Why some doctors bill Medicare patients more than others

If you have original Medicare, then choosing which doctor you visit can make a big difference in how much you have to pay.

Under Medicare Part B, which pays for doctor visits, once your annual deductible is met, Medicare pays 80 percent of what it considers a “reasonable charge” for the item or service. You’re responsible for the other 20 percent.

However, in most cases, what Medicare calls a “reasonable charge” is less than what a medical provider normally charges for the service. Whether a Medicare beneficiary must pay part of the difference between the Medicare-approved charge and the provider’s normal charge depends on whether the provider has agreed to participate in the Medicare program. [Read more…]

Five things to discuss with your spouse before you retire

You may have a vision for your retirement, but does your spouse share that vision?

A recent study by Fidelity Investments found that many couples are not in accord about retirement. For example, one-third of couples approaching retirement disagree about or don’t know where they are going to live after they retire, and 62 percent don’t agree on their expected retirement ages.

Here are some important things to discuss with your spouse as you get ready to retire:

1. When to stop working. Many factors go into a decision about when to retire, including job enjoyment and financial needs. But you’ll also want to plan how to maximize your Social Security benefits. There are a number of different strategies for when each spouse should file for various types of benefits, and couples who do it wrong can leave a lot of money on the table. [Read more…]

Tax deductions for long-term care insurance are increased

The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2013.

If you itemize your deductions, you can generally deduct part of your premiums if the premiums, together with your other unreimbursed medical expenses, amount to more than 10 percent of your adjusted gross income (or 7.5 percent if you’re age 65 or older).

The maximum amount of premiums you can deduct each year depends on your age at the end of the year. For 2013, the maximums are:

 Age                                                     Maximum deduction

40 or less                                             $360

41-50                                                   $680

51-60                                                   $1,360

61-70                                                   $3,640

Over 70                                               $4,550

[Read more…]

Average private nursing home room is $90,520 a year

The cost of long-term care increased significantly in the past year, according to a new survey by MetLife.

The cost of a private room in a nursing home jumped 3.8%, to an average of $90,520 a year. That works out to $248 a day.

The cost of a semi-private room increased by 3.7% to $81,030 a year, or $222 a day.

The average cost for an assisted living facility rose 2.1%, to $42,600 a year. And the average rate charged by homemakers and companions increased by 5.3%, to $20 per hour.

On the other hand, the average cost of adult day care services was unchanged at $70 per day, and the average rate for home health aides remained at $21 per hour. [Read more…]

Medicare expands coverage for chronic conditions

In a major change, the federal government has agreed to provide seniors who have chronic illnesses and disabilities with Medicare coverage for many services … even if those services will simply maintain the person’s present health status and aren’t likely to improve their condition.

This is very important news for people who have diabetes, heart disease, Alzheimer’s disease, multiple sclerosis, Parkinson’s disease, Lou Gehrig’s disease, arthritis, or the effects of a stroke, among other medical conditions.

Soon, these seniors may be able to obtain Medicare coverage for care in a skilled nursing facility, as well as home health care and outpatient therapy. [Read more…]

How estate and gift tax exemptions and rates have changed over the years



tax rate

2001 $675,000 55%
2002 $1 million 50%
2003 $1 million 49%
2004 $1.5 million 48%
2005 $1.5 million 47%
2006 $2 million 46%
2007 $2 million 45%
2008 $2 million 45%
2009 $3.5 million 45%
2010 Repealed
2011 $5 million 35%
2012 $5.12 million 35%
2013 $5.25 million 40%

Many estates can save money by filing tax returns – even if they don’t have to

A federal estate tax return doesn’t have to be filed every time someone dies. In fact, most estates never have to file one. However, a provision in the new “fiscal cliff” tax law may make it very advantageous to file an estate tax return if the deceased person is survived by a spouse – even if a return is not legally required.

Here’s why: Generally, when a person dies, his or her estate can give an unlimited amount to a surviving spouse. After that, if the person’s bequests (plus large lifetime gifts) total more than a certain “exemption amount,” then an estate tax is due. For 2013, the exemption amount is $5.25 million.

Traditionally, the exemption amount applied separately to each spouse. So if a husband died first, his estate could use his exemption amount, and when his wife died later, she would get her own exemption amount. [Read more…]

Roth 401(k) plans get a big boost in the new tax law

The new tax law that resolved the “fiscal cliff” issue in January allows employees with a 401(k) plan at work to roll over any or all of the assets in their current plan into a Roth 401(k) plan. This is a big change, and should at least be considered by anyone who is eligible.

In a traditional IRA or 401(k) plan, employees contribute pre-tax earnings to the plan. The assets grow tax-free until retirement age, at which point the employee can withdraw them and pay ordinary income tax on the withdrawals.

With a Roth IRA, though, employees contribute post-tax earnings to the account, but when they withdraw the assets years later, the withdrawals are tax-free.

The new Roth 401(k) plans follow the same idea – earnings are contributed post-tax, but withdrawals are tax-free. [Read more…]

Annual gift tax exemption has been increased to $14,000

The annual gift tax exemption has been increased to $14,000 in 2013, up from $13,000 last year. That’s due to an adjustment for inflation.

This means that you can give any person $14,000 this year without any gift tax liability at all. Making annual gifts of the exemption amount is one of the best and easiest forms of estate planning, because it transfers assets from one generation to the next without any tax liability whatsoever.

If you have multiple heirs, the amount you can give away tax-free multiplies quickly. For instance, if you have two children, and each child is married and has two children, you can give $14,000 to each child, spouse and grandchild. That’s eight recipients at $14,000 each, or a potential maximum gift of $112,000 a year. [Read more…]

How the new federal tax law will affect your estate planning

In a big surprise to many people, when Congress passed a law to resolve the “fiscal cliff” in January, it retained the large ($5 million-plus) estate, gift, and generation-skipping transfer tax exemptions that had been available in 2011 and 2012. These taxes will now be 40% of amounts over this exemption.

Without this new law, the exemptions would have dropped to only $1 million at the start of 2013, with a tax rate of 55%.

The exemptions will now be $5 million in 2011 dollars, with adjustments for inflation each year. For 2013, they will be $5.25 million.

This is great news for people who want to transfer wealth to the next generation while avoiding taxes. It means that anyone who didn’t use the “window” in 2011 and 2012 to make large gifts without incurring gift tax has a reprieve, and can make those gifts this year. [Read more…]

Very knowledgeable about MA Elder Care

Attorney Margaret Cross-Beliveau is very knowledgeable about MA elder care issues and estate issues. I needed her advice on my 86 year old mother’s situation, and also advice on a distribution from a trust to a relative. ~ Elder Law client