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According to a recent study, elderly drivers who stop driving and have no transportation alternatives become less socially active and risk isolation. This can lead to a decline in both physical and mental health.

Teja Pristavec, a sociology researcher at Rutgers University in New Brunswick, NJ, sought to determine the effect of driving mobility on the social participation of older Americans. Her results were published online in May 2016 in The Journals of Gerontology Series B: Psychological Sciences and Social Sciences (available here).

Pristavec defines driving mobility as a combination of being able to drive oneself and receiving rides. She looked at driving habits and social activities of more than 4,300 adults over age 65, using survey data collected in 2011 and 2013 by the National Health and Aging Trends Study (www.nhats.org).

Compared to seniors who had stopped driving, she found that frequent drivers are more than three times more likely to visit friends and family, and almost three times as likely to participate in social outings like going to the movies. They were also more than twice as likely to attend religious services or organized group activities. But when they lost the ability to drive and had no transportation alternatives, their participation in social activities declined to the same level as those who never drove at all. A decrease in driving frequency, from frequent driving to occasional driving to not driving, lowers social participation.

 

Benefits of Social Participation for Seniors

Pristovec notes that with a longer life expectancy, older adults can remain socially engaged in later years. Those who do so report being in better health, experience lower mortality risk over time, and have lower rates of depression, dementia and other cognitive impairments. Social participation is also linked to greater life satisfaction, self-esteem and positive effect. For these reasons, maintaining participation in social, economic, cultural, spiritual and civic affairs is part of healthy, active and successful aging.

 

Fewer Older Drivers

Driving is a way of life in the U.S. and is often crucial for social participation and having access to services. Approximately 85% of individuals 60 years and older currently drive, but the proportion of those still driving decreases with age. In 2011, 93% of adults age 60-69 held a driver’s license, compared with 60% of those age 85 or older. With life expectancy increasing, the number of years older adults spend not being able to drive is also lengthening. Pristovec notes that at 70 years, men have a total life expectancy of 18 years, but a driving life expectancy of 11 years, resulting in a gap of seven years. For women, the gap is about ten years. In a time of their lives when they could still be active social participants, older adults are likely to experience limited driving mobility.

Physical and mental decline in later years eventually lead to a decision to reduce and cease driving. In the U.S., over 600,000 older individuals stop driving every year and must rely on other transportation.

 

Limited Driving Leads to Cessation

Most older adults start ceasing to drive by limiting their driving behaviors. They drive less frequently, shorter distances and to fewer destinations, adapt speed, and restrict trips to familiar roads and particular hours. How long they can continue to drive, even occasionally, will likely depend on their confidence, capabilities, and whether they live in a city or rural area. A smaller town usually means less traffic and a slower pace, making it safer for a senior to drive more slowly and cautiously. City driving, of course, is stressful for persons of all ages.

Some need a little help in making the decision to stop driving, and family members can watch for signs. For example, the driver may start making all right turns in order to avoid turning left at an intersection, or insist on having a navigator so he or she can concentrate solely on driving. A driver who becomes disoriented or has trouble following directions may also need to be discouraged from driving. At some point, it becomes a safety issue—both for the senior and for the public at large.

 

Social Activities Become Limited

Physical changes and health issues in later life may not only affect the ability to drive, but can also restrict the range of activities in which seniors can participate. Many also find their savings have to stretch farther than they anticipated. As their health, finances, and social contacts decline, they often choose to focus on fewer select activities instead of maintaining their previous participation levels. They may engage in one or two activities they find most rewarding, require fewer resources, or are nearby. Attending religious services, or visiting family and friends, often become more important than going to the movies, out to dinner, and other outings simply for enjoyment.

In short, even if they don’t drive, seniors will try to find ways to continue participating in activities they value and cut back on those they deem less important. Social activities may just become too difficult and too expensive, and therefore less enjoyable.

For many seniors, religious services remain a high priority in their lives. Research has shown that religious involvement remains stable until the end of life, and there are known health and well-being benefits of religious participation. Pristovec found that those with higher self-driving mobility (including occasional drivers) are more likely to attend religious services than those who ceased driving and those with lower self-driving mobility. For those non-driving seniors who value religious services, efforts should be made to find rides so they can continue participating

 

Receiving Rides Can Help Prolong Social Participation

Receiving rides, a component of driving mobility, is a crucial alternative transportation option for older adults as their own ability to drive declines. Pristovec found that providing regular rides is likely to prolong social participation into later life. Family members, friends and caregivers are often best able to provide flexible, supportive, door-to-door service, with escort assistance that best meets the older individual’s changing needs.

Unfortunately, many older individuals do not have children living nearby, and a smaller social network may mean fewer people are willing or able to provide rides. Family and friends may also be reluctant to assist due to limited time, money, and competing work or other family obligations.

Further, seniors are often hesitant to ask for rides because they fear being a burden to others. When they do ask for help, they tend to request rides for basic needs, like doctor visits and grocery shopping, not for social activities.

 

Public Transportation

Those who live in metropolitan areas may have public transportation options, including buses, taxis, and Uber or Lyft. Some areas provide transportation specifically for seniors, such as community buses and mini-buses on fixed, circular routes; Dial-A-Ride services; point-to-point services for those with disabilities; and volunteer drivers. Many are provided at low senior rates. Some neighborhood senior community centers provide free transportation and a mid-day meal.

However, public and community transportation are often unsuitable for older individuals due to limited schedules during non-peak times, limited service to nonwork destinations, poor accessibility, low availability, inadequately trained drivers and limited personal assistance. Additionally, many seniors and their families are simply not aware these options exist.

 

Senior Living Centers

Social interaction can also be provided in community living centers, whether for active seniors or for those requiring some assistance with daily living activities. Most provide field trips and outings, in addition to on-site activities and community dining. These can be a good, albeit often costly, choice to encourage social participation if transportation options are limited.

 

Conclusion

Keeping seniors socially engaged is vital to their physical and mental well-being in later years. Pristovec’s study illuminates the need for seniors to have transportation options when their driving abilities lessen and cease, pointing to the need for developing transportation alternatives that are accessible and non-stigmatizing. These options could facilitate continued participation without older adults feeling burdensome or risking their safety (and the safety of others) with prolonged self-driving.

We specialize in assisting with legal issues that affect seniors and their loved ones.  If you or someone you know would like to learn more, please don’t hesitate to contact us.

About The National Health and Aging Trends Study

Pristavec based her findings on survey data provided by the National Health and Aging Trends Study (www.nhats.org), a new resource for the scientific study of functioning in later life. The study is being conducted by the Johns Hopkins University Bloomberg School of Public Health, with data collection by Westat and support from the National Institute on Aging. In design and content, NHATS is intended to foster research that will guide efforts to reduce disability, maximize health and independent functioning, and enhance quality of life at older ages.

Starting in 2011, NHATS has been gathering information on a nationally representative sample of Medicare beneficiaries ages 65 and older. In-person interviews collect detailed information on activities of daily life, living arrangements, economic status and well-being, aspects of early life, and quality of life. Among the specific content areas included are: the general and technological environment of the home, health conditions, work status and participation in valued activities, mobility and use of assistive devices, cognitive functioning, and help provided with daily activities (self-care, household, and medical).

Study participants are re-interviewed every year in order to compile a record of change over time. The content and questions included in NHATS were developed by a multidisciplinary team of researchers from the fields of demography, geriatric medicine, epidemiology, health services research, economics, and gerontology.

As the population ages, NHATS will provide the basis for understanding trends in late-life functioning, how these differ for various population subgroups, and the economic and social consequences of aging and disability for individuals, families, and society.

 

category: Elder Counselor (Newsletter)

Elder Counselor Newsletter Top Reasons Everyone Needs a Comprehensive Power of Attorney

The benefits of a highly detailed, comprehensive power of attorney are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for our senior population. This issue of the ElderCounselor highlights the benefits of a comprehensive, detailed power of attorney, including some of the provisions that should be included. A proper starting point is to emphasize that the proper use of a power of attorney as an estate planning and elder law document depends on the reliability and honesty of the appointed agent.

The agent under a power of attorney has traditionally been called an “attorney-in-fact” or sometimes just “attorney.” However, confusion over these terms has encouraged the terminology to change so more recent state statutes tend to use the label “agent” for the person receiving power by the document.

The “law of agency” governs the agent under a power of attorney. The law of agency is the body of statutes and common law court decisions built up over centuries that dictate how and to what degree an agent is authorized to act on behalf of the “principal”—in other words, the individual who has appointed the agent to represent him or her. Powers of attorney are a species of agency-creating document. In most states, powers of attorney can be and most often are unilateral contracts – that is, signed only by the principal, but accepted by the agent by the act of performance.

Much has been written about financial exploitation of individuals, particularly seniors and other vulnerable people, by people who take advantage of them through undue influence, hidden transactions, identity theft and the like. Prior issues of the ElderCounselor have addressed guardianships and conservatorships and discussed the benefits of court supervision of care of vulnerable people in such contexts. Even though exploitation risks exist, there are great benefits to one individual (the principal) privately empowering another person (the agent) to act on the principal’s behalf to perform certain financial functions.

A comprehensive power of attorney may include a grant of power for the agent to represent and advocate for the principal in regard to health care decisions. Such health care powers are more commonly addressed in a separate “health care power of attorney,” which may be a distinct document or combined with other health topics in an “advance health care directive.”

Another important preliminary consideration about powers of attorney is “durability.” Powers of attorney are voluntary delegations of authority by the principal to the agent. The principal has not given up his or her own power to do these same functions but has granted legal authority to the agent to perform various tasks on the principal’s behalf. All states have adopted a “durability” statute that allows principals to include in their powers of attorney a simple declaration that no power granted by the principal in this document will become invalid upon the subsequent mental incapacity of the principal. The result is a “durable power of attorney” – a document that continues to be valid until a stated termination date or event occurs, or the principal dies. Absent durability provisions, the power of attorney terminates upon the principal’s death or incapacity.

Having covered the explanation of what a durable power of attorney is, let us look at the top benefits of having a comprehensive durable power of attorney.

1. Provides the ability to choose who will make decisions for you (rather than a court).

If someone has signed a power of attorney and later becomes incapacitated and unable to make decisions, the agent named can step into the shoes of the incapacitated person and make important financial decisions. Without a power of attorney, a guardianship or conservatorship may need to be established, and can be very expensive.

2. Avoids the necessity of a guardianship or conservatorship.

Someone who does not have a comprehensive power of attorney at the time they become incapacitated would have no alternative than to have someone else petition the court to appoint a guardian or conservator. The court will choose who is appointed to manage the financial and/or health affairs of the incapacitated person, and the court will continue to monitor the situation as long as the incapacitated person is alive. While not only a costly process, another detriment is the fact that the incapacitated person has no input on who will be appointed to serve.

3. Provides family members a good opportunity to discuss wishes and desires.

There is much thought and consideration that goes into the creation of a comprehensive power of attorney. One of the most important decisions is who will serve as the agent. When a parent or loved one makes the decision to sign a power of attorney, it is a good opportunity for the parent to discuss wishes and expectations with the family and, in particular, the person named as agent in the power of attorney.

4. The more comprehensive the power of attorney, the better.

As people age, their needs change and their power of attorney should reflect that. Seniors have concerns about long-term care, applying for government benefits to pay for care, as well as choosing the proper care providers. Without allowing, the agent to perform these tasks and more, precious time and money may be wasted.

5. Prevents questions about principal’s intent.

Many of us have read about court battles over a person’s intent once that person has become incapacitated. A well-drafted power of attorney, along with other health care directives, can eliminate the need for family members to argue or disagree over a loved one’s wishes. Once written down, this document is excellent evidence of their intent and is difficult to dispute.

6. Prevents delays in asset protection planning.

A comprehensive power of attorney should include all of the powers required to do effective asset protection planning. If the power of attorney does not include a specific power, it can greatly dampen the agent’s ability to complete the planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is necessary to include all of the powers necessary to carry out proper planning.

7. Protects the agent from claims of financial abuse.

Comprehensive powers of attorney often allow the agent to make substantial gifts to self or others in order to carry out asset protection planning objectives. Without the power of attorney authorizing this, the agent (often a family member) could be at risk for financial abuse allegations.

8. Allows agents to talk to other agencies.

An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive power of attorney giving authority to the agent, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money.

9. Allows an agent to perform planning and transactions to make the principal eligible for public benefits.

One could argue that transferring assets from the principal to others in order to make the principal eligible for public benefits–Medicaid and/or non-service-connected Veterans Administration benefits–is not in the best interests of the principal, but rather in the best interests of the transferees. In fact, one reason that a comprehensive durable power of attorney is essential in elder law is that a Judge may not be willing to authorize a conservator to protect assets for others while enhancing the ward/protected person’s eligibility for public benefits. However, that may have been the wish of the incapacitated person and one that would remain unfulfilled if a power of attorney were not in place.

10. Provides immediate access to critical assets.

A well-crafted power of attorney includes provisions that allow the agent to access critical assets, such as the principal’s digital assets or safety deposit box, to continue to pay bills, access funds, etc. in a timely manner. Absent these provisions, court approval will be required before anyone can access these assets. Digital assets are also important because older powers of attorney did not address digital assets, yet more and more individuals have digital accounts.

11. Provides peace of mind for everyone involved.

Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families and loved ones.

Conclusion
This discussion of the Reasons Why Everyone Needs a Comprehensive Power of Attorney could be expanded by many more. Which benefits are most important depends on the situation of the principal and their loved ones. This is why a comprehensive power of attorney is so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy agents to do whatever needs to be done in the future. Please call us if we can be of assistance in any way or if you have any questions about durable powers of attorney.

 

category: Elder Counselor (Newsletter), Power of Attorney

Elder Counselor Newsletter The Future of Long Term Care and How to Finance It

Long-term care is becoming an important issue for our nation to address.  We have 78 million aging baby boomers.  The costs of long-term care to these baby boomers can be catastrophic and few people have sufficient resources to pay for needed long-term care.

In an effort to deal with this growing concern, the Long-Term Care Financing Collaborative (the “Collaborative”) began meeting informally in 2012 for the purpose of finding a solution.  They have since become a formalized group made up of a variety of national experts and stakeholders with varying ideological stances.  Their common goal is to improve the way Americans pay and prepare for non-medical care (Long-term supports and services) needed by the elderly and those living with disabilities.  On February 22, 2016, the Collaborative announced its third and final set of recommendations.[1]

ABOUT THE COLLABORATIVE

The diverse group[2] is made up of policy experts, consumer advocates and representatives from service providers and the insurance industry.  In addition, the group consists of senior executive branch officials in both the Democratic and Republican administrations, former congressional aides, and former top state health officials.

THE COSTS INVOLVED

The statistics surrounding long-term care or long-term supports and services (“LTSS”) are eye opening.  According to the Collaborative, there are between 10 and 12 million adults today who require LTSS and that number is expected to double by the year 2030.  More than two-thirds of older adults will need some assistance before they die and nearly half will have a high enough need that they will be eligible for private long-term care insurance or Medicaid to pay the bill.  More than 6 million older adults need that level of care today and nearly 16 million will need it in 50 years.

The Collaborative defines Long-term supports and services (“LTSS”) as non-medical assistance.  This would include help with such things as food preparation, personal hygiene, assistive devices and transportation, bathing, eating and the like.

Cost to the Elderly or Disabled:

The elderly or disabled persons who find themselves in need of LTSS try to pay for it out of their savings or income from their retirement along with help from family members.  Often, this is insufficient to cover the costs and many people have to turn to Medicaid for help.  The overall spending on LTSS is expected to double by 2050, which will cause even more people to depend on Medicaid to pay for it.

Few people have saved sufficiently for LTSS.  In fact, the Collaborative reports that a typical American between the ages of 65 and 74 has financial assets of $95,000 and about $81,000 in home equity.  This does not include retirement savings, which vary widely across the country.  To pay for one’s lifetime medical expenses with a 90% certainty requires savings of about $130,000 and an additional $69,500 for LTSS costs.  With this in mind, it is easy to see how people are running out of money.

Over all, individuals pay for about 55% of LTSS expenditures; Medicaid pays about 37%; and Private LTSS insurance pays for less than 5%.

Cost to Family and Friends:

In addition to the financial stress this places on the elderly and disabled, it also significantly affects their families.  The Collaborative estimates that in 2013, family and friends provided 37 billion hours of uncompensated LTSS to adults.  This care calculates to up to $470 billion, which is three times the amount Medicaid spent on LTSS the same year.

When family members provide caregiving to a loved one, it often comes at the cost of their job or a portion of their job.  On average, the Collaborative reports, a woman in her 50s who leaves a job to care for her aging parents does so at a cost of $300,000 of income over her lifetime.  The Collaborative states that “unpaid family caregivers lose an estimated $3 trillion in lost lifetime wages and benefits.”

Cost to Employers of Family and Friends:

The Collaborative reports that employers experience a loss of $17.1 to $33 billion in productivity due to absenteeism alone.  In addition, they state that “costs of turnover and schedule adjustments for caregiving workers add an additional $17.7 billion in costs.”

THE COLLABORATIVE’S RECOMMENDATIONS

The Collaborative was able to agree to five key recommendations in three key areas.  This final set of recommendations focused significantly on:  1) A need for universal catastrophic insurance; 2) Private market initiatives and public policies to revitalize the insurance market to help address non-catastrophic LTSS risk; and 3) Enhanced Medicaid LTSS for those with lower lifetime incomes.

The Collaborative calls for a strong government role in the solution.  The group considered voluntary and universal insurance programs and came to the conclusion that universal was the only viable, long-term solution as it spread the risk across the entire population and avoided challenges of adverse selection.  The Collaborative noted in the report, “As a result, universal insurance appears to offer broad-based insurance at a comparatively low lifetime cost.”

In addition to recommending universal catastrophic insurance, the Collaborative also recommended taking some actions to revitalize the private insurance market.  These included suggestions of employers offering long-term care insurance as part of their benefits packages.  In addition, the group suggests that regulatory changes in the insurance industry, creating more standardization in policies, would save costs to consumers.  The specifics of the regulatory change suggestions include increasing premiums and benefits as the individual ages.  There is also a suggestion that this type of insurance be sold in conjunction with Medicare supplemental programs.  Finally, the group suggests that policymakers continue to encourage and support efforts by the insurance industry to experiment with more hybrid products, combining long-term care insurance with other products.

Another recommendation given by the Collaborative was to encourage increased private savings for retirement.  This encouragement might come in the form of ease of enrollment through employers’ benefits programs, expanded retirement products, tax subsidies and education.

Of note was a recommendation made by the Collaborative was to modernize Medicaid financing and eligibility.  This recommendation is really one to expand Medicaid coverage to include more people, in more settings, for more care.  Eligibility would be based on a functional assessment and a needs assessment rather than requiring an institutional level of care.

CONCLUSION

The Collaborative leaves us with a final recommendation to provide more education about LTSS.  Many people are in denial about the possibility that they may need it some day and do not plan.  While it is encouraging that the nationwide issue is being studied more and taken more seriously now, the problem is far from resolved.  Until there is a firm solution, individuals must take responsibility and plan ahead.

If you or someone you know has questions about how to plan for the costs of long-term care, please feel free to contact our office.

ABOUT THE COLLABORATIVE

The diverse group[3] is made up of policy experts, consumer advocates and representatives from service providers and the insurance industry.  In addition, the group consists of senior executive branch officials in both the Democratic and Republican administrations, former congressional aides, and former top state health officials.

THE COSTS INVOLVED

The statistics surrounding long-term care or long-term supports and services (“LTSS”) are eye opening.  According to the Collaborative, there are between 10 and 12 million adults today who require LTSS and that number is expected to double by the year 2030.  More than two-thirds of older adults will need some assistance before they die and nearly half will have a high enough need that they will be eligible for private long-term care insurance or Medicaid to pay the bill.  More than 6 million older adults need that level of care today and nearly 16 million will need it in 50 years.

The Collaborative defines Long-term supports and services (“LTSS”) as non-medical assistance.  This would include help with such things as food preparation, personal hygiene, assistive devices and transportation, bathing, eating and the like.

Cost to the Elderly or Disabled:

The elderly or disabled persons who find themselves in need of LTSS try to pay for it out of their savings or income from their retirement along with help from family members.  Often, this is insufficient to cover the costs and many people have to turn to Medicaid for help.  The overall spending on LTSS is expected to double by 2050, which will cause even more people to depend on Medicaid to pay for it.

Few people have saved sufficiently for LTSS.  In fact, the Collaborative reports that a typical American between the ages of 65 and 74 has financial assets of $95,000 and about $81,000 in home equity.  This does not include retirement savings, which vary widely across the country.  To pay for one’s lifetime medical expenses with a 90% certainty requires savings of about $130,000 and an additional $69,500 for LTSS costs.  With this in mind, it is easy to see how people are running out of money.

Over all, individuals pay for about 55% of LTSS expenditures; Medicaid pays about 37%; and Private LTSS insurance pays for less than 5%.

Cost to Family and Friends:

In addition to the financial stress this places on the elderly and disabled, it also significantly affects their families.  The Collaborative estimates that in 2013, family and friends provided 37 billion hours of uncompensated LTSS to adults.  This care calculates to up to $470 billion, which is three times the amount Medicaid spent on LTSS the same year.

When family members provide caregiving to a loved one, it often comes at the cost of their job or a portion of their job.  On average, the Collaborative reports, a woman in her 50s who leaves a job to care for her aging parents does so at a cost of $300,000 of income over her lifetime.  The Collaborative states that “unpaid family caregivers lose an estimated $3 trillion in lost lifetime wages and benefits.”

Cost to Employers of Family and Friends:

The Collaborative reports that employers experience a loss of $17.1 to $33 billion in productivity due to absenteeism alone.  In addition, they state that “costs of turnover and schedule adjustments for caregiving workers add an additional $17.7 billion in costs.”

THE COLLABORATIVE’S RECOMMENDATIONS

The Collaborative was able to agree to five key recommendations in three key areas.  This final set of recommendations focused significantly on:  1) A need for universal catastrophic insurance; 2) Private market initiatives and public policies to revitalize the insurance market to help address non-catastrophic LTSS risk; and 3) Enhanced Medicaid LTSS for those with lower lifetime incomes.

The Collaborative calls for a strong government role in the solution.  The group considered voluntary and universal insurance programs and came to the conclusion that universal was the only viable, long-term solution as it spread the risk across the entire population and avoided challenges of adverse selection.  The Collaborative noted in the report, “As a result, universal insurance appears to offer broad-based insurance at a comparatively low lifetime cost.”

In addition to recommending universal catastrophic insurance, the Collaborative also recommended taking some actions to revitalize the private insurance market.  These included suggestions of employers offering long-term care insurance as part of their benefits packages.  In addition, the group suggests that regulatory changes in the insurance industry, creating more standardization in policies, would save costs to consumers.  The specifics of the regulatory change suggestions include increasing premiums and benefits as the individual ages.  There is also a suggestion that this type of insurance be sold in conjunction with Medicare supplemental programs.  Finally, the group suggests that policymakers continue to encourage and support efforts by the insurance industry to experiment with more hybrid products, combining long-term care insurance with other products.

Another recommendation given by the Collaborative was to encourage increased private savings for retirement.  This encouragement might come in the form of ease of enrollment through employers’ benefits programs, expanded retirement products, tax subsidies and education.

Of note was a recommendation made by the Collaborative was to modernize Medicaid financing and eligibility.  This recommendation is really one to expand Medicaid coverage to include more people, in more settings, for more care.  Eligibility would be based on a functional assessment and a needs assessment rather than requiring an institutional level of care.

CONCLUSION

The Collaborative leaves us with a final recommendation to provide more education about LTSS.  Many people are in denial about the possibility that they may need it some day and do not plan.  While it is encouraging that the nationwide issue is being studied more and taken more seriously now, the problem is far from resolved.  Until there is a firm solution, individuals must take responsibility and plan ahead.

If you or someone you know has questions about how to plan for the costs of long-term care, please feel free to contact our office.


[1] Full report:  http://www.convergencepolicy.org/wp-content/uploads/2016/02/LTCFC-FINAL-REPORT-Feb-2016.pdf

[2] For a list of members of the collaborative:  http://www.convergencepolicy.org/ltcfc-participants/

[3] For a list of members of the collaborative:  http://www.convergencepolicy.org/ltcfc-participants/

 

 

category: Elder Counselor (Newsletter)

Elder Counselor Newsletter Underestimating the Risk of Disability – The Importance of Being Prepared

No one likes to think about the possibility of their own disability or the disability of a loved one. However, as the statistics below demonstrate, we should all plan for at least a temporary disability. This issue of The ElderCounselorTM examines the eye-opening statistics surrounding disability and some of the common disability planning options. Disability planning is one area where we can give each and every person and family we work with great comfort in knowing that, if they or a loved one becomes disabled, they will be prepared.

Most Individuals Will Face At Least a Temporary Disability
Study after study confirms that nearly everyone will face at least a temporary disability sometime during their lifetime. More specifically, one in three Americans will face at least a 90-day disability before reaching age 65 and, according to the definitive study in this area, depending upon their ages, up to 44% of Americans will face a disability of up to 4.7 years. On the whole, Americans are up to 3.5 times more likely to become disabled than die in any given year.

In raw numbers, over 37 million Americans, or roughly 12% of the total population, are classified as disabled according to the 2010 census. Perhaps surprisingly, more than 50% of those disabled Americans are in their working years, from 18-64. For example, in December 2012, according to the Social Security Administration more than 2.5 million disabled workers in their 20s, 30s, and 40s received SSDI (i.e., disability) benefits.

Many Persons Will Face a Long Term Disability
Unfortunately, for many Americans the disability will not be short-lived. According to the 2007 National Home and Hospice Care Survey, conducted by the Centers for Disease Control’s National Center for Health Statistics, over 1.46 million Americans received long term home health care services at any given time in 2007 (the most recent year this information is available). Three-fourths of these patients received skilled care, the highest level of in-home care, and 51% needed help with at least one “activity of daily living” (such as eating, bathing, getting dressed, or the kind of care needed for a severe cognitive impairment like Alzheimer’s disease). The average length of service was more than 300 days, and 69% of in-home patients were 65 years of age or older. Patient age is particularly important as more Americans live past age 65. The U.S. Department of Health and Human Services Administration on Aging tells us that Americans over 65 are increasing at an impressive rate:

The Department of Health and Human Services also estimates that 9 million Americans over age 65 will need long term care this year. That number is expected to increase to 12 million by 2020. The Department also estimates that 70% of all persons age 65 or older will need some type of long term care services during their lifetime.

The Council for Disability Awareness provides startling examples of how disability is likely to impact “typical” Americans.

“A typical female, age 35, 5’4″, 125 pounds, non-smoker, who works mostly an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:

“A typical male, age 35, 5’10″, 170 pounds, non-smoker, who works an office job, with some outdoor physical responsibilities, and who leads a healthy lifestyle has the following risks:

Visit the Council for Disability Awareness website at http://www.whatsmypdq.org/ to calculate your own Personal Disability Quotient (PDQ), or risk for disability.

The Alzheimer’s Factor
Alzheimer’s is growing at an alarming rate. Alzheimer’s increased by 46.1% as a cause of death between 2000 and 2006, while causes of death from prostate cancer, breast cancer, heart disease and HIV all declined during that same time period.

The 2015 Alzheimer’s Association annual report titled, “Alzheimer’s Disease Facts and Figures” explores different types of dementia, causes and risk factors, and the cost involved in providing health care, among other areas. This report contains some eye-opening statistics:

Caregivers are at risk of developing health problems. There were approximately 10.9 million unpaid caregivers (family members and friends) providing care to persons with Alzheimer’s or dementia in 2009. According to the Alzheimer’s Association, those persons are at high risk of developing health problems, or worsening existing health issues. For example, family and other unpaid caregivers of people with Alzheimer’s or another dementia are more likely than non-caregivers to have high levels of stress hormones, reduced immune function, slow wound healing, new hypertension and new coronary heart disease.

Spouses who are caregivers for the other spouse with Alzheimer’s or other dementia are at greater risk for emergency room visits due to their health deteriorating as the result of providing care. A study mentioned in the 2010 Alzheimer’s Association report found that caregivers of spouses who were hospitalized for dementia were more likely than caregivers of spouses who were hospitalized for other diseases to die in the following year.

Receiving care. According to the National Nursing Home Survey 2004 Study, the most recent of its kind, the national average length of stay for nursing home residents is 835 days, with over 56% of nursing home residents staying at least one year. Significantly, only 19% are discharged in less than three months. Those residents who were married or living with a partner at the time of admission had a significantly shorter average stay than those who were widowed, divorced or never married. Likewise, those who lived with a family member prior to admission also had a shorter average stay than those who lived alone prior to admission.

While a relatively small number (1.56 million) and percentage (4.5%) of the 65+ population lived in nursing homes in 2000, the percentage increased dramatically with age, ranging from 1.1% for persons 65-74 years to 4.7% for persons 75-84 years and 18.2% for persons 85+. According to the U.S. Census Bureau, 68% of nursing home residents were women, and only 16% of all residents were under the age of 65. The median age of residents was 83 years.

See Vol. 4 Issue 5 of the Elder Counselor, The Affordable Care Act:  How It Impacts Our Senior Population, for a discussion of the Affordable Care Act’s Impact on information regarding nursing homes.

Long Term Care Costs Can Be Staggering
Not only will many individuals and families face prolonged long term care, in-home care and nursing home costs continue to rise. According to the Genworth 2015 Cost of Care Survey, Assisted Living, Adult Day Services, and Home Care Costs national averages for long term care costs are as follows:

These costs vary significantly by region, and thus it is critical to know the costs where the individual will receive care. For example, the median annual cost for a private room in the state of California during 2015 was $104,025, whereas the median cost for a year in a semi private room was nearly $90,000.

Most Americans Underestimate the Risk
Perhaps most importantly, despite overwhelming and compelling statistics; most Americans grossly underestimate the risk of disability to themselves and to their loved ones. According to the Council on Disability Awareness 2010 survey:

 

 

Given the high costs of care, this underestimation often leaves Americans ill prepared to pay for the costs of long term care.
Long Term Care Insurance May Cover These Costs
If a parent, their spouse, or family member needs long term care, the cost could easily deplete and/or extinguish the family’s hard-earned assets. Alternatively, seniors (or their families) can pay for long term care completely or in part through long term care insurance.

Most long term care insurance plans let the individual choose the amount of the coverage she wants, as well as how and where she can use her benefits. A comprehensive plan includes benefits for all levels of care, custodial to skilled. Clients can receive care in a variety of settings, including the person’s home, assisted living facilities, adult day care centers or hospice facilities.

Planning in the Event Long Term Care Insurance is Unavailable or Insufficient
Unfortunately, many older Americans will either be medically ineligible for long term care insurance or unable to afford the premiums. In that event, more aggressive planning should be considered as early as possible to make sure life savings are not depleted as a result of having to pay out-of-pocket for care. With the help of an elder law attorney, a plan can be created that will protect much of the assets of an individual or couple that would otherwise be at risk of being depleted.

All Planning Should Thoroughly Address Disability
When a person becomes disabled; he or she is often unable to make personal and/or financial decisions. If the disabled person cannot make these decisions, someone must have the legal authority to do so. Otherwise, the family must apply to the court for appointment of a guardian over the person or property, or both. Those who are old enough to remember the public guardianship proceedings for Groucho Marx recognize the need to avoid a guardianship proceeding if at all possible.

At a minimum, seniors need broad powers of attorney that will allow agents to handle all of their property upon disability, as well as the appointment of a decision-maker for health care decisions (the name of the legal document varies by state, but all accomplish the same thing). Alternatively, a fully funded revocable trust can ensure that the senior’s person and property will be cared for as desired, pursuant to the highest duty under the law – that of a trustee.

Conclusion

The above discussion outlines the minimum planning everyone, including seniors and their loved ones, should consider in preparation for a possible disability. It is imperative that families work with a team of professional advisors (legal, medical and financial) to ensure that, in light of their unique goals and objectives, their planning addresses all aspects of a potential disability. Our firm is dedicated to helping seniors and their loved ones work through these issues and implement sound legal planning to address them. If we can help in any way, please don’t hesitate to contact our office.

 

category: Elder Counselor (Newsletter)

Elder Counselor Newsletter Alzheimer’s Awareness Month: The Costs of Dementia

November is Alzheimer’s disease and Awareness month.  It’s the perfect time to educate people about the disease of Alzheimer’s (and other dementias) and the effects of the disease on its victims and their loved ones.  In this edition of the ElderCounselor™, we are going to focus on the high costs associated with dementia during the final years.

Alzheimer’s disease is a type of dementia.  In fact, it is the most common form of dementia.  Other types of dementia include:  Parkinson’s disease, Lewy body dementia, vascular dementia and Huntington’s disease.  According to the Alzheimer’s Association, 1 in 3 seniors living in the United States die with Alzheimer’s disease.  It is the 6th leading cause of death in the country.  The Parkinson’s Disease Foundation estimates that 600,000 people have been diagnosed with Parkinson’s disease in the United States.  And, around 1 million adults suffer from Lewy body dementia according to the National Institute on Aging.

Compared to other diseases that are common in older adults, dementia has been discovered to be much more costly.  On October 27, 2015, the Annals of Internal Medicine published results of a study of which the objective was, “To examine social costs and financial risks faced by Medicare beneficiaries 5 years before death.”[1] The study compared 1,702 deceased Medicare beneficiaries, classified into 4 groups as follows:  persons with high probability of dementia; those who died due to heart disease; those who died of cancer; and those who died for other causes.

The results of the study showed a significantly higher cost of those who died of dementia than those who died of other causes.  Over a five-year period, the average cost of care for the dementia patient was $287,038.  In contrast, the heart disease patient’s average cost for the same period of time was $175,136 and the cancer patient’s cost was $173,383.

Medicare paid out about $100,000 per patient, regardless of whether the patient suffered from dementia, heart disease, cancer or other disease, over the five-year period.  However, for the same 5-year period, the out-of-pocket costs (costs not covered by Medicare) were 80% higher, or about $61,522 more, for the dementia patients than the heart disease or cancer patients.

Why the discrepancy in the cost for dementia patients over other terrible illnesses?  The reason is that dementia patients require more “caregiving” in terms of help with basic daily functions.  Things that many of us take for granted to be able to do for ourselves, even when we are sick, such as bathing, dressing, toileting, and eating, are all activities many dementia patients require assistance with as the disease progresses.  In addition, dementia patients often need someone with them just to protect them from themselves.  Many dementia patients wander or harm themselves.  Therefore, constant oversight of them is necessary.

Caregiving for the dementia patient is often taken on by a family member to avoid additional costs to the patient.  This results in a financial cost to the family member who quits his or her job to take on this new caretaking role.  It often results in a health cost to the family member as well since family caretakers are frequently overworked and have less time to care for their own health.  This leads to increased medical bills, loss of days at work, more visits to the doctor and other expenses associated with deteriorating health of the family caretaker.

Sometimes family recognizes the benefit of hiring outside caregivers and, in order to keep their loved one in his/her home, hire an in-home caregiver.  These in home care providers cost, on national average, about $20 per hour.[2] A full-time caregiver at $20 per hour could cost a family up to $174,720 per year.  There are also other options, such as adult day care, an assisted living facility with a dementia unit (where doors are kept locked to avoid wandering), and nursing home facilities.  These options can cost, on national average, anywhere from $17,904 for day care to $91,250 for a nursing home.  As is no surprise, the long-term caregiving costs can add up quickly and be devastating to most middle class families.

Currently, there is no cure for Alzheimer’s, or any other type of dementia.  There are treatments that may help slow the progression of the disease.  There are also theories related to diet that may help prevention or stave off the development of dementia.[3] However, there are no surefire ways to beat this disease as of the date of this writing.  Advocating for the recognition of the costs associated with the disease as well as the heartbreaking effect on friends and family of the patient, is the best way to raise funds to support the finding of a cure and prevention of dementia.  We can all look forward to a day that this disease is a thing of the past because a cure, and/or prevention, has been found.

Until that day, there are support groups for family/friend caregivers.  The Alzheimer’s Association puts these groups together as do local hospitals and senior communities.  It is imperative that caregivers seek out emotional, spiritual and physical support as they care for their loved ones.  It cannot be stressed enough that without proper support, the caregiver’s own health will suffer and the caregiver will become a patient as well.

If you, or someone you know, suffers from dementia or loves someone who does, please contact us to discuss your options for planning for the costs associated with caregiving.  Please think of us as a resource for your loved one with dementia.  We can help.  And, if we can’t, we probably know someone who can.

Take some time this month to spread the news about the costs associated with dementia (including Alzheimer’s).  Bring this disease to the forefront of everyone’s mind so we can find a way to beat this disease once and for all.

Have a happy Holiday Season!


[1] http://annals.org/article.aspx?articleid=2466364

[2] https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html $20 is based on the 2015 Long Term Care Costs Survey by Genworth, which states that Homemaker Services national average expenses is $45,760 (for 44 hours/week x 52 weeks).

[3] http://www.webmd.com/alzheimers/features/mind-diet-alzheimers-disease The MIND diet is said to help prevent Alzheimer’s.

 

category: Elder Counselor (Newsletter)

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