Elder Law Blog

Tuesday, June 11, 2013

Medicare Coverage and the New Health Care Law

Beware of scams that urge Medicare beneficiaries to purchase a “qualified health plan” (QHP) in the new health insurance marketplace.  Medicare beneficiaries should not purchase a QHP.  Medicare beneficiaries may enroll in Medicare Savings Programs and Medicaid, if eligible, via the online marketplace that opens October 1, 2013.  The following plans, however, will not be available for purchase on the exchange:  Medicare drug plans, Medicare Advantage plans, and Medicare supplement or Medigap plans. For more information on Medicare coverage and the ACA, follow this link to the Center for Medicare Advocacy’s website:


Thursday, May 30, 2013

Medical Loss Ratio Will Apply to Medicare Plans

MLR:  Is a refund due from your Medicare Advantage or Drug plan?

Under Health Reform, Insurance companies must spend a certain percentage of premiums on health care benefits.  Individual and small business plans must spend at least 80% of premiums on benefits and limit administrative expenses to less than 20% of premiums.  This is known as the medical loss ratio (MLR).  Large group plans must spend at least 85% of premiums on benefits.  Under a new rule, Medicare Advantage and Part D Drug plans must also spend 85% of premiums on benefits and limit administrative expenses, including profits, to less than 15%.

If a plan does not meet the MLR, it is required to refund the excess premiums to beneficiaries.  In 2011, the insurance industry refunded $1.1 billion in excess premiums to beneficiaries.  As a result of the MLR requirement, insurance company administrative costs dropped in 39 states, including Texas. 

Although insurance companies must limit their share of profits, they are expected to receive billions of dollars in new business, possibly $230 billion by 2020, which will make the size of the insurance pie substantially larger under Health Reform.

Thursday, June 28, 2012

Health Reform's Individual Mandate Upheld as a Tax

Health Care Reform’s Individual Mandate Upheld as a Tax by Supreme Court

Beginning in 2014, U.S. residents who fail to purchase “minimum essential” health insurance coverage will be subject to a tax penalty under the Affordable Care Act (ACA), unless they are exempt or covered by an employer-sponsored health insurance policy or a public program, such as Medicare, Medicaid, or the VA. 

Since the ACA does not outlaw the failure to maintain minimum coverage, but merely imposes a tax on those who do not buy insurance, the U.S. Supreme Court today upheld the individual mandate as within Congress’s power to “lay and collect taxes…The payment is not so high that there is really no choice but to buy health insurance;…and the payment is collected solely by the IRS through the normal means of taxation,” the Court reasoned.

Tax Penalty

The tax penalty for not having minimum essential coverage will be phased in over three years, beginning in 2014.  The penalty will be the greater of a flat dollar amount or a percentage of the individual’s taxable income above the tax threshold amount.  In 2014, an individual would pay $95 or 1% of income, whichever is greater; in 2015, a flat $325 or 2% of income; in 2016, a flat $695 or 2.5% of income.  For example, if an individual's taxable income is $50,000 and the tax threshold amount is $10,000, the penalty in 2014 would be $400.  Generally, the annual penalty is capped at an amount equal to the national average premium for Bronze coverage in qualified health plans.


Those who fail to comply with the ACA will be required to pay a tax penalty to the IRS, unless they are exempt from the mandate.  Individuals with an income below the tax filing threshold or who cannot afford coverage (cost of purchasing insurance exceeds 8% of income) are exempt from the mandate.  Individuals with a coverage gap of less than three months are also exempt.  Others exemptions are available on the basis of hardship or religious objections, and for Native Americans, incarcerated individuals, and undocumented aliens.


Monday, May 28, 2012

National Plan to Address Alzheimer's Disease Announced

The Obama administration has launched the first national plan to eliminate the burden of Alzheimer’s disease, which afflicts 5.1 million Americans.  The National Plan to Address Alzheimer’s Disease has the ambitious goal of preventing and effectively treating Alzheimer's and related dementias (AD) by 2025.  The five goals of the national plan are:

  1. Prevent and Effectively Treat Alzheimer’s Disease by 2025
  2. Enhance Care Quality and Efficiency
  3. Expand Supports for People with Alzheimer’s Disease and Their Families
  4. Enhance Public Awareness and Engagement
  5. Improve Data to Track Progress

The initiative will provide increased funding of Alzheimer’s research, including the first large-scale clinical trial of an experimental drug to prevent the development of AD in people who are at higher risk for the disease, but do not yet show symptoms.  To read the news release of the U.S. Department of Health and Human Services, click here.

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Attorney Nancy Stone assists clients with Elder Law, Medicaid Planning, and Estate Planning throughout Harris County, TX. I am now based in Sugar Land and serve all of Houston, Harris County, Bellaire, Jersey Village, Cypress, West University, The Heights, Pearland, Alvin, Sugar Land, Missouri City, Kingwood, Humble, The Woodlands, Spring, Tomball, Richmond, Rosenberg Pasadena, Baytown, La Porte, Clear Lake, Texas City, Katy, Friendswood, Stafford, as well as Fort Bend County, Brazoria County, Montgomery County, Galveston County, Liberty County, Chambers County, Waller County and throughout Southeast TX.

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