Common Incapacity Documents -- Medicare, Medigap, and Medicaid

THIS IS THE THIRD IN A SERIES OF ARTICLES THAT WE'LL BE POSTING DISCUSSING TOPICS RELATING TO INCAPACITY.

COMMON DOCUMENTS

Durable Power of Attorney for Health Care (DPAHC)/Health-Care Proxy
Advantages	Disadvantages
Is flexible--allows your representative to act on your behalf and make medical decisions based on current circumstances Generally, your representative can make any decision you would be allowed to make Generally can be used any time you become incompetent	Not practical in an emergency--your representative must be present to act on your behalf Not permitted in some states
Living Will
Advantages	Disadvantages
Allows you to convey decisions regarding your medical care without relying on any one person to carry out your wishes	Generally can be used only if you are terminally injured or ill, or in a persistent vegetative state Generally used only to make decisions regarding life-sustaining treatments Emergency medical personnel generally cannot withhold emergency care based on a living will Not permitted in some states
Do Not Resuscitate (DNR) Order
Advantages	Disadvantages
Allows you to decline CPR if your heart or breathing fails Effective in an emergency--your doctor should note an in-hospital DNR order on your chart. Out-of-hospital DNR orders take various forms, depending on the laws of your state. ID bracelets, MedicAlert® necklaces, and wallet cards are some methods of noting DNR status.	Some states allow DNR orders only for hospitalized patients--others do not restrict eligibility Only used to decline CPR in case of cardiac or respiratory arrest Not permitted in some states
Durable Power of Attorney (DPOA)
Advantages	Disadvantages
You control who acts and what they can do with your property Low cost to implement Decreases the chance of court intervention	Some states do not permit a "springing" DPOA (i.e., a DPOA that is effective only after you have become incapacitated)

Medicare, Medigap, and Medicaid

Medicare	Medigap	Medicaid
What is it?	Federal health insurance program for Social Security recipients. Parts A and B comprise the original Medicare program. Medicare Advantage (also referred to as Part C) plans are also available in some areas. They provide managed care and fee-for-service options through private insurers.	Medicare supplement insurance issued by private companies. Typically, individuals who have Medicare Advantage would not need a Medigap plan.	Joint federal-state need-based health insurance program. Eligibility requirements and covered services vary from state to state.
What does it cover?	All or some portion of: Part A: Hospital and skilled nursing facilities, home health agency care, hospice care, inpatient psychiatric care, and blood transfusions. Part B: Doctors, outpatient mental health services, therapy, part-time skilled home health care, certain preventative services, and other medical services. Part C: All the benefits offered by the original Medicare plan. Some offer added benefits such as prescription drugs, eye exams, and hearing aids. Part D: Prescription drug coverage (optional).	All or some portion of: Medical care not covered by Medicare, deductibles, co-payments, and coinsurance; plans may also cover other services such as eye and dental exams.	All or some portion of: A broad range of medical services including inpatient and outpatient hospital care, prescription drugs, nursing home care, and skilled care.
Who is eligible?	Generally, persons age 65 or older, and those with certain disabilities or diseases are eligible for Medicare Parts A and B. Anyone eligible for Parts A and B is eligible for Part C and Part D.	Individuals who are enrolled in Medicare Parts A and B.	Individuals who have limited income and resources and who meet other eligibility requirements.
What is the cost?	Part A: Most participants don't pay for this coverage because of prior Social Security covered employment. Part B: $96.40 monthly premium, $135 annual deductible; $133.50 daily co-pay for skilled nursing care for days 21-100 (in 2009). Part C: Varies by insurer, state, and plan. Part D: Varies by insurer, state, and plan.	Premiums vary by company, region, and plan. There are generally 12 available plans (A-L), each offering different levels of coverage. Not all plans are available in every state.	No premium. Deductibles vary from state to state.
What does it take to enroll?	If you are receiving Social Security or Railroad Retirement benefits (or are applying for benefits) at or prior to age 65, you will be automatically enrolled in Part A and Part B. Contact the Social Security Administration to enroll if: You will not receive Social Security or Railroad Retirement benefits at age 65 You want to enroll in Medicare Part C You want to apply for benefits prior to age 65 due to a covered medical condition	Purchase a policy from an insurance company. You can find information on Medigap policies offered in your area by visiting the Medicare website or calling (800) 633-4227.	Application procedures vary from state to state. For information, contact the agency responsible for administering Medicaid in your state.

Medicaid Eligibility for Nursing Home Care

The Medicaid program is the largest single payer of nursing home bills in America, and is the payer of last resort for those who do not have the resources to pay for their own care.

Medicaid eligibility rules are complicated and differ from state to state. It is important to get the advice of an experienced Medicaid planning professional before applying for Medicaid benefits. Because the Medicaid rules require an applicant's finances to be reviewed as far back as five years before the application date, now is the time to get advice if there may be a need for Medicaid benefits in the future.

To qualify for Medicaid nursing home coverage, an applicant must meet three eligibility tests.

• Category test: Applicants must be at least one of the following: age 65 or older, disabled, or blind.
• Income test: In "spend-down" states, the applicant must spend his or her monthly income (minus a small personal needs allowance) on medical or nursing home expenses.
In "income-cap" states, a spend down of income is not allowed. Income of even $1 over the monthly income amount allowed by the state will disqualify an applicant from receiving Medicaid (although planning opportunities may exist to allow eligibility under certain conditions).
• Asset test: The applicant is allowed to own only minimal assets (generally $2,000 for an individual, $3,000 for a married couple if both are applying), but certain assets are exempt from this calculation. Exempt assets (such as certain prepaid burial contracts) may be purchased to reduce the applicant's assets below the allowable figure. Certain transfers (such as limited transfers to a spouse who is not covered by Medicaid, transfers to a disabled child, etc.) are also allowed to reduce the applicant's assets.

PART FOUR -- Next Wednesday's article is "Housing Options for Loved Ones" and "Tips for Caregivers"

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Market Week: November 30, 2009

The Markets

When U.S. investors were slicing up turkey, most European markets were slicing off 3% or more on unsettling news from Dubai. After hitting their highest levels in over a year earlier in the week, U.S. markets fell in response when they reopened for a half-day Friday; the almost 1.5% drop in the Dow wiped out all of the week's gains. However, the recent rotation into large-cap stocks continued as the small-cap Russell 2000 took the biggest hit for the week while the S&P 500 ended the week where it began.

Market/Index	2008 Close	Prior Week	As of 11/27/09	Week Change	YTD Change
DJIA	8776.39	10318.16	10309.92	-.08%	17.47%
NASDAQ	1577.03	2146.04	2138.44	-.35%	35.6%
S&P 500	903.25	1091.38	1091.49	0.01%	20.84%
Russell 2000	499.45	584.68	577.23	-1.27%	15.57%
Global Dow	1526.21	1935.54	1925.70	-.51%	26.18%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	2.24%	3.36%	3.21%	-.15 bps	.97 bps

Last Week's Headlines

• Homebuyers rushing to beat the deadline for the first-time homebuyers tax credit (before it was extended) helped push October home resales up by 10.1% from the previous month, to a level not seen since February 2007, according to the National Association of Realtors. If October's pace kept up for a full year, it would represent the sale of 6.1 million existing homes. Distressed properties, which accounted for 30% of October resales, continued to weigh on the median home resale price, which at $173,100 was down 7.1% from last October.
• Overseas markets were hardly thankful for the Thanksgiving Day news that state-run Dubai World plans to restructure and wants to delay payments on $60 billion worth of debt for six months. The announcement raised questions about bank exposure to derivatives based on that debt as well as potential problems with other sovereign debt, particularly in emerging markets.
• Personal incomes rose in October by 0.2%--the fourth consecutive month of increases. Spending also increased 0.7% from the month before, though the month-to-month comparison is affected by the substantial drop in September's spending that resulted from the end of the "cash for clunkers" program.
• The 3.5% growth rate initially reported for the third quarter by the Commerce Department was revised downward to 2.8%, though it's still the strongest in two years.
• October durable goods orders were down 0.6%, primarily because of weaker demand for machinery and defense equipment.
• The dollar hit a 15-month low against the euro and a 14-month low against the Japanese yen before jitters over Dubai led global investors to begin unwinding riskier currency bets, bolstering both currencies a bit. The spot gold price continued to hit new records, reaching $1,194.50 an ounce on Thursday before falling back.
• New U.S. home sales were up 6.2% from September, and up 5.1% from a year ago. The South saw the highest jump, with a 23.2% increase.

Eye on the Week Ahead

Traders returning to their desks will be trying to figure out whether the negative sentiment at week's end will carry over, and whether that would represent a bad omen for global credit stability or a buying opportunity. Friday's unemployment figures will be watched for their implications for the holiday shopping season.

Key data releases: Auto and pending home sales, manufacturing (12/1); productivity (12/3); unemployment/payrolls (12/4).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

--see disclaimer below--