health insurance from a company with less than 20 workers, retiree coverage from a former employer, or individual health insurance coverage exempts them from Part B’s lifetime late penalties and waiting periods with no insurance.

To help seniors avoid such mistakes, bipartisan legislation has been introduced in both the House and Senate that would allow people who miss their initial Part B enrollment deadline to sign up in the fall, when millions of seniors already in Medicare are choosing private drug or medical plan changes. Part B coverage would begin the month after they enroll. It would also allow most people who enroll late to apply for retroactive coverage to their initial eligibility date and request a waiver of the late penalties if they can prove they were misled (currently, an exemption may be based only on misinformation from a federal government representative, i.e. Social Security or CMS).

“Because I didn’t ask Social Security and they did not provide any wrong information, there was nothing they could do,” Hunter said. “They said if they had given me the wrong information, they might be able to do something.”

Seniors “should not face penalties or gaps in their Part B coverage simply due to bureaucratic snafu,” said Rep. Patrick Meehan, R-Pa., who co-sponsored the House bill. “I’ve had seniors contact my office and say they simply had no idea of existing deadlines — or that they faced penalties down the road for missing them.”

The legislation also would require Medicare officials to notify all Americans prior to their 65th birthday about signing up for Medicare. Currently, the federal government and some states notify only those 64-year-olds who have health insurance though the Affordable Care Act’s marketplaces.

Although the bill did not see action before the end of the 2016 congressional session, Meehan said he will reintroduce it in 2017.

Getting an official government notice before turning 65 explaining when to sign up for Part B would “absolutely” help, said Withers. “There should be something that tells people what they need to do.”

Hospice Care – Although Not Actually Dying?

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The service of hospice care is intended for patients who are terminally ill and expected to die.

But over the past decade [as a 2014 Washington Post investigation found] the number of patients who outlived hospice care in the United States has risen dramatically, in part because hospice companies earn more by recruiting patients who are not actually dying.

Now government inspectors have turned up information about how that happens.

About one in three hospice patients were not given key information about what the choice of hospice entails at the time they enrolled, according to a report released on September 15, 2016 by the Office of Inspector General of the Department of Health and Human Services.

In their investigation, government inspectors reviewed a random sample of the documentation that patients sign to indicate they want hospice care. In many cases, the patient was not informed that electing hospice meant that they intended to forgo a cure for their terminal illness — a critical distinction between hospice care and other health services. Hospices instead provide “palliative care”- that is,  care focused on the prevention and alleviation of suffering.

“When people elect hospice care they are forgoing curative care – and it’s important for them to know that,” Nancy Harrison, one of the investigators, said in a interview.

Moreover, in about 14 percent of cases reviewed, the physician who is supposed to approve the enrollment of a patient in hospice care paid only cursory attention to the matter. They provided scant information about the patient’s prognosis, and “appeared to have limited involvement  in determining that the [patient] was appropriate for hospice care,” according to the report.

The trend is “alarming” said Jodi Nudelman, who also worked on the report.

Medicare, the government insurer, pays for the vast majority of hospice care in the United States. In 2013, it paid $15.1 billion for hospice services covering 1.3 million people. The federal government in recent years has sought to recover more than $1 billion from hospices that, according to attorneys, illegally billed Medicare for patients who were not near death.


Patients who are not near death are more profitable because they typically require fewer services. Hospices are paid a flat daily rate for hospice patients.

The Office of Inspector General at HHS “has investigated and is investigating hundreds of hospice fraud schemes,” a spokesman said.

The report follows the 2014 series in The Post, “Business of Dying,” that examined how hospice care, which had begun as a service provided by nonprofit groups, had changed as businesses began to provide the service.

The series reported that at hundreds of United States hospices, more than one in three patients are dropping the service before dying, a sign of trouble in an industry who’s responsibility is to care for patients until death.

With that many patients leaving hospice care alive, experts said, the hospices are likely to be either driving them away with inadequate care or enrolling patients who aren’t really dying in order to pad their profits.

It is normal for a hospice to release a small portion of patients before death — about 15 percent has been typical, often because a patient’s health unexpectedly improves. But research showed that at some hospices, and particularly at new, for-profit companies, the rate of patients leaving hospice care alive is double that level or more.

The number of “hospice survivors” was especially high in two states: in Mississippi, where 41 percent of hospice patients were discharged alive, and Alabama, 35 percent. 

The new findings by the government inspectors are part of a larger body of work by the government that, in the inspectors words, reveals “numerous vulnerabilities” and raises serious questions “as to whether Medicare is paying appropriately for hospice.”





New Medicare Law for a Patient Loophole

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Long-Term CareLast November, after a bad fall, 85-year old Elizabeth Cannon was taken to a hospital near Philadelphia for seven days of observation, followed by nearly five months in a nursing home for rehabilitation and skilled nursing care. The cost: more than $40,000.  

The hospital insisted that Elizabeth had never been formally admitted there as an inpatient, so under federal rules, Medicare would not pay for her nursing home stay. The money would have to come from her pocket.

The experience of Elizabeth and thousands like her inspired a new Medicare law — in force as of Saturday, August 6, 2016 — that requires hospitals to notify patients they may incur huge out-of-pocket costs if they stay more than 24 hours in the hospital without being formally admitted. Because of the Notice Act, passed by Congress last year [2015] with broad bipartisan support, patients can expect to start receiving the notice in January [2017].

“It was extremely distressful to my mother, who was frugal her whole life,” said Cynthia Morgan, Elizabeth’s daughter. Elizabeth had questioned why Medicare would not pay for her care after she paid into Medicare for so many years. Elizabeth died in April 2016.

Hospitals have been keeping patients like Elizabeth in limbo due to fear of being penalized by Medicare for inappropriate admissions. While under observation, patients can be liable for substantial hospital bills, and Medicare will not pay for subsequent nursing home care unless a person has spent three consecutive days in the hospital as an inpatient.

Time spent under observation does not count toward the three days, even though the patient may spend five or six nights in a hospital bed and receive extensive hospital services, including tests, treatment and medications ordered by a doctor.

Under the new law, the notice must be provided to “each individual who receives observation services as an outpatient” at a hospital for more than 24 hours. Medicare officials estimate that hospitals will have to issue 1.4 million notices a year.

“The financial consequences of observation stays can be devastating for seniors,” said Senator Susan Collins, Republican of Maine and the chairwoman of the Senate Special Committee on Aging.

Senator Benjamin Cardin, Democrat of Maryland, the chief sponsor of the Senate version of the legislation, said it would “save seniors from the sticker shock that comes after they are discharged from the hospital and realize that Medicare will not cover the cost of care in a skilled nursing facility.”

The median cost for a private room in a nursing home is roughly $92,000 a year, according to a survey by Genworth Financial. Medicare covers up to 100 days of skilled nursing home care at a time.

The text of the standard “Medicare outpatient observation notice” is subject to approval by the White House Office of Management and Budget. In its current form, the notice to beneficiaries says: “You are a hospital outpatient receiving observation services. You are not an inpatient.” And it explains that Medicare will cover care in a skilled nursing home only if the beneficiary has had an inpatient hospital stay of at least three days.

Patients can then consult their doctors and may ask to be reclassified as inpatients.

Hospitals have found themselves in a dilemma. They increased their use of “observation status” in response to close scrutiny of their billing practices by Medicare auditors — private companies hired by the government to review claims. In many cases, these companies challenged decisions by doctors to admit patients to a hospital, saying the services should have been provided on an outpatient basis. The auditors then tried to recover what they described as improper payments.

Doctors and hospitals said the auditors were like bounty hunters because they were allowed to keep a percentage of the funds they recovered.

But patients will now, at least, be better informed. The Senate Finance Committee explained the reason for the law this way:

“The number of Medicare beneficiaries receiving outpatient observation care over the last several years has been steadily increasing. Some beneficiaries are surprised to learn that although having received treatment overnight in a hospital bed, the beneficiary was never formally admitted as an inpatient but was instead a hospital outpatient.”

Federal officials acknowledged that Medicare beneficiaries sometimes had to pay more as outpatients under observation than they would have paid if they had been formally admitted to the hospital and received the same services as inpatients.

The administration issued rules to carry out the new law. The purpose, it said, is “to inform beneficiaries of costs they might not otherwise be aware.”

“Even if staying in a hospital overnight, the status might still be considered outpatient,” the administration said in a publication for beneficiaries.

Consumer advocates and nursing homes support the new requirement.

“Medicare beneficiaries are spending more and more time in the hospital without being formally admitted,” said Joyce Rogers, a senior vice president of AARP, the lobby for older Americans, adding that this “can expose beneficiaries to unexpectedly high out-of-pocket costs amounting to thousands of dollars.”

Mark Parkinson, the president and chief executive of the American Health Care Association, a trade group for nursing homes, said, “Patients often have no idea what their status is in a hospital and observation stays impose a significant financial burden on seniors increasing the likelihood of turning to Medicaid.”  

“The new law is an important first step, but Congress and the administration need to do more to protect beneficiaries,” said Judith Stein, the executive director of the nonprofit Center for Medicare Advocacy.

Under the law, hospitals can still keep Medicare patients in observation status, and some of the patients will be responsible for nursing home costs. Twenty-four senators and more than 120 House members are supporting bipartisan legislation to address that concern. Under that bill, time in a hospital under observation would count toward the three-day inpatient stay required for Medicare coverage of nursing home care.

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