Financial Benefits Available to Seniors Many senior citizens find themselves in financial trouble as they grow older. Oftentimes, financial planning was not done or, if done, falls short of what is needed to survive, leaving seniors struggling to get by. There are many programs available that may assist seniors in making ends meet; however, these programs often go unused because of lack of information about what is available. Federal Government Programs Social Security- Retirement Benefits Social Security benefits are probably the most widely known of all the government benefit programs. Social Security benefits are based on the same principle as insurance. You pay into the program in the form of a payroll tax. When you retire, you receive a monthly benefit based on your earnings and continue to receive this monthly benefit until you are deceased. There is the potential for receiving much more in benefits than what you paid into the system, depending upon how long you live. Your spouse and dependent children may also be able to receive a monthly benefit based on your earnings. (There is also a disability benefit through Social Security, which will be discussed at length later in this chapter.) To be eligible to receive Social Security retirement benefits, you must work and pay taxes into the Social Security system. To qualify for benefits under Social Security, you must have worked in a job (or jobs) covered by Social Security (meaning you paid Social Security payroll taxes), and you must have accumulated enough Social Security “credits” or “quarters.” Nearly all work - full time, part time and self employment - is covered by Social Security. Typically, one must earn 40 credits or quarters to be eligible for Social Security benefits. Forty credits is roughly equivalent to about 10 years of work. The amount of your Social Security benefit depends largely upon the amount of your lifetime earnings. The more you earn, the higher your benefit will be. Every year you should receive a Social Security Statement from the Social Security Administration (SSA). This statement contains your earnings record and also shows estimates of what your retirement benefits (as well as disability and survivor’s benefits, both discussed at length later in this chapter) are now and what they will be in the future. If you work for someone, your employer is responsible for reporting your earnings to - Financial Assistance for Seniors Social Security. If you are self-employed, it is your responsibility to report your earnings to Social Security. It is recommended that you check your Social Security statement closely each year. It is your responsibility, as well as your employer’s, to confirm that all of your earnings are accurately reported to ensure that you receive the maximum benefit to which you are entitled. The amount of your benefit is also affected, to a lesser extent, by your age. Your monthly benefit will be reduced if you choose to retire before your full retirement age; however, you will still receive the same amount of Social Security benefits over your lifetime because you will be receiving them over a longer period of time. Full retirement age for those born in 1937 and earlier is 65 years of age. For those born in 1938 and later, the full retirement age gradually begins to rise from 65 years old to 67 years old. For example, if you were born in 1938, your full retirement age is 65 years, 2 months, for those born in 1939, 65 years and 4 months, and so on. Full retirement age is 67 years old for those born in 1960 and after. No matter what your full retirement age is, the earliest that you may begin receiving Social Security retirement benefits is 62 years old. Some people choose to delay receiving their Social Security benefit and continue working beyond their full retirement age. There are several advantages to doing this. Each additional year you work beyond your full retirement age increases your lifetime earnings and thus the amount you will receive when you do eventually retire. A second advantage to delaying retirement is that your benefit will be increased by a certain percentage. For example, if you were born in 1943 or later, your benefit will be increased by 8 percent for each year you delay signing up for Social Security retirement benefits beyond your full retirement age until you begin taking your benefits or reach the age of 70. Note: If you decide to delay receiving your Social Security retirement benefit, don’t delay in signing up for Medicare when you turn 65 (SSA advises filing for Medicare benefits approximately 3 months before turning 65). In some cases, Medicare will cost more if you delay applying for it. You may also continue to work and receive Social Security retirement benefits. If you opt to begin receiving Social Security benefits prior to your full retirement age and continue to work as well, your benefits may be reduced. Every year the Social Security Administration fixes a limit on the amount of earned income you can have without incurring a reduction in benefits. For 2009, that limit is $14,160. If your earned income exceeds this limit, your benefits will be reduced. Beginning with the month that you reach full retirement age, you can earn as much money as you like without any reduction in your benefits. Some people have to pay taxes on their Social Security benefits. Only those who have a substantial amount of income in addition to their Social Security will have to pay taxes. At the end of the year, you will receive a statement showing the amount of Social Security benefits you received for that year. You can use the information on this statement when you file your federal income tax return to determine if you owe taxes on your benefits. It is not required that you have federal taxes withheld from your Social Security benefits; however, it may be easier than paying the quarterly estimated tax payments. You may fill out a Form W-4V, available through the Social Security Administration, to have federal taxes withheld from your Social Security benefits. Social Security- Disability Benefits In addition to retirement benefits, the Social Security Administration also administers disability benefits. The Social Security Administration pays out disability benefits under two programs: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). When you apply under either one of these programs, you must provide the Social Security Administration with detailed information about your medical, work and education history to assist in determining if you qualify for either program. Social Security Disability Insurance, like the Social Security retirement benefit, is based on your work record. In order to qualify, you must have worked in jobs covered by Social Security, and you must have accumulated the necessary number of work credits. Generally, you need eight and a half years of work, and you need to have worked five years out of the ten-year period ending in the month your disability began. In addition to the work credit requirement, you must also be found to be disabled under Social Security guidelines. How Social Security determines if you are disabled is discussed in detail later in this chapter. If you do not have enough work credits to qualify for SSDI, you may qualify under the Supplemental Security Income (SSI) program. SSI is a need-based program administered by the state on behalf of the Social Security Administration for the elderly, blind and disabled who meet certain income and asset criteria. Unlike SSDI, there is no work credit requirement; however, an applicant must meet certain income and asset eligibility requirements, in addition to being determined disabled (if you are under 65). In order to be considered disabled under the SSDI and SSI programs, you must be unable to do the work you did previous to your disability and unable to adjust to any other kind of work because of your disability. Additionally, your disability must be expected to last at least one year or to result in death. A disability determination is made in five steps. Step 1: Are you working? Each year the Social Security Administration determines a threshold amount, and, if your earnings average more than this amount, you cannot be considered disabled. In 2009, this threshold amount is $980 per month. If you are not working, or your income is equal to or less than the threshold amount, move on to step two. Step 2: Is the condition upon which you are basing your disability claim severe? The condition upon which you base your disability claim must be severe enough to interfere with basic, work-related activities for at least one year. If your condition interferes with basic work-related activities, move on to step three. Step 3: Is your condition found on the List of Impairments? The Social Security Administration has compiled a detailed list of medical conditions for each of the major body systems. The conditions included on these lists are so severe that you are automatically considered disabled if you have one. Cystic fibrosis, lupus and multiple sclerosis are examples of these qualifying conditions. If you have a condition that is not on the list, it must be determined that your condition is equal in severity to a medical condition already on the list. If your condition is on the list or is found to be as severe as one on the list, you will be found disabled. If not, the analysis moves on to step four. Step 4: Can you do the work you did previously? If your condition is not one of those listed and is not found to be as equally severe as one on the list, then a determination is made as to whether or not your condition interferes with your ability to do the work you did previously. If your condition does not interfere with the work you did previously, then the analysis stops here, and your disability claim is denied. If your condition is found to interfere with the work you did previously, then you move on to the fifth and final step. Step 5: Can you do any other type of work? If you are unable to do the work you did previously, a determination is made as to whether you are able to adjust to other work. In making this determination, your age, education, past work experience, transferable job skills and medical condition are all taken into consideration. If it is determined that you are unable to adjust to other work, your claim for disability will be approved. If it is found that you can adjust to other work, your claim will be denied. Note: There are special rules for those who are blind, recognizing the severe impact blindness has on a person’s ability to work. For more information, contact the Social Security Administration. If your claim for SSDI benefits is granted, you will be eligible to receive Medicare after 24 months. If your claim for SSI benefits is granted, you will immediately be covered under Medicaid. When you turn 65 year of age, your SSDI benefits automatically switch to Social Security retirement benefits; however, the amount you receive each month will remain the same. If you receive SSI, your benefit will be adjusted when you begin receiving Social Security retirement benefits. If your Social Security retirement benefit amount (or any retirement benefit or pension for that matter) exceeds the income eligibility requirement for SSI (for 2009, this is $674 per month for an individual), you will no longer receive a SSI payment or full coverage under the Medicaid program. You may still be entitled to assistance under the QMB, SLIMB, or QI-1 programs of Medicaid. See Chapter Two for more information on these programs. If your claim for SSDI or SSI benefits is denied, what are your rights? If you do not agree with the Social Security Administration’s decision, you have the right to have your claim reviewed. There are four levels of review or appeal: reconsideration, hearing before an Administrative Law Judge, Appeals Council review, and Federal Court review. The levels of appeal are progressive, meaning if you are not satisfied with the decision at one level, you may appeal to the next level. You may not skip any levels; in other words, you may not go from an initial denial of your application for benefits to review in Federal court. If you receive an adverse decision from the Social Security Administration regarding a claim for SSDI or SSI and decide to appeal, it is important to read and understand the directions for pursuing your appeal. These directions will be included with the decision. There are time limitations for requesting review at each stage or level of appeal that must be adhered to, or you may lose your right to appeal. Following is a general overview of the appeals process for SSDI and SSI disability claims. To protect your right to appeal, it is imperative you carefully read, understand and follow the instructions included with the notice of decision on your claim. As noted above, failure to follow the instructions for review of a decision on a disability claim may result in loss of rights with respect to that claim. Reconsideration. Reconsideration is a complete review of your claim by someone who had no part in making the first decision. The person conducting the review will look at all the evidence used in making the original decision, plus any new evidence you have to submit. After the review of your claim has been completed and a decision has been made, a notice will be sent to you explaining the decision. Hearing before an Administrative Law Judge. If after reconsideration you are still not satisfied with the decision, you may request a hearing before an Administrative Law Judge (ALJ). Prior to the hearing, you may review your file and submit new evidence. You may bring witnesses to the hearing to testify on your behalf. The ALJ may ask witnesses (a doctor, for example) to come to the hearing and testify. You may ask the ALJ to order witnesses to come to the hearing. During the hearing, the ALJ may question you and your witnesses. You may also question the witnesses. As noted above, you may appear before the ALJ in person and present your case, or you may ask the ALJ to make a decision based on the evidence in your file. If you are able, you should attend the hearing. This will give you the opportunity to provide the ALJ with information that may not be in your file. If you request a hearing but find that you are unable to attend, it is very important that you notify the ALJ as soon as possible and explain why you will be unable to attend. The ALJ may be able to accommodate you by changing the time or place of the hearing. If you fail to attend your scheduled hearing, you could lose your appeal rights. The ALJ will send you a copy of the hearing decision. Appeals Council review. If you disagree with the decision of the ALJ, you may request review of your claim by the Appeals Council. You may submit new evidence to be considered. Unlike the two preceding levels of appeal (reconsideration and hearing before an ALJ) review at this level is not automatically granted. The Appeals Council will consider all requests for review but may decline to review your claim if it believes that the decision of the ALJ was correct. If the Appeals Council decides not to hear your claim, it will send you a written notice explaining the decision. If the Appeals Council accepts your case for review, it will either decide the case or send it back to the ALJ for further action. You will be notified of the Appeals Council’s decision by mail. Federal Court review. If after going through reconsideration, a hearing before an ALJ and Appeals Council review, you are still dissatisfied with the decision on your claim, the final level of appeal available to you is to file a lawsuit in the U.S. District Court in your area. The court will review the evidence and the earlier decisions but will not hold a hearing. It is advisable to have an attorney represent you at this phase. Note: It is vitally important that you carefully read and follow the instructions for appealing a decision on your disability claim for each and every level of appeal. The instructions for appealing the decision are always included in the letter or notice of decision. The instructions will explain how to appeal, where to appeal and, most importantly, how long you have to appeal. If you fail to appeal within the time allotted to do so, you may lose your right to appeal altogether. Right to have representation. At all levels or stages of review, you are permitted to be assisted or represented by someone of your own choosing. Unlike most legal proceedings, the person representing you does not have to be a licensed attorney. Your representative should, however, be familiar with you and your disabling condition(s), as well as have an understanding of how the Social Security program you are applying for works. Social Security will work with whomever you choose to assist you, in the same manner as it would work with you. The person you choose to assist or represent you may not charge or collect a fee from you without first obtaining written approval from Social Security. Payment of benefits. Those receiving benefits from Social Security Administration are encouraged to have their benefits directly deposited into their bank, savings and loan or credit union account. Using direct deposit virtually eliminates the chance that your benefits will be lost or stolen. When you use direct deposit, your benefits are electronically deposited into your bank, savings and loan or credit union account. With direct deposit, you have immediate access to your benefits. You no longer have to wait by the mailbox for your check to be delivered and then make a trip to the bank to deposit the check. You may sign up for direct deposit by contacting the Social Security Administration or by contacting your bank, savings and loan or credit union. Simply fill out the direct deposit sign-up form and take it to either your local Social Security office or the bank, savings and loan or credit union where you have your account. Another option for receiving your benefits is the Direct Express® card. Your monthly benefit is deposited directly onto this card. You do not need a bank account. You can use the card anywhere that accepts MasterCard®, and you can also use the card to withdraw cash. To sign up for the card, call the Direct Express® hotline at (877) 212-9991, go to www.USDirectExpress. com, or contact the Social Security Administration. Representative Payee. A representative payee is a person, agency or institution who receives and manages the benefits on behalf of a beneficiary who is unable to do so. The beneficiary may need a representative payee because of age or mental or physical impairment. A representative payee must always act in the best interests of the beneficiary. The benefits are the property of the beneficiary and not of the representative payee and, as such, should only be used for the benefit of the beneficiary. An annual accounting is required. Benefits for Family Members, Spouses, Widows, Children, and Divorced Spouses In addition to providing disability and retirement benefits for the wage earner, benefits under the Social Security program may be available to the wage earner’s family members, specifically the spouse, widow, children and divorced spouse (and in limited circumstances, grandchildren). Spouse’s benefits. As a spouse, you can receive up to one-half of the retired worker’s full benefit if you begin collecting at full retirement age. If you opt to begin collecting the spousal benefit prior to reaching full retirement age, your benefit will be permanently reduced by a percentage based on the number of months you have until full retirement age. If you were also a wage earner and are entitled to retirement benefits based on your own work record, you will be paid your own benefit first. If the amount of your benefit is less than what you would have received if you collected on your spouse’s benefit, you will receive a combination of the two benefits, your own and your spouse’s, in an amount equal to the higher spouse’s benefit. For example, you have a retirement benefit of $400 per month based on your own work, and the spouse’s benefit you would receive is $700. If you wait until full retirement age, you will receive your full benefit of $400, plus $300 from your spouse’s benefit, totaling $700. Widow’s benefits. These benefits are known as survivor’s benefits as they are intended to help those left behind when a wage earner dies. Widows or widowers can begin receiving full benefits at age 65 (the full retirement age will gradually increase to age 67 for those born after 1939) or reduced benefits at the age of 60. A disabled widow(er) can begin receiving benefits as early as age 50. If you are eligible for benefits on your own work record, and those benefits would be higher than what you are receiving as a widow(er), you can switch to your own benefits as early as age 62. A widow(er) can get benefits at any age if he or she is taking care of the deceased’s child who is under the age of 16 or is disabled. Children’s benefits. These benefits are also known as survivor’s benefits. Children under the age of 18 (or up to age 19 if the child is attending elementary or secondary school full time) may receive benefits. Adopted children and dependent step- children are eligible for the same benefits as biological children. Children who are disabled before the age of 22 and remain disabled may get these benefits at any age. Under certain circumstances, grandchildren may also be eligible for benefits. Check with your local SSA office for eligibility information. (See “Resources” at the end of this chapter) Dependent parents. In some cases, the parents may receive survivor’s benefits based on the earnings of their deceased adult child. The parents have to meet several requirements, including proving that the child provided at least 50 percent of the financial support for the parents. Divorced spouses. Divorced spouses may be entitled to benefits on their ex-spouse’s work record, whether that spouse is living or deceased. In order to qualify for these benefits, your marriage must have lasted at least 10 years (the “length-of-marriage” rule), you must be presently unmarried, you must be at least 62 years of age (if your ex-spouse is deceased, you may begin collecting benefits at age 60 or age 50 if you become disabled), and you are not entitled to an increased benefit based on your own record which exceeds one half of your ex-spouse’s unreduced benefit rate (you cannot get more than a married spouse can receive). If your ex-spouse is still living, he or she must also be eligible to receive benefits in order for you to receive benefits. For example, you are eligible for benefits on your ex-spouse’s work record if he or she has turned 62 and is eligible for benefits. However, if he or she has not applied for benefits, you can only receive benefits if you have been divorced at least two years. The “length-of-marriage” rule discussed above does not apply to surviving divorced spouses who are caring for a child who is under 16 years old or disabled and who is already receiving benefits on the deceaseds spouse’s work record. The child must be your former deceased spouse’s natural or legally adopted child. You may collect benefits on your ex- spouse’s work record even if your ex- spouse has remarried. However, as noted above, you may not collect on our ex- spouse’s work record if you have remarried before age 60, unless your later marriage ends. If you remarry after age 60 (age 50 if disabled), you may still collect benefits on your ex-spouse’s record. Maximum family benefits. There is a limit to the total amount of money that can be paid to a family on an individual’s work record. The limit varies. If the sum of the benefits (either retirement or disability) payable on your work record exceeds this limit, the benefits to your family members will be reduced proportionately. Your benefit will not be affected. Contact the Social Security Administration for more information about the maximum family benefit, and how it affects you. Special one-time death benefit. A special one-time death benefit may be available to your widow(er) or minor children after your death. This benefit is available only to those who have accrued enough credits. Federal, state and local government employment If you were employed by the federal, state or local government, you may or may not be covered by Social Security. Federal government employment. Prior to 1984, federal government employees were covered under the Civil Service Retirement System (CSRS). If you were covered under the CSRS, you did not pay Social Security taxes on your earnings, and, as such, those earnings will not be accounted for on your Social Security record. Your retirement benefits will be paid out under the CSRS. In 1984, the Federal Employees Retirement System (FERS) came into being. If you were employed by the federal government from 1984 forward, you are covered by FERS. Work under FERS is covered by Social Security. Some federal employees who were covered by CSRS chose to switch to FERS. If you paid into both the CSRS and FERS, your Social Security benefits may be affected by your CSRS pension. If you are covered by both the CSRS and FERS, you may contact the Social Security Administration for more information about how your benefits will be affected. Note: Whether you are covered under CSRS or FERS, you still paid Medicare taxes on your earnings and, as such, are covered under the Medicare program. State and local government employment. If you work for a state or local government agency, you may or may not be covered under the Social Security system. State and local government employment may cover a broad range of employment situations, including, but not limited to: teachers, firefighters, police officers, university employees, health care workers and sanitation workers. If you are covered only by a state or local pension plan, you do not pay Social Security taxes, and your earnings from the state or local government employer will not appear on your Social Security record. In some cases, state and local government employees are covered by both the Social Security and the state or local government pension plan. In this case you will receive both a retirement benefit from Social Security and from the state or local government pension. As noted above in the section on federal government employment, if you are covered under Social Security as well as a state or local government pension, the amount of your Social Security benefit may be affected by your state or local government pension. If you are covered by both a state or local government pension and Social Security, you may contact the Social Security Administration for more information about how your benefits will be affected. Supplemental Security Income (SSI) Supplemental Security Income (SSI) is a federally-funded, state-administered program for the low-income elderly, blind and disabled. SSI is a need-based program, meaning you must meet certain income and asset eligibility criteria. In addition to the income and asset eligibility requirement, if you are under 65 years of age, you must also be determined to be disabled. (How a SSI disability determination is made is discussed at length, above.) SSI benefits include a monthly cash benefit and Medicaid health insurance. SSI is a benefit program for individuals with low incomes and very few assets. “Income” is money from employment, other benefit programs (such as Social Security retirement benefits or Veterans Affairs benefits), and private pensions. Also taken into consideration are “non- cash” items, such as living in someone else’s home at no cost, or having someone else provide your food at no cost to you. “Assets” are things you own, such as real estate, bank accounts and cash. Only certain assets are considered or counted when applying for SSI. Assets that are not counted are your home, many of your personal belongings (such as your clothing and furniture), and, in most cases, your car. You may be able to qualify for SSI if the countable assets you own are worth less than $2,000 for a single person and $3,000 for a couple. Note: The income and asset eligibility figures provided in this handbook are current as of the date of publication, August 2009. As with most public assistance programs, the income and asset eligibility requirements are subject to change at least once yearly to reflect inflation and changes in federal and state budgetary priorities. Contact the Social Security Administration for the most current eligibility information. Overpayment of Benefits An overpayment of SSDI or SSI benefits occurs when the amount of benefits received in a certain period exceeds those which are due for that period. An overpayment can occur for any number of reasons and may or may not be the fault of the person receiving the benefits. The reason for the overpayment will determine if and how the overpayment will be repaid to the Social Security Administration. Many overpayments occur because the benefit recipient failed to notify Social Security of a change in his or her status, such as when there is an improvement in your disabling condition and you are able to work. If you receive SSI, the change in status could also be a change in income or assets, the death of a spouse or a change in living arrangements. There are many other reasons why an overpayment may occur. To lessen the chance of an overpayment, it is very important to keep in touch with the Social Security Administration. Always advise them of any changes in your circumstances. If you receive any mail from Social Security, open it immediately and read it carefully. If you do not understand what the letter or notice says, seek assistance from family, a friend or an advocate for the disabled. Never simply ignore the Social Security Administration. They will not go away. If you are involved in an overpayment situation, the Social Security Administration is required to notify you of the overpayment and include the following information: • The reason for the overpayment. • The amount of the overpayment. • The time period covered by the overpayment. • Your right to request a reconsideration of the overpayment determination. • The time limit in which you must file an appeal. • The amount of the proposed monthly payment. • The availability of a lower monthly repayment amount. • The availability of forms to request a reconsideration of the overpayment determination or waiver of the overpayment amount and the availability of assistance from the Social Security Administration in filling out the forms. If you are notified of an overpayment of your SSDI or SSI benefits, there are two ways you can appeal. You may do either one or both. The first is to ask for a waiver of the overpayment. This means that you are asking to be excused from paying back the amount overpaid. A waiver of overpayment does not challenge the existence of the overpayment or the amount. In order to be eligible for a waiver of the overpayment, the overpayment must not be your fault, and recovery of the overpayment by Social Security would either defeat the purposes of the law that created the benefits programs (the “hardship test”) or be against equity and good conscience. If you are unsuccessful in your request for waiver of overpayment, you may request reconsideration of that decision. If your request for reconsideration is denied, the appeals process is similar to that of applying for disability benefits: the next level is an administrative hearing before an ALJ, after which you may request Appeals Council review, and, finally, you may file a lawsuit in Federal District Court. The second avenue of appeal is a request for reconsideration of the alleged overpayment. Reconsideration disputes the existence and the amount of the overpayment. If you are unsuccessful at this level, you may seek further review by an ALJ, the Appeals Council, and, finally, in Federal District Court. Both of these actions are time sensitive. Read the notice you receive regarding the overpayment determination very carefully. It will explain how to appeal and how long you have to do so. Note: If you receive a notice that you have been overpaid SSDI or SSI benefits, it is advisable to seek the advice of an individual or organization that advocates on behalf of SSDI or SSI recipients to assist you in either challenging the overpayment or seeking a waiver. (See Resources) If you are unsuccessful in the appeals process pertaining to an overpayment of SSDI or SSI, you can expect the SSA to attempt to recover the overpaid amounts. The SSA has many avenues available to recover the overpaid amounts, and the process can be quite complex. It is imperative that you seek assistance in working with the SSA to find a solution that you can live with. (See Resources) Privacy Concerns Your privacy and Social Security. The Social Security Administration has access to the personal information (e.g., address, date of birth, Social Security number) of millions of people living in this country. Because of the sensitive and very personal nature of this information, the Social Security Administration will discuss this information only with you unless you give your permission for someone else to communicate with the Social Security Administration. Other Federal Government Benefits According to the Social Security Administration, Social Security benefits are not intended to meet all of your financial needs when you hit retirement age. Social Security is intended simply to form the foundation of your retirement income which should be supplemented with savings or pension income. However, for many seniors this is not the case. There are many senior citizens who live only on their Social Security income. This section will cover other benefits available from the Federal government, who may be eligible, and how to apply. Veteran’s Benefits The United States Deparment of Veterans Affairs (VA) offers a wide range of benefits to persons (and their dependents and survivors) who have served in the U.S. armed forces, the national reserves or the National Guard. To be eligible, you must have received a discharge other than dishonorable. Although some benefits are available to all veterans, other benefits are available only to those veterans who have served during specific periods. To apply for VA benefits or request information, contact the VA regional office nearest you or contact the New Mexico Department of Veteran’s Services, a state agency with field offices whose specific purpose is to assist veterans in obtaining benefits and services. (See Resources) The following is a brief summary of the major federal benefits. You should contact the New Mexico Department of Veteran’s Services to determine if you are eligible for any state assistance as a veteran. Disability Compensation. If you have a disability as a result of an injury or disease that began or was aggravated during your military service, you are entitled to compensation benefits. Disabilities are rated according to type and severity which determines the amount you will receive. Pensions. Pensions are also available to veterans who have 90 days or more active military service (at least one day of which was during a period of war) whose incomes are within certain limits and who are totally and permanently disabled. The disability does not have to be service- connected. The amount of pension depends on your income, disability and number of dependents. Veterans of a period of war who are 65 or older, and meet the service and income requirements listed above, are eligible to receive a pension regardless of current physical condition. Dependents. If your disability rating is at least 30% (see www.va.gov to explain the ratings system), you may receive an additional monthly sum if you have a spouse, children or parents who are dependent. Other VA Benefits. A number of other benefits are available to veterans. For example, some veterans are eligible for nursing home care. To find out what benefits may be available to you, contact the Veterans Affairs regional office nearest you or visit the VA on the Internet at www. va.gov. Appeals. If you have been denied VA benefits, a notice of your right to appeal will be included with the denial notice. This notice will advise you how to proceed with your appeal, including any deadlines that may apply. Your first step in the process is to file a Notice of Disagreement with your local VA office. Your local office will then send you a Statement of the Case (SOC), explaining how they came to their decision regarding your case. Along with the SOC, the office will send you a form that allows you to appeal to the Board of Veteran’s Appeals (BVA). At that point, you may request a hearing with the BVA. If your claim is allowed or denied, the BVA’s decision is final. If your case is “remanded,” it means that the BVA is requesting more information and has not made a final decision in your case yet. If your claim is ultimately denied by the BVA, you will have several options, including appealing your case to the U.S. Court of Appeals For Veterans Claims. Each step of the above appeal process has an important filing deadline which you must follow, or your rights may be lost. Railroad Workers The railroad retirement system covers nearly all types of railroad employment in the United States. If certain vesting and work record requirements are met, the spouses and dependent survivors of these workers also may receive benefits. The Railroad Retirement Board (RRB) is the agency responsible for determination and payment of benefits, which includes pension, disability, spousal and survivors’ benefits. Certain retired railroad workers are also eligible for Social Security benefits (because of other non-railroad work), as are their spouses, former spouses and survivors. The RRB is also responsible for payment of the Social Security benefits for these retirees, combining the benefit payment with the railroad benefits and issuing one check. However, the Social Security Administration still handles all claims regarding Social Security benefits, as well as making all determinations including eligibility and benefit amount. Application and Appeals. An application for benefits may be made to any RRB office. The process and documentation for applying and proving eligibility is similar to Social Security. You will receive a written notice of the decision. To appeal a decision you must file a written request for reconsideration. Most reconsiderations are written reviews, but a hearing may be requested in some cases. If on reconsideration you receive an unfavorable decision, you may appeal to the Bureau of Hearings and Appeals. An appeal of the bureau’s decision is made to the three-member Board which heads the RRB. In all of the above cases, information as to how to request reconsideration or appeal of an unfavorable decision, including any important deadlines, will be included with the decision. If you are still unhappy with the RRB’s decision, you may file an appeal with the U.S. Court of Appeals. For more information, contact your local Railroad Retirement Board office, or visit their website at www.rrb.gov. State Financial Assistance The Income Support Division (ISD) of the New Mexico Human Services Department (HSD) administers a number of state financial assistance programs. Detailed information and applications for financial assistance are available at your county ISD office. To be eligible for financial assistance you must show need, have a Social Security number, be a resident of New Mexico, show you have not transferred real property without receiving a reasonable return within the last two years, and not be receiving other financial assistance payments. Application. Applications for any assistance program administered by the state (food stamps, cash assistance or Medicaid) must be made at your local ISD office. Every application is followed by an interview. You will be asked about your household, including the Social Security numbers of all household members, and to provide proof of the information you give. A caseworker may also visit your home to confirm eligibility but must schedule the visit in advance. If you are eligible for assistance, you will be able to get benefits only for a specified period of time. You must re-apply to assess continued eligibility for additional periods. You must also report all changes in your situation that may affect eligibility to your caseworker within 10 calendar days of the occurrence of the event. Such events include income changes, buying or selling a vehicle, changes in resources, changes in residence, changes in shelter costs, and when anyone moves in or out of the home. Cash Assistance. The Temporary Assistance for Needy Families (TANF) program provides cash assistance to eligible persons with limited income and resources. In New Mexico, this program is known as NMWorks. In general, the program is time limited and the recipient must work at least part time. However, persons age 60 and over are exempted from the work requirement. Cash assistance may also be available under the General Assistance Program. This program is for dependent needy children and disabled adults who do not qualify for SSI or NMWorks Food Stamps. The food stamp program is federally funded but managed by the state. It provides an Electronic Benefits (EBT) card for the purchase of food. An EBT card is used like a bank debit card. Every month your food stamp allotment will be deposited into your EBT account. You then use the card to purchase food items at participating grocery stores. You do not have to be receiving any other type of assistance to be eligible for food stamps. Food stamps may by used to purchase products intended for human consumption (excluding tobacco and alcohol) and, subsequently, may not be used to purchase pet food, soap, or paper products. Any household may qualify for food stamps if its income and resources are low enough and its members are U.S. citizens or legal residents. The exact amount in food stamps you can receive depends upon household income. You will be considered a household and only your income and assets will be considered if you live alone, or live with others but purchase your own food and prepare your meals separately. Otherwise, the entire household income and resources will be taken into account. Right to Appeal. If your application for assistance is denied or you think you were issued an incorrect amount of food stamps, you have the right to a fair hearing. You may request a hearing in person, in writing or by telephone. You may also have a friend, family member or attorney help you with your appeal. You have the right to examine, prior to the hearing, your case record and any documents used in the determination of your benefits. Fraud Penalties. Any person who knowingly gives false, incorrect, or incomplete information in order to apply, to receive or help someone else receive food stamp benefits or cash assistance is subject to prosecution for fraud. If found guilty of fraud, a person can be fined, imprisoned, and/or barred from receiving benefits for a period of time. Pensions Federal Employees. The retirement system for federal employees is much too complex to cover adequately in this publication. If you were or are an employee of the federal government and need information regarding your retirement benefits, how to apply, or how to appeal an unfavorable decision, contact the personnel office of the agency for which you worked. You may also contact the Office of Personnel Management’s office in Washington, D.C. or visit their website, www.opm.gov. New Mexico Public Employees (PERA) and New Mexico Educational Employees (ERA). The Public Employees Retirement Association of New Mexico (PERA) administers more than 600 different pension plans for state and local government units. Given the size and the complexity of the program, it is not possible to adequately summarize your benefits here. For information about your account, benefits, and options, you should contact PERA. A retirement kit is available from PERA with instructions and an application for benefits. You can reach PERA at (800) 342-3422, or you may visit them on the Internet at www. state.nm.us/pera. The retirement fund for New Mexico’s educators is managed and administered by the State of New Mexico Educational Retirement Board (ERA). Members range from bus drivers to university professors. You may contact ERA by telephone (505) 827-8030 or on the Internet at www.nmerb. org. Private Pension Plans ERISA. The Employee Retirement Income Security Act of 1974 (ERISA) was enacted to provide increased protections for employees who are covered by private employee benefit plans. The law sets minimum standards for most voluntarily established pension and health plans in private industry. Examples of such plans include pension plans, profit sharing plans, 401(k) retirement plans and employee stock ownership plans. Your Right to Information. A plan administrator usually handles the operation of employee benefit plans. ERISA requires that all plan rules be in writing and that the plan administrator disclose to you in writing all important facts and rules you need to know about your employee benefit plan. ERISA does not require any particular benefits, only that the plan rules established by the employer are available to employees, and that the plan is administered according to those rules. By having access to the plan rules, your employment records, and a statement of the credit you have earned to date, you can determine when you will be eligible for benefits and the approximate amount of your benefits. You may request copies of the plan from the plan administrator. You should also receive a periodic summary plan description that outlines your rights. Consult your plan rules or plan administrator for questions regarding eligibility for benefits, payment of pension benefits and how to appeal unfavorable decisions. Remember: Always notify the plan administrator of a change of address. Lost Pensions If you think you or your deceased spouse might be owed a pension but are not sure how to locate the plan, try contacting the Pension Benefit Guaranty Corporation (PBGC). PBGC is a government agency that maintains a pension search directory with a list of people who are entitled to a pension yet cannot be found by the companies funding the pensions. You can check PBGC’s website at www.pbgc.gov or call (800) 326-LOST. Tax Relief Federal income tax. Generally, even though you owe no tax, you must file a tax return if your gross income is at least as much as the published minimums for your filing status and age. (However, there are a number of circumstances when you must file a tax return even if your income is less than the minimum.) Every taxpayer, regardless of age, is entitled to a basic standard deduction if not itemizing deductions. Taxpayers who are at least 65 years old or blind are entitled to an additional deduction. If you itemize deductions, your interest on your home mortgage and charitable contributions, among other things, can be deducted. Medical and dental expenses may be deducted as well, to the extent the amount meets or exceeds a certain percentage of your adjusted gross income. Credits. There are special tax credits that apply to seniors and the disabled. Payments made for dependent care may be claimed as a tax credit. In the case of an elderly dependent, the taxpayer with whom the dependent lives may claim expenses for care in a licensed adult daycare center. There is also a tax credit for income- eligible individuals who are at least age 65, or under 65 and retired on a permanent and total disability. However, benefits received through Social Security, Veterans Affairs or railroad retirement may reduce this credit. Assistance. Through the Tax Counseling for the Elderly (TCE) program, IRS-trained volunteers assist people age 60 or older with their tax returns at neighborhood locations in many areas. In addition, certain volunteer income tax assistance (VITA) aides have been trained to help seniors with their tax returns. To find the VITA or TCE site nearest you, call your local IRS office. The American Association of Retired Persons (AARP) also provides Tax-Aide at various sites. To find a site near you, contact the AARP. If you have attempted to deal with an IRS problem unsuccessfully, you should contact the Taxpayer Advocate Service within the IRS. This service provides advocates who independently represent the interests and concerns of taxpayers by protecting taxpayer rights and resolving problems that have not been sorted out through normal channels. To contact your taxpayer advocate, call the Taxpayer Advocate Service at (877)777- 4778 or locally at (505) 837-5505. The IRS also has a telephone service that provides recorded tax information on a variety of subjects. TeleTax is available 24-hours a day, seven days a week from a touch-tone phone by calling (800) 829- 4477. Live assistance is also available 24-hours a day, seven days a week during tax season, by calling the IRS toll-free number, (800) 829-1040. There are also a number of free IRS publications to help answer your tax questions. They are available by calling the IRS, going online to the IRS website (www.irs.gov) or visiting your local post office or library. Large print tax return forms are also available. State Tax Relief Depending on income level, New Mexico taxpayers who are 65 or older may be eligible for a deduction from taxable income of up to $8,000 per person. New Mexico also provides for a low- income comprehensive tax rebate for resident taxpayers whose adjusted gross income is $22,000 or less and who also meet other qualifications. Medical Care Deductions. Any New Mexico taxpayer may claim an income tax deduction for certain qualified medical care expenses. Generally, only out-of-pocket, non-reimbursed and uncompensated medical expenses not already itemized on your federal income tax return may be claimed. Additionally, if you are at least 65 years of age and have at least $28,000 of uncompensated or unreimbursed medical expenses, you may qualify for an additional exemption and credit. There are limitations and exclusions to these deductions. If you have questions about whether these deductions apply to your particular situation, contact the Taxation and Revenue Department by phone at (505) 827-0700 or visit the department’s website, www.tax.state.nm.us. Property Tax Benefits. There are several property tax benefits available to seniors who are residents of New Mexico. Seniors who are at least 65 and meet several other criteria may claim a property tax rebate. Additionally, property owners who are at least 65 and income eligible, may apply to have the valuation of their single-family, owner-occupied residence frozen at the valuation for the year they first apply. The owner must re-apply for this benefit each year. For 2009, the owner’s modified gross annual income cannot exceed $32,000 (this amount may change yearly; please contact the Taxation and Revenue Department for more information). Finally, qualified veterans in New Mexico (and their surviving spouses) may be allowed a $4,000 reduction off the assessed value of real property for county taxation purposes. Some disabled veterans may be eligible for a complete property tax waiver on their primary residence. For further information about these property tax benefits and how they may apply to you, contact the Taxation and Revenue Department by phone (505) 827-0700 or visit their website, www.tax.state.nm.us. Utility Assistance Utility costs can quickly deplete limited resources, particularly during winter months. Lack of telephone service is also a safety concern for someone with health or disability concerns. Programs are available to provide this much-needed assistance. The Low-Income Home Energy Assistance Program (LIHEAP) provides vouchers for assistance with heating, gas, electric, propane and wood in winter months, and, funding permitted, cooling in summer months. Eligibility is based on a points system that considers: household income, household size, vulnerability of household members (including children under 6, adults over 60, and the disabled), as well as the regional energy costs. Applications are available at your local Income Support Division office or on the Human Services Department website, www.hsd.state.nm.us/isd. If you receive Medicaid or LIHEAP assistance, you may also qualify for a Low- Income Telephone Assistance Program (LITAP) through your telephone service provider. This program provides a small subsidy for basic telephone service and reduced installation charges. For more information about the LITAP program, contact your telephone service provider for an application. You may need to obtain proof of eligibility from your local Income Support Division office to provide to your telephone company. Employment The Aging and Long-Term Services Department provides training opportunities to low-income workers who are 55 and older. The Senior Employment Program helps older persons find temporary, part-time training assignments in senior centers, private nonprofit organizations and government offices. Training assignments are for 20 hours a week and pay $7.50 an hour. You may qualify if you are: • 55 or older. • Not making it on Social Security or other retirement income. • Interested in updating your job skills. • In need of developing new skills. This program does have income requirements: an individual may not have a gross income greater than $13,537 per year. Some benefits may be subtracted from your income to determine eligibility. For more information, contact the New Mexico Aging and Long-Term Services Department’s Senior Employment Program at (866) 451-2901 or (505) 476-4799 in Santa Fe. Reverse Mortgages In the last decade, reverse mortgages have become quite popular in the United States. A reverse mortgage (RM) is a special type of loan that allows a homeowner to turn some of the equity in his or her home into cash. The equity you have built up in your home over the years is paid back to you. Many seniors use this type of mortgage to supplement their Social Security income. A reverse mortgage differs from a traditional mortgage or a home equity loan in that you are not required to make monthly payments; in fact, as noted above, payments are made to you. To qualify for a RM you must own your home. For many reverse mortgages, the home must be your primary residence, and you must be at least 62 years of age. The amount you may borrow is based on your age, the amount of equity in your home and the interest rate the lender is charging, among other factors. You may receive the money in a lump sum, monthly advances, through a line of credit, or in a combination of the three. Because you still retain the title to the home, you are responsible for maintenance, taxes, insurance and repairs. You do not need to repay the loan as long as you live in the house and keep the taxes and insurance current. If you outlive the loan, meaning you are still living when the payments under the loan have stopped, the lender cannot take your home away from you, nor do you have to begin repayment. The lender is paid back when the home is no longer your primary residence, when the house is sold or from the proceeds of your estate. Whether or not to get a RM is an important decision and should be made only after careful consideration. For many people, their home is their largest single asset and source of wealth. You should consider a RM only after considering all other options. Remember, a RM uses some or all of the equity in your home. This means that there will be fewer assets for you and your heirs in the future. If, after careful consideration you determine that a RM is the right thing for you, shop around for the best type for you, as there are several types (fixed interest rate, adjustable interest rate, etc.). Beware of people or services that charge a fee for a referral to a lender. You can obtain information about RMs and lists of lenders, free of charge. For more information about reverse mortgages and a free list of lenders who offer reverse mortgages, contact the United States Department of Housing and Urban Development (HUD) or AARP. (See Resources) Other Resources For Seniors There are a number of other resources and programs to assist senior citizens. Not all programs are available in all areas. Contact your local senior citizen’s center or Office of Senior Affairs for information about programs your community offers. Senior Citizen’s Centers Senior citizen’s centers provide meals, activities, and information for seniors. Many senior centers have volunteer opportunities for seniors. Senior centers are good places to make new friends and keep active, both physically and mentally. Meal Delivery Service If you are elderly and homebound, you may qualify for meal delivery service. Check with your local senior center or in the telephone directory in the county or city government pages under “Seniors” for information about meal services in your area. If you are elderly and/or disabled, there may be special transportation services provided in your area to take you to doctor’s appointments and to do your marketing. Check with your local senior center or in the telephone directory in the county or city government pages under “Senior Transportation” or “Transportation” for information about transportation services in your area. Resources Your local Senior Center or Senior Affairs Department. If your city has either of these they will be listed in the telephone directory city or county government pages “Seniors.” Access America for Seniors Entry site for seniors to locate U.S. Government web sites. www.seniors.gov Administration on Aging Provides links to government and non- government sites for information relevant to seniors. www.aoa.gov Human Services Department (information and referral) (800) 609-4833 or (505) 827-9454 www.state.nm.us/hsd Income Support Division Local office is listed in the telephone directory government pages under State – Human Services Dept. – Income Support Division. Internal Revenue Service Local offices are listed in telephone directory government pages under United States – Internal Revenue Service. (800) 829-3676 Publications (800) 829-1040 Live assistance (800) 829-4477 Tele-Tax tapes www.irs.gov LIHEAP (utility assistance) Your local Income Support Division office is listed in the telephone directory government pages under State-Human Services Division. www.state.nm.us.gov/hsd LITAP (telephone assistance) Your local Income Support Division office listed in the telephone directory government pages under State-Human Services Division. (800) 244-1111 (Qwest) (800) 564-1211 (Spanish) New Mexico Taxation & Revenue (505) 827-0700 (505) 827-0822 Personal Income Tax (505) 827-0870 Property Tax www.state.nm.us/tax Public Employees Retirement Assoc. (PERA) (505) 827-4700 (800) 342-3422 www.state.nm.us/pera Railroad Retirement Board (877) 772-5772 (312) 751-4701 (TTY) www.rrb.gov Social Security Administration Local office is listed in the telephone directory government pages under United States – Social Security Administration. (800) 772-1213 www.ssa.gov New Mexico Aging and Long- Term Services Department Benefits Counseling Program Provides free, unbiased information about health care options and other entitlements. (800) 432-2080 www.nmaging.state.nm.us Veterans Affairs (800) 827-1000 www.va.gov N. M. Department of Veteran’s Services Statewide community service program that assists with obtaining benefits. (505) 827-6300 (866) 433-8387 www.state.nm.us/veterans New Mexico Senior Legal Handbook Chapter 2 - Medicare, Medicaid and Long Term Care - 21 Chapter Two Medicare, Medicaid and Other Long Term Care Benefits Most people have heard of Medicare and Medicaid but do not know exactly what each of these programs do or what the differences between them are. This chapter will explain the differences between the programs, the benefits each program provides, your rights and protections under these programs, and where you can obtain more information about each of these programs. Medicare Medicare is a federally-funded benefit for medical insurance that is administered by the Social Security Administration. Generally, you qualify for benefits if you are 65 years old and have worked and paid into Social Security or railroad retirement long enough. If you are under age 65, you may qualify for benefits if: 1) you have been eligible to receive disability benefits for 24 months; 2) if you receive a disability pension from the railroad retirement board and meet certain requirements; 3) you have Lou Gehrig’s Disease; or 4) you have end-stage renal disease (permanent kidney failure requiring dialysis or a transplant). Medicare works just like private health insurance. If you are already receiving benefits from Social Security or the Railroad Retirement Board, your Medicare card will be mailed to you about three months before your entitlement date. If you are not yet receiving benefits, you should contact Medicare a couple of months before your 65th birthday. If you do not qualify for Medicare because you did not pay enough into the Social Security Administration, you may still receive Medicare but will pay higher premiums. If you are considered low- income and have limited resources or assets, you may also qualify for help through the Medicaid program. Medicaid is discussed later in this chapter. Medicare programs. Medicare is divided into what are referred to as “Parts.” In this chapter, Parts A, B and D will be discussed. Each Part provides a different type of service. Medicare Part A. If you are receiving Social Security benefits or a railroad retirement benefit, you are automatically enrolled in Medicare Part A when you turn 65 years old. If you are not receiving benefits, you should contact Medicare about three months before your 65th birthday to enroll. Most people do not have to pay for Part A because they paid Medicare taxes while working. If you (or your spouse) did not pay Medicare taxes while you worked, or you did pay into the system but do not have enough quarters, and you are age 65 or older, you still may be able to buy Part A. Medicare Part A works much like private hospital insurance. Part A pays for inpatient services, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities, hospice care, Religious Nonmedical Health Care Institutions and some home health care. 22 - Chapter 2 - Medicare, Medicaid and Long Term Care New Mexico Senior Legal Handbook For more information about what services are covered by Part A, contact Medicare at (800) 633-4227, or visit the Medicare website at www.medicare.gov. Most people do not have to pay Medicare Part A premiums, but there may be deductibles and coinsurance that you will be responsible for paying. The deductibles and coinsurance are tied to what Medicare refers to as “benefit periods.” A benefit period begins the day you go to a hospital (or under special circumstances, a skilled nursing facility). In 2009, a deductible of $1068 is required for the first 60-days stay in a hospital. Days 61-90 require a $267 per day coinsurance. Lifetime reserve days give you an extra one-time-only 60 days at a $534 per day coinsurance. The benefit period ends when you have not received hospital or skilled nursing care for 60 days in a row. If you go into the hospital after one benefit period has ended, a new benefit period begins. There is no limit to the number of benefit periods you can have. Additionally, the deductible and coinsurance amounts change every year to reflect inflation. When you go to a skilled nursing facility for rehabilitation services after a hospital stay of three or more days, you get the first 20 days for free and days 21-100 at a cost of $133.50 coinsurance per day (rate in 2009). Beyond day 100, you pay 100% of the cost. For more information about benefit periods, deductibles and coinsurance, you may contact Medicare at (800) 633-4227 or visit the Medicare website at www.medicare.gov. You may also contact the Aging and Long-Term Services Department at (800) 432-2080. Medicare Part B is similar to private supplemental insurance and covers services that Part A does not. Part B pays for doctor visits, outpatient hospital care, and other services such as physical and occupational therapy. Part B will only cover services if they are medically necessary. Part B requires you to pay a monthly premium. This premium changes every year to reflect inflation. There are programs that assist seniors in paying this premium if you can qualify by meeting income and resource eligibility guidelines. These programs are called Medicare Savings Programs (MSP) and will be discussed in detail in the section on “Medicaid,” later in this chapter. Enrollment in Medicare Part B is optional. You can sign up anytime in a seven-month period beginning three months before your 65th birthday, including your birthday month, and extending three months after your birthday. However, if you do not sign up for Part B during this seven month period, and later decide that you would like that coverage, the cost to you for this benefit will increase by 10 percent for every year that you were not enrolled in those first seven months. You will have to pay this increased cost for the rest of your life. There is an exception to this enrollment rule if you are 65 or older, and you are covered under a group health plan from your (or your spouse’s) current employment. Your Part B payments will automatically be deducted from your Social Security, railroad retirement or civil service retirement check. If your income is not from one of these sources, you can choose to have it electronically deducted, or Medicare will bill you each month. Medicare plan choices. Medicare recipients have options when choosing a health care plan. Based on what your individual needs are, you can choose the plan that works best for you within the Medicare program. Original Medicare Plan. One option is the Original Medicare Plan. This is simply the basic plan that is administered through Medicare which includes Parts A and B. It is sometimes referred to as a fee-for-service plan. Services are provided through any provider that accepts Medicare payments. The Original Medicare Plan is available throughout New Mexico. Supplemental plans to cover the deductibles, coinsurances and other costs not covered by Medicare, also known as “Medigap” policies, will be discussed in detail later in this chapter. Medicare Advantage Plans (Part C). Private companies also contract with the Medicare program to offer plans in addition to the Original Medicare Plan. These are called Medicare Advantage Plans and include Parts A and B (and may also include drug plans). There are two different types of private plans offered in New Mexico: Medicare managed plans and private fee- for-services plans. Medicare Advantage Plans offer a wider range of services than the Original Medicare Plan does. Some plans will charge beyond the Part B premium, and some will not. Some plans offer discounts on prescription drugs (not the same as the prescription drug program Medicare Part D, which is discussed at length, below) and coordinate care among providers, which may lower your out- of-pocket expenses. Not all Medicare Advantage Plans are offered in all parts of New Mexico. You should contact Medicare at (800) 633-4227/(877) 486-2048 (TTY/ TDD) or visit their website, www.medicare. org; or contact the Aging and Long-Term Services Department at (800) 432-2080 or www.nmaging.state.nm.us, for more information about the Medicare Advantage Plans available in your area. Making the best choice for you. There are many factors that you should consider when choosing a Medicare plan, such as cost, extra benefits, doctor choice, convenience, and quality of care. These are all important factors, but some may be more important to you than others. You need to look at what plans are available in your area and what each plan offers in order to make the best choice for you. Also, individuals under the age of 65 may have trouble finding a Medigap plan that will be affordable and provide enough benefits under original Medicare. They may find Medicare Advantage Plans a fairer and more comprehensive plan for themselves, and the Medicare Advantage Plan cannot discriminate against Medicare beneficiaries under the age of 65. Some questions you should ask when considering the plans available in your area: Cost. What will my out-of-pocket costs be? Benefits. Do I need extra benefits and services, such as prescription drugs, eye exams, hearing aids or routine physical exams? Doctor choice. Can I see the doctor(s) I want to see, or only those who are members of the plan? Do I need a referral to see a specialist? Convenience. Where are the doctors’ offices, and what are their hours? Is there paperwork? Do I have to file claims myself? Is there a telephone hotline for medical advice from a nurse or other medical staff? When may I join a Medicare Advantage Plan? Generally, you may join a Medicare Advantage Plan at any time. However, some Medicare Advantage Plans limit the number of members in their plans. These plans may not accept new members when they reach their limit. A plan can tell you if it is signing up new members. When may I leave a Medicare Advantage Plan? You may leave your plan at anytime, for any reason. This will not disqualify you from Medicare; it will simply remove you from that plan. If you are going to be on Medicare in the near future, you should check with your medical provider to make sure that they do accept “Medicare assignment” if you are planning to choose the Original Medicare Plan. Medicare assignment is direct and full payment from Medicare to your health care provider. (You are still responsible for any deductibles or co-pays.) If you are going to choose a Medicare Advantage Plan, make sure your medical provider(s) participates in that particular plan. How to File a Claim. You should not need to file a claim for the services you receive from your health care providers, no matter what Medicare insurance plan you choose (except as a last alternative; see below). If you choose the Original Medicare Plan, it is important to make sure that your health care providers (for example, your physician and hospital) accept “Medicare assignment,” which is direct payment from Medicare. When a health care provider agrees to accept Medicare assignment, they are agreeing to accept as full payment what Medicare pays. (Even if your health care provider accepts Medicare assignment, you are still responsible for any co-pays or deductibles.) If your health care providers do not accept Medicare assignment, you will be required to pay for the services rendered up front, and Medicare will reimburse you for the covered amounts, which may be less than the amount you paid. Medicare cannot pay your health care providers until a claim is filed. If your health care provider does not file a claim for services provided, the first thing you should do is contact the health care provider and request a claim be filed. If, after requesting a claim be filed, the provider still has not filed the claim, the next step is to contact your local Medicare carrier (see the “Resources” section at the end of this chapter for contact information). Your local Medicare carrier will contact the health care provider on your behalf to inform them of their duty to file Medicare claims in a timely manner. It is also important to ask your Medicare carrier about the exact time limit for filing your particular claim. Medicare claims must be filed within one full calendar year following the year in which the services were provided. For example, if you see your physician on April 15, 2009, the Medicare claim for that visit must be filed by December 31, 2010. If after contacting the health care provider and your Medicare carrier, your claim still has not been filed, you should file the claim yourself. You can get the necessary forms by contacting your Medicare carrier. (See Resources) Important: There is a time limit for filing a Medicare claim. If a claim is not filed within the time allowed, Medicare will not pay any amount of the bill. Remember: If the medical services that you need are not covered by Medicare, you will be responsible for the entire bill for any services, drugs, or supplies purchased. Your physician or supplier must agree to accept Medicare assignment in order for the costs of services and/or supplies associated with your health care to be paid by Medicare directly. If you are enrolled in a managed care plan or a private fee-for-service plan (Medicare Advantage Plan), Medicare claims are not filed. Medicare pays these private insurance companies a set fee each month, eliminating the need to file Medicare claims. Privacy and Medicare. By law Medicare is required to protect the privacy of your personal medical information. Medicare is also required to give you notice to tell you how Medicare may use and give out (“disclose”) your personal medical information held by Medicare. For more information on Medicare’s privacy policy, contact Medicare at (800) 633-4227 or (877) 486-2048 (TTY) and ask to speak to a customer service representative about Medicare’s privacy notice. You can also find information about Medicare’s privacy policy on the Medicare website, www. medicare.gov. Buying (joining) Medigap plans. Medigap is insurance that covers the cost difference between what your Medicare plan covers and the services that you need. Generally, you must be enrolled in Medicare Parts A and B to be able to enroll in a Medigap plan. Medigap policies are identified by the letters A through L. The best time to buy a Medigap plan is during your Medigap open enrollment period. Your Medigap open enrollment period lasts for 6 months and starts on the first day of the month in which you are both: • Age 65 or older, and • Enrolled in Medicare Part B. In some situations, you have the right to buy a Medigap policy outside of your Medigap open enrollment period. These rights are called “Medigap Protections” or “Guaranteed Issue Rights.” Guaranteed Issue Rights generally allow you to purchase a Medigap policy outside your open enrollment period when you find yourself without health coverage through no fault of your own. The following are examples of when your Guaranteed Issue Rights may apply: • Your health coverage ends because you move out of the plan’s service area, or your health coverage provider stops providing coverage in your area. • You join a Medicare Advantage Plan or PACE plan (PACE plan is discussed later in this chapter) at age 65 and, within the first year, you decide you want to leave. • You leave a Medigap plan to join a Medicare Advantage or PACE program for the first time and decide within the first year that you want to leave. Individuals Under 65 Individuals who are under 65 and enrolled in Medicare Part B do not have guaranteed Medigap plans. The plans for these individuals are called Medigap Disability Plans, and the premiums are usually higher. The insurance companies do not have to insure individuals under 65 who apply. You may not need a Medigap plan. Before you purchase a plan, make sure you are not covered by another policy. Often, former employers provide Medigap plans to pay for costs that the Original Medicare Plan doesn’t cover. Also, if you have a Medicare Advantage Plan, you may not need Medigap insurance. To find a list of plans available in your area, look at the Medicare Personal Plan Finder on the Medicare website, www.medicare. gov, or call (800) 633-4227/(877) 486-2048 (TTY/TDD) to receive free publications and other information discussing Medicare and Medigap plans. You may also contact the New Mexico Aging and Long-Term Services Department at (800) 432-2080 or www.nmaging.state.nm.us. Medicare Part D Medicare Part D, or Medicare Prescription Drug Coverage, helps cover the cost of prescription drugs. It is an optional benefit, much like Part B, and you must “opt-in.” There is a 1 percent premium penalty for each month you delay enrolling. This penalty amount may increase every year. Part D is open to anyone entitled to Part A, or enrolled in Part B. There is special assistance for those who have low incomes and few assets. If you are a dual eligible (a person who receives both Medicare and Medicaid) you will receive your prescription coverage under Part D, instead of Medicaid. You may choose between Original Medicare (fee-for-service), with access to prescription drug plans, or you may choose a Medicare Advantage Plan that offers both medical benefits and prescription drug coverage. You have the option of changing plans once a year during the open enrollment period, Nov. 15 through Dec. 31 (except for dual eligibles). In an effort to give all Medicare beneficiaries a choice, there should be at least two prescription drug plans, or one prescription drug plan and a Medicare Advantage Plan to choose from. Only drugs on the plan’s preferred drug list will be counted as a cost, both to meet the deductible and doughnut hole (second deductible period or “coverage gap”) and to qualify as a drug for which Medicare will pay a portion of the cost. It is important when selecting a plan that you search the plan’s covered drug list to make sure your drugs are covered. Part D Low-Income Subsidies – “Extra Help” For low-income individuals with little resources, drug cost savings can be significant. Medicare’s program for financial assistance for Part D for low- income individuals is called “Extra Help.” There are a number of subsidy tiers of assistance, each with its own income and resource limits. Full Low-Income Subsidy. This includes people who are dual eligible (have both Medicare and full Medicaid), those on SSI but not Medicaid, those with income up to 135% of federal poverty level (FPL), and enrollees of the Medicare Savings Plan (discussed below). • Resources of $8100 for single; $12,910 for couple. • $0 premium, $0 deductible. • “Doughnut hole” coverage • Full benefit, dual eligibles with income below 100% of FPL initially pay no more than $1.10 generic/$3.20 brandname per prescription. • All other full subsidy beneficiaries initially pay $2.40 generic/$6.00 brandname per prescription. Partial Low-Income Subsidy. • Incomes at or below 150% of FPL. • Resources of $12,510 for a single person; $25,010 for a couple. • Premiums based on a sliding scale. • Deductible of $60. • 15% co-insurance (non-subsidy individuals pay 25%.) • Coverage during “doughnut hole” and after all out-of-pocket expenses have been met. • Copay of $2.40/$6.00 per prescription after all out-of-pocket expenses have been met. For more information about Medicare Part D, contact Medicare at (800) 633-4227 or go to their website at www.medicare.gov, or contact the New Mexico Aging and Long-Term Services Department at (800) 432-2080 or www.nmaging.state.nm.us. If you do not qualify for Medicare Individuals 65 years and older, who are not otherwise eligible for premium-free Medicare Part A and have 39 or fewer quarters of Medicare-covered employment, can buy into the Medicare program. The amount of the premium you will be required to pay for the coverage will vary depending on how many quarters of Medicare-covered employment you have. Other health insurance. You may also have or qualify for: • Employer or union health coverage. • Railroad Retirement. • Veteran’s benefits. • Tricare for Life (for military retirees and their spouses and survivors). • Medicaid (more on this in the Medicaid section). • Prescription drug and MedBank programs. • PACE (program of all-inclusive care for the elderly – currently only available in Albuquerque will be discussed later in this chapter). • Other insurance, for example, long- term care insurance. Medicaid (non-institutional) Medicaid is a state-run program that provides health insurance to low- income individuals. The State of New Mexico and the federal government jointly fund Medicaid. Medicaid is a need-based program, meaning it is available only to those who meet certain income, asset and, in some cases, disability criteria. Medicaid can be divided into two categories, non-institutional and institutional. Non- institutional Medicaid is for applicants who do not require institutionalization (nursing home care). Institutional Medicaid is for those applicants whose physical and/or mental health require placement outside their home. Institutional Medicaid is discussed in detail below. There are several different state-run programs that provide Medicaid to eligible New Mexico senior citizens. Which program you may qualify for depends on several factors: your income level, the assets you own, if you are under 65, and whether or not you are considered disabled by the Social Security Administration. Supplemental Security Income (SSI). SSI provides cash assistance and medical insurance (Medicaid) to the elderly, disabled and blind. It is a need-based program, meaning an applicant must meet certain income and asset requirements. If you are under 65, you must also be found to be disabled under Social Security Administration guidelines. Generally speaking, only those seniors with the lowest incomes will qualify for SSI (for 2009, the maximum benefit an individual on SSI can receive is $674/month and $1,011/month per couple). In addition to income, an applicant must meet certain asset requirements. As of the publication of this handbook in 2009, a single person is allowed only $2,000 in assets or resources, and a couple is allowed $3,000 (the applicant’s residence is not counted as long as he/she is living in it). If you do not qualify for SSI, there are several other Medicaid programs for which you may qualify (discussed below). Note: If you were receiving SSI as a supplement to a Social Security benefit and you lose your SSI due to a Social Security cost of living increase, you may be able to extend your Medicaid benefits after SSI ends under what is known as the “Pickle” Amendment. If you fall into this category, you should contact the Aging and Long- Term Services Department at (800) 432- 2080 or the Lawyer Referral for the Elderly Program at (800) 876-6657. Medicare Savings Programs Medicare Savings Programs are helpful in defraying costs associated with Medicare. There are three programs, each based on income and resource eligibility. They are the Qualified Medicare Beneficiary Program (QMB), the Specified Low-Income Beneficiary Program (SLIMB), and the Qualified Individuals Program (QI-1). Qualified Medicare Beneficiary (QMB). The QMB program, like SSI, is a need- based program available to those whose income and assets meet certain eligibility criteria. The monthly income limit is fixed at 100 percent of the federal poverty level guidelines (in 2009, $903 for a single person and $1215 for a couple). There are asset or resource limits as well (in 2009, $4,000 for a single person and $6,000 for a couple). As with SSI, the income and asset limits may change yearly to reflect inflation. In addition to the income and asset criteria, you must be enrolled in Medicare Part A. Under the QMB program, Medicaid will pay for your Medicare Part B deductibles, coinsurance and monthly premiums. Participants in this program are required to recertify (prove that you are still eligible) for the program at least every 12 months. QMB participants receive a Medicaid card. Specified Low-income Medicare Beneficiary (SLIMB). The SLIMB program is also a need-based program. The income threshold is slightly higher than the QMB program, making those whose monthly incomes fall between 100 and 120 percent of the federal poverty level guidelines (in 2009, $903-1083 for a single person and $1215-1457 for a couple) eligible for this program. The asset limits are the same as the QMB program, discussed above. As with other Medicaid programs, the income and asset limits are subject to change on a yearly basis to reflect inflation. In addition to the income and asset limitations, you must also be enrolled in Medicare Part A. Under the SLIMB program, Medicaid will pay for your Medicare Part B premiums, but you will not receive a Medicaid card. Qualified Individuals (QI-1). The QI- 1 program is an expansion of the SLIMB program and offers the same benefits. To qualify, you must have Medicare Part A and meet certain income and asset criteria, as QI-1 is a need-based program. To be eligible, your monthly income must fall between 120 and 135 percent of the federal poverty level guidelines (in 2009, $1083- 1219 for a single person and $1457-1640 for a couple). The asset or resource limits are the same as for the QMB and SLIMB programs. These amounts change on a yearly basis to reflect inflation. You will not receive a Medicaid card. This program is renewed on a yearly basis by Congress. As noted above, the income and asset limitations with all Medicaid programs are subject to change on a yearly basis to reflect inflation. Contact your local Income Support Division office, Lawyer Referral for the Elderly Program or the Senior Citizen’s Law Office (in Albuquerque) for current eligibility information. (See “Resources”) Prescription Drug Benefits Everyday, breakthroughs in medicine allow people to live longer and improved lives. Often this means that people need to be on various prescription drugs in order to maintain a good quality of life. Many prescription drugs are quite expensive, and the cost of being on many, or even one or two different drugs, can add up quickly. Congress has made changes to Medicare to provide for some prescription drug costs (see Part D Medicare earlier in the chapter). Other prescription drug assistance programs are discussed below. MedBank MedBank is an Internet-based program that assists uninsured or underinsured New Mexico residents of any age obtain free prescription drugs. You may use MedBank if you do not have prescription drug insurance (and you are not eligible for Medicaid benefits that include prescription drug coverage), or you have reached the limits of your coverage.You must meet the financial qualifications of the particular drug company that carries the drugs you need. MedBank simplifies the process of applying for free prescription drugs from drug companies. Only brand name prescription medications can be obtained through the drug companies’ assistance programs, but not all brand name medications are available. Call NM MedBank to see if the medicine you take is covered. It may take anywhere from two to eight weeks for you to get your first supply of medication. To assist applicants while they wait, an emergency fund is available to provide one-time vouchers that provide up to $300 for the purchase of prescription drugs. To be eligible for a voucher, you must meet the following requirements: • Be a New Mexico resident. • Have no prescription drug insurance. (Applicants who have insurance but have reached their benefit cap are not eligible for this emergency fund.) • Be ineligible for full Medicaid or have been denied full Medicaid. • Have income of less than $18,000 for an individual and $24,000 for a couple. • Have submitted a MedBank application with all required information including prescriber information and proof of income for entire household. • Need one or more prescription drugs currently available through MedBank. Patient assistance programs do not assist with generic medications, injectable drugs (except insulin), test strips, needles, nicotine patches, some narcotics, or vitamins. However, the prescription drug program may be able to help you find other sources to help you pay for these medications. For more information about or assistance using the MedBank program, contact the New Mexico Aging and Long-Term Services Department at (800) 432-2080 or www.nmaging.state.nm.us. Partnership for Prescription Assistance The Partnership for Prescription Assistance program is composed of American pharmaceutical companies, doctors, patient advocacy groups and civic groups. The program assists low-income, uninsured patients get free or nearly free prescription medications. The program’s website, www.pparx.org, is a single point of access to more than 475 public and private patient assistance programs, including more than 200 offered by pharmaceutical companies. The application process is quite simple. You provide information about yourself and the prescription drugs you take, and, based on this information, you will be provided with the names and applications for programs through which you may be able to get your prescription medications free or nearly free. Each manufacturer participating in the program has its own set of eligibility criteria and application procedures. Not all manufacturers participate, and not all medications are available under this program. New Mexico Discount Prescription Drug Program This program is administered through the New Mexico Retiree Health Care Authority and is a state-sponsored program available to all New Mexico residents, regardless of whether or not they have insurance. You may review a list of covered drugs at www.nmrhca.state.nm.us. When you enroll, you receive a card and a list of over 300 pharmacies that participate in the program. Contact the website or call (866) 244-0882 for more details. Nursing Facilities Medicare, in specific circumstances, will pay for skilled nursing care. Medicaid, in addition to paying for care provided in a nursing home or other care facility, will, in some cases, pay for at- home care. The different types of care and services that the programs provide are explained below. Skilled Nursing Facility – Medicare A skilled nursing facility (SNF) can be a stand-alone facility or can be part of a nursing home or hospital. A SNF provides around-the-clock nursing services (to those in need of medical or nursing care) or rehabilitative services to manage, observe and evaluate care. Examples of such services are those of a licensed nurse or rehabilitation therapist (physical, occupational, or speech-language). Medicare certifies these facilities if they have the staff and equipment to give skilled nursing care or skilled rehabilitation services. Medicare will only cover skilled nursing care when you meet certain conditions and, generally, only for a short time after a hospitalization (see “Eligibility,” below). Medicare does not pay for long-term custodial care. Note: The following explains benefits under the Original Medicare Plan (see this chapter for information about different Medicare plan types). If you are enrolled in a Medicare managed care or private fee-for-service plan, you are still entitled to at least the same benefits, but choice of facility, costs, coverage and rights or protections may be different. Eligibility. Medicare will cover skilled nursing facility care only if all of the following are true: • You have Medicare Part A. • You have days left in your benefit period (see below). • You have a qualifying hospital stay of at least three days in a row (not including the day you leave hospital). • You must enter the SNF within a short time (generally 30 days) of leaving the hospital. • Your doctor has determined you need daily skilled care (five to six days per week is okay if only receiving rehabilitation therapies). • You need the skilled services for a medical condition that was treated during the qualifying three-day hospital stay, or that started while getting SNF care for another condition. • The SNF is certified by Medicare. Covered services. When you qualify for SNF care, Medicare pays for the following: • Semi-private room • Meals • Skilled nursing care • Physical therapy • Occupational therapy* • Speech-language therapy* • Medical social services* • Medications • Medical supplies and equipment • Ambulance transportation – if necessary to safely transport to a provider of services not available at the SNF • Dietary counseling * Rehabilitation therapies are covered only if they are reasonable and necessary for treatment of the patient’s condition. Skilled nursing facility stays and benefit periods. Medicare uses a period of time called a “benefit period” (see above for an explanation of “benefit periods”) to keep track of how many days of SNF benefits you use and how many are still available. You get up to 100 days of SNF care in a benefit period. The benefit period begins on the day you start using hospital or SNF benefits. Once you use the 100 SNF days, your current benefit period must end before you can renew your SNF benefits. Your benefit period ends when you have not been in a SNF or hospital for at least 60 days in a row; or if you remain in a facility, when you have not received skilled care for at least 60 days in a row. There is no limit to the number of benefit periods you can have. Once a benefit period ends, however, you must have another three-day qualifying hospital stay and meet the other requirements before you can get another 100 days of SNF benefits. You do not need a new three-day hospital stay if your break in SNF care has been less than 30 days. In that case, your benefit period has not ended. However, the coverage available is limited to the number of unused SNF days left in your benefit period. If you have a break in SNF care of more than 30 days but less than 60, you need another three-day hospital stay to qualify for more SNF care, but coverage is limited to the number of unused SNF days left in your benefit period since the period has not ended. Costs. Under the Original Medicare Plan, Medicare pays 100 percent of the first 20 days of SNF care for each benefit period. You will be required to pay part of your care for each benefit period your SNF stay exceeds 20 days and all your care if your SNF stay exceeds 100 days. You must also pay any additional charges not covered by Medicare, such as telephone and laundry fees. Note: Your costs may be different if you are in a Medicare managed care or private fee- for-service plan. Check your plan for costs. Note: Costs tend to go up every year. For the most up-to-date information regarding what Medicare covers, contact Medicare or the New Mexico Aging and Long-Term Services Department. (See “Resources”) Help with paying for SNF care. What if your skilled nursing facility stay extends past that which is covered fully by Medicare (20 days)? How do you pay the coinsurance amount? Medicaid. If you qualify for both Medicare and Medicaid, Medicaid will pay the coinsurance not paid by Medicare for SNF care. In addition, Medicaid may pay for long-term care in a nursing facility under certain circumstances. Medigap policy. If you have a supplemental insurance policy (a Medigap policy) to fill the gaps in your Medicare coverage, the policy will likely pay the SNF coinsurance for days 21-100. Check your individual policy to determine if you have coverage. Long-term care insurance. If you have long-term care insurance, check your policy to see what care is covered. Some policies will pay the coinsurance for days 21-100. Some policies only pay for long-term custodial care. Some pay for both. Employer or union coverage. If you have coverage from an employer or union, check with your benefits administrator regarding coverage. Private pay. If you do not qualify for Medicaid, do not have coverage through your employer or union, and did not purchase any type of private insurance, then it is expected that you will pay for the care from your own funds. When Medicare ends. When the SNF thinks you no longer qualify for Medicare coverage, they must provide you with a Skilled Nursing Facility Advance Beneficiary Notice of Medicare Non- Coverage. If you think you still need SNF care, you have the right to have Medicare review the SNF’s opinion. The notice of non-coverage must tell you: • The date your Medicare coverage will end. • Why your stay is not, or no longer, covered. • Your right to request the SNF to have Medicare review the SNF’s opinion of non-coverage (sometimes called a “demand bill”). • That if you request a demand bill, you are not required to pay for your SNF stay until you are informed of Medicare’s decision. • Where you should sign to show you got the notice. The SNF cannot make you pay a deposit for services that Medicare may not cover until Medicare makes its decision, but you must continue to pay the costs you would normally pay under Medicare while the demand bill is being processed. If Medicare decides your care is no longer covered, you are responsible for the cost of the care you received while you were waiting for the decision. You may have a right to a fast appeal if you do not agree with this decision. During a fast appeal, an independent reviewer called a Quality Improvement Organization reviews the decision. You should receive a notice from Medicare telling you how to contact the Quality Improvement Organization. If you do not receive this information, you should request it. Note: If you are in a Medicare managed care or private fee-for-service plan, check with your plan to find out how you will know when Medicare coverage is ending, and how you appeal. Nursing Facilities and Medicaid As discussed above, Medicare will pay for a limited amount of skilled nursing care. Oftentimes, individuals who once required skilled nursing care recover enough to require a lesser level of care, what is referred to as “custodial care.” Custodial care is for individuals who require assistance with many of the activities of daily living, such as bathing, toileting and eating. Medicare does not, however, pay for custodial care. If Medicare does not pay for this level of care, who does? If you need custodial care, there are several payment options, namely: private pay, long-term care insurance and Medicaid. Private Pay. If you require nursing home custodial care and have sufficient income and assets, it is expected that you will pay for your own care. Long-Term Care Insurance. Long- term care insurance is relatively new, and policies may vary greatly. Policies may or may not cover: nursing home care, home health care, personal care in your home, services in assisted living facilities, services in adult day-care centers, and services by licensed providers or agencies only. Because policies vary in their coverage, it is critical to understand what services and providers are covered and where you can access these services and providers. Whether or not you should purchase a long- term care policy depends on many factors. The two major factors are cost and need. Long-term care insurance is quite expensive unless you lock into a low premium when you are young and healthy. The younger and healthier you are when you purchase your long-term care insurance, the lower your premium will be. If you wait to purchase long-term care insurance until shortly before you need it, your premium will be very expensive, a reflection of your age and state of health. Another thing to consider is whether you have any assets to protect. If you have very few assets and would quickly qualify for Medicaid anyway, you may want to consider forgoing the insurance and saving your money. Finally, you should consider whether you can afford the premiums now, and whether you will be able to afford them in the future, should your financial situation change (due to the death of a spouse and the subsequent loss of that spouse’s income, for example). With long- term care insurance, if you miss a premium payment, you may lose the coverage, and all the previous premiums you paid will have been for nothing. Institutional or Long-Term Medicaid. Nursing home costs, like health care costs in general, have skyrocketed over the past decade. Very few individuals can afford to privately pay for this type of care for very long. If you did not purchase long-term care insurance and are not able to privately pay for custodial care in a nursing home, you may qualify for Institutional or Long- Term Care Medicaid. Qualifying for Institutional Care Medicaid. As noted before, Medicaid is a need-based, state-run program that provides health insurance to individuals who meet certain income and asset eligibility requirements. The following sections outline the income and asset eligibility requirements for married and single applicants. They are current as of the publication date of this handbook. As with all Medicaid programs, the eligibility requirements change at least yearly to reflect inflation and changing budgetary priorities of the state and federal governments. Married Applicants. It used to be that in order to qualify for Medicaid financial assistance, you had to be very poor, and, if your spouse stayed at home (was not also in a nursing home), he or she would have to become impoverished as well. This is no longer true. It is still expected that, if you have the ability to pay for your own nursing home care, you will do so. That has not changed. What has changed is that if you are married and need to go into a nursing home, but your spouse is still well enough to stay at home, your spouse will be allowed to keep a substantial amount of the community assets to live on. How much your spouse will be allowed to keep depends upon the amount of your joint income and assets. As of the publication of this handbook, an at-home spouse of a nursing home patient is allowed to keep the following income and assets: • The home. • A car of any value as long as the car is used for transportation. • One half of the couple’s assets (in 2009, at least $31,290, but no more than $109,560). • At least one half of the couple’s monthly income. It usually works out that the at-home spouse is allowed to keep a majority of the monthly income. The minimum monthly income allowance is $1,750 until mid 2009, and the maximum monthly allowance is $2,739. In addition to the income and asset requirements, the applicant must be 65 years old, blind or disabled and require nursing home level care. Single Applicants. If you are single, divorced, widowed or your spouse is already in a nursing home, Medicaid will pay for custodial care in a nursing facility if you meet the following requirements: • You must be 65 years old, blind or disabled and require nursing home care. • You have no more than $2,000 in personal resources. This includes the cash surrender value of any non- term life insurance policies (burial insurance and term life insurance are not counted). • You have no more than $1,500 in a burial account. These burial funds cannot be commingled with non- burial funds. In lieu of the burial account, you may choose to purchase a pre-paid burial agreement (there is no limit as to how much the pre- paid burial agreement may cost). It must be pre-paid and irrevocable (you cannot get your money back). A burial space or an agreement for the purchase of a burial space is an excluded resource, regardless of value. • You may have one car of any value. • Your income is not more than $2,022 per month (these figures are for the year 2009). The nursing home resident gets $60 of this amount each month for personal needs, such as toiletries, beauty shop visits and cigarettes. This money is placed in a special account. The remainder of the income is paid to the nursing home for the cost of care. • The nursing home resident’s home (if the equity equals $750,000 or less) is not counted as an asset as long as the person states that he/she intends to return home, even if only to die. The intent to return home does not have to be a realistic one. Because the house is not counted as an asset, it will not have to be sold to pay for the nursing home care. The state of New Mexico has the power, however, to make a claim against the nursing home resident’s estate after that person dies to recover the costs paid by Medicaid for that person’s care. Note: As with many of the programs mentioned in this handbook, the income and asset information for Institutional Care Medicaid is subject to change on a yearly basis to reflect inflation, availability of funds and program priorities. Keep in mind that Medicaid does not pay for the first 30 days of nursing home care. Often patients have coverage either through private pay or Medicare for the first 30 days they are in a facility, and there is no problem. What happens to those with few or no assets who require custodial care and have to move into a nursing home? For these individuals, paying the first month of nursing home care until Medicaid becomes available is very difficult, if not impossible. If you are in this position, you should contact the Aging and Long-Term Services Department at (800) 432-2080. Income Diversion Trusts. If your income exceeds the limit for qualifying for Institutional Care Medicaid, you will be expected to pay for your own nursing home care. However, as of the publication of this handbook, the average cost of a nursing home in New Mexico is about $5,037 per month. What do you do if your income exceeds the limit to qualify for Institutional Care Medicaid but is less than the $5,037 per month it will cost to be in a nursing home? The solution to this dilemma is an Income Diversion Trust. This is a special type of trust that has nothing to do with your property or avoiding probate. Each month your (the nursing home patient’s) income, over the maximum allowable income ($2,022 for 2009), is put into the trust. From the maximum allowable income, the trustee may take a small fee and your personal care allowance is deducted. The remaining amount is paid to the nursing home as your “medical care credit.” Your income (the portion that was over the maximum allowable income) accumulates in the trust. This type of trust is irrevocable, meaning it cannot be changed or revoked. Upon your death, the state of New Mexico’s Medicaid program gets any money remaining in the trust as reimbursement for the cost of your care in the nursing home. Considering the cost of nursing home care in New Mexico, this is a pretty good deal. It is important to note that a nursing home cannot treat you differently because you are receiving assistance from Medicaid. You have the same rights as every other patient in the facility, regardless of how you are paying. (See the section on Residents’ Rights, later in this chapter) A word of caution about qualifying for Institutional Care Medicaid. When it is anticipated that a loved one may need nursing home care, many families begin trying to take assets out of the loved one’s name, thinking that this will help him/ her qualify for Medicaid. If the individual owns a home or other real estate, they may transfer the property into someone else’s name. If the individual has money in the bank, they may withdraw the money and put it into another’s account or start making gifts. These types of transfers are never advisable without first obtaining the advice of an attorney who has experience in this particular area. When an individual applies for Institutional Care Medicaid, a fairly extensive check is made of the applicant’s financial situation. For almost all transfers of assets, there is a “look back” period of 60 months. This means that certain transfers of assets will be scrutinized, and if the transfers are found to be inappropriate, the applicant will be subject to a penalty period in which he/she will have to pay for his or her own nursing home care. The penalty period is determined by dividing the value of the transferred asset by the average cost of nursing home care in New Mexico. For example, if, during the look back period, you gifted your home worth $100,000 to a friend, then you could be penalized for 19.8 months (or 100,000/5,037 = 19.8) and will not be eligible for Institutional Care Medicaid for those months. Note: There are no penalties for transfers of assets made between spouses. It is advisable to be completely candid when applying for Institutional Care Medicaid. In some cases, as noted above, applicants (and if they are married, their spouses) are allowed to keep a substantial amount of income and assets. State-Run Facilities for Nursing Home Care What happens to those who have no private long-term care insurance, do not qualify for Medicaid and do not have the resources to pay for nursing home care on their own? Those who fall into this category are not denied care. In New Mexico, there are two state-run hospitals for indigent individuals who need nursing home level care. They are located in Ft. Bayard and Las Vegas. Selecting A Nursing Facility If you require skilled nursing care and are in the Original Medicare Plan, you can go to any Medicare-certified skilled nursing facility (SNF) if a bed is available. If you belong to a Medicare managed care plan, you must use a SNF that belongs to your plan. If you are in a Medicare private fee-for- service plan, you can go to any Medicare- certified SNF if a bed is available, but you must notify your plan prior to admission (otherwise, you may have to pay more for your SNF care). Instructions for notifying your insurer should be on your insurance card. If the hospital you are in has its own SNF unit, you may be able to move to that unit if a bed is available. If you have been living in a nursing home or are planning to make a long-term move to a facility, you may want to use the SNF in that facility, if there is one. If you do not require skilled nursing care, you can go to any nursing facility that has beds available. If you are on Medicaid, you must go to a nursing facility that accepts Medicaid patients. If you do not know much about the nursing facilities in your area, there are several resources you can check to learn more about what is available. The discharge planner or social worker at your hospital should have a list of local nursing facilities, or your doctor may have experience with some or all of the nursing facilities in your area. You may also call the Aging and Long- Term Services Department’s Long-Term Care Ombudsman Program (LTCOP) for information on SNFs in your area at (866) 842-9230. The LTCOP advocates for the recognition, respect and enforcement of the civil and human rights of residents of long-term care facilities in New Mexico. In addition to a small number of highly- skilled staff, many volunteers throughout the state regularly visit nursing homes and other long-term care facilities to ensure that residents are properly treated. The LTCOP’s primary duty is to investigate and resolve complaints made by or on behalf of residents. In discharging this duty, the LTCOP often coordinates with other state agencies, including the Department of Health, the Human Services Department, and the Adult Protective Services Division of the Aging and Long-Term Services Department. The LTCOP staff regularly visit nursing facilities to speak with residents, investigate complaints, help solve problems and monitor quality of care. They are a good source of information about facilities. In addition, you can get general information about all nursing facilities in your area on the Medicare website at www.medicare.gov (click on or search for “Compare Nursing Homes in Your Area”). The information provided includes inspection reports, number of staff, and resident information. If possible, visit the facilities you are considering (or have a family member or friend visit) to ask questions and get a first-hand impression. Trust your senses. If you don’t like what you see on a visit, if the facility doesn’t smell clean, or if staff are not helpful or don’t make you feel comfortable, you may want to choose another nursing facility. Resident Rights Nursing facility residents have certain rights and protections under the law. Nursing facilities must tell you these rights as well as give a copy of the rights to all new residents. Resident rights include: Respect: You have the right to be treated with dignity and respect. Services and fees: You must be informed in writing about services and fees before you are admitted. Money: You have the right to manage your own money or to choose someone you trust to do this for you. Privacy: You have the right to privacy and to keep and use your personal belongings and property, as long as they don’t interfere with the rights, health or safety of others. Medical care: You have the right to be informed about your medical condition and your medications and to see your doctor. You also have the right to refuse medications and treatment. Activities: You have the right to spend day- to-day time in a way that means something to you. Virtual visitation: New Mexico has a“Granny Cam” law which allows a nursing facility resident or family of a resident to have a video camera installed in their room in order to monitor possible abuse. If you have a roommate, the roommate must give written permission to install the camera before you can proceed. The intent of this law is not only to catch abuses on film but also to create a strong disincentive to abusers who, knowing that there is a camera on them, will treat the resident properly. For more information regarding your rights as a nursing home resident, contact Medicare at (800) 633-4227 or visit their website at www.medicare.gov, or you can contact the Aging and Long-Term Services Department’s Ombudsman Program at (866) 842-9230 or www.nmaging.state. nm.us. Other Long Term Care Facilities In addition to skilled nursing facilities and nursing homes, there are many other types of long-term care facilities. Assisted Living If you can no longer live independently but do not require the level of care given at a nursing home, an assisted living facility might be right for you. Assisted living facilities bridge the gap between living independently and living in a nursing home. Residents of assisted living facilities generally do not require constant care but do need help with such tasks as housekeeping, laundry, bathing, eating and medications. Assisted living is not an alternative to nursing home care. Instead, it is a different level of care for more independent residents. Some assisted living facilities provide medical care, while others provide only room and board. Depending on the level medical care provided, Medicaid (through the CoLTS waiver programs, discussed below) may cover part of the cost of some assisted living facilities. Continuing Care Facilities Many assisted living facilities are also part of what is called a “continuing care facility.” Continuing care facilities provide various levels of care. Usually, continuing care facilities include independent living, assisted living and nursing home facilities, all within the same building or set of buildings. Thus, residents may initially move into the independent living facility, and, as they require more assistance, move to the assisted living and then the nursing home facility. This means that a resident in a continuing care facility can easily move to a another part of the facility if more assistance is required without having to go through the stress of looking for a new facility and relocating or adapting to a new place. Other Care Options In addition to going into a nursing home or other facility, Medicaid also has programs that may pay for someone to care for you in your own home. Each program has its own eligibility requirements. For information on any of the following programs, contact your local Income Support Division office or the Aging and Long-Term Services Department at (800) 432-2080 or www. nmaging.state.nm.us. Program of All Inclusive Care for the Elderly (PACE). The PACE program is an optional benefit under both Medicare and Medicaid available only to the frail elderly. In order to qualify, an applicant must be at least 55 years old, be able to live in the community safely, have specific long-term care needs, live in a specific area of Albuquerque, and be eligible for Institutional Medicaid. The PACE program offers a comprehensive package of medical and social services aimed at keeping individuals as independent as possible and out of nursing homes. The medical services are provided at an adult day health care center, although services may be provided in-home and through outside referral services, as needed. The applicant returns home in the evening. Meals and transportation are included. Services are provided 24-hours a day, seven days a week, 365 days a year. Unfortunately, as of the date of publication of this handbook, the PACE program is only available in limited areas of Albuquerque. For more information about the PACE program, contact Total Community Care Center at (505) 924-2650, or visit their website at www.totalcommunitycare.org, or visit the Aging and Long-Term Services Department website at www.nmaging. state.nm.us. Medicaid Personal Care Option. The goal of the Medicaid Personal Care Option program is to improve the quality of life for the disabled and the elderly and prevent them from having to enter a nursing facility. Personal Care allows consumers to live in their own home and achieve the highest level of independence possible. Medicaid Personal Care Option is available to individuals who: • Are on a FULL Medicaid coverage category (except for waiver or nursing facility categories). The most common category of eligibility is an SSI category; • Are 21 years of age or older; and • Meet the level of care required for nursing facilities which is determined by the Third-Party Assessor provider. There are two options available in the Medicaid Personal Care Option program. These options are Consumer-Directed and Consumer-Delegated. In both options the consumer may select a family member (except a spouse), friend, neighbor, or other individual as their attendant. All attendants must be 18 years of age or older and be able to pass a nationwide caregivers criminal history screening. • Consumer-Directed Option. The consumer acts as the employer. The consumer selects, hires, trains, supervises, and terminates his or her Personal Care attendant. The type of training the Personal Care attendant receives is at the direction of the consumer. Up to eight hours of training per year is paid for by the Medical Assistance Division. These hours can be for the consumer or the personal care attendant. The Personal Care agency acts as the fiscal agent and is responsible for processing all financial paperwork and issuing pay-roll. • Consumer-Delegated Option. The Personal Care agency performs all employer-related tasks. This includes hiring, training, supervising, and terminating Personal Care attendants. The Personal Care agency also is responsible for processing all financial paperwork and issuing payroll. Services offered under the Medicaid Personal Care Option program include: • Mobility • Eating • Self-administered medication • Skin care • Cognitive functioning • Household services • Individualized bowel and bladder services • Meal preparation • Support services • Bathing • Minor maintenance of assistive device(s) Note: The Personal Care Option program does not provide 24 hours of care per day and may not be the most appropriate program for some individuals. Approximately half of the participants receive about 28 hours of care per week. CoLTS C Waiver Program (formerly Disabled and Elderly Waiver Program). CoLTS C Waiver (CCW) Program is similar to the Personal Care Option. “CoLTS” stands for “Coordination of Long-Term Services.” To qualify for this program you must be medically eligible for custodial nursing home care, and meet the same financial eligibility requirements as for Institutional Care Medicaid. The benefits and services provided under the CCW program are more extensive than those provided under the PCO. Services available: • Adult day health • Assisted living • Bowel and bladder services • Case management services • Emergency response • Environmental modifications • Homemaker services • Homemaker respite • Therapies • Private duty nursing (RN & LPN) Unfortunately, the CCW program is limited. The number of positions available is controlled and dependent upon federal approval and state appropriations. Persons registered for the CCW program may have to wait on a central registry until a position becomes available. How to apply: • By calling toll free (800) 432- 2080. • The Aging and Long-Term Services Department has created a comprehensive statewide home and community-based Resource Center staffed with knowledgeable personnel ready to register seniors and people living with a disability for the CCW Program. • Assessment conducted over the phone. • Name placed on central registry. Mia Via Program Mia Via is a self-directed waiver program which gives its recipients the power to choose and manage the services they receive. Medicaid recipients who are eligible for other long-term services programs (such as the CoLTS C Waiver Program) will be eligible for Mia Via. Mia Via participants can choose the services they need, hire their own workers, and decide how and when to spend their Mia Via budget, with the advice of a consultant if necessary. For more information, go to www.miavianm.org or contact Aging and Long-Term Services. Community Based Assistance – Aging and Long-Term Services There are a number of other resources and programs available to assist senior citizens. Not all programs are available in all areas. Contact your local senior citizen’s center, your local Office of Senior Affairs, or the Aging and Long-Term Services Department at (800) 432-2080, for information about the following programs in your community. Senior Citizen’s Centers. Senior citizen’s centers provide meals, activities and information for seniors. Many senior centers have volunteer opportunities for seniors. Senior centers are good places to make new friends, stay informed and keep active, both physically and mentally. Meal Delivery Service. Meal delivery services, often called “Meals on Wheels,” are available for qualified elderly and disabled individuals. Meals are delivered to your home. Transportation. If you are elderly or disabled, there may be special transportation services provided in your area to take you to doctor’s appointments and to do errands, such as your shopping. Check with your local senior center or in the telephone directory in the county or city government pages under “Transportation,” for information about transportation services in your area. Home Assistance. Home assistance workers, called “homemakers,” help with light housekeeping and some cooking, offering some relief from daily chores for caregivers and their charges. Home Repair. Home Repair is a program that assists in improving and repairing homes so that participants are able to remain in their homes. Some of the repairs and improvements include adding grab bars, wheelchair ramps, and generally increasing accessibility for the disabled and impaired. In Albuquerque, these services are provided by the City of Albuquerque Home Services Program. Adult Day-care. Just as children’s day- care centers began to appear when both spouses entered the workforce, adult day- care centers are beginning to appear now because more adults, unable to be alone, are being cared for by their families at home, rather than in a facility. In addition to having trained staff supervising the participants, the centers often serve meals and provide supervised activities. Some adult day-care centers will even pick up participants from their homes. Many adult day-care centers charge by the actual time the participant is in the center, rather than charging a flat fee. Mental Health Mental health problems, including depression and anxiety, can come at any age. If you think you are having problems that are affecting your mental health, talk to your doctor. You can get help. Medicare, Medicaid and many insurance plans cover both outpatient and inpatient (hospital) mental health care. The following describes Medicare coverage of mental health services. Remember, if you also have Medicaid, it will pick up your deductible and co-insurance. If you have Medicaid only, or have the Medicare Managed Care Plan, you belong to an HMO, which will determine when you qualify for mental health services, what services you can have and who your provider can be. Contact your HMO for details. Insurance plans vary as to what they will cover. Check with your plan. Outpatient Benefits If you are in the Original Medicare Plan and have Medicare Part B, Medicare covers visits with these type providers for mental health services: • Doctor (psychiatrist or other) • Clinical psychologist • Clinical social worker • Clinical nurse specialist • Nurse practitioner • Physician’s assistant Remember, not all health care providers are signed up with Medicare. Before your treatment, be sure to ask if the provider you have chosen accepts Medicare. Medicare Part B deductibles and co-insurance payments apply. (See Chapter Two) Outpatient services are those that do not require an overnight stay and can be given in a clinic, doctor or therapist’s office, or the outpatient department of a hospital. Medicare covers services such as: • Individual and group therapy by qualified professionals (not support groups) • Counseling for your family to help with your treatment • Mental health evaluation and testing • Medication management • Individualized activity therapies as part of your treatment • Individual patient training and education about your condition • Occupational therapy that is part of your treatment • Prescription medicines that cannot be self-administered (not medicines you can take yourself) • Laboratory tests. • Screening for mental health conditions during the one-time “Welcome to Medicare” physical exam. Partial Hospitalization Sometimes, your mental health care needs are more involved than what can be provided in visits to your doctor or therapist’s office. You may require “partial hospitalization,” and, under certain conditions, Medicare will help pay for this kind of care. Partial hospitalization is a structured program of active treatment that is longer and more intense than office visits. To be covered by Medicare, a doctor must say that you would otherwise need inpatient treatment. These programs are given through hospital outpatient departments or community mental health centers. Again, remember to check that the program is a Medicare provider. Note: Partial hospitalization will cost you more than outpatient care. Under partial hospitalization, Medicare pays 50 percent of most services after you meet your deductible. On the other hand, Medicare generally pays 80 percent for outpatient care, just like any other Part B benefit. Inpatient Hospitalization When you require hospitalization for your mental health care, Medicare Part A helps pay in the same way as for any other inpatient hospital care. Inpatient care can be provided in a general hospital or in a Medicare-certified psychiatric hospital. The only difference is that you have a lifetime limit of 190 days in a psychiatric hospital. There is no lifetime limit of days in a general hospital. Otherwise, deductibles, co-insurance and benefit periods are calculated exactly the same for inpatient mental health care as for any other inpatient hospital care. (See Chapter Two) For more information contact Medicare and request “Medicare and Your Mental Health Benefits” at (800) 633-4227 or visit www.medicare.gov. Dental, Vision and Hearing Medicare does not cover eyeglasses, hearing aids or most outpatient dental work. However, there are some programs that may assist you with these needs. Federally Qualified Health Centers (FQHC) provide health care services on a sliding-fee scale for patients who have no, or inadequate, health care coverage. In addition, the services provided by many FQHCs include dental and vision care, as well as prescriptions. If you have Medicare but have difficulty with your out-of-pocket health care expenses, you may want to consider seeking care at a FQHC. To find a FQHC in your area, contact the New Mexico Primary Care Association at (505) 880-8882. The Seniors EyeCare Program (formerly the National Eye Care Project) is a program that links qualifying patients with participating ophthalmologists who provide vision services and eyeglasses free or at reduced cost for low-income individuals. If you are a U.S. citizen or legal resident 65 years or older, and you have not been to an ophthalmologist for 3 years or more and do not have an HMO or Veteran’s vision care, you may contact (800) 222-EYES (3937) to apply for this assistance. The Hear Now Program is a program that provides reconditioned hearing aids to low- income patients at reduced costs. Call (800) 648-4327 or go to www.sotheworldmayhear. org for more information. For more information on any of these programs contact the Aging and Long-Term Services Department at (800) 432-2080. Resources Senior Citizens’ Resources Entry site for seniors to locate U.S. Government and other web sites on topics of interest to senior citizens. www.seniors.gov Administration on Aging Provides links to an infinite number of government and non-government sites for information relevant to seniors. www.aoa.gov New Mexico Department of Insurance (800) 947-4722 (statewide) (505) 827-4601 (Santa Fe) Medicare Health insurance program for seniors and the disabled. (800) MEDICARE ((800) 633-4227) TTY/TDD: 1-877-486-2048 www.medicare.gov Income Support Division (Medicaid, SSI, food stamps, utility assistance) Local office is listed in the telephone directory under State Government – Human Services Department – Income Support Division. Social Security Administration Local Office is listed in the telephone directory under U.S. Government – Social Security Administration (800) 772-1213 www.ssa.gov Eye Care America Raising awareness about eye health, screening and information about eye care. (800) 222-3937 www.eyecareamerica.org National Hospice Organization Provides free consumer information on hospice care and puts the public in direct contact with hospice programs. (800) 658-8898 www.nho.org New Mexico Health Facility Licensing Bureau Establishes, monitors and enforces quality standards for health facilities in New Mexico. (505) 476-9025 (Santa Fe) (505) 841-5800 (Albuquerque) (505) 528-5079 (Las Cruces) (505) 627-8343 (Roswell) Partnership for Prescription Assistance (PPA) PPA helps provide free or nearly free prescription drugs to patients who cannot pay for their medications. www.pparx.org Total Community Care (PACE) Available to person 55 years and older. A day health care center offering comprehensive set of services aimed at keeping those, who would otherwise require institutionalization, at home. Currently available to Albuquerque residents only. (505) 924-2650 New MexicoAging and Long-Term Services Department Resource Center State agency assisting the elderly and those with disabilities achieve the highest quality of life. (800) 432-2080 www.nmaging.state.nm.us Hear Now Program Hearing aid assistance. (800) 648-4327 Benefits Counseling Program (HIBAC) Provides free, unbiased information about health care options and other entitlements. (800) 432-2080 (505) 265-1244 (in Albuquerque) www.nmaging.state.nm.us NOTES __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ 46 - Chapter 3 - Consumer Protection New Mexico Senior Legal Handbook Chapter Three Consumer Protection If you purchase goods or services for a non- business purpose, you are a “consumer.” The majority of businesses and salespeople offering goods and services are honest, but there are businesses and salespeople who will try to cheat and take advantage of you. Senior citizens are often targets of these unscrupulous and dishonest businesses and salespeople. As a consumer, you are protected from dishonest or unscrupulous people and businesses by a variety of state and federal laws; however, it is up to you, the consumer, to enforce these laws. If you feel that you have been taken advantage of or lied to by a salesperson or business, contact an attorney or the Consumer Protection Division of the Attorney General’s office. (See “Resources” at the end of this chapter.) It is also up to you, as a consumer, to protect yourself from dishonest or unscrupulous people and businesses. This chapter will discuss the different types of consumer transactions, the laws that protect consumers, how to protect yourself, and, finally, the consequences of “over consuming.” Consumer Transactions Any discussion of consumer issues would be incomplete without offering some general advice about dealing with businesses and salespeople. You are your own best protection against dishonest and unscrupulous businesses and people. Here are some general warnings to remember when you are considering the purchase of any goods or services: • Carefully choose the people with whom you do business. If possible, deal with businesses and people who are familiar to you or have a good reputation among your friends or in the community. Word of mouth is a good indicator about a business or salesperson. Remember, if something sounds too good to be true, it probably is. • Do not let anyone pressure you into buying anything at any time. There is seldom an offer that is good “for one day only.” Any reputable business or salesperson will give you time to think about what you want to do. • DO NOT GIVE MONEY TO ANYONE “UP FRONT!” Again, there is seldom an offer that is good “for one day only.” Any reputable business or salesperson will give you an opportunity to think about what you want to do. There are some types of consumer transactions that allow you three days to cancel a purchase under the “Cooling-Off Rule” (discussed at length later in this chapter). However, this rule does not apply to all consumer transactions. Take time to think before you enter into any consumer transaction, since once you agree, you may not be able to change your mind. • You do not have to pay for anything that comes in the mail that you did not order. New Mexico Senior Legal Handbook Chapter 3 - Consumer Protection - 47 Credit Purchases Buying on time or credit means that you borrow the money to pay for the good or service. You agree to pay back the money, plus a finance charge, in a specified amount of time. These days it is almost impossible to make a major purchase without using credit. The following are some important terms you will see when you borrow money. • Cash price. The cash price is the amount a good or service would cost if you paid cash, in full, for the item at the time of the purchase. • Finance charge. A finance charge is the cost of borrowing money to pay for a good or service. It generally includes interest but may include other fees as well. • Total of payments. The total of payments is the total amount you will pay for the good or service over time, which includes the cost of the good or service and the finance charge. • Amount financed. The amount financed is the initial amount you are borrowing, also known as the “principal.” • Annual percentage rate. The annual percentage rate is the rate of interest you will pay for the good or service over time. The interest rate can be fixed, meaning it remains the same over the life of the loan, or it may be variable, meaning it can change over the life of the loan. Whenever you purchase any good or service using credit, the federal Truth in Lending Act requires creditors to give you a written statement advising you of the amount financed, the annual percentage rate, the finance charge and the total payments for the purchase you wish to make. The majority of credit purchases are made with credit cards. When you use a credit card, you will incur a monthly finance charge on any unpaid balance; however, if you pay the balance in full, you may be able to avoid the monthly finance charge. If you are only paying the minimum monthly payment required by the lender, you may only be paying the monthly finance charge and not any of the principal. In fact, the minimum monthly payment may not even cover the monthly finance charge, meaning you are paying interest on the interest. If this is the case, your balance owed will actually grow even if you do not make any new purchases on the account. If at all possible, pay more than the minimum monthly payments. If you are only able to pay the minimum monthly payment on your credit card(s), you may have overextended yourself by making too many credit purchases and should stop using your credit cards. What to do if you have overextended yourself financially will be discussed later in this chapter. Contracts Every day we enter into numerous contracts, most of which are informal and implied. For example, when we eat in a restaurant, it is implied when we order and eat our food that we will pay for it after we are through with the meal. That process is actually an unspoken agreement or contract: the restaurant is providing food in exchange for our payment. There are some contracts, however, that are formal, meaning there is a written, signed agreement between the parties. Oftentimes, you will be required to sign a contract for the purchase of goods and services. Other names for a contract are “purchase agreement,” “agreement,” “lease” and “rental agreement.” No matter what it is called, it is still a contract. It is imperative that, prior to signing any contract, you read and understand what you are signing and agreeing to do. The law assumes that when you sign a contract, you have read and understood the contract. The following is some cautionary advice to consider before signing any contract. • As noted above, read the contract before you sign it. If there is anything in the contract you do not understand, ask questions until you understand the whole document. If after asking questions you still don’t understand the whole document, ask someone you trust (not the person who wants you to sign the contract) for assistance. Any reputable business or salesperson will let you take the contract home to study before you sign. As noted above, there is seldom a good or service that is available “for one day only.” The same good or service will be available to you when you understand the contract. • Sometimes a seller will promise you something that is not part of the written contract in order to induce you to sign the contract. There is no guarantee you will get what the seller verbally promised you because it is not a part of the written contract. If there are any verbal promises or agreements between you and the seller, make sure they become part of the written contract. • Before you sign a contract, make sure that you really want to do what you are agreeing to do in the contract. It is not rude, impolite or bad manners to decline a good or service or to refuse to enter into a contract. Sometimes a seller will try to appeal to your sympathy in order to make a sale. They may tell you a hard luck story so that you will feel sorry for them and purchase the good or service they are selling. Most likely the story is not true, and, even it were true, it is not your responsibility to solve the seller’s problems. • Never sign a contract that has blank spaces that can be filled in later. Insist that any blank spaces in a contract be filled in prior to signing. If the seller refuses to do so, take your business elsewhere. • As noted in the introduction to this chapter, every consumer has certain legal rights and protections under the law. Do not sign a contract that takes away these legal rights. Any reputable business or salesperson would not ask or expect you to give up these rights or protections. • Before signing any contract, ask about your right to cancel the contract. Certain types of consumer transactions, specifically door-to- door sales and sales at facilities rented by the seller on a short term or temporary basis, are subject to a three-day cancellation period, commonly referred to as the “Cooling-Off Rule.” The “Cooling- Off Rule” will be discussed at greater length later in this chapter. • If you feel at all pressured or rushed to sign a contract, don’t sign. The good or service will still be there after you have had a chance to think about it. • Keep a copy of all contracts, receipts, payment records, billing statements and any letters you send or receive regarding the good or service. • Make sure you keep the seller/ creditor informed of any address changes to ensure that you receive all billing statements, correspondence and warranty information about the good or service. Finally, before you sign any contract, ask yourself the following questions: • Do I really want what I am agreeing to buy? Remember, not all transactions have a “cooling- off” period, should you experience buyer’s remorse. • Do I understand the entire contract? Saying, “I did not understand the contract,” is not a defense. The law assumes you have read and understand any contract that you signed. • Do I know the total price I am paying for the good or service, including any finance charges or other fees? • Do I know how long it is going to take to finish paying for the good or service? • Is this the best price for the good or service? What about the quality of the good or service? Sometimes the least expensive option is not always the best one. Remember, you get what you pay for. • Can I really afford the good or service? If my financial circumstances were to change for the worse, would I still be able to make the payments |