Republican lawmakers, who so far have been unable to win Senate approval of either full estate tax repeal or a significant reduction in the tax that wealthy heirs pay, are now considering another tactic: slipping estate tax "reform" into a pension bill now in a House-Senate conference committee.
The pension legislation, H.R. 2830, which seeks to put the nation's defined benefit pension plans on a sounder footing, is being finalized by a conference committee reconciling different House and Senate versions.
The "primary advocate" for attaching estate tax reform to the pension bill, according to the National Underwriter, an insurance industry publication, is Sen. Trent Lott (R-MS). Lott said he doubts that a deal on reducing the estate tax can emerge in the Senate, and so is viewing the pension bill conference report as an alternative vehicle.
“Conference reports are not amendable, and this would be a circuitous way to move estate tax reform forward without providing opportunity for consideration of alternatives on the Senate floor,” said David Stertzer, chief executive of the Association for Advanced Life Underwriting.
But such a last-minute inclusion of estate tax provisions could doom the contentious pension bill, which has taken months to hammer out. "Adding additional controversial issues to the package could kill the chances for enactment this year,” said Kenneth Cohen, senior vice president and deputy general counsel of the Massachusetts Mutual Life Insurance Company.
The latest Republican compromise proposal on the estate tax would exempt any individual estate under $5 million from the tax ($10 million for couples) and would lower the tax rate to a sliding scale starting at 15 percent and rising to 30 percent for estates over $30 million. These changes would cost the U.S. Treasury about 80 percent as much as full repeal, or about $800 billion over the first ten years in which its budgetary effects would be fully felt, according to the Center on Budget and Policy Priorities.
Source: elderlawanswers.com
Thursday, June 22, 2006
Thursday, June 8, 2006
Senate Gearing Up for Estate Tax Repeal Vote
Senate Republicans are preparing to revive the debate over permanent repeal of the estate tax on June 6, but the real action will be on the Democratic side.
Republicans concede they lack the votes for full repeal, but they are hoping they can work out a compromise that would persuade enough Democrats to exempt the families of many wealthy individuals from paying federal estate tax. Sens. John Kyl (R-AZ) and Max Baucus (D-MT), who is the senior Democrat on the Senate Finance Committee, are reportedly negotiating.
Kyl is proposing increasing the estate tax exemption to $5 million and reducing the top estate tax rate to 15 percent from its current 46 percent.
Currently, only estates worth more than $2 million are taxed by the federal government. The threshold is scheduled to rise to $3.5 million in 2009. For the year 2010, estates will be entirely free from federal taxation. However, the law that includes this provision expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax exemption will then revert to $1 million.
Baucus is under pressure from fellow Democrats who say that even a compromise would deplete federal revenue by hundreds of billions of dollars and make it more difficult to shore up social programs and balance the budget. According to the Center on Budget and Policy Priorities, reducing the top rate to 15 percent would lose nearly as much revenue as full repeal, which will cost the U.S. Treasury an estimated $1 trillion. The Republicans need Baucus to deliver about a half-dozen Democrats to reach the 60 votes required to overcome any filibuster.
Almost all Democrats support raising the exemption threshold for eligibility to $3.5 million for an individual and $7 million for a couple.
Meanwhile, House Democrats have released a report detailing the effect that a repeal of the tax would have on the estates of oil company executives and members of the Bush cabinet. According to the report, estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million, and would save the estate of Defense Secretary Donald Rumsfeld between $32 million and $101 million. The family of retired ExxonMobil chief Lee R. Raymond would receive a $164 million windfall.
Republicans concede they lack the votes for full repeal, but they are hoping they can work out a compromise that would persuade enough Democrats to exempt the families of many wealthy individuals from paying federal estate tax. Sens. John Kyl (R-AZ) and Max Baucus (D-MT), who is the senior Democrat on the Senate Finance Committee, are reportedly negotiating.
Kyl is proposing increasing the estate tax exemption to $5 million and reducing the top estate tax rate to 15 percent from its current 46 percent.
Currently, only estates worth more than $2 million are taxed by the federal government. The threshold is scheduled to rise to $3.5 million in 2009. For the year 2010, estates will be entirely free from federal taxation. However, the law that includes this provision expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax exemption will then revert to $1 million.
Baucus is under pressure from fellow Democrats who say that even a compromise would deplete federal revenue by hundreds of billions of dollars and make it more difficult to shore up social programs and balance the budget. According to the Center on Budget and Policy Priorities, reducing the top rate to 15 percent would lose nearly as much revenue as full repeal, which will cost the U.S. Treasury an estimated $1 trillion. The Republicans need Baucus to deliver about a half-dozen Democrats to reach the 60 votes required to overcome any filibuster.
Almost all Democrats support raising the exemption threshold for eligibility to $3.5 million for an individual and $7 million for a couple.
Meanwhile, House Democrats have released a report detailing the effect that a repeal of the tax would have on the estates of oil company executives and members of the Bush cabinet. According to the report, estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million, and would save the estate of Defense Secretary Donald Rumsfeld between $32 million and $101 million. The family of retired ExxonMobil chief Lee R. Raymond would receive a $164 million windfall.
Wednesday, May 17, 2006
Report: Strict asset transfer rules are not an answer to controlling Medicaid spending
A Kaiser Commission on Medicaid and the Uninsured has issued a report, Asset Transfer and Nursing Home Use: Empirical Evidence and Policy Significance, which concludes that, “Eliminating asset transfers for Medicaid nursing home coverage will not substantially alter the private market for long-term care and is not the answer for controlling growth in Medicaid spending.”
The University of Michigan’s Health and Retirement Study produced data for the study to determine the extent to which individuals needing nursing home care make asset transfers. Four categories of individuals were screened: (1)those eligible for Medicaid in the community prior to entering a nursing home; (2)those who became Medicaid eligible within a year of admission; (3)those who became eligible more than a year after admission; and (4)those who never received Medicaid coverage and resided in a nursing home for more than a year.
Forty-three percent of the approximately 2.6 million individuals entering nursing homes between 1998 and 2002 received Medicaid assistance at some point during their stay. Nearly half of these were eligible prior to entering the facility, and only 5 percent of this group transferred more than $50,000 in cash in the six years preceding their admission to the facility. When including transfers involving deeds for this group, only 20 percent made gifts of more than $50,000. For the rest of the Medicaid population, the vast majority made transfers of less than $50,000 within the same time period (including transfers involving deeds).
By contrast, individuals who never received Medicaid assistance for their nursing home care made transfers with greater frequency and higher value. Half of these individuals made gifts in the six years leading up to their institutionalization, and two-thirds of the transfers were cash transfers exceeding $5,000.
All told, the report notes that $6.6 billion in liquid assets were transferred by the Medicaid population within the six years leading up to their qualification for Medicaid. Medicaid spent $100 billion in fiscal year 2004, so Medicaid would recover only six percent of its costs if it blocked all of these transfers. However, the report reviewed activity dating back six years (one year longer than the five-year- look-back period of federal law), so some of these transfers could not be blocked by Medicaid. Also, potentially inflating the amount that Medicaid could save is the evidence that individuals who never attained Medicaid eligibility after lengthy stays in institutions made the most frequent and highest value transfers. This evidence suggests that transfers made prior to entry are frequently not made for the purpose of attaining Medicaid eligibility. Federal law does not allow a penalty for a transfer not made for the purpose of establishing Medicaid eligibility, so other transfers netted in the analysis could not be restricted by Medicaid.
Source: Washington Weekly, Volume XXXII, Issue No. 16, April 28, 2006.
The University of Michigan’s Health and Retirement Study produced data for the study to determine the extent to which individuals needing nursing home care make asset transfers. Four categories of individuals were screened: (1)those eligible for Medicaid in the community prior to entering a nursing home; (2)those who became Medicaid eligible within a year of admission; (3)those who became eligible more than a year after admission; and (4)those who never received Medicaid coverage and resided in a nursing home for more than a year.
Forty-three percent of the approximately 2.6 million individuals entering nursing homes between 1998 and 2002 received Medicaid assistance at some point during their stay. Nearly half of these were eligible prior to entering the facility, and only 5 percent of this group transferred more than $50,000 in cash in the six years preceding their admission to the facility. When including transfers involving deeds for this group, only 20 percent made gifts of more than $50,000. For the rest of the Medicaid population, the vast majority made transfers of less than $50,000 within the same time period (including transfers involving deeds).
By contrast, individuals who never received Medicaid assistance for their nursing home care made transfers with greater frequency and higher value. Half of these individuals made gifts in the six years leading up to their institutionalization, and two-thirds of the transfers were cash transfers exceeding $5,000.
All told, the report notes that $6.6 billion in liquid assets were transferred by the Medicaid population within the six years leading up to their qualification for Medicaid. Medicaid spent $100 billion in fiscal year 2004, so Medicaid would recover only six percent of its costs if it blocked all of these transfers. However, the report reviewed activity dating back six years (one year longer than the five-year- look-back period of federal law), so some of these transfers could not be blocked by Medicaid. Also, potentially inflating the amount that Medicaid could save is the evidence that individuals who never attained Medicaid eligibility after lengthy stays in institutions made the most frequent and highest value transfers. This evidence suggests that transfers made prior to entry are frequently not made for the purpose of attaining Medicaid eligibility. Federal law does not allow a penalty for a transfer not made for the purpose of establishing Medicaid eligibility, so other transfers netted in the analysis could not be restricted by Medicaid.
Source: Washington Weekly, Volume XXXII, Issue No. 16, April 28, 2006.
Thursday, May 11, 2006
Caregiving: A growing field
Usually one family member is the primary caregiver. Women make up 75% and are either a spouse or an adult daughter. Nearly two-thirds of caregivers are working full or part-time.
Spouses, on average, provide 40-60 hours of care per week and adult children provide 15-30 hours of care per week.
The Economic Value of the care provided by families is $196 billion nationwide (1997) - $13.5 billion in New York.
Caregiving costs U.S. businesses an estimated $11.4 billion per year in lost productivity by contributing to the following: replacing employees, absenteeism, partial absenteeism, workday interruption, eldercare crisis, supervisor’s time.
Caregivers adjust their work schedules due to caregiving responsibilities by incorporating the following: making phone calls at work (84%), arriving late/leaving early (69%), taking time off during the day (67%), making up work on weekends/evenings (29%), using sick days (64%), decreased hours (33%), taking a leave of absence (22%).
In 2000, New York had 3.2 million people over the age of 60. By 2010, New York will have 5.5 million people over the age of 60. Also in need of caregiver assistance are families with a disabled child or an older person with disabilities under the age of 60.
The fastest growing segment of the aging population in New York are those 75+ and those 85+. These individuals will need more supportive services, including caregiver supports if they are to remain independent.
The average monthly out-of-pocket expense for a family caregiver is $171 (food, transportation and medication expenses account for top 3 expenses). Total un-reimbursed monthly expenses for family caregivers is $1.5 billion.
Most caregivers start out providing a small amount of care, gradually taking on more responsibility. Caregivers also underestimate the number of hours that would be required and the duration of caregiving responsibilities. The average length of care provided is about 8 years.
Caregiving responsibilities take a toll on the health of the caregivers, and on employee productivity due to increases in absenteeism, early retirement and turnover. Half of surveyed caregivers made additional visits to their health care practitioners. Half reported more than 8 additional visits per year.
Source: Caregiver Fact Sheet
Spouses, on average, provide 40-60 hours of care per week and adult children provide 15-30 hours of care per week.
The Economic Value of the care provided by families is $196 billion nationwide (1997) - $13.5 billion in New York.
Caregiving costs U.S. businesses an estimated $11.4 billion per year in lost productivity by contributing to the following: replacing employees, absenteeism, partial absenteeism, workday interruption, eldercare crisis, supervisor’s time.
Caregivers adjust their work schedules due to caregiving responsibilities by incorporating the following: making phone calls at work (84%), arriving late/leaving early (69%), taking time off during the day (67%), making up work on weekends/evenings (29%), using sick days (64%), decreased hours (33%), taking a leave of absence (22%).
In 2000, New York had 3.2 million people over the age of 60. By 2010, New York will have 5.5 million people over the age of 60. Also in need of caregiver assistance are families with a disabled child or an older person with disabilities under the age of 60.
The fastest growing segment of the aging population in New York are those 75+ and those 85+. These individuals will need more supportive services, including caregiver supports if they are to remain independent.
The average monthly out-of-pocket expense for a family caregiver is $171 (food, transportation and medication expenses account for top 3 expenses). Total un-reimbursed monthly expenses for family caregivers is $1.5 billion.
Most caregivers start out providing a small amount of care, gradually taking on more responsibility. Caregivers also underestimate the number of hours that would be required and the duration of caregiving responsibilities. The average length of care provided is about 8 years.
Caregiving responsibilities take a toll on the health of the caregivers, and on employee productivity due to increases in absenteeism, early retirement and turnover. Half of surveyed caregivers made additional visits to their health care practitioners. Half reported more than 8 additional visits per year.
Source: Caregiver Fact Sheet
Thursday, April 6, 2006
Experts Disagree on Retiree Health-Cost Estimate
Fidelity Investments says that a 65-year-old couple retiring now without employer-provided health benefits will need $200,000 for out-of-pocket healthcare expenses during retirement, according to data it released this past week. Yet many financial planners and other observers think that is way too little.
“People don’t have a clue as to what they’ll need in the future,” says Ron Roge, a wealth manager in Bohemia, N.Y. “The numbers are frightening.” He has increased the life-span expectancy of his clients to 100, for retirement-planning purposes.
The Employee Benefit Research Institute (EBRI), a research organization in Washington, estimates that people could need twice as much as Fidelity predicted because it based its numbers on life expectancies of 82 years for men and 85 for women.
Financial experts are concerned not only because longer life expectancies could make healthcare costs even more burdensome for many Americans, but also because Medicare premiums are expected to rise and more workers will probably lose their company benefits.
The EBRI estimates that a couple without employer-provided retirement healthcare coverage would need $216,000 if they live to 80. That number climbs to $444,000 if they live to 90 and $778,000 if they survive to 100. Most people underestimate how long they will live, said EBRI President.
A 65-year-old man today has a 50% chance of being alive at age 85 and a 25% chance of making it to 92, according to data from the American Society of Actuaries. A 65-year-old woman has a 50% chance of being alive at 88 and a 25% chance of living to 94.
The numbers are even higher for couples. If both are 65, they have a 50% chance of one living to 92 and a 25% chance of one surviving to 97.
The Fidelity prediction, which is updated annually by the financial-services firm, includes expenses associated with Medicare premiums and co-pays for exams and prescription drugs. It doesn’t include the cost of over-the-counter medicines, most dental care or long-term care.
It also doesn’t take into account that the premiums for Medicare are expected to rise, especially for high earners. Medicare beneficiaries with an annual income under $80,000 and $100,000 will pay 35%, and those with at least $200,000 income will be responsible for 80% of premiums.
Source: The Wall Street Journal, Jilian Mincer, April 2006.
“People don’t have a clue as to what they’ll need in the future,” says Ron Roge, a wealth manager in Bohemia, N.Y. “The numbers are frightening.” He has increased the life-span expectancy of his clients to 100, for retirement-planning purposes.
The Employee Benefit Research Institute (EBRI), a research organization in Washington, estimates that people could need twice as much as Fidelity predicted because it based its numbers on life expectancies of 82 years for men and 85 for women.
Financial experts are concerned not only because longer life expectancies could make healthcare costs even more burdensome for many Americans, but also because Medicare premiums are expected to rise and more workers will probably lose their company benefits.
The EBRI estimates that a couple without employer-provided retirement healthcare coverage would need $216,000 if they live to 80. That number climbs to $444,000 if they live to 90 and $778,000 if they survive to 100. Most people underestimate how long they will live, said EBRI President.
A 65-year-old man today has a 50% chance of being alive at age 85 and a 25% chance of making it to 92, according to data from the American Society of Actuaries. A 65-year-old woman has a 50% chance of being alive at 88 and a 25% chance of living to 94.
The numbers are even higher for couples. If both are 65, they have a 50% chance of one living to 92 and a 25% chance of one surviving to 97.
The Fidelity prediction, which is updated annually by the financial-services firm, includes expenses associated with Medicare premiums and co-pays for exams and prescription drugs. It doesn’t include the cost of over-the-counter medicines, most dental care or long-term care.
It also doesn’t take into account that the premiums for Medicare are expected to rise, especially for high earners. Medicare beneficiaries with an annual income under $80,000 and $100,000 will pay 35%, and those with at least $200,000 income will be responsible for 80% of premiums.
Source: The Wall Street Journal, Jilian Mincer, April 2006.
Sunday, March 26, 2006
Consumer Group Sues Over 'Law' Changing Medicaid Rules
The consumer watchdog group Public Citizen has filed suit in federal court charging that the Deficit Reduction Act of 2005 (DRA) signed by President Bush on February 8th is invalid because the president signed a version of the bill that was passed by the U.S. Senate but not the U.S. House of Representatives. Meanwhile, House Democratic Leader Nancy Pelosi and Congressman Henry Waxman, senior Democrat on the House Government Reform Committee, have sent a letter to President Bush requesting clarification on his knowledge of what he was signing.
Among various cuts in social programs, the DRA would place severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The measure barely passed both houses of Congress. But the Constitution requires that before a bill can be enacted into law by the president, it must pass both the House and Senate in identical form. Due to a clerk’s substantive change as the legislation passed between houses, the president signed legislation that was passed by the Senate but not the House.
Public Citizen’s lawsuit, filed in the U.S. District Court for the District of Columbia, “simply requests the court to uphold the Constitution,” said Adina Rosenbaum, a Public Citizen attorney. “The entire law is invalid because the law the House passed is different from the law the Senate passed and the president signed.”
The Congress and the president have to be brought to account for their rogue actions in moving to enact this very controversial legislation without complying with the Constitution,” said Joan Claybrook, president of Public Citizen. “This time, they will have to answer for their actions.”
Public Citizen attorneys said the suit has been assigned to U.S. District Court Judge John D. Bates, who was appointed by President Bush in December 2001. The consumer group said it does not expect a full hearing until late spring.
Alabama attorney Jim Zeigler earlier filed suit challenging the DRA’s constitutionality.
“I expect dozens of lawsuits against the DRA, because its constitutional flaw is clear and obvious,” Zeigler said in response to the Public Citizen suit. “Millions of citizens and thousands of businesses are adversely affected by the DRA.”
Zeigler said he expects to soon see senior citizens dependent on oxygen joining the suits as plaintiffs. “They are clearly affected,” he said. “Under the old law, they could receive Medicare oxygen for life. Under the new law, they are literally cut off after 13 months.”
Source: www.elderlawanswers.com
Among various cuts in social programs, the DRA would place severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The measure barely passed both houses of Congress. But the Constitution requires that before a bill can be enacted into law by the president, it must pass both the House and Senate in identical form. Due to a clerk’s substantive change as the legislation passed between houses, the president signed legislation that was passed by the Senate but not the House.
Public Citizen’s lawsuit, filed in the U.S. District Court for the District of Columbia, “simply requests the court to uphold the Constitution,” said Adina Rosenbaum, a Public Citizen attorney. “The entire law is invalid because the law the House passed is different from the law the Senate passed and the president signed.”
The Congress and the president have to be brought to account for their rogue actions in moving to enact this very controversial legislation without complying with the Constitution,” said Joan Claybrook, president of Public Citizen. “This time, they will have to answer for their actions.”
Public Citizen attorneys said the suit has been assigned to U.S. District Court Judge John D. Bates, who was appointed by President Bush in December 2001. The consumer group said it does not expect a full hearing until late spring.
Alabama attorney Jim Zeigler earlier filed suit challenging the DRA’s constitutionality.
“I expect dozens of lawsuits against the DRA, because its constitutional flaw is clear and obvious,” Zeigler said in response to the Public Citizen suit. “Millions of citizens and thousands of businesses are adversely affected by the DRA.”
Zeigler said he expects to soon see senior citizens dependent on oxygen joining the suits as plaintiffs. “They are clearly affected,” he said. “Under the old law, they could receive Medicare oxygen for life. Under the new law, they are literally cut off after 13 months.”
Source: www.elderlawanswers.com
Thursday, March 16, 2006
Deficit Reduction Act Update: Democrats Demand Hearing, Zeigler Fights On
Continuing efforts to achieve a legislative solution to the controversy surrounding enactment of the Deficit Reduction Ace of 2005 (DRA), three Democrats on the House Administration Committee have sent a letter to Committee Vernon Ehlers requesting an oversight hearing on the constitutional and procedural problems with the measure. The letter questions the legitimacy of the bill because on February 8, the President signed a version that was passed by the Senate but was different from one passed by the House. (See past newsletters for details.)
“This incident strikes at the very core of Congress’ law-making powers and the legitimacy of our constitutional system,” according to the March 8 letter.
Democrats in the House of Representatives say the Act is invalid and are calling for a re-vote because, according to the U.S. Constitution, a law must be approved in identical form by both houses of Congress. Republicans are resisting, not wishing to open a fresh debate on the budget measure’s cutbacks on programs for the poor and middle class.
A spokesman for House minority leader Nancy Pelosi (D-CA), reported that the Republican majority is not likely to heed the request for a hearing, “but we want to at least put them on the record and then we may ratchet it up after that – get GAO [the Government Accountability Office] or somebody else to do it as well. There are different strategies.” It was also insinuated that there are other lawsuits being filed in addition to the one lodged by Alabama elder law attorney Jim Zeigler, but no specifics were given.
Meanwhile, Zeigler has announced that he is looking for “a few good plaintiffs” to join him in his suit. Zeigler says the addition of persons affected by specific changes in DRA would help his case in two ways: eliminating the possibility that his own legal standing may be challenged and opening the possibility of injunctive relief.
“An ideal plaintiff would be someone soon to be personally affected by the Feb. 8 changes, “ Zeigler said. “We could then apply for a temporary restraining order or preliminary injunction to enjoin the effective date of the Act pending the outcome of the case.”
“We have just obtained service of process on the local U.S. Attorney and are still awaiting return of service from the U.S. Attorney General,” Zeigler added. “We expect them to take the maximum time to file responsive pleadings.”
Zeigler is not raising funds for the suit on his website www.JimZeigler.com. The Alabama attorney, who was once a member of President Bush’s legal team, now estimates the cost will be $750,000; his earlier estimate of $300,000 did not reflect bond and appeals.
The controversy over the DRA’s constitutionality has caught the notice of Wall Street. The publication TheStreet.com published an article on the dispute’s possible impact on home health care providers.
“This incident strikes at the very core of Congress’ law-making powers and the legitimacy of our constitutional system,” according to the March 8 letter.
Democrats in the House of Representatives say the Act is invalid and are calling for a re-vote because, according to the U.S. Constitution, a law must be approved in identical form by both houses of Congress. Republicans are resisting, not wishing to open a fresh debate on the budget measure’s cutbacks on programs for the poor and middle class.
A spokesman for House minority leader Nancy Pelosi (D-CA), reported that the Republican majority is not likely to heed the request for a hearing, “but we want to at least put them on the record and then we may ratchet it up after that – get GAO [the Government Accountability Office] or somebody else to do it as well. There are different strategies.” It was also insinuated that there are other lawsuits being filed in addition to the one lodged by Alabama elder law attorney Jim Zeigler, but no specifics were given.
Meanwhile, Zeigler has announced that he is looking for “a few good plaintiffs” to join him in his suit. Zeigler says the addition of persons affected by specific changes in DRA would help his case in two ways: eliminating the possibility that his own legal standing may be challenged and opening the possibility of injunctive relief.
“An ideal plaintiff would be someone soon to be personally affected by the Feb. 8 changes, “ Zeigler said. “We could then apply for a temporary restraining order or preliminary injunction to enjoin the effective date of the Act pending the outcome of the case.”
“We have just obtained service of process on the local U.S. Attorney and are still awaiting return of service from the U.S. Attorney General,” Zeigler added. “We expect them to take the maximum time to file responsive pleadings.”
Zeigler is not raising funds for the suit on his website www.JimZeigler.com. The Alabama attorney, who was once a member of President Bush’s legal team, now estimates the cost will be $750,000; his earlier estimate of $300,000 did not reflect bond and appeals.
The controversy over the DRA’s constitutionality has caught the notice of Wall Street. The publication TheStreet.com published an article on the dispute’s possible impact on home health care providers.
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