Governor's Bud get Emphasizes Home Care; DPW "Income First" Proposal Likely to Expire

Written By: Attorney Jeffrey A. Marshall , CELA*

  Governor Rendell has released his Administration's budget for 2004-2005.

The budget anticipates a substantial increase in the provision of long term care services in the home and a corresponding decrease in the number of institutionalized recipients of long term care.  The budget recommends a significant expansion in home and community based care as an alternative to nursing home care.  As a result, the number of people who are clinically eligible for nursing home care but who will instead be provided with in-home services by the Pennsylvania Department of Aging is expected to increase to 27,380 next year (from 23,035 this year).  The cost of this expansion in home care largely will be funded from Tobacco Settlement funds.    

For those of us who have been concerned with the Department of Public Welfare's (DPW's) proposal to put new limits on the financial resources that can be retained by low income community spouses, the budget contains good news.  The budget recommendation is that no Medical Assistance eligibility reductions occur during the upcoming year. As a result, it now seems unlikely that the Medical Assistance eligibility changes that were first proposed by DPW in October 2002 will be implemented.

Here is the reasoning behind our speculation that the proposed Medical Assistance eligibility changes will be allowed to expire. 

DPW is required by statute to submit its final regulations within two years of their initial proposal. For the "income first" regulations, the end of this two year period will occur during the Governor's upcoming budget year.  If finalized, the proposed regulations would make it more difficult for married individuals to qualify for Medical Assistance for nursing home care. This would constitute an eligibility reduction, in violation of the Governor's budget.  Since the final regulations would be contrary to the Governor's stated intentions and since DPW works under the Governor, we think it is unlikely that the regulations would be filed.

Thus, it appears likely that the regulations will not be acted upon during the upcoming year.  And, if DPW does not submit its final regulations within this upcoming year, the regulations will be deemed legally withdrawn.

Pennsylvania's retention of the more protective "resource first" method of qualifying married couples for Medical Assistance represents a significant victory for elder law attorneys and other advocates for seniors who opposed the rule change.  Retention of the resource first rule in Pennsylvania will help preserve the health and dignity and financial security of our seniors.  Married couples in a number of other states have not been so fortunate - several states have changed to "income first."    

To read about DPW budget goals for the year:

http://www.dpw.state.pa.us/Exec/GovRend04-05bdgtadd.pdf

To review DPW Secretary Richman's budget briefing slides:

http://www.dpw.state.pa.us/Exec/SecRich04-05bdgtbrief.pdf

To read the Governor's budget:

http://www.budget.state.pa.us/budget/lib/budget/2004-2005/exec_budget/005_016_contents.pdf

More information on DPW's proposed changes in Medical Assistance eligibility rules, including a link to the regulations that would change Pennsylvania to an "income first" state, is available on Marshall & Associates website: http://www.paelderlaw.com/finsecurityregulation.html and http://www.paelderlaw.com/dpwcomment.html

Fire Insurer Properly Denies Coverage on Vacant Home

Written By: Attorney Jeffrey A. Marshall , CELA*

  Barbara Higgins died in 1999.  Her home was left unoccupied.  Her Estate renewed the existing fire insurance covering the property, but didn't notify the insurance company that the home was no longer occupied.  On December 20, 2001 , the dwelling and its contents were destroyed by fire.  As of the date of the fire, the dwelling had been unoccupied for more than 60 consecutive days. 

Ms. Higgins estate filed a claim with the fire insurance company.  However, the claim was denied based on a provision in the policy that suspended coverage if the dwelling was vacant for 60 consecutive days before the loss. The dispute went to the Pennsylvania Superior Court, which entered a judgment in favor of the insurance company.  Even though the estate had paid the premiums, there was no coverage. 

While the Higgins case involved an estate, it serves as a red flag for individuals whose residences are left unoccupied when they move into a nursing home. 

For purposes of Medicaid, a home is an unavailable resource; but, if it is transferred or sold, a nursing home resident can lose his or her Medicaid benefits.  So, frequently the resident retains ownership of the unoccupied home.

If this situation arises, it is important for the family to check the insurance coverage on the unoccupied residence.  In the Higgins case, the insurance was fire insurance rather than the more common homeowner's type policy.  But standard homeowner's policies do generally limit coverage for at least some risks, like vandalism and frozen pipes, if a home is unoccupied. There is also a risk that an insurance company might claim that since homeowner's insurance is "residential" insurance, and an unoccupied home is no longer serving as residence, that coverage ceased at some point.

Unfortunately, while insurance can be obtained for unoccupied properties, it will likely be more expensive and more limited in coverage than a homeowner's policy.  Therefore, families are naturally inclined not to disclose the fact that a property is unoccupied; they hope to retain coverage just by continuing to pay the lower premiums under the old homeowner's or fire policy.  As the Higgins case shows, there may be substantial risk by doing this.

Instead, families may want to discuss the unoccupied status of the home with their insurance company representative, to make sure that the property remains protected.  

Estate of Higgins v. Washington Mutual Fire Ins. Co.  2003 PA Super 476, ( Dec 8, 2003 ). 

Marshall, Parker & Associates' Website Now Even Quicker & Easier

  In the last few days we have reorganized and updated the Articles page on our website.  Now it's faster and easier to find the latest information on long term care, estate planning, Veteran's Benefits, and Medicare.  Check it out at www. paelderlaw.com/articles.html.  Also, while you are on the site, don't forget to look at the Meet Our Staff page that includes updated biographical information about all of our staff members.

Do you have a website?  Do you think the information we provide in the Elder Care Law Alert and on our website would be useful to your on-line visitors?  If so, please contact Melissa at mbottorf@paelderlaw.com  or at 1-800-401-4552 to add our link to your website.  Help us empower seniors and their advisors with accurate and up-to-date information.      

Pharmaceutical Manufacturer Drug Discount Card Programs  

Written By: Josephine Balsamo , Geriatric Planning Specialist, Marshall, Parker & Associates' Wilkes-Barre Office

The recently enacted Medicare Act of 2003 authorizes the implementation of a temporary Medicare-approved drug discount card program.  Here is a link to more information on this new program which will commence this Spring: http://www.paelderlaw.com/discount.html.

  While the Medicare approved cards will be available to most Medicare recipients, it is anticipated that few will enroll in the new Government approved program.  Many Medicare recipients may actually benefit more by taking advantage of some of the already existing discount drug cards that are sponsored by many of the pharmaceutical companies.  

Pharmaceutical Manufacturer Drug Discount Cards require that applicants be Medicare recipients and have no other prescription coverage. These drug discount cards are free and there are no enrollment or annual fees. Most pharmaceutical company cards have income limits which vary from company to company.  The discounts offered also vary by company and sometimes by the drug as well.  Also, the discount will only be offered at participating pharmacies, but the list of participating pharmacies is usually vast.  Many of the pharmaceutical companies have a website where you can obtain information about eligibility requirements for their drug discount card program.  You can also ask at your local pharmacy which may have some information about drug discount cards. 

Below are the names of some drug discount card programs, examples of savings they could offer to those who qualify, and phone numbers to call or websites to visit for more information:

If you are not eligible for any of the above drug discount card programs because you exceed the annual income limit and/or because you are not a Medicare recipient, you may still be eligible for the Nonprofit Warehouse Drug Discount Card Program which covers all drugs, has no income limits, no age requirement, and has a savings of 50% off regular retail price on generic drugs and up to 15% on brand name drugs. The phone number is 1-770-541-7777 and the website is http://www.nonprofitwarehouse.com/kscriptcard.asp

Of course, low income Pennsylvania seniors should also consider enrollment in the PACE/PACENET programs.  More information on PACE/PACENET is available on our website at http://www.paelderlaw.com/newincomelimits.html or by e-mailing the PA Department of Aging at www.PACECares@fhsc.com.

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*Attorney Marshall is certified as an Elder Law Attorney by the National Elder Law Foundation under authorization from the Pennsylvania Supreme Court

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