Friday, February 29, 2008

Manufacturing honchos doubt Congressional resolve (caj--?) to reform health care

CHICAGO (Reuters) - Chief executives from the U.S. manufacturing and transportation sectors say something must be done about soaring health-care costs but doubt the ability of Washington to come up with meaningful, bipartisan reform.  "There is a lot of work that needs to be done on the part of the politicians to rein in some of these costs," Lincoln Electric Holdings Inc ( CEO John Stropki said at the Reuters Manufacturing Summit in Chicago this week, adding: "I have very little confidence in Washington."  In some cases, U.S. companies say they are focusing on "wellness" programs to cut health-care costs, including encouraging employees to eat well, exercise and quit smoking.  U.S. health-care costs have seen double-digit increases for much of the past decade and are set to keep on rising.  "Something eventually has to give there," said Wick Moorman, CEO of U.S. railroad Norfolk Southern Corp "This is a critical issue that is confronting our economy."

Source:  Reuters,

February 29, 2008 in Medicare | Permalink | TrackBack (0)

How creepy is this????

Life Gem is an Australian company that creates lab diamonds from cremains.  Seriously.  Here is the promo:

The LifeGem® is a certified, high-quality diamond created from the carbon of your loved one as a memorial to their unique life.

Love.   Life’s single greatest risk.  Life’s single greatest reward.  Love captures your heart in a second and holds it for eternity.  You have experienced a love without equal.  You have had someone truly special in your life and mere words simply will not do.
LifeGem diamonds are available in brilliant and beautiful blues, reds, greens, yellows, and now even colorless.  Like a sunset captured in time or a wave upon the ocean, each LifeGem ®

This tidbit found via Gerry Beyer's Wills Trusts and Estates Blog.

February 29, 2008 in Advance Directives/End-of-Life | Permalink | TrackBack (0)

Centers for Medicare & Medicaid Services presents "Supporting Rural Family Caregivers"

Centers for Medicare & Medicaid Services and DHHS New Freedom Initiative Subcommittee on Caregiving presents "Supporting Rural Family Caregivers" March 19, 2008 - 1-3:30 PM (Eastern Time)

The purpose of this satellite broadcast is to conduct a discussion of the difficulties faced by rural family caregivers and how to support them in areas with limited provider agencies, manpower shortages, and transportation challenges. With assistance from USDA/CREES and other organizations, this session will highlight creative responses to rural family caregiving such as consumer directed care. This broadcast will feature family caregivers who have applied innovative means to be effective caregivers in rural areas.

Sign up here:

February 29, 2008 | Permalink | TrackBack (0)

Feb. BIFOCAL now available

The February 2008 issue of BIFOCAL, Journal of the ABA Commission on Law and Aging , is now available.  

This issue features:

  • Team Approach to Guardianship Preserves Independence of Ward, Generates Savings for State, by Jean Callahan and Andrea Snelson, The Vera Institute of Justice
  • Legal Services Program Tackles Senior Debt, by Dolores Schaefer, MFY Legal Services
  • Economic Stimulus Bill Includes Disregard of Refund As Income or Resources, by Holly Robinson, ABA Commission
  • Public Guardianship After 25 Years: In the Best Interest of Incapacitated People? by Pamela B. Teaster, Erica F. Wood, Winsor C. Schmidt, Jr., and Susan A. Lawrence
  • Kentucky Assesses Legal Needs of Seniors
  • National Healthcare Decisions Day Set for April 16, 2008 (Webinar March 19)
  • Select NALC Workshops Available Online for Listening 
  • Funding Opportunities: Partnership in Law and Aging (Last Chance!)  Borchard Fellowship

    The ABA Commission on Law and Aging distributes BIFOCAL six times a year to elder bar section and committee officers and members, legal services providers, elder law and other private practitioners, judges, court staff, advocates, policymakers, law schools and elder law clinics, law libraries, and other professionals in the law and aging network.

    Visit to receive the new issue or subscribe

February 29, 2008 in Other | Permalink | TrackBack (0)

Thursday, February 28, 2008

CRS report discusses pending congressional bills on estate tax

Under provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16), the estate tax exclusion is scheduled to continue to rise, from $2 million for decedents dying in 2008, to $3.5 million in 2009. The estate tax is repealed for decedents dying in 2010 only. The gift tax is to remain in place in 2010. In addition, when the estate tax is repealed, there is scheduled to be a significant change in the method used to determine the "basis" of all capital assets transferred at death -- from "step-up in basis" to "modified carryover basis." Whatever basis-valuation rule is in effect for the year of death applies to all capital assets transferred after any person's death, whether or not their estate is large enough to be liable for the estate tax. The estate tax provisions of EGTRRA are scheduled to sunset at the end of 2010. That explains why the repeal of the estate tax is currently scheduled to last for only one year. If Congress does not change the law beforehand, on January 1, 2011, estate and gift tax law will return to what it would have been had EGTRRA never been enacted. The unified estate and gift tax will be reinstated with a combined exclusion of $1 million. The maximum tax rate will revert (from 45% in 2007-2009) to 55%. These large year-to-year differences in the estate tax law mean that wealthy individuals face a wide and erratic variation in their potential estate tax liability over the next four years, 2008-2011, depending upon the year they might happen to die. Following EGTRRA, the House passed a bill to permanently repeal the estate tax in each of the past three Congresses, but the Senate did not pass any legislation addressing the estate tax. In addition, in the second session of the 109th Congress, the House passed two bills that would have modified and retained the estate tax. Thus far in the 110th Congress, seven bills to permanently repeal the estate tax have been introduced in the House and four in the Senate. Seven bills to retain but modify the estate tax have been introduced in the House and one in the Senate. The repeal bills differ on whether or not they would preserve the other changes made by EGTRRA to the taxation of gifts and the basis for inherited assets. The modification bills differ on the level of the exclusion, what year it would take effect, whether or not it would be indexed for inflation, and whether any unused exclusion could be carried over to the estate of the surviving spouse. They also differ on the tax rates, whether special relief would be given to family-owned farms or businesses, and whether the gift tax would be defined separately from or unified with the estate tax. The U.S. Treasury Department's February 2008 estimates show the annual revenue loss from total repeal of the estate tax rising steadily from $58 billion in FY2012, up to $84 billion in FY2018. Even though estate and gift taxes account for less than 2% of federal revenue, permanent repeal of the estate tax accounts for one quarter of the estimated revenue loss of the Bush Administration's FY2009 budget proposal to make permanent the group of tax cuts enacted in 2001 and 2003, measured over the 10-year forecast period, FY2009-FY2018. This report will be updated when new estate tax bills are introduced and when new revenue loss estimates become available.

Source:  Open CRS,

February 28, 2008 in Other | Permalink | TrackBack (0)

GAO report says that Medicare Advantage beneficiaries may pay more despite gov't subsidies

In 2007, plans projected that relatively little of their rebates would be spent on additional benefits compared to cost-sharing and premium reductions. Of the average projected rebate amount of $87 PMPM, plans projected they would allocate about $10 PMPM (11 percent) to additional benefits, about $61 PMPM (69 percent) to reduced cost sharing, and about $17 PMPM (20 percent) to reduced premiums.
Using funding from both rebates and additional premiums, plans covered a variety of additional benefits not covered by Medicare FFS in 2007, including dental and vision benefits. On the basis of plans’ projections, GAO estimated that rebates would pay for approximately 77 percent of additional benefits and additional beneficiary premiums would pay for the remaining 23 percent.

MA plans projected that, on average, beneficiaries in their plans would have lower cost sharing than Medicare FFS cost-sharing estimates, although some MA plans projected that their beneficiaries would have higher cost sharing for certain service categories, such as home health care and inpatient services. Because cost sharing was projected to be higher for some categories of services, beneficiaries who frequently used these services could have had overall cost sharing that would be higher than under Medicare FFS.

On average, MA plans projected that they would allocate about 87 percent of total revenue ($683 of $783 PMPM) to medical expenses; approximately 9 percent ($71 PMPM) to non-medical expenses, including administration, marketing, and sales; and approximately 4 percent ($30 PMPM) to the plans’ margin, sometimes called the plans’ profit. About 30 percent of beneficiaries were enrolled in plans that projected they would allocate less than 85 percent of their revenues to medical expenses.

Whether the value that MA beneficiaries receive in the form of reduced cost sharing, lower premiums, and additional benefits is worth the additional cost is a decision for policymakers. However, if the policy objective is to subsidize health care costs of low-income Medicare beneficiaries, it may be more efficient to directly target subsidies to a defined low-income population than to subsidize premiums and cost sharing for all MA beneficiaries, including those who are well off. As Congress considers the design and cost of MA, it will be important for policymakers to balance the needs of beneficiaries and the necessity of addressing Medicare’s long-term financial health.

In commenting on a draft of this report, the Centers for Medicare & Medicaid Services expressed concern that the report was not balanced because it did not sufficiently focus on the advantages of MA plans. GAO disagrees. This report provides information on how plans projected they would use rebates and identified instances in which MA beneficiaries could have out-of-pocket costs higher than they would have experienced under Medicare FFS.


Comment:  The privatization of Medicare costs beneficiaries and taxpayers and enriches insurance companies.  End of story.

February 28, 2008 in Medicare | Permalink | TrackBack (0)

Wednesday, February 27, 2008

Symposium issue on voting rights and cognitive impairment is now onl-line

The McGeorge School of Law has put the entire special Symposium Issue on "Facilitating Voting as People Age: Implications of Cognitive Impairment" on its web site at:

At that page, scroll down to Issue 38, Number 4.

Thanks to Charlie Sabatino/elderbar listserv.

February 27, 2008 in Discrimination | Permalink | TrackBack (0)

Part D structure is undermiining Medicare's long term financial security--duh

When President Bush signed the Medicare drug prescription law in 2003, describing it as "the greatest advance in health care for America's seniors," he was criticized because the plan could prove to be hugely costly and someday end up wrecking the Medicare budget.  Some critics were concerned about the law's mind-boggling complexity and provision, known as Part D, which subsidizes the supply of drugs by private insurers without allowing Medicare to negotiate prices. And others thought that rushing to a new entitlement to guarantee Bush's second-term re-election without really understanding what we would be paying in perpetuity was irresponsible.

At first look, the plan has fulfilled its goal of providing drug coverage to Medicare beneficiaries. According to the Centers for Medicare and Medicaid Services, 40 million seniors now have prescription drug coverage. A study from IMS, a pharma-industry data collection firm, shows that seniors in Part D plans filled about 486 million prescriptions in 2006, boosting use of the most profitable chronic disease drugs.  Drugs for high blood pressure and high cholesterol accounted for 122 million prescriptions. More than 20 million prescriptions were for drugs to treat diabetes, pain, cancer and ulcers. And rounding out the top 10 were antibiotics, hormones, blood thinners, and drugs for seizures and psychiatric disorders.

But the program has failed to protect low-income Americans from high out-of-pocket costs for their medications, according to a 2007 survey of 16,000 seniors by the Kaiser Foundation, Commonwealth Fund, and Tufts-New England Medical Center. And program costs that critics had feared would exceed government projections by as much as $750 billion by the end of the decade have materialized sooner than expected.

According to the House Oversight and Government Reform Committee, the implementation of Part D contributed to an 18.7 percent increase in Medicare spending in 2006, the fastest rate of growth since 1981 and double the rise in 2005, while overall health spending had increased only 6.7 percent. Privatizing delivery of drug benefits, the committee added, "has been costly and inefficient and enriched the drug companies and the insurance industry at the expense of seniors and taxpayers." Program costs would have been $11.7 billion less, if plans obtained rebates compared to those negotiated by Medicaid and the Veterans Administration.

Source/more:  SF Chronicle,

February 27, 2008 in Medicare | Permalink | TrackBack (0)

Tuesday, February 26, 2008

Minn. non-profit to offer LTC resident dental plan

A Minnesota nonprofit group has announced a pilot program that offers dental insurance specifically designed for long-term-care residents and their families.  Care facilities that join will offer the insurance, said Dr. Michael Helgeson, chief executive officer of Apple Tree Dental.  The nonprofit group will refer patients to their regular dentists. If a patient doesn't have a regular dentist, Apple Tree will provide dental care on-site.  The insurance plan was announced Thursday night. The organization will start providing mobile dental service in July to residents of Rochester-area nursing homes, assisted-living facilities and homes for people with special needs, Helgeson said. The insurance will be offered only in the Twin Cities and Rochester area at first, he said.  The dental plan has no deductible and covers fillings, single dentures, crowns, root canals and treatment for gum disease at 100 percent. There are additional costs if the annual maximum of $2,000 is exceeded.  It's less expensive to provide dental insurance than to pay for staff and transportation for one dental visit outside a nursing home, Helgeson said.

Source/more:  Rochester MN Post Bulletin,

February 26, 2008 in Health Care/Long Term Care | Permalink | TrackBack (0)

AoA updates annual "Profile of Older Americans"

KFF rounds up editorials on Bush Medicare "reform"

      Several newspapers recently published editorials and an opinion piece on a Medicare proposal recently announced by the Bush administration.  Summaries appear below.  

  • Daytona Beach News-Journal: A "rich nation should care for its elderly in return for their lifetime of productivity for the country," but, "as the tax structure and Medicare stand today, the program may become unaffordable," according to a News-Journal editorial. The editorial states, "Keeping things as they are won't work," but "drastic changes aren't necessary, either." According to the editorial, a "combination of modest tax increases and adjustments within the programs can assure solvency far into the future." The editorial concludes, "The administration's overarching goal is to privatize the program, not to make it permanently solvent as one of the more successful government programs of the last 40 years," and, as "Medicare beneficiaries have every reason to back fair Medicare reform," they "also have every reason to doubt that this administration can be trusted to deliver" (Daytona Beach News-Journal, 2/22).
  • New York Times: The Bush administration "has just made several proposals -- some sensible, some not -- to reform Medicare financing and spending," but the "exercise is seriously hobbled by an ill-advised 2003 law that prevents consideration of some of the best and fairest ways to begin fixing Medicare," according to a Times editorial. Because of the way the law is structured, the editorial states, "Congress can't bolster Medicare with money generated by closing corporate tax loopholes or letting the president's tax cuts for the wealthy expire" because those measures would increase the amount of general fund support for the program and push it "over the arbitrary 45% cap." The editorial continues, "The worst proposals, a slew of provisions to restrain medical malpractice awards, look mostly like a jab at the trial lawyers who support the Democratic Party" and are "not apt to save the program much money." In addition, the "administration has made no effort to reduce the lavish and unjustified subsidies granted to the private health plans that participate in Medicare," and their elimination "could save Medicare far more general revenue money than reducing drug-program subsidies would," according to the editorial. The editorial concludes, "Congress needs to focus on ways to restrain the relentless rise in health care costs that is bedeviling all health insurers, including Medicare," and "Congress and the administration need to be able to consider all possible sources of revenue for Medicare -- on their own sound and equitable merits" (New York Times, 2/25).  
  • John Goodman, Wall Street Journal: "Rarely in Washington does the president get to propose legislation that Congress is required to fast track," but such an "opportunity exists right now" with a proposal to address "the rising costs of Medicare," Goodman, president of the National Center for Policy Analysis, writes in a Journal opinion piece. According to Goodman, reductions in Medicare physician and hospital reimbursements "do not improve care and have not worked to contain costs in the past." In addition, although proposals to "promote electronic medical records, price and quality transparency, limits on malpractice awards and means-testing" for Medicare prescription drug benefit premiums are "commendable," they are "far from adequate," Goodman writes. Among other proposals, he writes, Medicare should "reward doctors and other health care providers who raise quality and lower costs" through "improving patient communication and access to care and teaching patients how to be better managers of their own care"; provide beneficiaries who have chronic diseases with "training, easier access to information, and the ability to purchase and use in-house monitors," efforts that would help them "manage their own care as well as, or better than, conventional physician care and at lower costs"; and revise the reimbursement system to remove the "many barriers to innovations in using those treatments efficiently and effectively" (Goodman, Wall Street Journal, 2/23).                         

Via KFF Daily Health Policy Report.

February 26, 2008 in Medicare | Permalink | TrackBack (0)

CMA seeks associate director for advocacy

The Center for Medicare Advocacy, the country’s foremost Medicare advocacy organization seeks an experienced attorney for a new, senior management position in its Connecticut office. The Associate Director for Advocacy will be responsible for the day-to-day supervision of the lawyers and advocates in the organization’s Connecticut office. The person in this position will coordinate the organization’s administrative appeal activities, including acting as liaison between data staff and legal staff, and will lead the interplay between the Center’s direct advocacy, policy work, and litigation. This person will also work with the management team to help develop the organization’s direction and funding.

Proven ability to work successfully with diverse personalities and to multi-task required.  Prior management and administrative law experience desirable.

The Center for Medicare Advocacy is a national, nonprofit advocacy organization that works to advance fair access to Medicare and quality health care.  The Center is headquartered in Connecticut, with offices in Washington, DC and throughout the country.  The Connecticut office is located in a beautiful area in Mansfield, Connecticut about 45 minutes from Hartford, less than 2 hours from Boston, and 3 hours from New York City.  For more information about the Center for Medicare Advocacy, visit .

Competitive salary range, depending on experience, excellent pension, health insurance, and other benefits.  EOE/AA.

This is an immediate opening, but we may be willing to wait for the right candidate.
Please send resumes and two references by March 28 to:

Carolyn Boyle, Administrator
Center for Medicare Advocacy, Inc.
PO Box 350
Willimantic, Connecticut 06226

February 26, 2008 in Medicare | Permalink | TrackBack (0)

Thursday, February 21, 2008

CRS Report: Medicare: FY2009 Budget Issues

Abstract:  Each February, the President submits a detailed budget request to Congress for the following federal fiscal year, along with projections for the five-year budget window. The budget informs Congress of the President's overall federal fiscal policy, based on proposed spending levels, revenues, and deficit (or surplus) levels. The budget request lays out the President's relative priorities for federal programs, such as how much should be spent on defense, education, health, and other federal programs. The President's budget may also include legislative proposals for spending and tax policy changes. While the President is not required to propose legislative changes for those parts of the budget that are governed by permanent law, such as Medicare benefits, these changes are generally included in the budget. The President's 2009 budget estimates current law Medicare net outlays of $413 billion in FY2009. The budget includes Medicare legislative proposals with estimated savings of $12.2 billion in FY2009 and $178 billion over the five-year budget window. The President's budget also includes Medicare administrative proposals with estimated savings of $645 million in FY2009 and $4.7 billion over the five-year budget window, which brings the estimated savings from the total Medicare budget proposals to $12.8 billion in FY2009 and $183 billion over the fiveyear budget window. Proposals include savings achieved through reductions in many of the Medicare payment updates. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA, P.L. 108-173) requires the Medicare Board of Trustees to examine and make a determination if general revenue Medicare funding is expected to exceed 45% of Medicare outlays for the current fiscal year or any of the next six fiscal years. An affirmative determination in two consecutive annual reports is considered to be a Medicare funding warning in the year in which the second report is made. The President has indicated that he intends to submit the required legislative proposal, due within the 15-day period following the budget submission to Congress. As part of the budget, the President has proposed reducing Medicare provider payments by 0.4% beginning in any year that the general revenue Medicare funding is expected to exceed 45% of Medicare outlays. This reduction would increase each year, until the percentage falls below the 45% trigger level. This report will be updated.

Get it NOW!!!

February 21, 2008 in Medicare | Permalink | TrackBack (0)

Wednesday, February 20, 2008

PBGC to diversify in effort to cover liabilities

The Pension Benefit Guaranty Corporation, the US government-sponsored guarantor for pensions, plans to step up its investments in riskier assets such as equities as it seeks to plug a $14bn deficit.  The move, quietly announced on the President’s Day public holiday in the US on Monday, will mean the PBGC will double its allocation of equity investments to 45 per cent of its total assets.  The PBGC, which in effect acts as a pensions insurance fund, guarantees the benefits of 44m workers and is currently paying benefits to 700,000 retirees. It holds approximately $55bn (€37.4bn, £28bn) in assets to invest under its new policy.  It has, however, no access to credit from the government. It relies only on insurance premiums paid by the companies whose plans it insures and the investment returns those premiums can earn. If it became insolvent, it would either have to slash benefits paid to retirees or seek a taxpayer bailout.  The PBGC did not have the resources to meet all its future commitments, Charles Millard, director of the corporation, said yesterday.

Source/more:  Financial Times,

February 20, 2008 in Retirement | Permalink | TrackBack (0)

Tuesday, February 19, 2008

CRS report analyzes S. 2499, the Medicare, Medicaid, and SCHIP Extension Act of 2007

On December 29, 2007, the President signed S. 2499, the Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173). This Act was passed by the House on December 19, 2007, and by a voice vote in the Senate on December 18, 2007. The Act makes changes to the nation's three major health programs, Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), as well as other federally funded programs. The most prominent provisions in the Act were to (1) suspend the Medicare physician payment cut scheduled to take effect and (2) provide SCHIP funding through March 2009. P.L. 110-173 mandates a 0.5% increase in the Medicare physician fee schedule for the six-month period from January 1, 2008, through June 30, 2008, and provides FY2008 and FY2009 SCHIP funding allotments through March 31, 2009. The Act also extends a number of expiring provisions and programs. These extensions affect Medicare plans and providers and Medicaid payments and programs. The Act also includes funding for some miscellaneous activities. The Act's Medicare extensions include incentive payments for certain physicians, and extensions of current law provisions for Medicare Special Needs Plans and cost-based plans. A variety of extensions also affect how long-term care, rural, and acute care hospitals are paid or classified. Other extensions affect Medicare payments for certain services and providers, outpatient physical therapy services, speech language pathology services, certain pathology laboratories, brachytherapy services, and therapeutic radiopharmaceuticals. The Act also includes Medicaid provisions designed to extend certain payments and programs, such as Medicaid disproportionate hospital share (DSH) allotments for Tennessee and Hawaii, the Transitional Medical Assistance (TMA) program, and the Qualifying Individual (QI) program, among other provisions. Miscellaneous provisions include using Medicare funds to make grants to State Health Insurance Assistance Programs, Area Agencies on Aging, and Aging and Disability Resource Centers. The Act also establishes the Medicare Payment Advisory Commission (MedPAC) as a congressional agency. The Act provides a number of offsets to pay for the spending increases, including a reduction in the Medicare Advantage stabilization fund in 2012. The Act also includes provisions affecting Medicare's responsibility as a secondary payer for covered services, Medicare payments for Inpatient Rehabilitation Facilities (IRFs), payments for most Medicare part B drugs, payments for certain diagnostic laboratory tests, and Medicare Long-Term Care Hospitals. This report provides short descriptions of the provisions contained in P.L. 110173.

Get it from Open CRS,

February 19, 2008 in Medicaid, Medicare, Other | Permalink | TrackBack (0)

Hand-held Computers Prod Older Adults to Increase Exercise

Via the National Center on Aging:

Today's younger generation may reckon that "ne'er the twain shall meet" where technology and their elders are concerned. However, ongoing research by Abby King, PhD, professor of health research and policy and of medicine at the Stanford Prevention Research Center, appears to be gradually dispelling that notion.

In a study that appears in the February issue of the American Journal of Preventive Medicine, King showed that specially programmed PDAs, or personal digital assistants, can prod middle-aged and older Americans--the most sedentary segment of the U.S. population--into increasing their physical activity levels.

This first-generation study follows on the heels of King's research report in the December issue of Health Psychology, in which she showed that automated computer calls were almost as effective as live health educators in coaxing people previously less active to get more of a spring in their step.

King and colleagues feel that developing approaches to help people increase their exercise frequency, while taking into account an individual's schedule and environment, is particularly important.

"Portable computer devices are useful because they can be carried around throughout a person's day," King said. "Such devices represent one kind of strategy for being able to provide individuals with the help and support they need, in a convenient, real-time context."

February 19, 2008 | Permalink | TrackBack (0)

Dick Kaplan on Back to School: The New Parameters of Funding a Grandchild's College Education

Richard Kaplan (Illinois) has just published  "Back to School:  The New Parameters of Funding a Grandchild's College Education"

Abstract:  This article examines several different mechanism for funding college expenses from the perspective of a grandparent. The mechanisms considered include direct gifts to the grandchild or the educational institution, college savings bonds (both state and federal), prepaid tuition contracts, college savings plans created under tax code section 529, and Coverdell Education Savings Accounts.

Although these college funding mechanisms are not new, legislation enacted within the past two years has radically altered many of the rules of thumb that have applied in the past. Specifically, the Tax Increase Prevention and Reconciliation Act of 2005 (actually enacted in May 2006) and the Small Business and Work Opportunity Tax Act of 2007 that accompanied that year's increase in the federal minimum wage have basically eliminated any tax advantage of custodial accounts as college funding vehicles. On the other hand, the Pension Protection Act of 2006 has enhanced the tax appeal of 529 plans at the same time that the Deficit Reduction Act of 2005 (actually enacted in February 2006) improved the financial aid status of such plans. Finally, that Deficit Reduction Act also created significant hurdles for grandparents who anticipate accessing the Medicaid program to pay their long-term care costs.

To determine the approach that best serves all family members, this article begins by considering several factors that are relevant to the financing of a grandchild's college expenses. These factors include: (1) the grandparents' and the grandchildren's income tax situation, (2) the grandparents' possible exposure to gift taxes, (3) the grandparents' desire to ensure that the funds they provide are actually used to pay for college costs, (4) the Medicaid implications for the grandparents, and (5) the impact on a grandchild's eligibility for needs-based financial aid. The article then examines the various mechanisms that are available to fund a grandchild's college costs and analyzes each mechanism in terms of these factors.

Get it NOW on SSRN.

February 19, 2008 in Other | Permalink | TrackBack (0)

NCOA develops fact sheet for low income recipients of stimulus package $$

Source:  National Council on Aging

Fact Sheet: Your Clients Who Are Low-Income Social Security Recipients Must File 2007 Tax Return to Receive Economic Stimulus Check

What is the stimulus package? 

To help spur a slowing economy, the IRS will send tax rebate checks to over 130 million households beginning in May 2007 and continuing through the summer.  Up to 20 million Americans who rely primarily on Social Security income qualify for a rebate check.

How do people qualify for a stimulus tax rebate check? 

Generally a person has to have more than $3,000 in income. Even if a person does not have any earned income they can still qualify for a stimulus tax rebate check if their Social Security benefits, Veteran’s Affairs (VA) benefits, and/or railroad retirement benefits equal at least $3,000 annually. 
To qualify, they must file a 2007 tax return on IRS Forms 1040 or 1040A with the IRS (even if their income is normally low enough that they are not required to file). 

If they file a tax return, how much are they eligible for?

In most cases, they will get payments ranging from $300 to $600.  Payments increase by $300 for families with dependent children under the age of 17. 

By what date does the 2007 tax return have to be filed and when will the checks be received?

The IRS encourages filing a return if possible, by the regular April 15 deadline to get the rebate check in May 2008. Those filing later than April 15, with or without a tax-filing extension, may delay receipt of the rebate check. Those who qualify for a stimulus check will receive one by the end of 2008 if they file by October 15, 2008. No rebate checks will be issued after 2008 ends. 

Will the stimulus payment affect eligibility for needs-based benefits programs? 

No.  Receiving a payment under the stimulus package does not have any effect on eligibility for or amount of needs-based benefits programs (i.e. Food Stamps). 
Do you have questions about the stimulus package?

Contact Hilary Dalin at the National Council on Aging at (202) 479- 6626,

Do you know a low-to-moderate income senior who needs help filing a tax return? 

The Tax Counseling for the Elderly (TCE) Program provides free tax help to people age 60 and older. To find an AARP Tax Aide site call 1-888-227-7669 or visit the AARP Web site.

The Volunteer Income Tax Assistance (VITA) program provides help to low- and moderate-income taxpayers. Call 1-800-906-9887 for assistance.

February 19, 2008 in Medicaid | Permalink | TrackBack (0)

Maryland low income seniors to get drug subsidies

About 7,500 low- and moderate-income seniors in Maryland would be eligible for a subsidy for their prescription drugs under a  plan announced yesterday by Gov. Martin O'Malley (D) and health-care leaders.  A deal reached with CareFirst BlueCross BlueShield, the region's largest nonprofit health insurer, would help senior citizens close a gap in Medicare drug coverage known as the doughnut hole. The Medicare benefit, passed by Congress in 2003, covers annual costs up to $2,510, but seniors then have to pay all of their drug costs until their total spending out of pocket hits $4,000. Coverage kicks back in after that.  The gap, designed to hold down costs, has proved unpopular. Health advocates say seniors are left with bills for vital drugs they cannot pay. Many are forced to go off their medication, endangering their health, critics say.  The subsidy offered under the agreement announced yesterday would cover seniors with incomes from Social Security benefits or retirement plans up to 300 percent of the federal poverty level -- about $30,000 for a single person. CareFirst has agreed to pay the annual $7 million cost of the program.  The average benefit would amount to $1,000.

Source:  Washington Post (16 February 2008)
Full story:

February 19, 2008 in Medicare | Permalink | TrackBack (0)

Thursday, February 14, 2008

New GAO report says VA needs to improve pension management

In 2006, most of the over 500,000 VA pensioners had nonpension incomes well
below the federal poverty level, were beyond retirement age, and had multiple
impairments, and the population has been decreasing in number. The average
annual reported income of these pensioners, excluding their VA pensions, was
less than $5,000. The average age of VA pensioners was 70. More than 80
percent had no spouse or dependent children. Three-fourths of veteran
pensioners had multiple impairments. After reaching a peak of almost 2
million in 1978, the overall size of the pensioner population has gradually
decreased, although the number of pensioners from more recent service
periods has been increasing.

VA policies and procedures are not sufficient to ensure sound decisions on
new pension claims. Unlike other federal agencies with similar income-based
programs, VA largely does not independently verify the accuracy of financial
information provided by claimants to support initial pension program
eligiblity. In addition, the guidance used by staff to make pension eligibility
decisions is not always current or clear. Further, VA’s quality assurance
review process for initial claims does not select a sufficient number of
pension cases to ensure the accuracy of pension claims decisions. Finally, VA
does not adequately evaluate training for pension staff.

VA procedures for assessing whether pensioners continue to receive the
proper benefits have significant limitations. Although the agency requires
pensioners to report changes that might affect their pensions, VA does not
require documentation such as bank or asset statements when pensioners
report financial changes. Also, a key data match operation with the Internal
Revenue Service is not conducted in a timely or efficient manner. Finally,
despite millions of dollars in improper pension payments made each year, VA
lacks a system to monitor and analyze their causes.

February 14, 2008 in Retirement | Permalink | TrackBack (0)