Checks Going Out to Seniors with High Drug Costs   Written By: Attorney Jeffrey A. Marshall, CELA* Seniors with high drug costs will start receiving one time $250 “rebate” checks from the federal government beginning this month (June 2010). The checks, which are a result of the new Health Care Reform laws, will go to Medicare drug plan enrollees who fall into the prescription drug coverage “donut hole.” Here is how it works. Medicare Part D provides prescription drug benefits to Americans on Medicare. This benefit comes with a $310 initial deductible. After you’ve spent $310, you pay 25 percent of the cost of your prescriptions until the total cost of all the covered medicine you have received in a year hits $2,830. (The $2,830 represents the total cost of the medications including the amount paid by insurance, not just the portion you pay.) At that point, you are stuck with 100 percent of the costs of your drugs until the total cost of your medicines hits the catastrophic threshold of $6,440. This gap, when you pay 100% and Medicare pays nothing, is known as the “donut hole.” In 2010 the donut hole totals $3,610 in drug costs that may end up being paid solely by you.  However, beginning this year, the newly enacted Health Care Reform law is starting on a path to eliminate the donut hole. In 2010, you will receive a $250 rebate from the government if you hit the donut hole. That check will be sent directly to you at your Social Security mailing address. There’s no application process and no private companies will be involved in getting your rebate check to you. If anyone tries to charge you for help in getting your rebate, beware: it is a scam.  The rebate checks should start going out on June 10th to individuals who already hit the donut hole earlier this year. Thereafter, checks will be sent out on a rolling basis as people’s drug costs put them into the coverage gap. Checks will be sent to your mailbox.  The money is tax free. Overall, it is anticipated that some 4 million seniors and disabled people will get rebate checks this year. The 2010 rebate is only the first step toward closing the Medicare prescription drug coverage gap. Beginning in 2011, enrollees who hit the donut hole will receive a 50 percent discount on brand-name drugs and some Medicare gap coverage for generic drugs.  Partial donut hole coverage for brand-name drugs begins in 2013. By 2020, the donut hole will be gone. Part D enrollees will then be responsible for only the standard 25 percent of the cost of both brand name drugs and generics until they reach the catastrophic limit where their co-pay is dramatically reduced: $2.40 per generic prescription filled and then either $6.00 per name-brand prescription filled or 5% of cost of name-brand prescription filled, whichever is higher. Note that low income Medicare beneficiaries who get “extra help” through the low income subsidy program and are not subject to the donut hole will not receive a rebate check. However, PACE/PACNET members are eligible for the rebate so long as they don’t also receive a low income subsidy. To make sure Social Security has your correct home mailing address you can call 1-800-772-1213. __________________________________________________   Gas Planning 101: What is a Pooled Production Unit?   Written By: Attorney Dale A. Tice   This is a first article in a series written by Marshall, Parker lawyer Dale A. Tice.  Dale is a nationally recognized expert on planning for landowners in the Marcellus Shale regions of Pennsylvania.  He has been quoted in the New York Times and Investor’s Business Daily. Over the next several issues of this newsletter, Dale will define a common term used in the Marcellus shale industry and then explain why it’s important to you as a landowner, professional or consumer living in our region.  If you would like regularly updated information about gas developments in the Marcellus shale, you can also follow Dale Tice on Twitter at PAGasLawGuy.     The oil and gas leases being used by companies leasing in the Marcellus shale include a provision that allows the gas company to combine, or “pool”, the landowner’s acreage with property from other leased landowners to form a production unit.  The production unit defines the area that the company intends to produce gas from by using vertical or horizontal gas wells.  In most cases the unit will be developed by drilling multiple horizontal wells, with the potential for six or more wells to be drilled over time.  To avoid trespass issues, most operators in the Marcellus want to have all of the contiguous acreage in the unit leased. The landowners in the unit will all share in the royalties from the wells drilled based on their proportional ownership in the unit.  This means that a landowner with 100 acres in a 600 acre unit will receive royalties based on the ratio of 100/600, multiplied by his or her royalty percentage.  As the size of the production unit increases, the landowner’s proportional ownership in the unit will decrease, and the landowner’s royalties will correspondingly be reduced. Because the gas company can fully develop the unit by drilling multiple horizontal wells from one well pad, many landowners in the unit will be entitled to receive royalties even though there is no drilling on their property.  However, all of the landowners in the unit will have their leases extended and “held by production” as long as wells on the unit are producing gas in paying quantities.   Many of the older leases that have been signed by Marcellus landowners limit the size of the production unit to 640 acres, or one square mile.  Units of this size may have been typical for drilling operations in states such as Texas and Oklahoma.  In order to allow greater flexibility in drilling operations, while holding more acreage by production, leases offered to landowners now often have no limit on the size of a production unit.   Before signing a gas lease, landowners should always consult a qualified attorney to ensure that they understand how the pooling provision in their lease will impact the potential royalties they will receive as production units are developed. ______________________________________________________________   Changes Coming to Medicare Advantage Plans   Written By: Attorney Jeffrey A. Marshall, CELA*   A Medicare beneficiary has to choose between two distinct paths of coverage. You can enroll in traditional (original) fee-for-service Medicare, or you can choose to join a federally subsidized private Medicare Advantage (MA) plan. MA plans typically operate like HMO or PPO managed care plans by placing some limitations on your access to health care providers.   The political philosophy underlying the Medicare Modernization Act of 2003 was to try to privatize Medicare by encouraging people to shift from traditional government administered Medicare to private MA Plans. To accomplish this goal, the government has been paying MA plans more per beneficiary than it would cost to cover the same beneficiary under original Medicare program.   Medicare currently pays Medicare Advantage plans an average of 13% more than the cost would be if the same beneficiaries were enrolled in traditional Medicare. These extra payments averaged $1,138 per plan enrollee in 2009. This extra money allows Advantage Plans to cover their higher administrative costs and still be able to offer enrollees some extra benefits, such as health club memberships, not included in traditional Medicare. The extra benefits then lure people to the private plans.  Currently, about 23% of Medicare beneficiaries are enrolled in MA plans nationwide.     The new Health Reform law (the “Affordable Care Act”) will eventually return the two Medicare coverage pathways to a more level competition by reducing the excess reimbursements to private Advantage Plans. Over the next 10 years, the extra payments to MA plans will be reduced until the average differential reaches 1%.  Actual payments to individual MA plans will vary depending on Medicare costs in the geographic location and the plan’s performance ratings.    Like many of the Medicare changes, the MA plan cuts and other changes will be phased in over time. In 2010, no cuts will be made. In 2011, payments will be frozen at current levels. Starting in 2012, the cuts will phase in over two to six years.   To encourage quality, MA plans that rate well on certain quality measures will receive bonuses. (MA plan ratings are available on the Medicare.gov website under "Find & Compare Health Plans.") Plans receiving 4 to 5 stars will be rewarded with bonus payments of 1.5 percent in 2012, 3.0 percent in 2013, and 5.0 percent in 2014 and later years. The Affordable Care Act also requires the suspension of MA plan enrollment for 3 years if a plan’s medical loss ratio is less than 85% for 2 consecutive years and the termination of the plan contract if the medical loss ratio is less than 85% for 5 consecutive years. (Effective beginning in 2011.) The Congressional Budget Office has estimated that the MA plan changes will reduce Medicare payments by $132 billion over the next 10 years.  This reduction in payments to MA plans has raised concerns that MA plans may reduce benefits, raise premiums, or both. However, MA plans must provide mandated benefits. This means that any benefit reductions due to the payment cuts will be to extra, optional benefits such as health club memberships, vision and dental. A report by Kaiser Health News found that there is some truth to concerns that MA plans will reduce benefits and raise premiums. It recommends that MA enrollees stick with an Advantage plan that's been around for at least five years and, if available, earns four or five stars from the government.   _____________________________________________________________   Marshall, Parker & Associates’ Attorneys Named Pennsylvania Super Lawyers   Written By: Melissa Bottorf, Director of Marketing & Business Development   Marshall, Parker & Associates’ Attorneys Jeff Marshall, Matt Parker and Kevin Grebas have been recognized by Philadelphia Magazine and Law and Politics Magazine as Super Lawyers in the field of Elder Law. This is the seventh consecutive year Mr. Marshall has attained this status and the third year for Mr. Parker. Attorney Grebas was named a Pennsylvania Rising Star, a distinction awarded to only four elder law attorneys in the entire state. In addition to the Super Lawyer award, Mr. Marshall was again named to the list of Top 100 Pennsylvania Lawyers in any field of law.      The list of Pennsylvania Super Lawyers is made up of less than five percent of all Pennsylvania lawyers.   The Top 100 Lawyer List and Super Lawyer List were published in the June 2010 edition of Philadelphia Magazine and Law and Politics Magazine. In November 2009, Law & Politics Magazine mailed more than 34,000 ballots to attorneys across Pennsylvania requesting each lawyer to vote for the most effective attorneys they had personally observed in action. Each nominated lawyer was given a score based on the number of votes. The top point-getters were then reviewed by a panel of experts to determine the final outcome for the Super Lawyer award.   "It is a great honor to receive the Super Lawyer and Top 100 Lawyer awards, because they are based on the opinions of other lawyers.  It is gratifying to know that other lawyers around the state think so highly of our work," commented Attorney Marshall.

IRRC Approves Assisted Living Regulations On June 3rd, The Pennsylvania Independent Regulatory Review Commission issued its approval the Assisted Living Residence Regulations that have been promulgated by the Department of Public Welfare.  Click here for the approval order. __________________________________________________ Join Marshall, Parker & Associates for our FREE Consumer Workshops to Learn How to Protect Your Home & Assets from Long Term Care Costs   Saturday, June 12, 2010 from 10:00 AM until 12:00 PM at Orlando’s Restaurant in Muncy.    Register online or call 321-9008 Marshall, Parker & Associates offers free workshops that help families learn about the options that are available to pay for long term care in the home or in a nursing facility.  Join us for one of these presentations and learn how to get the help you need to protect your family's financial security when your spouse or parent is faced with a long term illness. Each presentation is FREE and open to seniors, their families, elder care professionals, and anyone else who would like to learn more about this complex subject.  Each presentation lasts about 2 hours, including a “Question & Answer” Session Register online or call 321-9008 __________________________________________________ Contacting Marshall, Parker & Associates Marshall, Parker & Associates is the ONLY law firm in the United States with more than two Certified Elder Law Attorneys (CELAs) on its staff.  Five of our attorneys are CELAs.  Only a lawyer who meets all of the certification requirements set by the Pennsylvania Supreme Court is recognized as a CELA. The coveted status has only been attained by 39 attorneys in Pennsylvania.  The Pennsylvania Supreme Court approved the CELA professional designation because it found that the CELA certification process provides valuable assurance to the public that the lawyer has an in-depth working knowledge of the legal issues impacting the elderly.   If you or someone you know needs assistance with estate or gas royalty planning or with qualification for Medicaid benefits for nursing home or home care, you can trust the lawyers at Marshall, Parker & Associates. Please call us toll free at 1-800-401-4552 or e-mail our Scheduling Coordinator, Lynn Wesley at webmail@paelderlaw.com

*Attorneys Marshall, Parker, Weber, Grebas and Colbert are Certified Elder Law Attorneys by the National Elder Law Foundation under Authorization of the Pennsylvania Supreme Court.   **In addition to her law degree and CELA status, Attorney Colbert holds an advanced legal degree (LLM) in Estate Planning from the University of Miami School of Law.     DISCLAIMER The comments contained in this newsletter are intended to be of a general nature only, do not constitute legal advice, and no recipient is entitled to rely on them for any purpose. The distribtion and receipt of this e-mail does not create an attorney-client relationship.