Massive
and Muddled - Medicare Legislation Passed by Congress
Written By:
Attorney
Jeffrey A. Marshall
, CELA*
In
late November both Houses of Congress passed the Medicare
Prescription Drug, Improvement, and Modernization Act. President
Bush is expected to sign this legislation into law on Monday, December 8th.
The
Act creates a new Medicare "Part D" which will provide Medicare
beneficiaries with the option of enrolling in a limited drug coverage
program. In additional to the long- promised prescription drug
benefit, the law contains a cornucopia of non-drug related provisions,
some of which are unrelated to Medicare. It will bring significant
added complexity to the Medicare health care program that serves 40
million older and disabled Americans.
Under
the new law, Medicare beneficiaries will be able to obtain some insurance
coverage for previously uncovered prescription drug costs. The drug
benefit will be optional and quite limited. Beginning in 2006, it
will be offered to all 40 million Medicare beneficiaries through
government-subsidized private plans. Due to premiums, deductibles, and
gaps in coverage, most seniors will have only a fraction of their
prescription expenses paid by the new benefit.
Despite
its name, there appears to be little "reform" or "modernization in
the legislation. Instead, the Act contains a "Santa's bag" of
benefits and handouts designed to obtain the support of various
congressmen, industries, geographic regions and interest groups for the
legislation.
The
numerous goodies are detailed in 681 pages of provisions weighing over 7
pounds. The cost is estimated by the Congressional Budget Office at
over 2 trillion dollars over the next two decades. But no one really
knows. What is clear is that the costs will be paid by increasing
deficit spending. Many commentators worry that such additional "unfunded
mandates" further threaten the already precarious fiscal integrity of
Medicare as well as the future financial security of most Americans.
Republican Senator McCain says Congress is "spending like a drunken
sailor" and further criticizes the bill for its "incredible favors to
the pharmaceutical companies."
The
Washington Post reports that over the next decade, the new law will steer
at least an additional $125 billion to the health care industry and
U.S.
businesses.
This includes an estimated $86 billion in payments and tax breaks to
employers who offer some prescription drug coverage to their retirees.
Hospitals, HMOs, physicians, ambulance services, and other providers will
also be paid more for treating elderly and disabled Medicare recipients.
Rural areas are particularly favored.
The
legislation is so complicated that its effects will only become clear over
many months and years. In future issues of this newsletter, I will be
providing you with my understanding of some of the more important
provisions and implications of the new law.
The
text of the Medicare Prescription Drug, Improvement, and Modernization Act
is available on the Internet at http://waysandmeans.house.gov.
Understanding
Your IRA
Written
By: Attorney
Matthew
J. Parker
More
often than not, the retirement plan of the average American constitutes
the largest part of his or her savings. These plans include traditional
IRAs, profit sharing plans, 401(k) plans, Keogh plans and 403(b) plans.
The rules and tax issues surrounding these plans are often
complicated and confusing.
In
general, these retirement plans share the following characteristics:
1) Each is a
formal arrangement for accumulating capital for the purpose of
financing the owner's retirement;
2) The
arrangement is funded with contributions from the owner's earnings or
with contributions made directly by the owner's employer;
3) Investment
earnings accumulated "inside" the arrangement are not subject to
income tax so long as they remain "inside";
4) In order to receive this special tax benefit, the arrangement must
comply with an array of tax rules and other requirements;
5)
One of the tax rules that all of these plans must comply with (with some
slight variations) is the minimum distribution rules.
Part
I:
What
is the required beginning date?
Once
the plan is set up, a plan owner will often ask what date is he or she
required to make withdrawals from the retirement plan.
The required beginning date (RBD) is defined as the date on which
the owner of the plan must start taking lifetime distributions from the
retirement plan. Most often
the RBD is April 1 of the year following the year the owner reaches 70½.
If the owner
fails to start withdrawing on the RBD, the IRS will penalize the owner in
an amount equal to 50% of the amount that was supposed to be withdrawn.
Be advised that the RBD is not the same for every type of
retirement plan.
For any owner
of a qualified retirement plan (a plan established by the owner's
employer in accordance with a multitude of IRS requirements) who owns less
than 5% of his company, or any employee in a 403(b) plan (a plan
established by a tax-exempt employer), the RBD is generally April 1 of the
year following the later of the calendar year in which the employee
attains age 70½ or the calendar year in which the employee retires from
employment with the employer maintaining the plan.
However, a qualified retirement plan is not required to
recognize this later beginning date and may choose to have all employees
commence distributions on April 1 of the calendar year following the year
they reach 70½ . There is no
RBD for a Roth IRA.
Although the
first required distribution is April 1 following the year the owner turns
70½, the owner should be aware of the concept of distribution years.
If the owner turns 70½ in October of 2003, he is required to take
the distribution for 2003 on or before April 1 of 2004.
However, in 2004, the owner is also required to take a distribution
for 2004 on or before
December 31, 2004
.
Therefore, if the owner waits to take the 2003 distribution in
April of 2004, the owner will be required to take two (2) distributions in
2004.
If you would
like more information on this topic and other issues relating to
retirement plans and estate planning, please stay tuned to the Elder
Care Law Alert for more articles and for information about our
upcoming free seminars entitled, "Understanding
Your IRA and Essential Estate Planning".
Government
Clarifies Rules for Disclosures to Patient's Family Members
Many
health care providers are confused about releasing information to family
members of their patients. The
Federal Government's Health and Human Services website recently posted
some helpful explanations and illustrations on this topic.
Here is the text, taken from Message 488 posted
11/4/03
.
"Does
the HIPAA Privacy Rule permit a doctor to discuss a patient's health
status, treatment, or payment arrangements with the patient's family and
friends?
Answer:
Yes.
The HIPAA
Privacy Rule at 45 CFR 164.510(b) specifically permits covered entities to
share information that is directly relevant to the involvement of a
spouse, family members, friends, or other persons identified by a patient,
in the patient's care or payment for health care. If the patient is
present, or is otherwise available prior to the disclosure, and has the
capacity to make health care decisions, the covered entity may discuss
this information with the family and these other persons if the patient
agrees or, when given the opportunity, does not object. The covered entity
may also share relevant information with the family and these other
persons if it can reasonably infer, based on professional judgment, that
the patient does not object. Under these circumstances, for example:
- A doctor may give information about a patient's mobility limitations
to a friend driving the patient home from the hospital.
- A hospital may discuss a patient's payment options with her adult
daughter.
- A doctor may instruct a patient's roommate about proper medicine
dosage when she comes to pick up her friend from the hospital.
- A physician may discuss a patient's treatment with the patient in the
presence of a friend when the patient brings the friend to a medical
appointment and asks if the friend can come into the treatment room.
Even when the patient is not present or it is impracticable because of
emergency circumstances or the patient's incapacity for the covered
entity to ask the patient about discussing her care or payment with a
family member or other person, a covered entity may share this information
with the person when, in exercising professional judgment, it determines
that doing so would be in the best interest of the patient. See 45 CFR
164.510(b). Thus, for example:
- A surgeon may, if consistent with such professional judgment, inform a
patient's spouse, who accompanied her husband to the emergency room,
that the patient has suffered a heart attack and provide periodic updates
on the patient's progress and prognosis.
- A doctor may, if consistent with such professional judgment, discuss an
incapacitated patient's condition with a family member over the phone.
In addition, the Privacy Rule expressly permits a covered entity to use
professional judgment and experience with common practice to make
reasonable inferences about the patient's best interests in allowing
another person to act on behalf of the patient to pick up a filled
prescription, medical supplies, X-rays, or other similar forms of
protected health information. For example, when a person comes to a
pharmacy requesting to pick up a prescription on behalf of an individual
he identifies by name, a pharmacist, based on professional judgment and
experience with common practice, may allow the person to do so."
The above
information and lots of additional answers to questions about the
requirements of the HIPAA Privacy Rule are provided on the Health and
Human Services website. http://answers.hhs.gov/.
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Your Club Or Organization Need A Speaker?
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you are interested in having an attorney or geriatric planning specialist
from
The
Elder Law Firm of Marshall & Associates speak to your group, or at an
upcoming event, please contact
our
Public Education Coordinator, Melissa
Bottorf
at mbottorf@paelderlaw.com
or 1-800-401-4552
*Attorney
Marshall
is
certified as an Elder Law Attorney by the National Elder Law Foundation
under authorization from the Pennsylvania Supreme Court
© 2000-2005
Marshall & Associates www.paelderlaw.com
