Understanding
the New Income Limits for
PACE
and PACENET
Written
By: Jerome Petro, Geriatric
Planning Specialist, Marshall,
Parker & Associates',
Wilkes-Barre
Office
PACE
and PACENET are
Pennsylvania
's pharmaceutical assistance programs for seniors.
These programs offer prescription coverage for older
Pennsylvanians who have low or moderate incomes.
The programs cover most medications that require prescriptions,
including insulin, syringes and insulin needles.
Over-the-counter drugs are not covered.
There are no premiums or monthly fees for seniors who qualify.
The programs are administered by the Pennsylvania Department of
Aging.
As
a result of legislation enacted last year, the PACE and PACENET programs
were revised so that additional seniors will be able to qualify in 2004.
(For more information on this legislation, see the
December 18, 2003
Elder
Care Law Alert at http://www.paelderlaw.com/drugdiscount.html).
Here
are the new eligibility rules for PACE/PACENET for 2004.
Who
is Eligible to Apply?
- Residents
of
Pennsylvania
who are 65
years of age and older.
You are not
eligible for benefits if you are under
the age of 65 and disabled.
- Must
have been a resident of
Pennsylvania
for at least 90 days prior to application.
- You
are not eligible for pharmaceutical benefits through the Medical
Assistance program.
You
can apply for PACE/PACENET even if you have health insurance or limited
prescription benefits through another insurance.
PACE
or PACENET? Which Program is Best for You?
PACE
is the more generous program, which means that seniors will save more on
their prescriptions if they can qualify for PACE rather than PACENET.
Here are the current (2004) income and co-payment requirements
for the two programs.
PACE
If
you are single and your total previous
calendar year's income was less than $14,500,
or
If
you are married and your combined total previous
calendar year's income was less than $17,700 you may be
eligible for PACE.
PACE
has a
GENERIC CO-PAY of $6 for each covered prescription,
and a SINGLE-
SOURCE CO-PAY of $9 for each covered prescription.
PACENET
If
you are single and your total previous
calendar
year's income was between $14,500
and $23,500,
or
If
you are married and your combined previous
calendar year's income was between $17,700
and $31,
500, you may be eligible for PACE.
PACENET
has a monthly $40
cumulative deductible for each cardholder. Once that
deductible has been met, PACENET
has a GENERIC CO-PAY of $8 and a SINGLE-SOURCE
CO-PAY of $15
for each covered prescription. They
track your out-of-pocket costs for you.
How
is Income Defined?
Income
includes, but is not limited to sources like.
-Gross Social Security
-Railroad Retirement & SSI
-Salaries/Wages/Commissions
-Self-Employed or partnership income
-Alimony and Support money
-Taxable amount of annuities and IRA's
-Gifts and inheritance of cash or property
over $300
-Veteran's disability payments
-Pensions
What
Documents are needed to file an Application?
1.
Proof of Age
2.
Proof of Residence (Document must be at least 90 days old)
3.
Proof of Income (Last Years Income)
How
Do You Apply?
1.
You can contact your local Area Agency on Aging for more information
2.
Or you can call Pennsylvania Department of Aging at 1-800-225-7223
3.
Or you can e-mail the Department of Aging at PACECares@fhsc.com
Traps
for Parents in Accounts for Children
Written
By: Attorney
Jeffrey
A. Marshall
,
CELA*
Want
to put something aside for that favored child or grandchild? Maybe you
have considered creating or have already created an account for the
child using the Pennsylvania Uniform Transfers to Minors Act (PUTMA).
PUTMA
accounts are easy and inexpensive to create. The donor simply contacts a
bank, broker, or mutual fund, and supplies the name and social security
number of the child and the name of an adult (the "custodian") who
will watch over the child's funds.
The donor then transfers cash or investments to the account to
complete the gift. The child owns the investment and all income is
reported at the child's potentially lower tax rate.
With
a PUTMA account, the funds can be managed and distributions controlled
by the adult custodian until the child reaches age 21 (and in some
situations, even until age 25 in
Pennsylvania
). This kind of account is a great alternative to a more formal (and
expensive) trust arrangement, especially since the custodian also has
the option to reinvest income in the account and pay out funds whenever
the custodian feels it is appropriate.
Sounds
good, right? Yes, BUT, parents and grandparents, and even many financial
advisors, need to be aware of some of the legal limitations of these
accounts. In particular,
they need to understand that under some circumstances a parent/custodian
may not be authorized to use the PUTMA account to pay for some of the
child's expenses. Under
Pennsylvania
law, the parent may be required to first use his or her own funds.
In
a recent case, Harold Sternlicht set up a custodial account for his
daughter, Jamie. He used
some of the funds in the account to pay for private school expenses for
his daughter. The court
said that this was improper since Mr. Sternlicht had sufficient funds to
pay for the school himself. Before
using the child's PUTMA account, a parent who has sufficient financial
means must first use his own funds to pay for anything that is deemed to
be part of the normal expenses of parenthood.
PUTMA
accounts are frequently recommended by financial advisors as savings
devices to pay for a child's college costs.
However, if the parent has sufficient means, the support
obligation can even include the payment of college expenses for a child
who is over age 18.
