The acronym “HIPAA” stands for the Health Insurance Portability and Accountability Act. To understand why we would be highlighting this piece of legislation as an elder law firm, we have to provide some background information about incapacity planning.
Decision Making Ability
There are some unpleasant realities of life that you should meet head on, and the eventualities of aging would certainly fit into this category.
A very significant percentage of Americans live into their 80s and beyond. In fact, the segment of the population that is between 80 and 90 years old has been growing faster than any other 10 year age grouping.
Approximately one third of people that are at least 85 years of age have Alzheimer’s disease, and people with dementia become unable to make sound decisions on their own. This is not the only form of cognitive impairment, so everyone should take this looming threat seriously.
Advance Directives for Health Care
In addition to the cognitive difficulties that many people experience, there are those that cannot communicate because of physical ailments. For these reasons, it is important to include an incapacity planning component when you are developing your estate plan.
One document that should be part of the plan is a living will. With this type of will, you state your preferences with regard to the use of artificial nutrition and respiration, resuscitation, mechanical respiration, and other life-support techniques.
You can express different choices for each respective type of life-support if you choose to do so, and you can include your organ and tissue donation declarations. When you have this document in place, you can go forward with the knowledge that your own true wishes will be honored if you are in this situation.
Your incapacity plan should also include a health care proxy. You name an agent in this document that would act as your representative when it comes to health care decision-making. It would apply to scenarios that are not specifically addressed in the living will.
Now that we have set the stage appropriately, we can take a look at the Health Insurance Portability and Accountability Act (HIPAA). This measure was enacted in 1996, and prior to its enactment, patient information was rather liberally distributed.
We will not get into the details that do not apply for our purposes, but a provision contained within HIPAA prevents doctors from sharing health care information with anyone other than the patient.
From an incapacity planning perspective, you have to make sure that your health care proxy can speak freely with your doctors. For this reason, you should include a HIPAA release that will give doctors the freedom to communicate openly with the agent.
The HIPAA protections extend to all adults, even 18-year-olds. This is something to keep in mind if you have a child that has become a young adult. If your child does not sign one of these forms, their doctors would be bound by HIPAA regulations.
Financial Decision Making
While we are on the subject, we should briefly touched upon the financial part of the equation.
A living trust is a very useful estate planning tool that can be far more effective than a simple will for a number of different reasons. When you have a living trust, you would act as the trustee while you are alive and well. As a result, you would have total access to the resources throughout your life.
To account for incapacity, you would name a disability trustee to assume the role if it becomes necessary. In practice, living trusts are commonly recognized by financial institutions, while powers of attorney very often are not honored.
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