Long-Term Care Requires Long-Range Planning

Consider your options today

An increasing number of Americans are sandwich generation caregivers struggling to meet the competing demands of caring for both an older family member and their own children or grandchildren. The majority of Americans serve as a family caregiver while working a full-time or part-time job. There is much to consider with long-term care, and advance planning is preferred to crisis planning.

J. Skinner is a shareholder with the firm of Winderweedle, Haines, Ward & Woodman, P.A., where she chairs the firm’s Wills, Trusts & Estates Department. She was recently named one of the Best Lawyers in America in the area of Elder Law for the third consecutive year. She is the host of The Power of Planning Podcast, anchor.fm/ thepowerofplanning.

Residency Decisions

People prefer to live in the comfort of their own home as long as they can safely do so. The Village Movement is designed to help people age in place. According to the Village to Village Network, there are over 264 open villages and more than 55 in development across the nation. These are grassroots, membership-driven nonprofit organizations where volunteers help support older adults by providing services that include transportation, social activities and access to vetted and discounted service providers. Visit vtvnetwork.org to see if there is a village in your community.

When living at home is no longer an option, there are a variety of residency choices available. Continuing care retirement communities (CCRCs) offer priority access to a continuum of care. Assisted living facilities (ALFs) provide assistance with activities of daily living (ADLs), including dressing, personal care and meal preparation, while residents still live independently in their own apartments or suites. Memory care facilities are designed for those suffering from Alzheimer’s disease or dementia and, in addition to assistance with ADLs, feature programs to slow the progression of memory loss, 24/7 security and antiwandering systems. Skilled nursing facilities (SNFs) provide a clinical environment with around-the-clock care and monitoring for patients who require medical, nursing, or rehabilitative services. Hospice provides palliative care in a residential, hospital, nursing home or hospice facility setting when someone is expected to live six months or less. You can locate and compare facilities in your area by visiting medicare.gov/care-compare

Crippling Costs of Long-Term Care

Most CCRCs require a sizeable entrance fee for admission, in addition to monthly charges, and can be cost prohibitive for many. The cost of long-term care facilities varies by location, age and level of care.

Many are surprised to learn that Medicare and private health insurance pay for limited, if any, long-term residential care. This causes families to rely on personal savings to pay for the cost of care. According to the National Council on Aging, 80% of people aged 60 and older do not have the financial resources to cover long-term care services, and 20% of older households have no assets to draw from as they age and need support. Further, one in seven older adults will require care for more than five years.

What Does Medicare Cover?

Medicare generally does not cover the cost of assisted living and memory care facilities because it does not pay for custodial care. Medicare Part A provides limited coverage for skilled nursing care if you have a qualifying hospital stay, which means you were admitted as an inpatient for a minimum of three consecutive days for something more than observation services, and enter a Medicare-certified SNF within 30 days of leaving the hospital for an illness or condition related to your hospital stay, with your doctor certifying that you need daily skilled care from, or under the supervision of, skilled nursing or therapy staff. If you meet these qualifications, Medicare will pay 100% for up to 20 days and approximately 80% for days 21-100, with a daily co-pay of $200.00. After a maximum of 100 days, you become solely responsible for all SNF costs.

Long-Term Care Insurance

Long-term care policies may pay for part or all of your care at ALFs, memory care facilities and SNFs. Traditional policies allow you to customize your coverage, including the waiting period, the benefit amount, monthly and lifetime limits, and an inflation rider. Hybrid policies combine life insurance with long-term health care and beneficiaries receive a death benefit for any money remaining within a policy.

Medicaid

Medicaid is a joint federal and state program that helps pay for SNF expenses for those who meet certain medical and financial eligibility requirements. In some states, Medicaid waiver programs also provide coverage for ALFs and memory care facilities. Certain Medicaid planning strategies can be considered for those whose income or assets exceed permitted limits, including qualified income trusts, special needs trusts, spousal asset transfers and/or spousal refusal, Medicaid compliant annuities and Medicaid asset protection trusts, which must be done well in advance of applying for benefits. The rules vary by state so you should consult with a local elder law attorney.

Veterans Benefits

Military veterans and surviving spouses who receive a pension from the Veterans Administration may qualify for Aid and Assistance or Household benefits to help pay for long-term care costs. Certain service, asset and income requirements must be met.

Since there is no one-size-fits-all when it comes to long-term care planning and many of the above options can take time to implement, long-range planning is key to ensuring your loved ones receive the appropriate level of care and support when it is needed the most.