Paying for Health Care
The early average age of onset of FTD may result in significant loss of income and health insurance. The following resources can provide some assistance.
Medicare is federally-funded health insurance available to persons 65 and older and certain persons who have been permanently and totally disabled for at least two years. The two-year waiting period begins with the date of Social Security disability determination. Private insurance companies administer Medicare benefits, and doctors may choose whether or not to accept patients covered by Medicare. Medicare coverage is limited to certain types of care and does not cover many medical expenses, such as nursing home stays over 100 days. In addition, some types of care are covered under Medicare Part A, which typically does not require a payment of premiums, and some types of care are covered under Part B, which does require payment of premiums. Prescription drugs are covered under Part D. State funds may be available to help pay the cost of co-payments, premiums, and prescription costs.
Social Security Disability
In addition to providing benefits to retired persons who have reached the age of retirement, Social Security also provides disability benefits to persons who are (i) unable to engage in substantial gainful activity (paid work), (ii) as the result of a medically documented physical or mental impairment, which will (iii) last at least 12 months or is expected to result in death. A person typically is eligible for disability benefits if he or she has worked for twenty of the forty calendar quarters before the disability began. Once a person qualifies, payments will continue as long as the person is disabled. When the person reaches retirement age, the disability benefits become retirement benefits. The amount of benefit payments depends on the person’s age, the amount of money he has earned over his lifetime, and other factors. The website of the Social Security Administration (SSA) at the link above includes information about the Social Security disability insurance program, application requirements and an on-line application.
Social Security Compassionate Allowances
Social Security Compassionate Allowances is an initiative that expedites the medical review of applications for Social Security disability benefits from anyone with a properly documented diagnosis of any one of the 300+ qualifying conditions. As of October 2011, all the FTD disorders (listed here) have been included on the list of Compassionate Allowances conditions. This initiative only affects the application process and does not impact the type or amount of benefits an individual may receive. Click here for more details on the Compassionate Allowances program.
Supplemental Security Income
SSI is a federally funded cash assistance program to help persons 65 or older and disabled persons with limited income and assets, to purchase basic needs such as food, clothing, and housing. SSI payments are sometimes supplemented with state benefits as well. A person does not need to have a work history to qualify for this program. If a person does have an adequate work history, it is possible to qualify for Social Security disability, SSI, and Medicaid benefits at the same time.
Medicaid is health insurance for persons with low incomes. Medicaid is funded by both federal and state governments, but each state administers its own Medicaid plan and has its own requirements and regulations. Medicaid coverage is broader than Medicare, covering additional services such as long-term care and supportive living facilities, but finding providers who accept Medicaid can be difficult. Eligibility to receive Medicaid is typically measured by considering your monthly income along with the value of your property, possessions, and savings, including a “look back” to your assets over the past several years. Individuals may sometimes be advised by a professional advisor to “spend down” their assets so that they become eligible for Medicaid. In addition, Medicaid allows for certain wealth and income transfers to a spouse or to special trusts for the benefit of a disabled person without affecting eligibility.
Medicare Supplemental Insurance (Medigap)
Because Medicare often does not cover important types of care, many individuals choose to purchase “Medigap” policies from private insurance companies. Medigap policies may cover types of care not covered by Medicare and may cover Medicare premiums, co-payments, and other costs. Start here for more details about “Medigap” insurance policies.
Long-Term Care Insurance
Long-term care insurance can be a good investment for individuals who do not qualify for Medicaid or do not wish to “spend down” their assets in order to qualify for Medicaid. Typically the premiums for long term care policies are more expensive as the insured individual grows older. However, the existence of certain medical conditions may exclude a person from coverage or make coverage prohibitively expensive. Long term care policies differ with respect to the types of care that are covered. If you are considering Long-Term Care Insurance there is more information on this webpage from the US Dept. of Health and Human Services.
Other Options for Financing Care
A number of other options exist to pay for health care or long term care if insurance plans, government assistance, and savings are insufficient.
“Reverse mortgages” are often used as a tool to provide a homeowner with income out of the value of a home. The bank pays the homeowner cash and receives the entire home or whatever portion has been paid in cash to the homeowner upon that person’s death. Numerous other strategies, such as sale-leasebacks, life estates, and charitable remainder trusts, can also be used to turn the value of the home into cash while maintaining residence.
Some life insurance plans allow the policy holder to begin receiving “accelerated benefits” or “living benefits” prior to death to pay for long-term care or other health care.
Viatical companies will sometimes purchase a life insurance policy from a person for cash and become the beneficiary of the policy upon the person’s death.
Joint Checking Accounts
A joint checking account with a caregiver as a signatory allows the caregiver (when properly authorized by a power of attorney) to pay bills on behalf of a loved one. Both account owners can access all of the funds in the account at any time. However, a joint account may affect eligibility for Medicaid payments if not managed properly, as all of the assets in the account will be considered to belong to the potential Medicaid recipient. A joint account “with right of survivorship” allows a surviving account owner to assume full ownership of the account and all remaining funds without submitting the account to probate upon the death of the other owner. However, it may be difficult to resolve disputes between the account owners in the event of disagreements about the proper management or disposition of the property. In addition, the creditors of each account owner may have recourse to the jointly owned property to settle obligations of each owner.
Other Financial Topics
A will is a legal document designating certain persons or entities to receive a person’s property upon his death. A will can be written by any person 18 or older who is mentally competent. A person is typically considered to be “competent” for purposes of creating a will if he knows that he is executing a will, knows the nature and extent of his property, and can identify the persons who are designated in the will. The primary purposes of the will are to designate beneficiaries to receive property, to designate guardians for minor children, to declare preferences for burial arrangements and organ donations, and to appoint an executor to oversee the execution of the will and management of the estate. If a person is the sole parent or legal guardian of minor children and does not designate a guardian for the children, a court will designate a legal guardian for the children.
“Probate” is a term used to describe the process by which a court approves a will and distributes a person’s property according to a will or state law upon the person’s death. If a person dies without a valid will, known as being “intestate,” a probate court will distribute the person’s property to his heirs and creditors according to state law.
For a description of a “living will,” please refer to the section above entitled Health Care Decisions.
A trust is a legal entity into which a person can place certain property or money for the benefit of a beneficiary. The creator of the trust can name someone else as trustee or can name himself as trustee and manage the trust until he dies or becomes incapacitated. A trust typically holds the property or money and pays certain income to the beneficiary, although there are numerous forms of trusts designed to accomplish different objectives. Trusts may also be useful in conjunction with a plan to become eligible for Medicaid.
Special Needs Trust
A “special needs trust” or “supplemental trust” is designed such that a disabled beneficiary can receive gifts, inheritance, or other funds and still maintain eligibility for Medicaid or other government assistance. These trusts are designed to pay for expenses that government assistance programs do not cover. Though typically created by a family member for the benefit of a disabled person, under certain conditions a person may create a special needs trust with his own money and for himself as beneficiary while maintaining eligibility for government assistance.
FTD and Property Tax Relief
When residential property values increase beyond what personal income allows owners to pay in property taxes, people are at risk of losing their home, and rental prices become unaffordable. This is particularly true for people with a low or fixed income, such as retirees and the disabled. Every state in the U.S. offers a Property Tax Relief program to address this problem, and many states have multiple programs designed for a variety of needs. The rules and regulations of each program are set by state law and implemented by the local government agency administering the program. In some states, eligibility is determined solely by the ratio of income to property tax burden. Other states restrict participation to those who have reached retirement age or are unable to work due to a disability. The majority of programs are only for owners, though a few states make them available to renters as well. Some programs offer a complete exemption from property taxes while others set an upper limit on the amount that can be exempted or freeze the tax rate at a lower level regardless of increases in property values. Many states call these programs “property tax relief” or something along those lines, but they also often are referred to as “homestead exemptions.” To learn more about what property tax relief may be available where you live, contact the taxation or revenue department in your state. Please visit this website to get started: http://taxation.lawyers.com/income-tax/State-Revenue-and-Taxation-Department-Websites.html
Special thanks to Sheri T. Rouse, an attorney in Alabama handling employee benefit claims for employees nationwide. She shared the topic of property tax relief with AFTD. Her husband was diagnosed with FTD in 2010 at the age of 43.