Long Term Care Myths

According to the U.S. Department of Health and Human Services, someone turning age 65 today will have a 70 percent chance of requiring some long term care (LTC) service and support during the remainder of their life. In the case of women, the typical LTC need will last about 3.7 years compared to men who will need about 2.2 years of care. While approximately one-third of today’s 65-year-olds may not ever need long term care 20 percent of those who do will require it for more than five years.

The statistics are clear; older Americans should be carrying a long term care insurance policy to protect their future but only about 7.2 million Americans 65 years or older currently own a traditional long term care policy, and this number has held steady for the last seven years. While LTC insurance is overall considered expensive and finding the right plan for you in the myriad of insurance products available can be confusing and vary from state to state. According to A Place for Mom, there are seven myths about long term care that anyone age 50 or more should understand.

One myth is that a person has to get rid of all of their assets to receive Medicaid which will qualify them for federally available LTC benefits. In general, the rule is a person is not allowed to keep more than $2,000 in countable assets to be eligible for Medicaid. Exemptions in some states can include your home (if a spouse, minor or disabled child still lives there), assets that cannot be converted to cash, and burial plots or spaces. Also, personal property, one vehicle, and prepaid funerals generally qualify as exemptions. The Community Spouse Resource Allowance rules permit the non-applicant spouse to keep a portion of the couple’s countable assets to prevent them from becoming destitute. Before making any attempt to spend down assets to qualify for Medicaid speak to an elder law attorney as the federal five year “lookback” rules have penalties and exceptions.

No, Medicare will not pay for long term care expenses except in the most specific and narrow of circumstances. Medicare will cover skilled in-home care from a nurse, occupational therapist, physical therapist, speech therapist or social worker for up to 21 days if ordered by a physician. In the case of a skilled nursing facility, Medicare pays for the first 20 days with no co-pays but if the stay is between 21 to 100 days, Medicare only pays a portion, and the beneficiary must pay the balance.

Another myth is that a person thinks they are too young to think about long term care insurance let alone the need to pay for it. The truth is that even under the age of 65 if the person has a chronic illness like diabetes or high blood pressure or in the event of an accident, long term in-home or residential care services may be needed. According to the US Department of Health and Human Services on average, about 8 percent of people age 40 to 50 have a disability that may require long term care services.

Relying on the hope that family will take care of a long term care need is often a myth. While many older Americans are successfully aging in place, in part due to the benefits of technology, unpaid family member caregivers and community organizations are typically not willing and available for long term, intensive caregiving. A family discussion is needed if there is an expectation that a family member is willing and able to take on a long term caregiver role. While many family members are eager to provide oversight through the use of technology, the intensive requirements of long term care are usually more than they are willing to accept.

Most health insurance policies will not cover long term care expenses to any meaningful degree. Some plans will have minimal home care and skilled nursing benefits; however the nature of the plan is short term and is intended to produce recovery and rehabilitation while long term care is generally custodial in nature for the safety, maintenance and well being of a person with a chronic condition. Even some long term care insurance policies will not cover all long term care expenses. There are elimination periods which function as a deductible or after a policy benefit has been exhausted. Specific coverage in long term care varies widely from policy to policy.

Finally, many aging Americans feel that their retirement savings will cover the costs of their long term care. The website A Place for Mom has a financial calculator to help individuals understand their specific needs to cover long term care costs. Currently, the average US national median long term health care cost is about $50,000 for a home health aide which is above and beyond all other living costs. In many situations, in particular with residential care, costs can run hundreds of thousands of dollars over a few short years. Unless a person is independently wealthy, most retirement savings will be spent down very quickly.

Chances are you will need long term care during your lifetime. Being educated about what is best suited to meet your personal financial and health background needs is a significant first step. Next, understand what legal options are available to help you in the event you need significant long term care and may run out of money trying to pay for it. We are here to help. Contact our office today and schedule an appointment to discuss how we can help you with your planning.

Medicaid Matters: Plan for When Your Ill Spouse Leaves Home

 

You may see it coming: Much as you want to and hard as you try, you just can’t take care of your ill spouse at home any more. At this emotionally difficult time, the last thing you need is the stress of not knowing where to find the money to pay for the steep costs of institutional care.

Advance planning is a must. As soon as you can – ideally at least five years before serious health problems arise – take advantage of many elder attorneys’ willingness to talk with you for free, or for a modest initial-consultation charge.

We are here to help you navigate the complexities of the Medicaid program. This is a governmental fund available to meet the staggering expense of institutional care, but the ins and outs of the qualification rules are complicated and mistakes can be costly. Here’s a thumbnail to help you grasp what your attorney will be telling you.

 

 

“Resources” and “Income”: The Difference

Medicaid assistance is available only to those who own very little. The Medicaid rules determine what “owning very little” actually means. A person can only own around $2,000.00 of what Medicaid calls “resources.”

Resources include cash in the bank, CDs, the cash value of insurance policies, investments, and the like. Income includes regular paychecks, Social Security, or payments received for child support. Both income and resources are potentially “counted” by Medicaid as “available.” To qualify for assistance, available income and resources must be carefully spent or transferred away.

 

Exempt Resources

Some resources are not counted or, in other words, are exempt. This means the Medicaid rules exclude them from adding up to the $2,000.00 limit. These resources are sheltered from Medicaid’s requirement that the applicant must spend down almost everything before assistance will be available.

A married couple’s residence, one motor vehicle, household goods and furnishings, medical equipment, jewelry, and other items are exempt. This means that an ill spouse can still qualify for Medicaid assistance even if the couple owns those resources. There’s no need to give them away or sell them to qualify.

The distinction between “exempt” and “non-exempt” assets can be tricky, though, and should first be assessed by a qualified elder-law attorney before any action is taken.

 

What the Well Spouse Can Keep

The Medicaid rules permit a spouse who remains at home to keep a portion of the couple’s resources. This is known as the “community spouse resource allowance” (CSRA). Of course you’d like to see the well spouse keep as much as possible within the CSRA limits. Planning can arrange the distribution of resources to make that happen.

Here is where the difference matters between “resources” and “income.” Medicaid distinguishes between the well spouse’s income and the couple’s resources. Resources over the CSRA limit must be spent down or carefully transferred. As to income, the well spouse can keep it up to a certain level, so he or she will have enough money to live on. The Medicaid rules call this the “monthly maintenance needs allowance” (MMNA).

For example, if the well spouse gets Social Security benefits of only $500.00 a month, but her allowed MMNA is as high as $2,000.00, it makes sense to convert some of the couple’s resources into raising her income up to the MMNA limit. This is not a simple matter, though, and should be done only on the advice of a qualified elder-law attorney.

Planning for Medicaid eligibility can be complicated. Please consult an elder-law attorney as soon as possible. The sooner you plan, the more strategies are available to protect your resources. An initial consultation with a qualified elder-law attorney, for free or for a modest amount, could save you many thousands of dollars.

Don’t delay.

Leaving Well: A Step-by-Step Process

Contemplating our own death is one of the hardest challenges we will ever have to face. Yet, if we want our dying to be meaningful and merciful, it is imperative that we think about it while we still can. Most of us want to die at home, in a familiar and peaceful setting surrounded by loved ones. We would much rather not spend our last moments in an emergency room or ICU, with strangers futilely pounding on our chests and our families relegated to the waiting room.

With those two alternatives in mind, we need to do all we can to keep control, as much as possible, of decisions that need to be made long before our final moments. We need to think carefully, well in advance, about what makes life worth living, and where pain and limitation have so eroded that quality of life that we would prefer not to go there.

These are notoriously difficult questions, but it is vital to address them anyway. For example, Terri Schiavo spent nearly half her young life unconscious in a condition known as a “persistent vegetative state,” being kept alive by a feeding tube. Her husband and friends claimed that before her severe brain injury, she said that she would not want her life sustained by machines. Unfortunately, she never put that wish in writing. On the other side, her devout family and right-to-life supporters insisted that she be kept alive despite her dire condition. After protracted litigation, Ms. Schiavo’s husband prevailed, the feeding tube was withdrawn, and, fifteen years after she was injured and never having regained consciousness, she was finally allowed to die.

Since her passing, the law has evolved nationwide to encourage us all to document final wishes, to avoid the anguish and uncertainty of Ms. Schiavo’s situation. There are a number of documents available in your state for that purpose. The umbrella term for these is “advance health-care directives.”

It’s our job as lawyers to help you sort through the various directives needed to express your wishes. Here is a step-by-step guide to begin the conversation about final wishes, and to understand which document does what when.

  1. If you are over the age of 18, appoint a health-care agent to speak for you when you can’t.

Decide who, among those who know you well, is best suited to take on this responsibility. That person must possess good communication skills, remain calm in difficult situations, and be able to deal flexibly with complexity that might arise in reconciling your wishes with available medical options. Depending on which state you live in, your agent can also be called a “health care proxy.”

Sit down with that person and discuss your wishes in various scenarios. This is not an easy conversation to have, but there are guides available to help you. Visit “The Conversation”

https://theconversationproject.org/

and download the starter kit.

http://theconversationproject.org/wp-content/uploads/2015/09/TCP_StarterKit_Final.pdf

  1. Health Care Power of Attorney (HCPOA)

Once you have had that conversation, visit your lawyer to name your agent formally  in an HCPOA document. HCPOA conveys legal authority on your agent or proxy to express your health-care decisions when you are unable to.

  1. HIPAA authorization

Your agent or proxy will also need access to your otherwise-private medical information. This is best done by a standardized document that complies with the federal Health Insurance Portability and Accountability Act (HIPAA). Without this authorization, your agent will be unable to obtain the medical information necessary to exercise the authority you want him or her to have.

Now armed with your agent and the HCPOA and HIPAA documents, you will know that if you were to meet with an accident or lose consciousness, you have chosen and empowered an advocate to speak for you. You should review and update these documents every five years or so.

The next three documents are important at the end of life. All these documents should stipulate that you desire comfort care, to keep you clean and as pain-free as possible. Remember, though, that you must create these documents while you are still able to know and communicate your wishes, so it’s best to do the next two documents at the same time that you do your HCPOA and HIPAA.

  1. Living Will (also known as Physician’s Directive)

This document is for use when you are not enjoying quality of life. Either death is imminent; you are in a persistent vegetative state; or you are permanently unconscious, permanently confused, or unable to care for yourself. If you have no awareness of others; can’t remember or understand or express yourself; or are unable to move, bathe, or dress yourself, it’s advisable to have expressed, in advance, the kind of treatment you want to receive or not receive.

A living will expresses your choice as to whether you do, or do not, want artificial measures that will merely prolong your life but not improve it. Those measures, among others, may include CPR if your heart stops, or breathing or feeding tubes, or repeated courses of antibiotics or chemotherapy.

You may also require physicians, and not your agent, to be the ones to decide whether to cease life-prolonging procedures as you would like. This decision will relieve your agent from the heavy responsibility of making that irreversible choice.

Living wills are legal in almost every state. Ask your lawyer. Don’t make this kind of document yourself. Otherwise you risk that the document may be misinterpreted, with drastic consequences.

  1. Specialized Directives

Medical decision-making varies depending on specific health conditions, so specific directives may be tailor-made for those conditions. For example, people suffering from advanced dementia benefit from a directive, in addition to the HCPOA or living will, specifically requesting that hand-feeding be ceased when the person can no longer speak, recognize loved ones, or move purposefully. Otherwise, caregivers are obligated to cajole or demand that the patient be fed by hand, taking advantage of a primitive reflex to open the mouth. This risks that the person may inhale the mush instead of swallowing it, in some cases causing pneumonia.

For this kind of condition, ask your lawyer to prepare a specific directive tailored for advanced dementia, using the directives created by

End of Life Washington or End of Life Choices New York.

If, however, you suffer from a neurological illness like Lou Gehrig’s disease (ALS) or advanced Parkinson’s, even though most of us would decline mechanical treatments, those same treatments may be important aids to preserve quality of life for people with those conditions.

Again, remember that you must create these documents while you still have the capacity to communicate your wishes. Living wills should be reviewed every six months, because wishes can change depending on the progress of the illness.

  1. POLST or MOLST

This is a brightly colored, short-form document that is primarily intended for emergency responders when the patient is frail and is likely to die within a year. It is designed to be immediately recognizable by hospitals and EMS personnel, to express that when the patient is unresponsive, cardio-pulmonary resuscitation (CPR) and other aggressive treatments are desired or not desired (DNR).

This document should be filled out in consultation with the patient’s physician. The acronyms stand for “physicians’ orders for life-sustaining treatment” or “medical orders for life-sustaining treatment.”  Many states provide for this kind of document.

  1. MAKE YOUR DOCUMENTS KNOWN

When it comes time to use your documents, they must be readily available. Give a copy of them to your agent or proxy, make sure they are included in your medical records, and, if you are in need of the POLST or MOLST, post it beside your bed or on your fridge where EMT knows to look for it. If your documents can’t be found, or if your agent or family don’t understand them or ignore them, you will have spent your time, effort, and money in vain.

But if all goes according to your wishes, you will have done your best to create a good death, one that is as meaningful as possible for all concerned. If we can assist in helping you with any of the documents above, we would be honored to do so.

Medicaid and Gift-Giving Can Be Risky

Mabel’s children were concerned that Mabel would need long-term nursing-home care in the near future. It was the holidays, and Mabel always got a lot of joy out of generosity. But her children had heard that people in Mabel’s circumstances should not give gifts.

The concern is real. For Medicaid to cover the huge expense of nursing-home care, Mabel would have to show that she owned nothing more than around $2,000. And she must also show that she had not given away money or assets over the prior five years (2.5 years in California). That Medicaid rule – the “look-back period” or the “transfer penalty” – would charge Mabel dearly for her generosity. Depending on the size and number of the gifts, the penalty could be substantial.

Many wrongly think that there is no penalty for gifts of up to around $15,000 annually. That misunderstanding confuses tax law with Medicaid law (and it also misstates tax law, but that’s another subject). The Medicaid rules are entirely different from the tax rules. In the Medicaid context, gifts of any amount that are given during the look-back period can be penalized.

There are exceptions. These include gifts to spouses and siblings under certain circumstances, disabled children, and children who are caregivers and who live at home with the elder for a span of time. But overall, gifts and Medicaid do not go together. The Medicaid rules are complicated and the consequences for mistakes can be very costly. There are a number of options to protect assets and still qualify for benefits, but these options must be weighed with great care. This is why it’s best to consult attorneys who, like us, are qualified by experience and expertise in Medicaid law.

There is one harmless deception Mabel’s children might consider, to keep Mabel happy and still satisfy the Medicaid rules. The children might help Mabel fill out checks for all the gifts she’d like to give, together with a greeting card for each gift. Everybody could thank Mabel, tear up the check later, and tell her what they “bought” with that amount. It may be that that little device would be worth it, so Mabel could enjoy the holidays too.

Otherwise, the sooner you consult a qualified elder law attorney, the more other options may be available. If we can be of assistance, please don’t hesitate to reach out.

Solo Aging, Independent Living and Housemates

Solo aging in the baby boomer generation is becoming more prevalent, but many Americans are running out of family caregivers to assist them in their quest for elderly living independence. The ratio of caregivers to care recipients has fallen and is projected to continue to do so for the next forty years. According to the Pew Research Center, the rate of childlessness among baby boomers is about 20 percent. That number is double the previous generation. Additionally, these boomers who are aging solo, without a spouse or partner and have children living more than 500 miles away, bring the total of solo agers in America to nearly 40 percent of adults over the age of 65.

Because solo agers who own their own home prefer to reside there, many of them are finding creative ways to share costs as well as reduce the workload, stress, and isolation of living alone. Welcome to your new housemate, but don’t call them that and don’t call them roommate either. The boomer generation is adopting the term “POSSSLQ,” (pronounced “possle-cue”) short for People of Similar Sensibilities Sharing Living Quarters. This moniker is a wink at the former US Census Bureau designation for unmarried couples; “Persons of the Opposite Sex Sharing Living Quarters.” Whatever the preferred terminology, this new housemate trend is a demographic and economic shift which is redefining the “golden years” of retirement.

It is no surprise that at a historic shortage of homes pushing up housing costs coupled with the fact that many boomers realize they have not saved nearly enough for retirement has fueled this housemate solution. Some of the best ground rules to follow are to find someone you may already know, perhaps of similar background. Also, keep your “POSSSLQ” in a narrow age range to your own. Seniors who are looking to be housemates and are of a certain age can find each other on websites, some of which are Roommates4Boomers and Let’s Share Housing. It is a great way to stretch retirement dollars and still have independence in a shared living experience without loneliness or feeling like a burden to family.

Women account for most of these new housemate living arrangements. Women tend to live longer and have less in retirement savings as compared to their male counterparts. Women also tend to be more adept at making a home and creating companionable spaces in which to cohabitate.

The rules of roommates are usually broad and general. Some specific ground rules may be non-negotiable such as pets, loud music, or romantic sleepovers; however many women have a more flexible approach and often work out smaller details in day to day conversation. Often the secret to housemate living is to embrace its unexpected nature so long as an established basic framework remains intact. These boomer housemates are expressing creativity in problem-solving issues related to their golden years and want their focus to be on living life rather than the end of life planning.

The cautionary tale of baby boomer housemate living is to be confident you enter into the relationship with a legal document that outlines home ownership, household expenses, chore responsibilities, house rules, as well as identification of objects you already own in your home (if the owner) or what you may bring into the house (as the new housemate). Remember that you spend the first half of your life trying to get something and the second half of your life trying to keep it. Another issue to discuss and lay legal ground rules for is what happens in the case a housemate gets a diagnosis of dementia? A housemate living situation should not evolve into a caretaker situation.

Whether you are the homeowner or the housemate, it is imperative to have a legal document signed and notarized defining the living arrangement. Contact our office today and schedule an appointment to discuss how we can help with the planning and execution of a housemate agreement.

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