The person you name as your financial Power of Attorney [POA] is responsible for handling your finances if you are unable to do so. However, there is one aspect of your financial life that a standard POA document will not allow your representative to manage – government benefits.
The Social Security Administration [SSA] and Center for Medicare & Medicaid Services [CMS] don’t accept POA documents. Instead, they have their own methods for assigning a person to manage benefits if you are incapacitated. It is important to understand these methods so you can take the proper steps now to ensure that you get the help you may need later.
Why don’t government programs accept POAs?
While POAs are generally accepted across the country, the abilities they grant and the laws governing them vary by state. Over 65 million people receive Medicare or Social Security and these people live all over the country. The SSA and CMS do not have the resources to evaluate millions of POA documents based on varying state laws, so these government agencies do not accept POAs under any circumstances.
Many seniors need help managing their benefits, especially if they are incapacitated or living in a long-term care facility. This begs the question – what are the alternatives to a POA if you need assistance managing Social Security or Medicare benefits?
Alternatives to POAs for Managing Government Benefits
Both Social Security and Medicare offer a way to name a person to help with your benefits if you are unable to do so. Their methods for naming this representative differ, but both require your input if you want a say in who manages your benefits.
Social Security – Representative Payee
If you become incapacitated, the SSA will appoint a Representative Payee – an individual or qualified organization assigned to receive your Social Security benefits and manage them on your behalf. You can name up to three individuals you would like the SSA to consider when appointing a representative payee via the Advance Designation program.
You can submit and update your Advance Designations online through your My Social Security Account, by calling the SSA at 1-800-772-1213, or in person by visiting your local SSA office. As you do this, keep in mind that you can only name individuals in your Advance Designation, not organizations.
If you want your chosen POA to manage your Social Security benefits if you become incapacitated, be sure to name them in your Advance Designations as soon as possible. Otherwise, the SSA will choose for you, and it may not be the person you wish.
Medicare – Authorized Representative
Similar to the Social Security Representative Payee, Medicare allows you to name an Authorized Representative to manage your benefits. This representative could be a family member, an organization, or other trusted individual.
There are two ways to name an Authorized Representative: complete Form CMS-10106 and mail it to the listed address or provide authorization online through your Medicare Account. This authorization allows your chosen representative to contact Medicare about your eligibility, claims, payments to providers, and more.
While the prospect of becoming incapacitated is uncomfortable to consider, preparing for this possibility is an important aspect of financial planning. An experienced financial advisor can help you create a plan that accounts for the possibility of your mental or physical health deteriorating and considers special circumstances like Social Security and Medicare.
Get Answers to Your Medicare and Social Security Questions with Meld Financial
A wholistic financial plan should consider the most common challenges to your financial future – like planning for incapacity. The team of tax, legal, and investment professionals at Meld Financial can help you create and manage this plan.
Our comprehensive wealth management program – Financial Fingerprint® – takes into account your government benefits and how to manage them if you are unable to do so. Best of all, this nimble plan is quick to assemble, easy to understand, and simple to modify as your circumstances change.
To get started with Financial Fingerprint® today, contact us.
