Working Caregivers:

Understanding Alternatives is the Key to Sensible Planning

About Care-Planning Options

America is rapidly moving to a two-tiered system of long-term care services. One provides a broad spectrum of services ranging from high quality home care to elegant and well staffed continuing care retirement communities for those who can afford to pay; while the other offers very limited services ranging from a few hours of home care per week to often dreary, poorly staffed, nursing homes funded by Medicaid.

State and federal officials are about to implement newly legislated budget cuts that will further limit care options for those who rely on public funding for their care. Meanwhile, the pool of workers in the labor intensive, long-term care industry continues to shrink as the numbers of frail and disabled elders grows at an ever-increasing rate.  
Many Americans still don’t understand that most health insurance coverage, including Medicare pays only for short term, skilled care. We are expected to pay for the rest from our savings, other assets, and funds from family members, or from the benefits of a private long-term care insurance policy.

When they discover this harsh reality, older Americans and their family members wonder if they can protect their home and their life savings without depleting them to pay for the costs of a chronic illness. Because care is so costly, an increasing number of older Americans need assistance from their grown children, many of whom live far from their aging parent’s home.
 
The evidence continues to grow that the choices and quality of care provided, to those who rely on public funding, is much more limited than for those who can pay privately. Nursing homes that rely on Medicaid funding are seriously under-staffed, their personnel are often poorly trained, staff turnover exceeds 50 percent a year, and the situation is expected to get worse, not better as our population ages.

Today, placement in a nursing home when we become frail and in need of help, can usually be avoided. If you'd rather receive care at home, in an Assisted Living Facility, or otherwise maintain your independence and your choice of care providers, consider such long term care financing alternatives as; private long-term care insurance, a federally guaranteed reverse equity mortgage, or a Life Settlement which allows you to sell existing life insurance and use the funds to pay for your care now.

Because long-term care insurance requires you to be in good health, this planning option is not available to everyone, especially older applicants for whom the premiums may also be prohibitive. Some newly developed financing alternatives such as life insurance policies with a long-term care rider and fixed annuities that also have long-term care riders should also be explored before deciding on the planning path that best suits your unique needs.

We recommend that consumers consider the following steps which will help them to make an informed decision, rather than succumbing to a high pressure sales pitch from someone who may not be the most qualified professional to advise you about the complicated process of planning for long-term care.

State and federal officials have recently implemented newly legislated long-term care budget cuts that will further limit care options for those who rely on public funding for their care. Meanwhile, the pool of workers in the labor intensive, long-term care industry continues to shrink as the numbers of frail and disabled elders grows at an ever-increasing rate.  
 
Many Americans still don’t understand that most health insurance coverage, including Medicare   pays only for short term, skilled care. We are expected to pay for the rest from our savings, other assets, with funds from family members, or from the benefits of a private long-term care insurance policy.

When they discover this harsh reality, older Americans and their family members wonder if they can protect their home and their life savings without depleting them to pay for the costs of a chronic illness. Because care is so costly, an increasing number of older Americans need assistance from their grown children, many of whom live far from their aging parent’s home.

A recent study by the University of Maryland revealed that these caregivers now pay an average of $392 a month out-of-pocket, compared with $196 just 7 years ago. The expenses include travel, medicine, phone bills, medical supplies, meals and home maintenance.

The evidence continues to grow that the choices and the quality of care provided to those who rely on public funding is much more limited than for those who can pay privately. Nursing homes that rely on Medicaid funding are seriously under-staffed, their personnel are often poorly trained, staff turnover exceeds 50 percent a year, and the situation is expected to get worse, not better as our population ages.

Today, placement in a nursing home when we become frail and in need of help, can usually be avoided. If you'd rather receive care at home, in an Assisted Living Facility, or otherwise maintain your independence and your choice of care providers, consider such long term care financing alternatives as private long-term care insurance, a federally guaranteed reverse equity mortgage, or a Life Settlement which allows you to sell an existing life insurance and use the funds to pay for your care now. Because long-term care insurance requires you to be in good health, this planning option is not available to everyone, especially older applicants for whom the premiums may also be prohibitive.

Some newly developed financing alternatives such as life insurance policies with a long-term care rider and fixed annuities that also have long term care riders should also be explored before deciding on the planning path that best suits your unique needs.

Because a review of these options can put the average person on "information overload" Informed Eldercare Decisions, Inc. has developed an information kit that is designed to provide an overview of long-term care planning alternatives in a consumer-friendly format. A "Personal Long-term Care Planning Profile" form is also provided. This will help to get a more specific picture of what planning choices make the most sense. This information will help us to prepare a specific set of recommendations including the costs, the tax implications, and the pros and cons of each option. For your own copy of this kit, please call us toll-free at 1-877-756-5007.

How to Plan for Long-Term Care

We recommend that consumers consider the following steps which will help them to make an informed decision, rather than succumbing to a high pressure sales pitch from someone who may not be the most qualified professional to advise you about the complicated process of planning for long-term care.

1. Schedule an initial consultation with an elder-law attorney who is a member of the National Academy of Elder Law Attorneys. (NAELA).

Elder law specialists focus on legal issues affecting the elderly and disabled, including: health and long-term care planning, probate and estate planning, guardianship and conservatorship, and eligibility for publicly funded services when you can no longer afford to pay for the costs of your care.

When planning for long-term care, don't overlook the possibility that incapacitation -- or even the strains of caregiving -- could impair your ability to manage finances with your usual thoroughness. To avoid asset depletion, you can plan for and document your desires concerning incapacitation in a living trust. A power of attorney can be used to enable a trusted designee to conduct transactions on your behalf.

2. Schedule an initial consultation with an elder care specialist who is more than just an insurance broker.

To help you decide which of the many alternatives available to plan for the costs of long-term care, an eldercare specialist should have extensive experience in, and knowledge about, the complex spectrum of services that make up the long-term care system in the U.S. They should also have well-developed relationships with several of the top-rated insurance carriers, banks who are qualified to participate in the federally insured reverse mortgage program, and also be knowledgeable about such financing alternatives as the new long-term care annuities and life insurance policies that allow the insured to use the death benefits to pay for home care, assisted living and nursing home care if needed.