Ask Liz Weston

Get smart with your money

Medicare

Q&A: Looking to Medicaid to pay for assisted living

By

Dear Liz: I am going to sell my house, pay back my reverse mortgage, spend down and go on Medicaid in order to pay for assisted living that I need. What are some good resources I can contact to help me navigate all this? I have done a lot but am still needing more help.

Answer: Medicaid, the government health insurance program for the poor, typically doesn’t cover the room and board costs of assisted living, but many states offer Medicaid waivers that pay some assisted living expenses. Even if you qualify, though, there are typically a limited number of waivers available and you may be put on a wait list.

You definitely shouldn’t sell your home or spend down your resources before consulting with an expert. You can contact the National Academy of Elder Law Attorneys (NAELA) for a referral to a lawyer who specializes in this complex area or use the American Council on Aging’s free locator tool to find a Medicaid planner.

Q&A: How capital gains boost Medicare premiums

By

Dear Liz: We are retired and living mainly on a pension, which covers our month-to-month needs. We own our house outright and are considering downsizing. When we do that, will the capital gain cause our Medicare premiums to go up two years later? If so, will it automatically go down again after one year?

Answer: A big-enough capital gain can trigger Medicare’s income-related adjustment amount, which are surcharges on your Part B and Part D premiums. As you note, there’s a two-year delay between the higher income on your tax returns and higher premiums.

If you’ve had a life-changing event — marriage, divorce, a spouse’s death or loss of income, for example — you can appeal the increase by filing form SSA-44. Otherwise, consider saving some of the home sale profits to cover your higher premiums for that one-year period.

Q&A: Social Security hit from capital gains

By

Dear Liz: Due to capital gains on the sale of a property, my monthly Social Security check is impacted by IRMAA, the income-related monthly adjustment amount for Medicare. Therefore not only do I not receive the recent cost-of-living increase, but my benefit substantially decreased. My question is: After a year will my monthly benefit go back to my most recent benefit, or to the increased amount I would have received without the IRMAA deduction? If the former, it seems like I lose forever.

Answer: You don’t lose forever, fortunately.

You did receive the most recent inflation increase in your Social Security benefit, but it was more than offset by the increase in your Medicare premiums. Medicare premiums are based on your income two years previously, so this year’s IRMAA was based on your tax returns from 2022. If your income went back to normal last year, then the IRMAA surcharge you’re experiencing should disappear next year.

Q&A: To shred or not to shred

By

Dear Liz: In a recent column, an attorney suggested that a veteran’s information can be shredded three years after death. However, surviving spouses of veterans can be eligible for benefits to cover the costs of assisted living and would need to provide that information.

Answer: That’s an excellent point. Many people aren’t aware of the “aid and attendance” benefit that can help veterans and their spouses pay for help with activities of daily living, including bathing, dressing and using the bathroom. These custodial care costs are typically not covered by Medicare.

Q&A: A health crisis brings high medical bills. Here are tips for dealing with the costs

By

Dear Liz: I have been diagnosed with Stage 4 cancer which has metastasized into at least two areas. Surgery, chemo, perhaps a stay in rehab and possibly radiation therapy will be prescribed by my oncologist. In order not to deplete my retirement savings (the oncologist estimates that I will live longer — years — if the treatment goes well), what resources can be identified to help financially with co-pay, medical and prescription costs? I already know about hospital benevolence programs. I am going to revert to my monthly “austerity” budget, watching every penny of my expenditures and trying to avoid or reduce them. I will be unable to work part time, as I have been doing, for at least this year. I am 70. I have Medicare and a Medicare supplement plan as well as a Part D prescription plan. Thank you for any suggestions.

Answer: You’ve just received a shocking diagnosis and it’s understandable that you’re worried about the costs you’ll face.

Your Medicare supplement plan — also known as a Medigap plan — is designed to cover some or all of the costs not paid by traditional Medicare, including co-payments, co-insurance and deductibles. The plans with lower premiums typically have skimpier coverage. You’ll want to carefully review your plan to see what coverage you have.

You probably will have questions, so consider connecting with your State Health Insurance Assistance Program. This program can refer you to a government-funded counselor who can provide free Medicare counseling. You can find your regional SHIP using the online locator or by calling (877) 839-2675 and say “Medicare” when prompted.

Ask your oncologist about lower-cost treatment options and any charitable programs they have or are aware of. Benefits.gov can show you what government programs might be available to help with costs, while 211.org can help you check if there are any local programs. You may be able to seek out cheaper prescriptions through online pharmacies, GoodRx, NeedyMeds, manufacturer discount programs or Medicare’s Extra Help program, which helps Medicare recipients with limited means to afford their medications.

Another option for people with catastrophic medical bills is to file for bankruptcy. Your retirement accounts would be protected, but you’d want to discuss your options with a bankruptcy attorney long before you file.

While you’re researching, keep in mind that the U.S. medical system is set up to push treatment, often regardless of the cost, efficacy or toll on quality of life. Physician and certified financial planner Carolyn McClanahan warns that people can find themselves on a “medical treadmill” that continues pushing painful, debilitating and costly treatments with little or no real benefit to the patient.

Consider having a frank talk with your oncologist about how much more time each treatment will likely get you — not just in a best-case scenario, but in an average-case scenario — and how you are likely to feel during the treatment. A second opinion may also be a good idea. These discussions can help you decide if you want to pour all your available resources into paying for treatment or if there are other options that would allow you to better enjoy whatever time remains.

McClanahan recommends picking up a copy of Katy Butler’s excellent book, “The Art of Dying Well: A Practical Guide to a Good End of Life.” Despite its title, the book doesn’t just focus on the very end of life, but also provides essential information about how to best navigate the healthcare system as an older person.

Q&A: When WEP doesn’t apply

By

Dear Liz: I am a retired police officer who worked for an organization that did not pay into Social Security or Medicare. During my career I worked side jobs and paid my own self-employment taxes to get my 40 quarters to qualify for Medicare once I reach age 65. I did have Social Security earnings for about eight years prior to my law enforcement career. My understanding is any Social Security I would otherwise be entitled to will be wiped out by the windfall elimination provision. The WEP calculator on Social Security’s website isn’t user friendly so I can’t tell if I will lose all or a portion of my Social Security to WEP.

Answer: Your own Social Security benefit won’t be wiped out. The windfall elimination provision can reduce your Social Security retirement benefit by up to half when you get a pension from a job that didn’t pay into Social Security.

By contrast, another provision called the government pension offset (GPO) can and often does eliminate Social Security benefits, but only those based on someone else’s work record, such as spousal or survivor benefits.

Also, you misunderstood how Medicare works. You need to work 40 quarters to qualify for a Social Security retirement benefit, but you can qualify for Medicare at age 65 as a U.S. citizen regardless of your work history.