Study Shows Multiple-Payer Administrative Costs Burden US Health System

Written By: Attorney Jeffrey A. Marshall , CELA*

  In the August 6^th, 2003 issue of the Elder Care Law Alert we noted that the current American system of health care administration seems woefully cost inefficient compared with the rest of the industrialized world.  

Now, a study printed in the August 21, 2003 issue of The New England Journal of Medicine says that the United States could reduce per capita health expenditures by implementing a single-payer system similar to Canada .  The savings would be more than enough to provide health care for the estimated 41 million uninsured Americans.  

Dr. Steffie Woolhander of Harvard Medical School and her colleagues calculated the administrative costs in both the US and Canada in 1999 for health insurers, employer's health benefit programs, hospitals, provider's offices, nursing homes, and home health agencies. The researchers found that health care administrative costs totaled $1,059 per person in the US , versus only $307 per person in Canada .  The research shows that 31% of health care spending in the United States was attributable to administrative costs compared to 16.7% in Canada .  The author's conclude that a large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system.

The study adds to a body of research data which points to the savings possible if the US adopted a single (i.e. government) payer system.  In the United States , of course, we are moving in the opposite direction.  Congress is currently seeking to "reform and modernize" Medicare into an increasingly multiple-payer system.  Despite the evidence reflected in this study and the other research to the contrary, Congressional supporters of Medicare "privatization" express the hope that expanding private competition will bring about cost savings.       

The New England Journal also published an editorial critique by Henry Aaron of the Brookings Institution who writes that Dr. Woolhander's study may be inaccurate due to the difficulty of comparing two such different health care systems.  An abstract of the Woolhander study and a link to the full article (subscription required) is available online at http://content.nejm.org/cgi/content/short/349/8/768.

Do I Need to Update My Will Now that My Spouse Needs Long Term Care?

Written By: Michael F. Rentko , Geriatric Planning Specialist

  This is a question not asked enough by individuals who attend our seminars or even our current clients.  In many instances, updating your will once your spouse needs long term care (either in the home or within a nursing home) is a crucial step to preserving your estate.  Here is why:

In most cases, both the spouse at home and the spouse within the facility each have what I like to refer to as simple "I love you wills."  In other words, spouses leave everything to the other when they die because they want to provide for their spouse. This sort of arrangement is logical and the typical thing to do in healthy situations.  The problem arises once one of spouses needs long term care.

Suppose an individual needs long term care and to qualify for government benefits, they placed all their resources in the healthy spouse's ownership.  The ill spouse receives care either in the home or in a facility through the Medical Assistance program and providing their resources remain below $2,000 a month, they do not have to pay privately.

The healthy spouse at home has a simple "I love you will" that leaves everything to the spouse on Medical Assistance.  Soon after the spouse qualifies for Medical Assistance, the healthy spouse passes away unexpectedly.  As one can guess, everything that was owned by the healthy spouse now passes to the spouse on Medical Assistance.  This makes the surviving spouse ineligible for Medical Assistance because of the resources inherited. The funds that are received have to be spent down before the individual can re-qualify for Medical Assistance.  This can mean that thousands of dollars can be lost for the cost of care which could have otherwise been covered by government assistance.

To avoid such a scenario it is important to draft a new will that limits the amount of resources the ill spouse would receive if the healthy spouse predeceased.  We often suggest that clients see us to complete a new type of will, which we refer to as an Elective Share Will.  This document entitles the ill spouse to the minimum inheritance required by law (approximately 1/3 of the estate.)  The remaining share passes to a special type of trust which supplements the surviving spouse's needs during their lifetime and does not disqualify them for government assistance.  After the ill spouse passes away , the funds will distribute to the surviving beneficiaries of the estate.

By updating your will after a spouse needs long term care, you can protect thousands from being lost to the costs of care.  In addition, you can make sure that funds will always be available to supplement your spouse's needs by including special types of trusts.

Cutting Credit Card Junk Mail Down to Size

Written By: Attorney Jeffrey A. Marshall , CELA*

"You're Pre-approved!"  Lucky you. 

  Are unsolicited credit card offers clogging your mailbox?  Do you worry that when you throw them out - some identity thief will find them and use your personal information to obtain a credit card in your name?  Does your paper shredder jam when you try to shred all those thick offers?  What can you do to stop the flood of credit card junk mail?

Here's an idea. You can call the major credit bureaus' opt-out number (888-567-8688) and remove yourself from the credit card solicitation list.  When you call you will be asked to punch in your identifying information on your telephone keypad.  It takes only about 2 minutes, and you will be removed from the solicitation list provided to credit card issuers for 2 years.  Hmmm.  A year a minute - now that sounds like a good deal!   

 "Using Medicaid to Pay for Home and Nursing Facility Care"

  Below you will find a list of some seminars that we will be presenting throughout Northeastern and Central Pennsylvania over the next few months. Lifetime planning and problems related to long term care are increasingly important issues for seniors. Four out of every ten people reaching age 65 will spend some time in a nursing home, and many more will require home care and assistance with daily living.

The Elder Law Firm of Marshall, Parker & Associates' is known throughout Pennsylvania for the expert help we provide seniors who are faced with long term care needs. Often families struggle to care for their loved one at home for as long as possible. We help these care-givers find ways to get the financial help they need so that the highest quality care can be provided in the most appropriate setting (at-home, assisted living, or nursing facility). 

If nursing home placement becomes necessary, we work with the facility to help make the transition go as smoothly as possible. We make certain that the nursing facility gets paid in a timely manner while teaching the family how they can pay nursing home costs without losing their homes or going broke.

Join us for one of these free seminars and learn what you need to know about how to get the help you need and protect your family's financial security when your spouse or parent is faced with a long term illness.               

Each seminar is FREE and open to seniors, their families, elder care professionals, and anyone else who needs to learn more about this complex subject.  Each seminar lasts about 1 ½ hours, including a "Question & Answer" Session.  

- Dallas :  Thursday, September 4^th at 6:30 PM at Stax & Company, Memorial Highway

-Northumberland: Thursday, September 17^th at 6:30 PM at Front Street Station

Reservations are suggested, but not required.  SIGN UP ONLINE or call 1-800-401-4552 for more information or to reserve your spot for one of these free seminars!

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