Beginning in April 2018 58 million Medicare beneficiaries will begin to receive new Medicare cards. The big change is that a Medicare beneficiary’s Social Security number will no longer be part of the Medicare number.


Instead, the new cards will feature a randomly assigned Medicare beneficiary identifier (MIB). The MBI will be generated from randomly selected numbers. The characters will have no special meaning. Other changes include the removal of the cardholder’s gender and the signature line.


The new Medicare cards are due to the signing of the Medicare Access and CHIP Reauthorization Act of 2015. This represents a major effort by the Centers for Medicare and Medicaid Services (CMS) to fight fraud against seniors.

Remember the song “Don’t Worry, Be Happy?” What will make you happy in retirement?
Is it traveling to far off destinations? Golfing five days a week? Fishing? Charity work? Church? Babysitting the grandkids? Your favorite hobby?

These are the activities that you do in retirement. But what is it that really gives you peace of mind, less worry and less anxiety?

According to a 2015 report by the Urban Institute the greater one’s income, the lower one’s likelihood of disease and premature death.”

The higher a person’s income is the longer, healthier and happier their life will be. Retirees like the sense of security that guaranteed predictable income provide.

A 2012 Towers Watson study examined what contributes to a happy retirement.
The study found that the source of retirement income plays a major role in retirement happiness.

A 2005 article by Jonathan Clements of the Wall Street Journal states that retirees who receive company pensions are happier than those who have just 401(k) and other defined contribution plans.

The most sweeping changes since 1993 are being made to the Medi-Cal recovery program. California’s aggressive recovery procedures have been punitive to the uninformed and unprepared especially with the expansion of the Medi-Cal health insurance program through Covered California.

Governor Brown signed the budget bill on June 27, 2016. Contained within are provisions of SB 33 (Hernandez) that bring California law into line with federal Medicaid laws in regards to recovery procedures.

Currently, if a person age 55 or older is receiving any type of Medi-Cal benefits, general or long-term care, the department will seek repayment of the benefits paid out after the Medi-Cal beneficiary passes away.

However, federal law only requires recovery of benefits paid out to a person age 55 or older for nursing home care, home and community-based services, hospital and prescription drug services while receiving nursing home or home care services and persons who are “permanently institutionalized.” Health insurance programs like Covered California are subject to recovery under federal law.

Up to now, California has gone beyond the scope of the federal law by placing claims on estates of surviving spouses and for all Medi-Cal benefits received by those age 55 or older.

Families have been forced to sell the family home in order to pay the claim. If they wanted to keep and stay in the home, they were forced to sign a “voluntary lien” which accrues at a 7% annual percentage rate.

Have you ever noticed that time seems to go faster the older we get? For baby boomers, your parents suddenly get old and need help. It all happens so fast. That is why it is important to get your parents’ personal, financial and legal matters in order as soon as possible.

Recently, a son came in for his parents. His father could no longer walk or take care of himself. His mother was exhausted from being the caregiver.

Getting help from a home care agency had been seriously considered. But the cost was prohibitive and for mom’s sake it was decided that it was best for dad to go to a long-term care facility.

His parents were very conservative and humble people. They had worked hard, were frugal and saved a little bit of money. However it was not enough to pay for dad’s nursing home care.
So they came to see me to start the application process for Medi-Cal.

Medi-Cal looks at your income and assets to see if you qualify for benefits. For a married couple, they are allowed to have up to $121,220 in Countable Assets. This limit is increased if either spouse can prove that they each received $20,000 in redress payments for internment during WWII. If both received redress, they are allowed to keep another $40,000 for a total of $161,220 in Countable Assets.

For our clients, they were under this threshold so they passed the asset test.

There is only one office for long-term Medi-Cal application processing in Los Angeles County. It is located in the City of Industry.
Not so long ago, we could directly call the Medi-Cal worker assigned to a case. No more. Now we have to call a customer service number and leave a message for the worker. Then we cross our fingers and hope that they call back.
That is not the only change. Not so long ago, we would UPS Overnight the application with the whole packet then getting delivered to the Medi-Cal worker assigned to the case.
Now, when the packet is received, it is scanned into the computer system. You would assume that the worker would still get the whole packet.

One of the most frustrating tasks is showing the trail of money when an account such as a certificate of deposit is closed. When a Medi-Cal application is submitted, Medi-Cal pulls up all of the past three years 1099’s even if you haven’t been filing your tax returns.If a 1099 shows up for an account that hasn’t been disclosed on the Medi-Cal application, Medi-Cal will want to know if the account is still open or if it has been closed. Proof has to be provided.

If an account is closed, they want a closing statement showing a $0 balance. Then Medi-Cal wants to know what happened to the funds and you must show proof of the disposition of the money through deposit receipts or statements. Also frustrating for the uninformed, is that Medi-Cal wants to see all of the pages of your bank, credit union and investment statements. For instance, let’s say that there are four pages in the statement. The pages are numbered 1 of 4, 2 of 4 and so on. The last page is typically blank or has disclosures. Most normal people would throw away the last page to save space in their files.

Caring for an aging parent is difficult – physically, emotionally and financially. To help ease the financial burden, there are little known tax deductions and tax credits available.
One often over-looked tax strategy is to claim your parent as a dependent. This deduction will help to reduce your taxable income by $4,000 for 2015.


THE 5 TESTS THAT NEED TO BE MET TO CLAIM A PARENT AS A DEPENDENT

To qualify for this exemption and claim your parent as a dependent, there are five tests that have to be met.
The first is that a dependent has to be related to you. This could be your father, mother, stepfather, stepmother, father-in-law or mother-in-law. They do not have to live with you.
Second, your parent must also be a U.S. citizen, U.S. resident alien, U.S. national or a resident of Canada or Mexico.

Third, your parent’s gross income for 2015 must be less than $4,000. Gross income does not include Social Security or tax-free income. Don’t worry, there are other strategies if your parent doesn’t meet the income requirement.

Fourth, if married, they cannot file a joint tax return with their spouse unless it is only to claim a refund.
Fifth, you must provide more than half of your parent’s total support for 2015.Expenses may include food, housing, clothing, medical and dental care, recreation, transportation and other necessities.

The chill of winter is in the air. With the change of seasons comes the time of year when seniors are more vulnerable to illness.
Sometimes it means a hospital stay followed by rehab care then long-term care in a nursing home.
With the average monthly long-term care facility costs from $7,000 – $10,000, many families are not prepared to deal with this cost. An option that many choose to help pay for this cost is Medi-Cal.

Many people today are unnecessarily spending down their hard-earned life savings paying for nursing home care. These funds could have been saved for the spouse still at home,children or grandchildren. Not being familiar with the rules can be a costly mistake.
People’s life savings are being spent down because of a mistaken belief or incorrect advice about the Medi-Cal “Look Back Period.”
Sometimes they’ve heard from advisors like attorneys, CPA’s, social workers or even family and friends that the look back period is three years or five years.

This is incorrect.

Unfortunately, it is also commonly believed that if a transfer or gift is made within the look back period, the applicant is automatically disqualified from receiving Medi-Cal benefits.
This also is absolutely not true.
The “Look Back Period” simply means that Medi-Cal looks back a certain number of months prior to application to see if countable assets like cash, stocks, bonds, or mutual funds, for example, were transferred or given away to someone other than the spouse.

A critical part of protecting your assets in a healthcare crisis is making sure that the beneficiaries on your retirement accounts are correctly designated.
Because you don’t know when or if a healthcare crisis will happen, it is vital that the beneficiaries on your retirement accounts like IRA’s, ROTH IRA’s, 403(b), 401(k), 457 deferred compensation and SEP’s be reviewed immediately.
If you wait, you may become incapacitated and legally unable to make any changes. This could be a very costly mistake for you and your family.