Module 7 : Legal and Financial Planning

• Social Security insures workers and their families against loss of income due to retirement, premature death, and disability.Persons obtain Social Security coverage by working in a job covered by Social Security.Even though most people think of Social Security as a retirement program, the disability and survivors benefits are a very significant part of the program.About 1 out of every 3 workers will either die or become disabled before retirement age.The amount of a Social Security check is based on the worker`s earnings over the whole working lifetime.
  

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  This section contributed by: Tom Clark, Social Security Administration, North Central Texas region.

• Persons who have at least 40 credits (10 years of work under Social Security) can receive Social Security retirement benefits as early as age 62.   In some cases, a spouse age 62 or over who is not due more based on his or her own work can receive an additional check once the wage earner begins receiving his or her retirement benefits.

• A worker who becomes disabled can receive Social Security disability benefits.To receive Social Security disability benefits, the worker has to have paid into Social Security recently, and be so disabled that he or she cannot do any type of substantial work.

• In addition, children of a deceased wage earner may be able to receive Social Security benefits until they reach age 18, or until 19 if still a full time high school student.If a person who receives Social Security retirement or disability benefits has children under age 18, those children may be able to receive benefits also.
• There is also one other survivors benefit under Social Security.A widow or widower can receive benefits based on a deceased spouse`s work record once the widower) is at least 60 years old.A widow(er) who is disabled may be able to receive disabled widow`s benefits as early as age 50.

Brief Summary

• Initial Application is the first step in the process to obtain benefits.
• Application reviewed by Disability Determination Services in Austin (Texas Rehabilitation Commission).
• Takes 2-6 months to get decision.
• Appeal must be filed within sixty days.
• Make take up to 2 years for approval.

Disability Insurance Benefits/Social Security Disability Insurance DIB/SSDI

• Based on wages and Social Security taxes paid into system.

Supplemental Security Income/Disability Insurance SSI/DI

• Must have a disability, very low income and limited assets.
• Must be on Social Security Disability for 24 continuous months before receiving Medicare.

Disabled Widow/Widower Benefits DIWB

• Based on wages, Social Security taxes and length of time married to the deceased spouse.

• SSI is not Social Security and it is not funded with Social Security taxes.

• However, the local Social Security offices administer the SSI program. Unlike Social Security, SSI is based on need.

• SSI is a program for persons 65 years of age or older or persons who are disabled who also have limited income and assets.

• In Texas and in most states, if a person receives a SSI check, they are also entitled to Medicaid from the state government.

• Although most Social Security business can be taken care of by phone, a person applying to be a payee must appear in person. When a payee is appointed, the Social Security or SSI benefits are paid to the payee for the beneficiary.A payee is required to use the benefits in the beneficiary’s best interest.

• Family members sometimes use a “power of attorney” to handle a person’s finances.For Social Security purposes, a “power of attorney” is not an acceptable way to manage a person’s monthly benefits.Although a “power of attorney” may be used for other matters, Social Security does not recognize it for managing Social Security or SSI benefits.The proper method is representative payment.

• For more information about the duties of a representative payee, contact Social Security and ask for the pamphlet Social Security: A Guide for Representative Payees.

Persons are entitled to Medicare at age 65 if they are entitled to a Social Security check based on their own work or based on their spouse’s work. Also, individuals who receive Social Security disability benefits receive Medicare after two years. Medicare has two parts.

• Part A of Medicare is hospital inpatient insurance.Since Part A is funded by FICA taxes, there is no additional cost to Part A for persons entitled to Social Security benefits.

• Part of Medicare covers physician bills and hospital outpatient treatment. Each person on Medicare pays ¼ of the cost of Part B. The federal government pays the other ¾ of the cost. The Part B monthly premium is held out of the Social Security check a person receives.

• Since Part B has a cost, an individual can decline it. However, in almost all situations, turning down Part B is a major financial mistake. A person should never turn down Medicare Part B without discussing their situation with the local Social Security office.

• For almost everyone, Medicare is the primary payer once a person turns 65. Generally, if a person turns down Part B, other insurance the person has will not pay anything that Part B would have paid.

• If a person has declined Part B, they can file an application to restore their Part B coverage in the first three months of each year. If an application to restore Part B is filed in the first three months of a year, Part B would then be effective the following July 1. The monthly premium will be 10% higher for each year that person did not have Part B.

Brief Medicare Summary

• Government health insurance plan for people who are 65 or older.
• People who are disabled or have permanent kidney failure can get Medicare at any age if the person has received disability benefits for a period of 24 consecutive months .
• Recipients pay the premiums for Medicare Part B.

Think of Medicaid as a type of health insurance for low-income families, children, and people who are elderly or have a disability. But unlike regular health insurance, you don`t have to pay for it, and most services are free.
Note: Medicaid is different in every state.

There are two types of Medicaid in Texas: traditional and STAR. People in both programs get the same benefits. Under the traditional program, you get medical care from any doctor or provider who accepts Medicaid. Under the STAR program, you have one provider who takes care of you. Your DHS caseworker will let you know which one you`ll receive.
The Social Security Administration determines ongoing Medicaid eligibility for people who receive Supplemental Security Income (SSI), while the Texas Department of Human Services (DHS) determines eligibility for everyone else. This includes coverage of unpaid or reimbursable medical bills during certain months before an SSI application. Then the Texas Health and Human Services Commission oversees benefits.

Eligibility People who receive SSI automatically (See above for information on SS)

• Other people also may qualify based on their income and resources.
• Families that have high medical bills they can`t pay.
• People who are elderly or have a disability who don`t receive SSI may qualify for assistance in a nursing facility, intermediate care facility for people with mental retardation (ICF/MR). They also may be eligible under a Medicaid waiver program or continue to qualify after being denied SSI due to a change in income.
• Medicaid also covers for certain Medicare recipients, such as Medicare premiums, deductibles, and co-insurance costs.

What are the minimum qualifications?

Medicaid is available to qualifying Texans of all ages and abilities. There are separate programs for families and children and for people who are elderly or have a disability. In general, the person must:

• Be a Texas resident.
• Be a U.S. citizen or a noncitizen in certain recognized categories.
• Meet certain resource and income limits, which vary by eligibility group.

How do my assets, such as home and bank accounts, and income affect whether a person can receive Medicaid?
The amount of assets and income you`re allowed depends on the category you apply under. Contact your local DHS office for more information. Proof of income and assets are necessary when application is made.

In most cases, a homestead is not counted as an asset.If the person does not qualify for Medicaid, can he or she still get help with any long-term care services?Even if the person is not eligible for Medicaid, she or he may still qualify to receive a number of the community-based services. Community care services are provided on a first-come, first-served basis at little or no cost to the individual. Contact the local DHS office for more information.To apply, Visit your local Texas Department of Human Services office. You can call the toll-free Medicaid Hotline at 1-800-252-8263 between 7:30 a.m. and 5:30 p.m., Monday through Friday. How does Medicaid work?
Each month the person receives a Medicaid ID card which must be shown at each doctor appointment or when getting a prescription filled. No monthly ID card if your only benefit is payment of all or part of Medicare Part B premium).Medicaid pays for most services, but not for everything. To make sure that that the older adult receives benefits, follow these rules.

• Do not pay for a service yourself and ask Medicaid to pay the person back. Payments are only made to providers, such as doctors, hospitals, pharmacies, or labs.
• Providers use must accept Medicaid. It will not pay if the person sees a non-Medicaid doctor.

What`s covered?

• In most cases, Medicaid pays for doctors` services, laboratory and X-ray charges, medicines, nursing facility and hospital services, family planning, eyeglasses, hearing aids, ambulance, podiatry, chiropractic, and other health care services.
• People who are elderly or have a disability who need help with daily activities may be able to receive services in their homes. The state also offers some non-Medicaid community care services.
• Medicaid often pays for regular medical checkups.

Will Medicaid pay if the person already has health insurance?
Yes, but the other insurer must pay first. Medicaid may pay for things not covered by the other policy.

If the person is covered by Medicare, but have a hard time paying my share of the costs, can Medicaid help with out-of-pocket expenses?
Texas has several Medicare savings programs that may help people who are eligible for Medicare Part A. Different income and resource limits apply to each.

• Qualified Medicare Beneficiaries pays the Medicare Part A and B premiums, deductibles, and co-insurance.
• Specified Low-income Medicare Beneficiaries pays only the Medicare Part B premium.
• Qualified Disabled Working Individuals pays Medicare Part A premiums for disabled working people.
• Qualified Individuals offers two options: Q-1 pays the Medicare Part B premium and Q-2 pays a portion of the premium.

Does the person have to be “broke” to qualify for long-term care Medicaid?

• The person can have some income and other resources and still be eligible for Medicaid.
• Some resources are protected. They generally include homestead, household goods, personal effects, a car, and certain burial funds and burial space items.

If need long-term care Medicaid assistance is needed, how does it affect the spouse?
Spouses can usually keep some amount of protected resources if they continue to live in their home or community. The resources a spouse may keep include a homestead, household goods, personal effects, and a car.

What other requirements must someone meet for long-term care Medicaid eligibility?

• Require RN/LVN nursing care.
• Meet certain health conditions that put you at risk for long-term care.
• If living in a nursing facility, must have been living for 30 consecutive days in a medical facility that has a contract to accept Medicaid patients.
• Must be either be age 65 or older or have a health condition that the Social Security Administration guidelines define as a disability.
• It is possible that the person may be required to contribute some income toward the cost of care. Only a DHS long-term care Medicaid eligibility worker who knows the details of your situation can tell you for sure whether or not the person will have to contribute to the cost of care.

My mother can`t really take care of herself anymore, but she won`t even consider a nursing home. Does Medicaid provide any way for people to get help so they can stay in their homes?

There are a number of Medicaid-funded home and community services for qualifying people of all ages. Some programs are available on a first-come, first-served basis.

• Community-based Alternatives offers home and community-based services as a cost-effective alternative to institutional care in nursing facilities.
• Day Activity and Health Services facilities offer daytime services to people residing in the community as an alternative to placement in nursing homes or institutions. Services address the physical, mental, medical, and social needs.
• Deaf-Blind with Multiple Disability Waiver program provides community-based services to help people who are deaf and blind with multiple disabilities become more independent.
• Home and Community-based Services – OBRA is a community alternative for nursing facility residents who have mental illness, mental retardation, or a developmental disability. (Note: The Texas Department of Mental Health and Mental Retardation administers this program, but DHS determines financial eligibility, if needed.)
• Personal Care Services provides assistance with daily living activities, such as dressing, eating, grooming, bathing, and food preparation. People may receive these services even if they don`t have other Medicaid coverage.

Below is a brief comparison of Medicare and Medicaid which are very different programs.

Federal tax aids are available through the IRS.
The AARP offers free tax aid service to older taxpayers.
Veterans benefits are not taxable and some pension incomes may not be taxable. Tax breaks are available for homestead exemptions, etc. Check with the local appraisal district.
An adult child may claim an aged relative as a dependent if the child has provided over 50% of the person`s support for the year. Check with your tax advisor or an agent of the IRS for the most current income levels, as those change every year.

For information on these services call 211.
Find contact information for other benefits counseling programs at local Area Agencies on Aging.