The
Integration of PACE/PACENET and Part D
Written
By: Lisa Barner, Planning Specialist
The Pharmaceutical Assistance
Contract for the Elderly (PACE) and the PACE Needs Enhancement Tier (PACENET)
assist eligible
Pennsylvania
residents who are 65 years of age or older to pay for their prescription
medicines.
Recently, at the
Marshall, Parker & Associates’ Professional Update, Kathleen
Spacht from PACE/First Health discussed some exciting developments
regarding the integration of PACE and Medicare Part D.
PACE is currently in the
process of identifying those cardholders who would be eligible for the
full low income subsidy with Medicare Part D.
There is legislation pending that would allow PACE to wrap around
the coverage provided by Medicare Part D.
This new legislation would allow PACE to pay the premiums,
co-payments, and doughnut holes existing in Medicare Part D coverage.
(This year the full low income Part
D subsidy has maximum income limits of $12,920 for a single person
and $17,321 for a married couple. There
are also maximum resource limits of $6,000 for a single person and
$9,000 for a married couple.)
PACE is partnering with
six Medicare Part D plans. When the new law takes effect, PACE members
who would also qualify for the full low income subsidy under Medicare
Part D will automatically be enrolled in one of these six Medicare Part
D plans. (Since enrollment in a Medicare Part D plan is voluntary, PACE
members would have the option to contact PACE and request that they not
be enrolled in a Part D plan or that they be enrolled in a different
Part D plan.) If the
cardholder does not contact PACE to request otherwise, the
cardholder will automatically be enrolled in the plan PACE has chosen.
PACE is the payer of
last resort. Therefore, once the PACE member has been successfully
enrolled in a Part D plan, he or she will take their card to the
pharmacy. Normally, with
PACE, the cardholder must pay either a $6 or $9 co-payment with each
prescription. However, if eligible for the full low income Part D
subsidy, the cardholder would pay the lesser of the co-payments.
With PACENET, the
coverage is a little different. No
one enrolled in PACENET is eligible for the full Part D low income
subsidy. Currently, there is
a $40 monthly deductible with PACENET.
The new idea would be to eliminate this deductible.
Instead, PACENET will ask the cardholder to pay the monthly Part
D premium. (Actually,
PACENET will pay the Medicare premium and will in turn bill the
consumer.) Thereafter, the consumer will have to pay the lesser of the
two co-payments (either the PACE co-payment or the Part D
co-payment) when obtaining prescriptions.
If the PACENET cardholder chooses not to enroll in a Part D plan,
his or her monthly PACE deductible amount will no longer be $40 per
month - instead it will be the benchmark Part D premium (currently
$32.54 monthly).
Both the PACE and
PACENET programs have an open formulary.
Part D plans do not. Therefore,
if the Medicare Part D plan will not provide coverage for a
prescription, PACE or PACENET should. PACENET should also be able to
cover any other gaps in coverage such as the deductibles and doughnut
holes.
Both the PACE and
PACENET programs are considered “creditable coverage.” (Creditable
coverage is coverage that is at least as good as Medicare Part D.)
This means that a Medicare beneficiary who has PACE or PACENET
coverage should not be subject to any Medicare penalty for not enrolling
in a Medicare drug plan by the
May 15, 2006
deadline.
Medicare beneficiaries
who qualify under either the PACE and PACENET income limits should
consider enrolling in PACE or PACENET so that they will have this
creditable coverage. You are
eligible for PACE if you have been a Pennsylvania resident for at least
90 consecutive days prior to application; you are age 65 or older; and
you had a total income for the preceding calendar year of less than
$14,500 for a single person, or less than $17,700 combined for a married
couple living together.
You are eligible for
PACENET if you have been a Pennsylvania resident for at least 90
consecutive days prior to application; you are at least age 65 or older;
and you had a total income for the preceding calendar year of between
$14,500 and $23,500 for a single person, or between $17,700 and $31,500
combined for a married couple living together. (However, you are not
eligible for either program if your prescription drug costs are covered
by a public assistance program.)
The goal of the PACE and
PACENET programs is to provide seamless wrap-around coverage for
Medicare Part D. Cardholders
who are also enrolled in a Medicare PDP will have only one card to show.
(They will not have to have two separate cards for each program.)
PACE is hoping that with the funds saved with this wrap around
coverage they will be able to eventually lower the age threshold for
enrollment from 65 to age 60.
More information
regarding PACE and PACENET can be found at www.aging.state.pa.us
or by calling 1-800-225-7223. More
information regarding the Medicare Part D program can be found by
calling 1-800-MEDICARE or at www.medicare.gov.
We would like to thank
Kathy Spacht from the First Health/PACE for providing this information
at our annual elder law update.
Lisa can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Are 529 Plans a Good
Estate Planning Option or Will Their Tax Advantage Disappear into the
Sunset?
Written By:
Attorney Tammy Weber
Section
529 plans are educational plans that are operated by individual states
or educational institutions. The
plans are named after a section in the Internal Revenue Code.
All 50 states and the
District of Columbia
offer these plans which permit tax-deferred and often tax-free savings
opportunities for college educations. There is no income limitation for
purchasers of the plans. There
are a myriad of potential, often complicated plans from which to choose,
and those plans may differ significantly within and between the various
states.
A purchaser sets up an account in a state’s 529
plan and selects the beneficiary of that account.
No tax is paid as the funds in the account grow and generate
income. When it is time for
the education of the beneficiary, the owner of the account permits the
release of the funds. There
is no tax paid on 529 plan distributions for tuition, room, board and
certain other expenses. Usually,
the donor/purchaser has no gift tax when the account is funded and the
monies are not included in the account owner’s estate at death.
The 529 account is not considered the beneficiary’s asset for
financial aid purposes.
Many parents and grandparents have purchased or
plan to purchase 529 plans as a tax wise way to amass funds to pay for
the college education of their children or grandchildren.
The great draw for these investments when they first became
available was the federal tax exemption on the long term equity increase
when the monies are withdrawn for college education.
If funds have to be withdrawn for other purposes, there is a 10%
penalty on the earnings for non-qualified distributions after 2002.
This penalty is assessed on the deferred income, not on the
principal.
However, under current law, the favorable
tax-deferred treatment applies only to distributions made in the years
2002 through 2010. Unless
Congress decides to extend this deadline, or make the tax-free status of
the withdrawals permanent, post-2010 distributions to the beneficiary
from the 529 plan will be taxed to the beneficiary to the extent of the
growth.
It is important that you obtain expert guidance
before you purchase a 529 plan. (Note
that ownership of a 529 account will be considered an available asset
for the account owner should the account owner need nursing facility
care).
For more information on Section 529 plans, visit www.savingforcollege.com
or www.collegesavings.org.
Attorney Weber can be contacted at
webmail@paelderlaw.com or at
1-800-401-4552
Neurologists
Issue New Guidelines To Improve Diagnosis and Quality of Life for People
with Parkinson Disease
Written By:
Attorney
Jeffrey A. Marshall
, CELA*
The
American
Academy
of Neurology has issued new guidelines to educate physicians on the
diagnosis and treatment of patients with Parkinson disease. The
guidelines were released by the American Academy of Neurology and published in the journal, Neurology.
“It is possible to improve the quality of life
for people with Parkinson disease,” said guideline author and
Parkinson expert William J. Weiner, MD, FAAN, of the University of
Maryland School of Medicine in
Baltimore
. “The guidelines provide recommendations for: making the correct
diagnosis as early as possible, making the best use of time-tested and
effective therapies to improve motor function, and screening for and
treating depression, psychosis and dementia—common symptoms of
Parkinson disease that often are left untreated.”
A press release issued in conjunction with the
guidelines states that “Parkinson disease is often misdiagnosed. It is
estimated that five to 10 percent of people with Parkinson disease are
misdiagnosed. Also, up to 20 percent of people diagnosed with Parkinson
disease are found to have a different diagnosis during an autopsy. The
new guidelines help doctors correctly diagnose Parkinson disease earlier
and more accurately. Then neurologists can suggest treatments and
lifestyle changes to better manage and treat the disease.”
The guidelines also
discuss the wide variety of therapies available to treat the motor
symptoms of Parkinson disease and the evidence for each.
A copy of
the press release is available online at:
http://www.aan.com/press/press/index.cfm?fuseaction=release.view&release=364
The new
guidelines are available online at:
http://www.aan.com/professionals/practice/guideline/index.cfm
Professional
Update Discusses Policy Changes & New Programs for PA Seniors
Written By:
Melissa Bottorf, Director of Marketing & Public
Ed
ucation
It
has been a year of major transition for seniors and their advisors.
Over 350 area professionals gathered to learn about some of these
changes at Marshall, Parker & Associates’ 10th Annual
Elder Law Update last week.
A significant change for those needing or providing
long-term care has been the enactment of the Deficit Reduction Act of
2005. The new Act attempts
to restrict asset transfers by extending the “look back” period from
three years to five years and changing the transfer penalty start date.
Board Certified Elder Law Attorney Matthew Parker provided an overview
of these changes, including the potential liability of children for a
parent’s health care costs. The new law could devastate hospitals and
nursing homes with patients/residents who are out of financial resources
but cannot qualify for Medicaid.
The Deficit Reduction Act makes advance long-term
care planning even more crucial than before.
One option of growing importance is long-term care insurance. Tom
Lilly from Futurecare Associates was on hand to discuss strategies that
maximize long-term care insurance benefits while minimizing costs.
Jim Pezzuti, Director of Long Term Care Services
for the Department of Public Welfare, and local representatives brought
attendees up-to-date on the exciting new LIFE program that is currently
operating in
Lackawanna
County
and soon will be available in Lycoming and
Clinton
Counties
. The LIFE program provides
a comprehensive array of services that include physicians, social
workers, therapists, dietitians and a multitude of other professionals
all under one roof. For
seniors who are both Medicare and Medicaid eligible, the program is even
more appealing since there are no co-pays or deductibles.
It is intended to provide better healthcare to our seniors so
they can stay in their homes as long as possible and maintain the
highest quality of life.
With the soaring costs of prescription drugs, more
and more seniors are finding it impossible to pay for all their
medications. Now, Medicare
Part D has provided a complicated and confusing option for seniors.
Pennsylvania
has long had nationally applauded prescription drug programs for seniors
with modest incomes with our PACE and PACENET programs.
Pennsylvania
is now working on expanding PACE/PACENET benefits through integration
with Part D. Kathleen Spacht,
Manager of Service Operations for First Health/PACE updated the audience
on these new initiatives. For more information, please see the previous
article, “The Integration of PACE/PACENET and Part D.”
For more information about the Update or to be
included on our mailing list for next year, please contact Melissa at mbottorf@paelderlaw.com.
Melissa can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Attorney
Marshall Quoted in National Kiplinger Publication
Marshall,
Parker & Associates’ managing attorney Jeff Marshall is mentioned
in the current (May 2006) issue of The Kiplinger Retirement Report.
Marshall
is quoted in the article, “The Long-Term Care Puzzle Gets Tougher.”
The article deals with the impact of the Deficit Reduction Act of 2005
on long-term care planning and discusses a number of options for
seniors.
The Kiplinger Retirement Report is a
national publication that provides monthly advice to seniors on
investing, making savings last, estate planning, health care, taxes,
insurance, and travel. Kiplinger,
based in
Washington
,
DC
, is known for creating the nation’s first personal finance magazine
in 1947. The article is
available online at http://www.kiplinger.com/retirementreport/features/Cover_May2006_03.html.
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*Attorneys
Marshall and Parker are certified
as Elder Law Attorneys by the National Elder Law Foundation under
authorization from the Pennsylvania Supreme Court.
