IRAs Have Acquired a Different Look
Question: A friend told me about changes in laws regarding Individual Retirement Accounts (IRAs), but when I called my bank they couldn’t help me. What do you know about recalculated benefits?
Answer: The new law passed last year as part of the 1984 Tax Act. The Treasury Department has not yet issued regulations, although many financial planners are interpreting the law in planning for their clients. Some older people with IRAs have significant income from other sources, and may want to shelter funds in an IRA for partial bequeathing to a spouse, child or grandchild.
In the past, rules required withdrawing a minimal amount each year after reaching age 70 1/2. Under the new law, IRA holders may recalculate their life expectancy each year and adjust withdrawals based on the recalculation. This reduces the yearly withdrawals and extends them over a greater number of years.
According to mortality tables used by the IRS, a woman age 70 has a life expectancy of 15 years. Under prior rules, you would have to withdraw 1/15th of your IRA money the first year, 1/14th the second year and so on. When you reached age 85, your IRA funds would be depleted.
But by recalculating life expectancy each year, the fund would not be depleted. The annual minimal withdrawal is calculated by dividing life expectancy into the amount remaining in the IRA. The new rules allow withdrawals based on joint life expectancy of the IRA owner and spouse, child or even grandchild.
Q: I am afflicted by dizziness and nausea. Although some attacks last only a few minutes, the last one was severe and lasted several hours. This was diagnosed as labyrinthitis, and my doctor told me it was a nerve problem--not an inner-ear problem--and that I may eventually become deaf. I am taking meclizine (Antivert) and diazepam (Valium). What is labyrinthitis, and how does it relate to Meniere’s syndrome?
A: Labyrinthitis and Meniere’s syndrome are two of the many conditions affecting the balance mechanisms of the inner ear and its nerve connections to the brain. Additional causes of dizziness are vestibular neuritis and, especially in older persons, benign positional vertigo and vascular insufficiency of the vertebro-basilar artery supplying blood to the brainstem.
Labyrinthitis is an acute inflammation of the inner ear. It causes a sudden dizziness and usually hearing loss. A virus is the most common cause. Chronic cases occur but, fortunately, most resolve after a week or two. Meniere’s syndrome is characterized by recurrent bouts of tinnitus (ringing in the ear), vertigo, fluctuating hearing loss and a sensation of fullness in the ear. Chronic labyrinthitis is one cause of Meniere’s syndrome, but the cause is usually not known. A swelling of the membranes in the inner ear leads to the symptoms, and permanent damage to hearing can result.
Meclizine (and other antihistamines) and diazepam are effective for the relief of the symptoms of vertigo. Both cause drowsiness, and and an elderly person must be careful with this combination since sedation can lead to confusion or falls.
Q: I have an elderly friend who was sent home from the hospital shortly after surgery. As far as I’m concerned, even though a nurse came by to see her, she was too sick to come home. Is anything being done to prevent the aged from being discharged prematurely under the DRG (Diagnosis Related Group) system?
A: The Senate Special Committee on Aging recently proposed that Congress change the Medicare payment system to reflect differences in the severity of illness among patients classified in the same DRG category. Currently a hospital is paid the same amount for each Medicare patient with a particular illness, regardless of how long the person is hospitalized.
If a patient feels that he is being discharged too soon, he or his representative can appeal to a peer-review organization, which includes doctors and health-care professionals who monitor Medicare services. Since the DRG payment system began in late 1983, the average length of hospital stays for Medicare patients has decreased from 9.5 to 7.7 days.
For cases where there is no appropriate place to send a patient at the proposed time of discharge, the Senate Special Committee has recommended that Congress change the law to allow Medicare to pay for extra days spent in the hospital.
The in-home nursing care that your friend is receiving is part of a shift in service-delivery patterns that has been identified with DRGs. The Southwest Long Term Care Gerontology Center of the University of Texas at Dallas found that the work load at community-based long-term-care agencies has increased 365% under DRGs, and the need for in-home, skilled-nursing care has risen 196%.
Despite the increased need for in-home services, two-thirds of Medicare’s $71 billion costs this year is going for hospital care, and the other one-third for physicians’ services.
