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Senior couple sitting on wicker chairs in backyard of their home

What Does the Realtor Settlement Mean for You?

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The National Association of Realtors (NAR) has agreed to pay $418 million over the next four years to resolve class action lawsuits brought by home sellers who said they were forced to pay inflated commissions to real estate agents.

This is big news for homeowners and seniors thinking about downsizing. Under the settlement, each seller can negotiate the commission rate with their broker and pay only their own broker. If the buyer wants to spend their broker 2%, it’s their rate and responsibility to pay. The seller does not need to pay both the selling agent and the buyer’s agent.

The lawsuits said the NAR rule requiring home sellers to pay commissions to agents and buyer’s agents inflated fees was price fixing. The class action lawsuits also questioned a NAR rule requiring their agents to list homes on NAR-affiliated databases—Multiple Listing Services— to sell the houses.

Over twelve copycat cases followed the initial lawsuit.

Approved by the court, experts expect home prices to drop and the residential real estate market to become more active than it has been. The cost of selling and buying homes will drop dramatically because the agent’s sales commissions will be cut by as much as a third.

Let’s say you have a home selling for $1 million. $60,000 of the sale will go to real estate agents: half to your selling agent and the other half to the agent who brings a buyer. For the average American, buying a modest home for $400,000 means the seller pays around $24,000 in commissions.

Under the settlement, the seller’s agents can’t offer commissions to buyers’ agents. One expert cited by The New York Times believes this will let sellers and buyers force rates down and comparison shop for real estate agents to work with more transparency.

NAR rules, which have dominated the American housing market for decades, require listing agents to state the commission a buying agent receives if they bring a buyer to the sale. This led buyers’ agents to direct clients to more expensive properties.

What could this mean to seniors in residential markets like New York?

Prior generations sold their homes to move to warmer climates and put extra cash in their retirement accounts. Boomers have been staying put because new housing is pricey, and seniors are reluctant to give up their low-interest mortgages if they have one or to take on a new mortgage if they don’t. However, the settlement terms of this class action lawsuit will change the cost of selling a home and could make selling their home much more attractive to boomers— and open the housing market for a new generation. 

#elderlawyerny #estateplanninglawyer #taxattorney #retirementplanning #boomerhomesales #residentialrealestate  #inheritance #estate planning #estateplanningattorney #legalneeds #newyorklawyer #longislandelderlaw #longislandestateplanningattorney #taxplanninglawyer #roslynestateplanninglawyer #nassauestateplanninglawyer #elderlawnassau #elderlawnewyork

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2025 Medicare Advantage Rates Are Finalized: Health Insurance Company Stocks Respond

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On April 1, the Centers for Medicare & Medicaid Services (CMS) finalized the Calendar Year 2025 Rate Announcement for Medicare Advantage and Medicare Part D Prescription Drug Programs to update payment policies for these programs, according to a press release from CMS.gov.

Payments to the government will increase an average of 3.70 percent from 2024 to 2025, and the federal government expects to pay between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.

Insurance company stocks dropped following the announcement, including UnitedHealth, Humana, Elevancew, CVS and Centene. The rate increase was well below the desired insurance company’s wish list. Insurance company-paid lobbyists argue the increase does not account for rising usage rates and position their companies as now being “forced” to reduce benefits and raise premiums.

Don’t feel too bad for the insurance companies or their lobbyists. The sector spent more than an estimated $157 million in 2023 alone, with 862 lobbyists – 63% who are former government employees – on the payroll.

The increase will not reduce the insurance company’s profits and could help in slowing down rampant overpayments by Medicare Advantage plans. It’s one of several challenges to Medicare Advantage, which is still a popular alternative to Medicare and a highly profitable revenue source for healthcare insurance companies.

More than half of all Medicare seniors are enrolled in a MA plan, according to data released by CMS.gov in December 2023. But for these insureds, this has been an especially unsettling season.

Recent battles between healthcare insurance companies and major hospital systems have left many Americans weary of a for-profit health system that is not working. Hospitals and healthcare systems are dropping Medicare Advantage plans because in part of their excessive prior permission denial rates and slow payments from insurers. The level of claims rejections has also created problems for smaller healthcare systems, who do not have the staffing to devote time battling with the insurance companies. Patients caught up in the crossfire end up either not getting the care they need or having to incur medical debt.

Seniors do not always know that their providers might not be in the MA network. If they go out of network, they must pay the higher cost or might have to switch healthcare providers. A recent article from Yahoo! Finance  reports the tradeoff of additional medical services like dental and vision from MA plans for the wider network of Medicare came to a head in 2022, as MA insurers began denying coverage for necessary care when the pandemic eased and people who had delayed elective procedures returned to hospitals struggling with labor shortages.

The number of medical groups withdrawing from MA plans or failing to negotiate new contracts is growing. More than a dozen healthcare and hospital systems nationwide have left MA plan networks.

Our country spends the most per capita on healthcare, but we have a consistently lower life expectancy than people living in countries with similar economies who enjoy the benefits of universal healthcare.

If there was a single-payer universal healthcare system, our high mortality rates and crippling medical debt might be eliminated if Medicare for all the answer? It might be, but do not expect it anytime soon.

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What are the New IRA and Retirement Saving Rules for 2024?

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If your New Year’s resolutions included increasing your retirement savings efforts in 2024, there are a few changes to rules about IRAs, 401(k)s, and even 529 College Savings Plans you’ll want to know about.

Contribution limits for 2024 have gone up. Annual contributions for IRAS in 2024 are now $7,000, up from $6,500 in 2023. It applies to the total contributions to all traditional and Roth IRAs. For those 50 and older, the contribution limit is $8,000 because of the $1,000 “catch-up” contribution allowed for older savers.

401(k) annual contributions are now $23,000. It applies to similar employer-sponsored retirement accounts, including 403(b) plans, most 457 plans, and the Thrift Savings Plan for federal government workers. Older savers (50-plus) may contribute up to $30,500 this year to a 401(k), 403(b), and most 427 plans and Thrift Savings Plans.

Funds in a 529 college savings account may now be rolled over into a Roth IRA for the beneficiary with no penalty. This tax-free rollover rule is part of SECURE 2.0. Individuals may roll over as much as $35,000 from 529 savings accounts, subject to annual Roth IRA limits. There are rules to follow: the account must be owned for at least 15 years before you can roll over the funds, and you may only roll over money that’s been in the account for at least five years. The account holder, typically a child’s parent or grandparent, may roll no money into their own Roth IRA – it can only go into an account established for the beneficiary of the 529 plan.

Rules about emergency withdrawals have changed. Previously, if you had an immediate financial emergency, you could get an early distribution from 401(k)s and IRAs. You’d have to pay income tax on the withdrawal, and if you were younger than 59 ½, you’d also get hit with a 10% penalty.

In 2024, you may make one withdrawal of $1,000 per year to pay for an emergency expense without owing the 10% penalty, as long as you “self-certify” that you need the money for an emergency.

There is another penalty-free withdrawal allowed to victims of domestic abuse under age 59 1/2, who may withdraw up to $10,000 from IRAs and 401(k)s.

“Starter 401(k)s” were introduced in 2024. These leaner plans have lower costs, fewer administrative burdens, and are designed specifically for small business employers. Employees may contribute up to $6,000 yearly, and small businesses have until tax time to set up the plans. The goal is to expand access to workplace retirement plans for people who work in small businesses.

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2024 Bringing Big Savings for Medicare Patients Relying on Expensive Drugs

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There is good news for Medicare recipients in 2024 who count on costly prescriptions. The Inflation Reduction Act passed in 2022 puts an annual ceiling of $3,300 in 2024 for Part D drugs. The number could shift slightly depending on whether they take brand-name or generic medications.

In 2025, the news is even better: the cap changes to a flat $2,000.

Here’s how it worked: people who pay for their medications through Medicare Plan D, the government insurance plan covering most prescription drugs, paid thousands for medications until they reach what’s known as the “catastrophic zone of spending.” After that, they pay a 5% deductible for the rest of the year, often in the thousands.

In 2024, the IRA eliminates the 5% coinsurance. And once patients spend roughly $3,300, they have met the “catastrophic zone.” And they won’t have to pay any more out of pocket for Part D drugs.

Here’s an example of the new rules. Let’s say a 69-year-old man has a plan with a $505 deductible. He takes a blood cancer drug that costs $200,000 per year—roughly $16,600 monthly. In 2023, he pays his full deductible, plus 25% coinsurance, until he hits the $3,100 catastrophic limit for 2023, plus 5% coinsurance after. On his next refill, as he has remained in the catastrophic zone, he paid only the 5% deductible–roughly $830. He’ll pay about $830 every time he fills his prescription, spending more than $12,000 out of pocket for the year.

In 2024, the same man taking the same drug will save a few hundred dollars the first time he fills the prescription, topping out at around $3,300. Subsequent refills will cost nothing. He will not pay for the blood cancer drug, or any other drug, for the year. In 2025, his first trip to the pharmacy will cost him $2,000, the cap for the year, unless he wants to participate in a “cost-smoothing” program and spread the $2,000 over 12 months.

The Inflation Reduction Act lets Medicare officials negotiate the price of drugs. By doing away with the 5% coinsurance, the law forces insurers and drugmakers to pick up part of the tab. Part D covers most outpatient prescription drugs, although some medications, including physician-administered infusions, are covered under Part B.

The downside is that premiums may go up, and Part D paperwork may become more complex. Premiums for stand-alone Part D plans were up an average of 20% in 2023. Because Part D plans are paying for more medications, they may be motivated to use techniques pushing patients to less expensive drugs or requiring them to get insurers’ approval before filling prescriptions. They may also change the list of drugs covered.

It’s always important for Medicare recipients to check their plans and medications, but these changes make it even more important.

Reference: The Wall Street Journal, January 15, 2024, “Medicare Patients on Pricey Drugs Are Saving Big This Year”

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NAELA News Article on QLACs Is Top Pick for 2023

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This past year, I’ve enjoyed contributing articles to prestigious professional journals, including one of our field’s most respected publications, NAELA News, by the National Academy of Elder Law Attorneys. With great pride, I announce that my article, “SECURE 2.0 Opens the Door for Qualified Longevity Annuity Contracts (QLACs),” has been recognized as the most-read article in NAELA News for 2023!

A Qualified Longevity Annuity Contract is an annuity purchased from an insurance company with a portion of the assets of an IRA. Before SECURE 2.0, the maximum premium was set very low, limiting the benefit of the QLAC.

SECURE 2.0 removed the percent limitation and raised the maximum premium to $200,000, making the QLAC a viable planning strategy. A QLAC allows an individual to defer distribution from a QLAC until age 85. Since the QLAC is structured as a Medicaid Qualified Annuity, it is not a resource for Medicaid purposes, even in states that count an IRA as an available resource. Also, if there is a surviving spouse and the account holder dies before payments begin or the balance of the annuity, they take priority over any state Medicaid recovery.

Click here to read the full article. If you have any questions, please feel free to contact me at sjs@sjslawpc.com.

Thank you to my colleagues at NAELA, who share my passion for an admittedly complex area of the law – and our shared commitment to improving the lives of our clients.

Here’s to a year filled with health, happiness, and innovative estate planning!

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Seniors Beware – Medicare (dis)Advantage Plans – Part Two.

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If you’re not worried about your Medicare Advantage plan, a recent article from The Washington Post, “Hospitals and doctors are fed up with Medicare Advantage,” might motivate you to check on your Medicare plan before the open enrollment period ends – next Thursday, December 7.

While Medicare Advantage plans have about 31 million members (nearly half of all Medicare enrollees), many doctors and hospitals have had their fill and refuse to accept the plans – even from companies like United Healthcare and Humana.

Consumer policy representatives say today’s pushback has changed as doctors and hospitals become more vocal about their frustration with the insurance companies’ cost-control efforts.

In Louisville, Baptist Health, which runs nine hospitals, clinics, and physician groups, says it will cut ties with Advantage plans from UnitedHealthcare and WellCare Health Plans starting in January unless they can come to terms. The plans “routinely deny or delay approval or payment for medical care recommended by your physician” was the message to patients from Baptist Health. Those are strong words from one institution to another.

Baptist’s medical group of 1,500 doctors and other providers left the Humana network in September.

Scripps Health in San Diego said they accept no Medicare Advantage plans because “revenue doesn’t cover the cost of patient care.”

Last year, the Health and Human Services Department’s inspector general published a study finding some Advantage plans improperly denied covered care coverage created under Medicare’s new rules. The Biden administration’s new rules, set to take effect in January, are in part a response to the OIG report.

Virtually all Medicare Advantage enrollees are in plans requiring the insurer to sign off in advance for at least some of the care. The insurance sector says the process ensures treatments are coordinated and appropriate. In 2021, Medicare Advantage participants submitted over 30 million requests for approvals, according to the KFF, an independent, healthy policy research, polling, and journalism organization. 11% of those denied filed appeals. Upon final determination, the review organization reversed 85% of the denials.

Bottom line: doctors and hospitals have many complaints about original Medicare, but approvals and claim denials are much more limited.

Make an informed choice about your healthcare by researching original Medicare and Medicare Advantage. 

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Seniors Beware – Medicare Advantage Plans – Part 1

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Seniors who sign up for a Medicare Advantage plan may find themselves in a world of trouble – the complete opposite of what they expected.

Once you turn 65, you are eligible to sign up for health coverage under Medicare. You can choose traditional Medicare (Parts A, B, and D) or Medicare Advantage (Part C).

Traditional Medicare is administered by the federal government while Medicare Advantage allows insurance companies to manage their policies. The insurance companies spend enormous amounts on marketing Medicare Advantage plans. Ad campaigns focus on how your out-of-pocket spending will be much smaller with an Advantage plan than with original Medicare. Last year, the Center for Medicare and Medicaid Services (CMS – the government agency that administers Medicare and Medicaid) found the television advertising for Medicare Advantage to be misleading and confusing. This year, CMS imposed severe restrictions on how Medicare Advantage plans are marketed.

The better choice is to go with traditional Medicare and purchase a Medigap policy. Here’s why.

With traditional Medicare, you can see any doctor who accepts Medicare, but Medicare Advantage plans limit your healthcare providers to a specific network of hospitals, doctors, and pharmacies. Go out of network, and your costs could skyrocket.

Provider networks for Advantage plans can change from one year to the next. So just when you’ve finally found a doctor you like one year, they can be out of network the following year.

Other benefits heavily marketed to seniors include supplemental benefits, like dental coverage, fitness club benefits, and meal delivery services. But to qualify for some benefits, you need a documented medical condition justifying your ability to receive them. If you have diabetes, for instance, you may qualify for meal delivery services. But if you don’t, you’re paying for something you can’t use.

Most Medicare Advantage programs require prior authorizations for many services. Medicare doesn’t have this requirement. You are paying more for an additional level of stress, which could lead to delayed essential treatment or diagnosis because of this extra step.

What if your local hospital system doesn’t accept your Advantage plan? Many hospital systems are dumping Medicaid Advantage because of high prior authorization denial rates and slow insurer payments. Last year, Mayo Clinic dropped Advantage plans in certain states, and Scripps recently notified patients it’s terminating many Medicare Advantage contracts. The Hospital for Special Surgery and Memorial Sloan Kettering do not participate in Medicare Advantage.

Do your research before you make this critical decision. It could affect not only your wallet but your health.

Reference: The Motley Fool “4 Pitfalls You Might Encounter With a Medicare Advantage Plan”

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Stephen J. Silverberg Speaking at Nassau County Bar Association on November 17th.

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Seniors aren’t the only ones who find Medicare options confusing. On Friday, November 17, Stephen J. Silverberg will present “Medicare Supplement vs. Medicare Advantage,” a program examining the different programs to help attorneys better assist their eligible senior clients.

The program, a joint meeting of the Senior Attorney and Elder Law, Social Services, and Health Advocacy Committees, will take place at the Founders Room at the Nassau County Bar Association, starting with networking at 12:30 – 1:00 pm and Mr. Silverberg’s presentation from 1:00 to 2:00 pm. The Nassau County Bar Association is located at 15 West Street, Mineola.

“In our Elder Law practice, we always ask clients to bring their Medicare information with them to the office, especially during Open Enrollment season,” said Mr. Silverberg. “Our reviews almost always find something that’s either outright wrong or that can be better. I’m hoping my colleagues at the Bar Association will be able to use the information from the presentation to help their clients.”

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Veterans Day 2023

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Today we honor the veterans who have kept our country and our democracy safe with respect, honor, and gratitude. We encourage clients, friends, and colleagues to consider donating to a Veterans organization, as so many of the nearly 100,000 veterans living on Long Island struggle to meet basic needs.

Please join us in supporting these organizations so they can do their important work of helping our veterans:

www.generalneeds.org

https://www.unitedwayli.org/mission-united

Veteran Resources:

Nassau County’s Veterans Services Agency  

VFW – Albertson, NY

American Legion – Williston Park

To all Veterans, we thank you for your service to our country.

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Are You One Medical Crisis Away from Losing Control of Your Life?

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If nothing else has you calling our office to ensure your Power of Attorney and Power of Attorney for Healthcare documents are in order, this recent article from The Washington Post will do it.

It is the story of an 80-year-old retired pilot driving his Ford Mustang convertible into a gas station. Someone thought he looked very distressed and called 911. He was placed in the responding ambulance and taken to the hospital, where doctors said he had suffered a stroke.

Most people do not realize the appointment of a guardian is a request to strip the incapacitated individual of their civil rights to manage their affairs. The United States Constitution requires a full court proceeding is necessary as Section 1 of the 14th Amendment to the Constitution provides in part:

No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Because he lived alone and there was no evidence of family, when he didn’t improve, hospital officials went to court and told the judge he needed a guardian. The judge agreed, and the formerly independent man lost his civil rights and many freedoms, including the right to vote, how to spend his money, and where to live.

More than a million Americans are in guardianship, many of whom are elderly. Despite many horror stories, there seems to be no end to the abuse. Excessive billing, missing funds, and disposition of personal possessions occur with no penalty.

As America continues to age, there’s a little more focus on this arrangement, especially in Florida, where so many seniors go to retire. Florida has 2 million residents aged 75 or older – more than the population of 14 other states. They move to Florida from different parts of the country, away from families, and when they show up in emergency rooms, they are vulnerable.

What happened to the pilot? His family in Pennsylvania began searching for him. After his stroke, he couldn’t tell anyone to call his family, and it’s not clear how hard the hospital tried to reach any relatives. He lived alone, had never married, or had children, but he had a niece who he had regularly visited with other family members in the Philadelphia region.  

When he was finally ready to be discharged from the hospital, a staff member of the Orlando hospital signed a petition to the court stating the pilot had no one to take care of his finances or medical decisions. He ended up in a nursing home.

The attorney hired by the hospital made a recommendation for a guardian. The attorney for the hospital was the guardian’s attorney. There is no rule in Florida prohibiting an attorney from representing both the hospital and the guardian recommended by the hospital in the same case.

It’s a long, ugly story where no one responded to the family’s search for their uncle, the court delayed responding to the niece’s query about her uncle’s whereabouts, and the real estate agents undersold the home by more than $100,000. The pilot died two days after Florida declined to pursue a criminal investigation despite a preponderance of evidence of fraud, intent to deceive, and elder abuse.

Takeaways for seniors and their children:

Regular check-ins – by phone, online video chats, and in-person visits, are the best way to keep an eye on family members. Even an estranged family member deserves some regular contact – no matter how grouchy they are.

Estate planning documents are necessary. Everyone, especially seniors living alone, should have their estate planning documents prepared long before they expect to need them. We never know when a stroke or heart attack will happen. These are the important documents everyone should have:

  • Durable Financial Power of Attorney – you appoint a person you know and trust to manage your money, pay bills, and manage your household.
  • Healthcare Power of Attorney – names a person you know to make medical decisions on your behalf.
  • Last Will and Testament – A Will directs the distributions of your property to your beneficiaries. It also names an executor, who is legally responsible for marshaling your assets and paying any debts, taxes, and expenses. The executor is also responsible for making sure the beneficiaries receive their legacies.
  • Trusts – can hold assets in case of incapacity, when only the named trustee will have access to funds and as much or as little discretion as you wish to use the funds.
  • HIPAA Release – The Release names an individual(s) who can discuss your medical issues with your medical team. Federal law prohibits medical professionals from discussing and accessing your medical records and history without the Release.
  • DNR – Do Not Resuscitate – declares your wish not to have CPR performed in the event of a heart attack.
  • MOLST (Medical Orders for Life-Sustaining Treatment) – a medical order form signed by a doctor or nurse practitioner to tell others the patient’s wishes for life-sustaining treatment. It is the only document used to document DNR and Do Not Intubate (DNI) orders in a non-hospital setting. Most states allow MOLSTs, but the form may vary from state to state.
  • Living Will – A Living Will is a document expressing your wishes if you cannot communicate your wishes yourself. In an end-of-life situation, i.e., if you are in a persistent vegetative state or have a terminal illness, the Living Will expresses your wishes regarding everything from painkillers, artificial nutrition and hydration, dialysis, organ donation, and life-prolonging treatments.

If you don’t have these documents in order, call our office to get things started to protect yourself and your family.

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Reference: The Washington Post (November 4, 2023) “The retired pilot went into the hospital. Then his life went into a tailspin.”