Posts Tagged ‘Older Americans Act’

Legislative Initiatives Affecting Elderly Clients


Congress, led by the Republican majority in both houses, continues to debate and promote “reform” of the Medicare and Medicaid programs. Simultaneously, discussion about the future of the Older Americans Act, the Nursing Home Reform Act and the Legal Services Corporation rages in Congress and between legislators, Administration figures and a concerned public.

Almost lost in the furor is the fact that other issues of concern to elderly citizens are being actively discussed in Congress at the same time. Two areas of current debate: the rights of grandparents in foster care placements and the estate and gift tax structure.

Foster Care Placement

The Kinship Care Act of 1995 would require states to involve adult relatives in placement decisions for dependent children. It would make relatives (including grandparents) the “preferred placement option” for parentless children, and would ease regulations governing financial assistance to relatives who act as foster parents.

If passed, the Kinship Care Act would encourage states to develop plans for dealing with the needs of families headed by grandparents. It would provide no new services, and would have no budget impact.

The Act has been introduced by both Democratic and Republican Representatives, but is unlikely to be voted on before next year.

Estate and Gift Tax

Under current rates, estate are due only on estates larger than $600,000. While that number is large, and most estates escape taxation, the threshold has not changed since 1987, despite steady (though gradual) decreases in the value of money.

House Republicans have revised the exemption figure. Under their proposal, the exemption would increase to $700,000 in 1996, then continue to increase as follows:



1999 and beyond–$750,000 adjusted annually for inflation.

The Senate has adopted similar, though slightly less generous, provisions. Since these changes are part of the negotiation over balancing the budget, they are likely to be adopted in some form by Congress’ December 15 deadline.

Long Term Care Insurance

Meanwhile, one jurisdiction is taking a leading position encouraging the use of long-term care insurance. While Congress debates mechanisms to increase the number of insured patients in nursing homes, New York State has enacted a tax deduction for the payments on insurance premiums. Policies which meet certain minimum criteria (including three years of coverage, home care benefits and adequate coverage amounts) will entitle the purchase to deduct a portion of the premium from income for state tax purposes.

Those deductions are keyed to the taxpayer’s age, and start at $750/year for 55-year-olds and increase to $2500/year for those over age 70. One problem: most of the policies currently available in New York willnot qualify for the deduction.

Court Voids Joint Tenancy Transfer To Effect Will


Lloyd Hines, a New York farmer, had no children. His Will left the family farmhouse (where he had lived with his brother for many years) to his niece Sandra Johnson. The rest of his estate he left to his nephew Arne Lih.

In 1991, Mr. Hines became concerned about Medicaid eligibility for possible nursing home care. Someone apparently told him that he should place someone else’s name on his residence to prevent it being taken by the State after his death, and so he asked his attorney to place the farmhouse in joint tenancy with his nephew, Arne Lih. At the time, he also made it clear to his attorney that he did not wish to change his Will.

Mr. Hines apparently did not understand that the joint tenancy meant the farmhouse would pass to Mr. Lih despite his Will, and Mr. Hines’ attorney did not explain this result to him. When Mr. Hines died two months later his niece sued to invalidate the transfer.

The New York court found that Mr. Lih had impliedly promised, while assisting Mr. Hines with his planning, that he would honor the provisions of Mr. Hines’ Will. Although there was no explicit promise to do so, the fact that Mr. Lih was actively assisting Mr. Hines with his affairs and arrangements created a “confidential relationship” which permitted the court to invalidate the joint tenancy.

The actual mechanism by which the deed was invalidated in this case was what is known as a “constructive trust.” Essentially, the court ruled that Mr. Lih was in fact a trustee over the property, which he held for the benefit of Ms. Johnson, and he was ordered to transfer the property to her.Johnson v. Lih, N.Y. Sup. Ct. App. Div., June 29, 1995.

Arizona law contains similar provisions. On the same facts, the result should be expected to be the same.

Congressional Reform Proposals Advance

As Congress debates how to balance the budget, adopt the “Contract with America” and reform welfare, various legislative proposals dealing with Medicare, Medicaid, the Older Americans Act and related issues have steadily advanced through the process. For more information about the specific proposals, see Elder Law Issues, Vol. 3, Issue 16.

Public opinion polling consistently shows that the American public disapproves of efforts to drastically limit Medicaid benefits or to dramatically reshape Medicare. Less well known to the public is the effort to repeal the 1987 Nursing Home Reform Act, a principal source of protection for the quality of nursing home care. Repeal of that Act (ironically, in the very year that regulations were finally made effective) has become a part of both the Senate and House Republican proposals.

The National Citizen’s Coalition for Nursing Home Reform has now published an analysis of the 1987 law, the changes in nursing home care attributable to that Act, the resultant savings in medical costs, and the likely effect of repeal.

Congressional Activity Steps Up As Senate Debates Cuts


The new Republican majority in Congress has consistently worked toward balancing the federal budget and returning governmental control to a more local level. Shortly after taking charge, the new majority was also presented with projections of shortfalls in Medicare and Medicaid.

Since Medicare provides the vast majority of medical care for elderly citizens and Medicaid pays for about half of all nursing home costs nationally, any proposals for change in those two programs would necessarily have a disproportionate impact on the elderly and disabled. Recent discussions in the House and in several key Senate committees show just how dramatic that impact is likely to be.

Earlier this year, the House of Representatives and the Senate agreed to a budget for fiscal year 1996 which included a $270 billion cut in Medicare, $182 billion cut in Medicaid, elimination of many federal programs, reductions in other social programs, and a tax cut of $245 billion. The expressed goal is to balance the budget in seven years.

As the House and Senate begin to work out minor differences in their respective proposals, several common themes have emerged. It is now almost certain that the Republican plan will contain the following elements:

  • Elimination of Medicaid by converting it to a program consisting of federal block grants to the states.
  • Elimination of the Nursing Home Reform Act of 1987.
  • Major modifications to the funding and reimbursement elements of Medicare.
  • Dramatic funding cuts and restrictions on the Legal Services Corporation.
  • Drastic reductions in funding under the Older Americans Act.

Medicaid Block Grants

The largest impact might well be felt in connection with the conversion of the federal Medicaid program into a block grant to the states. Under the House proposal, for example, Arizona’s anticipated increases in Medicare funding would be reduced by a total of $711 million less over the next seven years (the 1996 payment would actually increase by $110 million). The Senate version would reduce Arizona’s anticipated Medicaid subsidy by over $1.1 billion over the same seven years, including a $141 million reduction in 1996.

At the same time that federal subsidies are drastically reduced, federal mandates on service would also be cut. Although there are differences between the House and Senate versions, both would eliminate most eligibility standards, allowing states to set their own rules for participation, copayments and deductibles. While childhood immunizations must be covered in both versions, the Senate does not expressly require nursing home coverage (though it does require coverage for elderly and disabled individuals earning less than $1142/month.

Most insidiously of all, however, the House version eliminates any requirement of rules governing spousal impoverishment. States would be free to return to the pre-1987 rules, under which an nursing home patient would receive assistance only if his spouse had spent down to $3,000 in countable assets. Even the current exemption for the patient’s home could be limited, and liens could be required at the state’s option.

Repeal of Nursing Home Standards

The Nursing Home Reform Act of 1987 set national standards of care for the industry. Among the most important consequences of the NHRA has been the dramatic reduction in use of restraints. In fact, recent studies suggest that the implementation of NHRA standards has reduced hospitalization among nursing home residents by as much as 25%.

Both the House and Senate would repeal the Nursing Home Reform Act. This would leave the adoption and enforcement of regulations to the same state governments whose inaction and failure generated bipartisan federal action in the first place.

Medicare Financing

Both the House and Senate have acted to increase premiums for all recipients. Next year, for example, premiums would be expected to rise from $46.10 per month for Medicare Part B to $54 (the premium had been scheduled to drop slightly next year). For the first time Medicare would be partially means-tested, with high income individuals (over $75,000) and couples (over $125,000) paying higher premiums. The Senate would also increase the age for Medicare coverage to 67, to match the scheduled increase in Social Security eligibility.

Originally, a significant portion of the savings was scheduled to come from reductions in payments to doctors. Facing possible American Medical Association opposition to the proposals, House Speaker Newt Gingrich last week agreed to as-yet unspecified limitations on those reductions. News reports indicate that the AMA has voted to approve the changes, after having been promised another $300 million in fees.

Legal Services Cutbacks

The national Legal Services Corporation (“Legal Aid” to most) has been the target of many previous budget cutting cycles. This time, the current budget of $415 million is slated to be cut by between 18% (Senate version) and 33% (House version). In addition, Legal Services programs will be prohibited from various activities seen as threatening the pace of welfare or regulatory reform. In the Senate version, for example, LSC lawyers would be prohibited from filing class actions.

Among the specific proposals being debated regarding Legal Services, training and education programs now provided by the National Senior Citizen’s Law Center would be eliminated. LSC lawyers would be specifically prohibited from filing any action challenging the legality of welfare reform measures or from handling fee generating cases in Medicaid, Medicare or similar litigation, even though private attorneys have not been interested in such cases.

Long Term Care Ombudsman

Since Richard Nixon’s administration, in 1972, the Long Term Care Ombudsman program has been an integral part of funding under the Older Americans Act. The Ombudsman program has been a mainstay of assistance and support for institutionalized patients and their families and advocates. Anyone working in the field for the past 25 years would be able to recall nursing home conditions and the quality of long term care prior to the activist work of local Ombudsmen.

The House Appropriations Bill would zero out funding for the Long Term Care Ombudsman, as well as elder abuse prevention. These actions would save $4.4 million and $4.7 million, respectively (remember that the Doctors’ lobby asked for and was given approximately $300 million in restored funding). The Senate would continue these programs, plus $1.3 million for legal hotline programs like the one administered by Southern Arizona Legal Aid.

The House bill also would reduce funding for the Older Americans Act by 13%. Services provided under the OAA include much of the funding for Area Agencies on Aging (such as the Pima Council on Aging in the Tucson area).

Congressional Activity Steps Up As Senate Debates Cuts

White House Conference on Aging Results

JUNE 5, 1995 VOLUME 2, NUMBER 48

The Fourth White House Conference on Aging met in Washington, D.C., the first week in May. After three intense days of discussion and speeches, 2225 delegates voted on over 100 resolutions. The five top priorities of the delegates were:

1. Keeping Social Security sound for now and for the future

2. Preserving the integrity of the Older Americans Act

3. Preserving the nature of Medicaid

4. Reauthorization of the Older Americans Act

5. Increasing funding for Alzheimer research

Past White House Conferences on Aging (held in 1961, 1971 and 1981) are generally credited with providing the impetus for major new programs like Medicare, the Older Americans Act and Medicaid. This session was notable for a very different focus: how to prevent wholesale cuts in existing government programs.

Even as WHCoA delegates met and discussed the need for continued viability of Social Security, Medicare and Medicaid, Congress was beginning early discussion of major cuts in the Medicare budget. One number frequently heard as a target for Medicare cuts (actually, reductions in projected growth rates) was $250 million. The coincidence that this was almost the exact cost of a tax cut also being promoted by Congressional Republicans made for some fireworks at the Conference.

President Clinton and Vice President Gore (as well as other Administration figures and leading Democrats), told cheering delegates that Republicans sought to take money from Medicare to finance tax cuts for the wealthy. Unfortunately, no major Republic figures appeared to explain their position or respond to the Administration’s broadsides.

But What Does it Mean?

For better or worse, the Fourth WHCoA was not a bipartisan, problem-solving endeavor. A truly representative group of seniors and advocates made an impassioned pitch for retention of existing programs, but no one provided alternative approaches or thoughtful analysis of the real problems facing seniors, the government and the country. The only clear message of the Fourth WHCoA was “save our programs–look somewhere else for cuts.”

Questions and Answers

Q: “Is it necessary to have two witnesses sign health care powers of attorney and Living Wills?”

A: No. A single witness (who may, but need not, be a notary) is sufficient. If there is only one witness, it may not be an heir or devisee (someone who will receive money upon the death of the signer). No similar restriction exists if there are two witnesses.

White House Conference on Aging (Conclusion)

APRIL 17, 1995 VOLUME 2, NUMBER 41

Previous Elder Law Issues have described proposals considered by the Arizona delegation to the WHCoA. This (final) installment of the series will focus on the two remaining topic areas under discussion.

“Special” Populations

Among the concerns of Arizona delegates to the WHCoA are the specific problems of minority, rural, ethnic and disabled elderly. Some of the proposals discussed by the delegation relate to those special populations.

Adapt program eligibility standards to consider chronic illness, social and geographic isolation and lack of preventive health practices (all more frequent among minority and rural populations).

Continue the SSI program, and increase benefits and eligibility to federal poverty levels.

Exclude SSI from block grant proposals.

Target special populations in program outreach efforts.

Provide transportation for program beneficiaries, particularly in rural areas.

Encourage (or require) medical schools to focus health care delivery on special populations.

Require multilingual and multicultural staff in programs serving the elderly.

Permit program flexibility to reach and provide services to minority, rural and disabled elderly.

Involve volunteers in efforts to overcome language and ethnic barriers.

Recruit and promote minority group members to policy making levels in agencies and committees.

Increase training for service providers.

Elder Rights

Suggestions for enhancement of personal integrity and dignity:

Continue funding and enforcement under the Older Americans Act.

Focus more resources on providing affordable, secure and safe housing for the elderly.

Require minimum standards for guardianship, conservatorship and other legal proceedings.

Expand the Ombudsman program under the Older Americans Act.

Enhance programs providing for intergenerational contacts.

Establish multi-generational housing, utilizing elderly residents for teaching, child care and similar functions.

Improve access to transportation for seniors.

On to Washington

The WHCoA begins in two weeks. If you feel strongly about any of the suggestions described in the last three Elder Law Issues, or if you have suggestions of your own, feel free to contact any of the delegates to the Conference; you can reach delegate Robert Fleming at the address in our masthead or at the FAX number below.

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