Can We Have a Fact-Based Conversation About End-of-Life Planning?

By Brendan Nyhan 

Dealing with health care needs at the end of life is a difficult but unavoidable issue in an aging society with rising health care costs like ours. After a failed attempt to deal with the issue as part of the Affordable Care Act, it may again be returning to the policy agenda. Can we avoid another catastrophic bout of misinformation?

The debate over end-of-life planning has largely been dormant since 2009, when the former Alaska governor Sarah Palin’s false claim that President Obama’s health care plan included a “death panel” spelled the end of a proposal for Medicare to reimburse doctors for voluntary end-of-life consultations with patients. The Obama administration briefly issued and then withdrew a regulation that would have added end-of-life consultation coverage to Medicare in early 2011, but is likely to revisit the issue after receiving a recommendation from an influential American Medical Association panel.

Unfortunately, the lesson from the “death panel” controversy is that this issue is vulnerable to demagoguery if it becomes linked to people’s partisanship or feelings about controversial political figures and issues. For example, after Ms. Palin’s comments became widely known, and other prominent Republicans began to echo her claims, the myth came to be deeply held among the public. People’s negative predispositions toward Mr. Obama or his plan overwhelmed their critical faculties.

A Myth That Refuses to Die

Although the claim has been repeatedly proved false, polls have consistently shown that more than a third of Americans believe the Affordable Care Act created a government panel to make decisions about end-of-life care for people on Medicare.

%

40

30

20

10

0

34%

Jul '10

Dec '10

Jun '11

Nov '11

Sep '12

Mar '13

Mar '14

Source: Kaiser Family Foundation polls

In an analysis of 2009 polling data, for instance, I found that Republicans who thought they were well informed about Mr. Obama’s plan were more likely to be misinformed than those who said they didn’t know very much about it — the same pattern observed in 1993 for the myth that President Clinton’s health care plan would take away your choice of doctor.

The same biased reasoning processes make it difficult to undo these mistaken beliefs once they are entrenched. In a 2011 experiment, Jason Reifler, Peter Ubel and I found that corrective information about the “death panel” claim successfully reduced belief in the myth among people with neutral or warm feelings toward Ms. Palin who were less knowledgeable about politics.

Sarah Palin speaking in 2012. Her assertion that President Obama’s health care plan included a “death panel” helped derail a proposal for Medicare to reimburse doctors for voluntary end-of-life consultations with patients. CreditStephen Crowley/The New York Times

However, we found that misperceptions did not decrease significantly among people with mixed or positive feelings toward Ms. Palin who were more knowledgeable about politics — the individuals who are best equipped cognitively to resist unwelcome information. In fact, exposure to corrective information attributed to “nonpartisan health care experts” actually increased belief in the myth among respondents who feel very warmly toward her — a finding that is consistent with the “backfire effect” Mr. Reifler and I found in prior research.

The “death panel” belief has persisted in the years since Ms. Palin’s comments. Though the wording of the question is imperfect, polling datafrom the Kaiser Family Foundation shows that approximately one-third of Americans still believe in the myth — a proportion that has remained relatively stable since 2010. (Similarly, a 2012 academic survey using different wording found that one in two Americans endorsed the myth and only about one in six knew with high certainly that it was false.) This persistence may be the reason that the Obama administration has avoided the issue until now.

Will things turn out differently this time? Support for covering voluntary end-of-life planning is actually remarkably strong across the political spectrum. In addition to the American Medical Association panel’s recommendation, both private insurers and states such as Colorado and Oregon are now offering coverage for these consultations. Even critics of President Obama’s health care plan such as National Review’s Wesley J. Smith and Senator Johnny Isakson, Republican of Georgia, are in favor of advance planning.

Given the strength of this bipartisan consensus, adding coverage for end-of-life planning might seem unlikely to attract significant opposition or revive previous misconceptions. But a risk-averse administration may still elect to dodge the issue given Mr. Obama’s weak approval ratings and precarious political standing. A lesson of 2009, after all, is that it only takes one ambitious critic to spark a conflagration.

Powers of Attorney

By: Stephen C. Hartnett, J.D., LL.M., Associate Director of Education, American Academy of Estate Planning Attorneys Posted in Estate Planning, Legal Education

Every estate planning attorney utilizes powers of attorney in their practice. They are a useful part of every estate plan.

However, powers of attorney can be very broad or very limited. For example, a power of attorney (or POA) could give the agent the authority only to sell a car or some other asset. On the other hand, a POA could give the agent extremely broad authority to do whatever the agent could do himself or herself.

Last week, I wrote about the need for clients to think about estate planning for their adult children who are going away from home. In such a limited circumstance, perhaps a POA may suffice. However, in some cases clients attempt to use a POA as their primary estate planning tool with poor results. A recent article in the New York Times discussed the drawbacks of using a POA as the primary planning tool and mentions a revocable trust as an alternative.

There are other potential drawbacks to using a POA. If the POA is too broad in scope, it may include all of the principal’s property in the agent’s estate for estate tax purposes. The reason for this is that it could be a general power of appointment (GPOA) for the agent.

A GPOA can easily arise if the agent has the power to make gifts. If that power to make gifts includes the power to gift to the agent themselves, then it would create a GPOA in the agent.

An unlimited power to make gifts may be useful in some limited circumstances. For example, it may make sense in the following situation:

• Client wants to do Medicaid planning

• Client may lose capacity in the future

• Client has only one adult child (or other beneficiary) whom they trust completely

• Adult child has no creditor problems

• Adult child does not have a taxable estate

If all of the above do not apply, then the unlimited power for the agent to gift to themselves may be quite dangerous. It may expose the assets of the principal to the agent’s creditors. It may expose the child to estate taxes. It may cause turmoil in the family.

However, most importantly, powers of attorney may be used by the agent to do things which the principal had not intended. Sometimes, they are involved in cases of elder financial abuse or fraud. That’s one reason one should be very careful before drafting a broad power of attorney, especially one that includes unlimited gifting powers. That’s also one reason that many financial institutions are reluctant to take POAs.

Stephen C. Hartnett, J.D., LL.M.Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128

Planning for Students

By: Stephen C. Hartnett, J.D., LL.M., Associate Director of Education, American Academy of Estate Planning Attorneys Posted in Estate Planning, Legal Education

It is back-to-school time in America. As Labor Day approaches, schools are starting back up. From an estate planning perspective, this is important in that many young adult students are heading away from home. Here’s alink to an interesting Forbes article on the topic.

Estate planning clients are typically reluctant to think about planning for themselves. But, seldom do they think about the planning for their adult children. But, it is very unlikely that the young adult would think of estate planning on their own. They are more concerned with what courses they’ll be taking, or what the dating scene might hold for them. The fact is that the parents still typically feel responsible for their young adult children, even if they are not legally responsible for them.

Estate planning attorneys might suggest that clients have their children talk with the attorney about having powers of attorney. The adult children should have a power of attorney for property. Normally, the child would name the parent(s) as the agent(s), although another agent could be named. If the child is reluctant because their parent could use it to find out about grades, the POA could be modified to exclude specifically any transaction having to do with finding out grades. If the child is particularly reticent and concerned about their independence, the power could even be made springing. However, an immediate power of attorney would be more useful and could be used by the parent to sell a car when the child is away at school, or many other transactions of convenience for the child.

The child should also have a health care power of attorney. This is especially important as accident and injury is more prevalent in the college age group.

Also, as a follow-up to my prior blog, college students are also susceptible to depression. In fact, that is often when depression first emerges. Here is a link to information from the National Institute of Mental Health on the topic.

Stephen C. Hartnett, J.D., LL.M.Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com