Shifting Drugs from Medicare Part B to Part D
A few months ago President Trump announced a plan to lower prescription drug costs under Medicare by moving coverage of certain expensive drugs from Medicare Part B to Part D. Part B is the medical benefit that was part of the original Medicare law passed by Congress in 1965. Part D is the drug coverage plan that was added to Medicare in 2003. The President believes costs can be reduced because under Part D the government contracts with private insurance companies to manage benefits and negotiate discounted rates with drug companies. Drugs under Part B are administered by infusions or injections that are either done in doctors’ offices or in hospital outpatient facilities. There is no negotiation of the cost of drugs covered under Part B. The idea is that if the drug costs are reduced thru negotiation under Part D then seniors save money and the government saves money. Everybody wins. There are, however, potential problems. One is that there is generally a higher out of pocket cost for drugs under Part D than there is under Part B. Part B beneficiaries usually are required to pay 20% of the Medicare approved charge but a good Medigap policy
A Pension Hole the Size of Japan’s Economy (Part 2)
In last week’s post I wrote about the growing public pension crisis in our country. A recent Wall Street Journal article highlighted the efforts by different states to try to start solving the problem which will only grow worse in coming years. Some pension recipients have either agreed to cuts to try to avoid deeper reductions forced upon them while other recipients have had their benefits involuntarily reduced. Some states’ efforts have been struck down in the courts so far. The numbers, however, are staggering and more attempts will surely come. So, who will be affected and is there anything you can do now? Most retirees in their 80’s and 90’s are not likely to be affected by any changes. First of all, many of the oldest pension recipients will pass away before changes are implemented. Secondly, lawmakers will try to inflict as little pain as possible on their constituents. The oldest retirees have no ability to make up for the loss of income. Having counted on their pension income for years, it would be impossible for them to replace it. Many would also be facing significant long term care and health care
A Pension Hole the Size of Japan’s Economy
The title of the article in the Wall Street Journal a few weeks ago was intended to turn heads. (See https://www.wsj.com/articles/the-pension-hole-for-u-s-cities-and-states-is-the-size-of-japans-economy-1532972501?mod=hp_lead_pos7) There has been an increasing amount of coverage in the media about the pension crisis in the country, specifically the underfunding of public employee pensions. According to the WSJ article public employee pension plans are underfunded by an estimated $5 trillion, an amount equal to the size of Japan’s economy. We know here in New Jersey we have a growing problem. According to some estimates our government pension system could run out of money in 12 years. The legislature and governor have talked about fixing it but there isn’t any easy solution and so far no real measures have been taken. What will happen if there isn’t enough money to meet all pension obligations? Will pensions be cut? Can they be? In some states that has already happened or is being tried. The city of Central Falls, Rhode Island filed for bankruptcy in 2011. The city’s police and firefighters agreed to pension cuts of 55% because they were fearful that they could lose more benefits if they didn’t. The city is doing somewhat better fiscally now, but the
Resistance to Power of Attorney – Part 3
In this week’s post we continue with the topic of power of attorney and specifically how to handle resistance from banks and financial institutions. Last week I outlined the scenarios in which a bank can refuse to honor a power of attorney. New Jersey law says that a banking institution does not have to accept the agent’s authority to act if it has actual knowledge of or believes in good faith that the POA is not genuine or has been revoked or that the principal is dead or was under a disability when he/she signed the POA. But what does “good faith” really mean? The statute defines good faith to mean when something is done honestly, regardless of whether it is done negligently. So let’s look at the common occurrence that I mentioned in Part 1 (my post on 7/30/18), in which the bank insists that the POA be its own form. Is that acting in good faith? I would submit that it clearly it is not acting in good faith because the bank in this case has found nothing wrong with the POA that was presented to it. It simply would prefer – for its own convenience and
Resistance to Power of Attorney – Part 2
Last week’s post again addressed the use of powers of attorney and specifically the problem of encountering resistance by a financial institution. As I explained, many financial institutions prefer that customers sign their own form of power of attorney and do so in front of one of their employees. This is for their protection but complying with their request isn’t always possible. Many of our elderly clients are unable to travel so cannot make the trip. Sometimes they can no longer even get on the phone. So how does one counter a bank, for example, that says they need Mom to come to the branch to sign a power of attorney because their legal department questions the validity of the one she signed a few years ago. It helps to know a little bit about what the law says about powers of attorney. Firstly, New Jersey law says that a power of attorney must be in writing. It must be signed by the principal and acknowledged before a notary public. There is also a specific section that covers banking transactions. If the power of attorney gives the agent the power to conduct banking transactions and makes reference to that