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Elder Counselor Newsletter A Review of Important Elder Law Stories From 2013

As Happy New Year! 2013 was an important year for news that affected our senior, Veteran and disabled populations. Many stories affecting these groups made national headlines. This edition of the ElderCounselorTM will review some of the top stories that made headlines in 2013 and why they may continue to do so in 2014.

The DOMA Decision

One of the US Supreme Court’s highlighted decisions of the year was US v. Windsor[1].  This case stemmed from a widow from a same-sex marriage who was denied tax relief under the “Defense of Marriage Act (DOMA).”  The Supreme Court determined DOMA to be unconstitutional, ruling in favor of Edith Windsor and striking down the part of the law defining marriage as a union between a man and a woman.  The Court noted that the law deprived same sex couples of both rights and responsibilities.

The well-publicized ruling of this case impacted many federal laws which fell under the Act’s definition of marriage. The affected federal laws include benefits such as Medicaid, Social Security, housing, food, stamps, tax laws, federal employee benefits and Veteran’s benefits. The changes to these laws have already started to impact seniors throughout the country who are in same-sex marriages. Whether there is a change to the individual in a same sex marriage will depend on a few factors. One factor is based on the benefit in question and whether the state in which the individual resides recognizes same-sex marriage. Another factor is whether the couple was validly married in a state that recognized same-sex marriage at the time they got married.

For example, Medicaid will likely not recognize a marriage unless it is being administered in a state that recognizes an otherwise valid same-sex marriage. However, some states do provide hardship protections to a partner of a person in long term care. And, in some states that recognize civil unions or registered domestic partnerships, Medicaid may treat the couple as married. Each state continues to have authority as to whether or not to recognize marriage for same sex couples.

But, where the state recognizes a same-sex marriage, the impact in terms of Medicaid is great. In regards to Medicaid financial eligibility, the change means an increased allowance of assets from that of a single person (approximately $2,000) to those of a married couple (up to $117,920). The sword cuts both ways, though, as Medicaid will consider assets of both parties to the marriage and not just the applicant. Legal counsel can help assess the strategies available to potential Medicaid applicants and their spouses.

 

Affordable Care Act

We have all been inundated by information regarding the Affordable Care Act (ACA). Regardless of your feelings on the new law, your senior clients will likely be affected by its implementation.

More impactful to the senior population than the individual mandate, are the changes to Medicare, the prohibition against pre-existing conditions clauses, nursing home care changes, changes to community-based long term services and supports, and the funding of the ACA.

ACA and Medicare
The changes in Medicare include prescription drug coverage that will eventually reach 25% across the board for all prescription drugs. The increase in coverage will be felt by those who spend more than $2800 per year on prescription drugs. Where there was no coverage by Medicare when the prescription drug expense of an individual was between $2800 and $4550, there will eventually be coverage of 25% for all such expenses for those receiving Medicare.

Another Medicare change under the ACA is increased coverage of preventive care. These now-covered services include annual wellness visits, flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases.

Finally, the ACA’s changes to Medicare include a cut to Medicare Advantage Plans. The ACA restricts the options that can be provided by these plans. This may result in fewer choices to seniors and it makes uncertain the future of Medicare Advantage Plans..

ACA and the Prohibition Against Pre-Existing Conditions Clauses
The ACA’s prohibition against pre-existing conditions clauses received a great deal of attention in the news. This part of the law prohibits insurance companies from considering health when one applies for health care coverage. It also prohibits insurance companies from charging varying amounts to individuals based on heath, sex, age or other factors. The elderly will benefit from this portion of the law as the risk of insuring them will now be evenly distributed among the entire population, old and young alike.

ACA and Nursing Homes
Another major change affecting seniors under the ACA concerns nursing homes. The ACA requires the Center for Medicare and Medicaid Services to provide a consumer-friendly website, posting comprehensive information regarding nursing homes. This website is to provide data regarding the nursing home’s inspections, complaints and number of violations received. It will also identify the owner of the home and show expense reports comparing resident care costs versus administrative costs. In addition, the ACA will make it easier to file complaints against a nursing home.

In the event a nursing home decides to close its doors, the ACA has built in protections for residents of the home. The ACA mandates notice far enough in advance that all its residents can relocate. Further, it requires that the home ensure all residents have successfully relocated prior to closing.

There are other parts of the ACA that will potentially benefit those in need of nursing homes as well, including additional federal funding (at the option of the state) to help with background checks of staff.

ACA and Long Term Care Services and Supports
The ACA provides several options to states to expand home and community-based care under Medicaid. These options will fall largely to the states to exercise and implement.

Funding the ACA
The portions of funding the ACA that will be felt by our senior clientele include: the cuts to Medicare Advantage Plans[2]; a surcharge tax of 3.8% to unearned income[3]; an increase in the floor for medical expense deductions from 7.5% to 10% of AGI; and a .9% Medicare payroll tax on high income earners.[4]

 

Proposed VA Pension Changes

There have been two bills introduced this past year that would make changes to Veterans pension benefits. The house introduced H.R. 2189 and the Senate introduced S. 944. Both bills propose essentially the same changes. The bills, if passed, will affect wartime Veterans and surviving spouses of wartime Veterans who apply for pension benefits in a number of ways.

First, the proposed law would impose a penalty against the claimant who disposes of property for less than fair market value if that transfer reduces the amount of the claimant’s estate. There is currently no penalty if a pension applicant gives away assets and then applies for benefits.

Second, the bill imposes a 36-month look-back period for transfers made prior to the submission of an application. Under this portion of the law, the VA will review the applicant’s gifts and other transactions over the past 36 months to ensure no penalties described in the prior paragraph should apply.

Finally, the bill describes transfers to a trust, annuity or other financial instrument or investment as a transfer of an asset. There are exceptions, but the goal appears to be to discourage some Veterans pension planning strategies that currently exist and, according to bill proponents, are being misused.

There are other aspects of the proposed law that would further affect Veterans, and their spouses, applying for these benefits. However, the bottom line for our senior clientele is that new planning strategies may be required to assist them in obtaining these benefits. We will keep you posted on the progress of these bills. For more information about Veterans pension benefits, please contact our office.

 

Conclusion

Several big changes occurred in 2013 that will impact our senior clientele in the coming months and years. While some of the changes will have a positive impact on the senior and Veteran population, others will not. We can help guide your clients to needed legal resources and information. If you have a client, or know of someone who could benefit from our services, please contact us to see how we might be able to help.


[1] US v. Windsor, 570 U.S. 12 (2013)

[2] The cuts to Medicare Advantage Plans are to be $145 billion over a ten (10) year period.

[3] This surcharge will be applied to unearned or investment income of singles with an annual income of over $200,000 and of couples with an annual income of over $250,000.

[4] High income earners are defined as taxpayers with over $200,000 in earned income for a single taxpayer and over $250,000 for families.

 

category: General Articles

Elder Counselor Newsletter The Affordable Care Act: How It Impacts Our Senior Population

Since its passage in 2010, the Affordable Care Act has been the subject of many heated debates and a cause for some confusion among most of the population. In order to assist you in serving your senior clientele, this issue of the ElderCounselorTM will attempt to shed some light on how the law affects the elderly. No doubt, there will continue to be debates over healthcare reform. Regardless, the law of the land is the ACA. Its far-reaching changes have already begun and will continue in the years to come. Here is how it impacts seniors.

Individual Mandate
Most of us have heard that under the ACA there is an individual mandate to obtain healthcare insurance. In the event that one fails to do so, a penalty will be imposed starting at $95 in 2013 and rising each year until 2016 when the penalty reaches $695. However, for our senior clientele, this is not as big a threat since those over 65 are eligible for Medicare coverage. As long as they enroll in the coverage available, seniors 65 and over will not face the penalty.

Medicare Changes
Although there will be payment cuts to Medicare, there are key benefits that are absolutely protected under the ACA. Medicare Part A (hospitals, hospice care and some home health services) and Medicare Part B (medical insurance) are protected and may not be cut. The changes under the ACA, according to the National Council on Aging, give seniors even more Medicare benefits.

Changes to Prescription Drug Coverage
The new healthcare law decreases the expenditure on prescription drugs for Medicare recipients. Prior to the law being enacted, Medicare recipients were subject to what has become commonly known as the “Donut Hole.” Simply put, the Medicare law previously required recipients to reach a $310 deductible prior to Medicare kicking in to assist. At that point, enrollees starting paying 25% of the drug cost until they reached a total expenditure of $2800. The drug expense from $2800 to $4550 was then paid 100% by the enrollee. Once drug expenses reached $4550 Medicare would kick in again and the enrollee would pay only a small percentage of the prescription at that point. The Affordable Care Act has enacted a provision that requires Medicare to pick up more of the tab and will close the “donut hole” by the year 2020. Eventually, Medicare recipients will pay 25% of all prescription drugs across the board. This is good news for seniors since the number of prescription drugs taken typically increases with age.

Preventive Care Expanded
Another benefit to seniors under the Affordable Care Act is an increase in preventive care coverage. The ACA requires that Medicare cover preventive care procedures and screenings in an effort to reduce possible necessary future treatment. Prior to the ACA, Medicare did not cover preventive services. Such services include flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases. In addition, seniors are allowed an annual wellness visit. Previously, these services, whether recommended or not, were paid out of the patient’s own pocket. No doubt the senior population sees this change as a benefit.

Changes to Medicare Advantage Plans
When a senior enrolls in Medicare, he or she may choose the traditional Medicare coverage plan or may seek what is called a Medicare Advantage Plan. The Medicare Advantage Plans have their own terms of coverage. They usually cover services not traditionally covered by Medicare such as dental or vision, but may, at the same time, require co-pays or cost-sharing fees for services covered at no out-of-pocket expense under traditional Medicare.

The ACA prohibits Medicare Advantage Plans from charging higher cost-sharing fees for seniors receiving chemotherapy and dialysis. In addition, it limits the amount of expenditures of other than medical services for enrollees. In other words, the Medicare Advantage Plans are now limited as to the amount they may spend on administrative, marketing and other non-medical expenses. While certain additional covered services under these plans may be eliminated, certain required benefits are prohibited from being cut. Presently, 1 in 4 seniors is enrolled in a Medicare Advantage Plan.

The new healthcare law reduces payments to Medicare Advantage Plans by $145 billion over 10 years. Because of these cuts to the Medicare Advantage Plans, the future as to these plans is uncertain. As to whether this is a benefit to the senior depends on your point of view. At any rate, it changes the options currently available to seniors under Medicare Advantage Plans.

Non-Medicare Changes
In addition to Medicare changes that certainly affect seniors, there are other changes written into the law that should be noted as well. Most of these would be considered beneficial to seniors.

No pre-existing and conditions clauses
All health insurance carriers are prohibited from including pre-existing conditions clauses in their plans. This means that health cannot be a factor as when applying for health care coverage. Furthermore, insurance companies are prohibited from charging individuals varying amounts for coverage based on their health, sex, age or other commonly-considered factors. This appears to be good news for the ill, females and the elderly, which are the groups of people who traditionally have paid more for their coverage. Now the cost will be evenly distributed to all.

In addition to those factors that may not be taken into consideration upon applying for coverage, there is also the protection of consumers once they are enrolled in the plan. The healthcare law says that once enrolled in a plan, the insurance company may not dis-enroll a person for becoming ill.

Grants as Incentives to Hospitals
The ACA incentivizes hospitals to take extra care of seniors by providing grants to them for working with seniors who are at high risk for frequent hospital readmissions.

The Elder Justice Act
The Elder Justice Act is aimed at protecting seniors from crimes and abuse including physical and mental abuse and financial exploitation. This was enacted under the ACA.

Nursing Home Care Changes
There are several provisions under the ACA that concern nursing homes. For example, the ACA requires the Center for Medicare and Medicaid Services to provide a comprehensive website where consumers may find information regarding local nursing homes, including inspection and complaint reports. From this, the consumer may find the number of violations and complaints a specific nursing home has received. In addition, the consumer will be able to find information about the nursing home such as the owner of the nursing home, how much the nursing home spends on resident care compared to administrative costs, the number of hours of nursing care received by residents and staff turnover rates.

In addition to being able to evaluate a nursing home more completely prior to choosing one, the law has made changes meant to make it easier to file complaints about the quality of care within the nursing home. It also prohibits retaliation for filing such a complaint.

Further, in the event a nursing home decides to close its doors, the ACA imposes new, expanded notice requirements for its residences. Not only must the nursing home provide notice of a closure far enough in advance for its residence to relocate, but it must ensure that all residents have been successfully relocated prior to actual closure.

Finally, the ACA provides all states with the option to enroll in federal grants to pay for criminal background checks on more staff working at the nursing home. This will ensure that not only are nurses and certified nursing assistants background checked, but that any staff coming into contact with patients may be subject to such a safety procedure as well. Again, this is an optional program left to the discrepancy of each state.

Community Based Long Term Services and Supports
The ACA aims to strengthen the emphasis on home and community-based care by giving states several options to expand such programs for Medicaid enrollees.

There are three voluntary provisions for the expansion of home and community-based services (HCBS) under Medicaid. First, a state may choose to offer a community first choice option to provide attendant care services and supports. Second, a state may amend its state plan to provide an optional HCBS benefit. And, finally, states may rebalance spending on long term services and supports to increase the proportion that is community-based. The first and third provisions offer states enhanced federal matching rates as an incentive. Although the new provisions are valuable, the law does not set minimum standards for access to HCBS, and the new financial incentives are limited especially for the many states facing serious budget problems. Wide variations in access to HCBS can be expected to continue, while HCBS will continue to compete for funding with mandated institutional services.

How is the ACA Funded by Seniors
The benefits received under the ACA must be funded. Although too lengthy to detail in this writing, we will outline how our seniors will bear part of the burden of funding the law.

As already mentioned, there will be some cuts to the Medicare Advantage Plans that will support the funding of the ACA. This is in the form of $145 billion over a ten (10) year period. Those seniors enrolled in such plans will no doubt undergo adjustments as the changes are implemented.

In addition, the ACA will be funded with a surcharge tax of 3.8% to unearned or investment income of singles with an annual income over $200,000 and couples with an annual income over $250,000. Therefore, seniors who fall within this income bracket will be subject to the tax.

Another impact on seniors is the increase in the floor for medical expense deductions from 7.5% to 10% of Adjusted Gross Income. This change will impact taxes paid for 2013.

Finally, working seniors may be subject to the additional 0.9% Medicare payroll tax on high income earners (defined as taxpayers with over $200,000 in earned income, $250,000 for families). This additional tax applies to the excess over the stated limits. This change takes place in 2013.

Conclusion
Clearly there are many changes made by the Affordable Care Act that will affect seniors and their loved ones. It is important to have a general understanding of what seniors are facing in terms of their health care coverage. With seniors facing so many changes during a susceptible time in their lives, it is crucial that they be directed to resources that can assist them to make educated decisions about their health, their finances and their care options. 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 An Overview of the Defense of Marriage Act Ruling

The U.S. Supreme Court delivered a historic decision in U.S. v. Windsor[1] that could have far-reaching effects on seniors, persons with disabilities, and veterans who are married to, or plan to marry, a person of the same gender.  This edition of the ElderCounselor™ will provide an overview of the decision and how it may affect Medicaid recipients in a same-sex marriage.

Overview of U.S. v. Windsor:

An historical decision by the U.S. Supreme Court came down on June 26, 2013, declaring unconstitutional a portion of the Federal law commonly known as the Defense of Marriage Act (“DOMA”).  In this case, Edith Windsor, the New York resident and Canadian married spouse of Thea Spyer, sought relief from the Court system when she was denied a $363,053 refund for estate taxes she paid when Spyer died.  In denying her request, the IRS relied on Section 3 of DOMA, which defined marriage as a union between a man and a woman.  Because Windsor and Spyer were a same-sex couple, albeit validly recognized under the laws of New York, the Federal law disallowed benefits to them which are available to heterosexual married couples.  Here, the benefit disallowed came in the form of estate tax relief to a surviving spouse.

In the written opinion of the Court, Justice Kennedy focused on the long-established right of the states to determine the laws regarding domestic relations.  The Court pointed out that New York, at the time Windsor and Spyer were married in Canada, may not have allowed same-sex marriage within the state, but its laws protected those who were legally married elsewhere by applying its laws equally to all married people.  It was also pointed out that New York eventually expanded its laws to include same-sex marriage.

In addition to the fact that states have traditionally had the role of determining what the domestic relations laws should be within their own territories, the Court looked at the purpose and impact of DOMA itself.  The Court came to the conclusion that because of the purpose written into the law itself along with the impact of the law, that DOMA has the purpose “to discourage enactment of state same-sex marriage laws and to restrict the freedom and choice of couples married under those laws if they are enacted.”1  The Court concluded that this historical balance between state and Federal law had been negatively impacted when DOMA, Section 3, was enacted.

The Court ruled in this case that DOMA violated the 5th Amendment of the U.S. Constitution because its “demonstrated purpose is to ensure that if any State decides to recognize same-sex marriages, those unions will be treated as second-class marriages for purposes of federal law.”1 This obviously deprives “some couples married under the laws of their State, but not other couples, of both rights and responsibilities.”1

Effect on Medicaid

Section 3 of DOMA, which defined marriage as only a union between a man and a woman, applied to over 1000 federal laws, including benefits such as Medicaid, Social Security, housing, food stamps, tax laws, benefits due to federal employees, and veterans benefits.  In some cases the application of DOMA took away rights of same-sex married couples and, in others, it relieved them of certain responsibilities.

As professionals serving the elderly, it is important to know how the overturning of this portion of the law will affect seniors.  The answer is it will vary depending on what state the couple was married in, and what state they currently reside in.  While the result of overturning Section 3 of the DOMA is far-reaching, it does not completely equalize the playing field.

With regard to Medicaid, whether a couple may be impacted depends on whether they are: 1) validly married; 2) living in a state that recognizes their marriage; and/or 3) In a civil union or registered domestic partnership and the state recognizes the relationship.

Currently 12 states and the District of Columbia recognize same-sex marriages.  In these states, Medicaid will also recognize the marriage.  This means that the Medicaid rules will change for same-sex married elders.  The positive changes for these elders could include an increased allowance as currently allowed for married couples.  Another advantage will be the ability of the ill spouse to transfer assets to the well spouse without penalty and the ability to receive some of the income of the ill spouse once qualified for Medicaid under the Spousal Impoverishment Act provisions.

In a state that does not recognize an otherwise valid same-sex marriage, Medicaid will also likely not recognize the union.  However, some states do provide hardship protections to a partner of a person in long term care.[2]

Finally, in a state that recognizes civil unions or registered domestic partnerships, a couple so joined may be treated as married by Medicaid.  This is a situation which will vary based on several factors and the tax treatment of these couples by the IRS may determine the answer.

Impact on Other Government Benefits

This decision will likely impact Social Security Income (SSI) recipients, as well as veterans receiving either pension or compensation benefits.  It will likely take months before we fully understand the impact of the Court’s decision in these areas, as each agency determines how best to apply the decision.

Conclusion

Medicaid alone is a complex program, even for single individuals.  With the new opportunities that have opened up for married couples of the same sex, the need for the assistance of an Elder Law attorney is even greater.  If we can help someone you know, please don’t hesitate to contact us.

Other references:

Supreme Court Boosts Gay Marriage (The Hill – www.thehill.com)

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.


[1] U.S. v. Windsor, 570 U.S. ___ (2013)

[2] LGBT Organizations Fact Sheet Series:  After DOMA What it Means for You https://www.glad.org/current/post/after-doma-fact-sheets

 

 

category: General Articles

Elder Counselor Newsletter The Staggering Cost of Dementia

Most of us know of someone who has been diagnosed with dementia. It is a costly, heart-breaking and life-altering syndrome that is nearly doubling in numbers of people affected worldwide every 20 years[1]. Dementia has affected the likes of Norman Rockwell, E.B. White, Rita Hayworth, Charlton Heston, Ronald Reagan, Charles Bronson, Margaret Thatcher and many other well-known people. It does not discriminate based on station in life, and its effects are widely dispersed. This edition of the ElderCounselorTM will focus on recent findings as to economic, financial and societal impacts of dementia as well as what an Elder Law attorney can do to help.

What is Dementia?

Dementia is a general term for a decline in mental ability, severe enough to interfere with daily life. Memory loss is one such example. Alzheimer’s is the most common type of dementia. Symptoms of dementia can vary greatly, but is diagnosed when at least two of the following core mental functions are significantly impaired: memory, communication and language, ability to focus and pay attention, reasoning and judgment, and visual perception.

These symptoms can be displayed when the person with dementia has problems with short-term memory, keeping track of his/her purse or wallet, paying bills, planning and preparing meals, remembering appointments, or travelling out of the neighborhood. These often progressive symptoms will likely eventually necessitate assistance with daily activities, resulting in increased expense and stress on the individual, their family members, and society at large.

The RAND Study[2]

The RAND Corporation recently concluded a nearly decade-long study on close to 11,000 people. The study sheds light on dementia statistics including rates of diagnosis and costs to society. The results of this study were recently published in the New England Journal of Medicine in early April 2013. The study’s reliability is significant—it was led by an independent, non-advocacy group and financed by the federal government.

The Cost of Dementia to Society

According to the RAND Corporation’s study, the cost of caring for those with dementia is projected to double by 2040 and is currently higher than caring for those with heart disease or cancer. The direct costs of dementia, including the cost of medicine and nursing homes, was $109 billion a year in 2010 compared to $102 billion for heart disease and $77 billion for cancer. This cost is pushed even higher, to $215 billion, when support from family members or other loved ones is given a cost value. This figure will rise to $511 billion by 2040. Information from the RAND study and from the Centers for Medicare & Medicaid Services indicates that, by 2020, dementia patients will account for about 10% of the elderly population while direct medical spending on them will equal about 17% of all spending projected for Medicare and Medicaid devoted to the aged[3].

The cost of dementia to society is great and is headed for a huge increase. In light of that, President Obama recently signed into law the National Alzheimer’s Project Act, which calls for tracking of financial costs of dementia as well as increased efforts to find new treatments and better care for those with dementia.

The Cost of Dementia to the Family

While the cost to society is great and will likely have a substantial impact on all of us, the costs to individuals diagnosed with dementia and their loved ones is even more significant. As evidenced by the RAND study, each individual case of dementia costs between $41,000 and $56,000 a year. In addition to the financial drain on families, dementia increases the stress on the caregiver loved one. In fact, caregivers have been found to be at increased risk for depression and anxiety and long term medical problems, which impose a further financial burden on the family.

Conclusion

Dementia poses higher costs to society and individuals than heart disease or cancer and these costs are projected to continue rising. Most significant is the cost of care for the patient with dementia. The dementia-ridden person will progressively need more and more help with daily activities and this is the biggest cost of the debilitating syndrome. With the proper attention given to improvements in medicine with regards to dementia, society will be able to get a handle on this costly condition. And, with help from an Elder Law attorney, the family of those afflicted with dementia can obtain the support they need to care properly for their loved one.

An Elder Law attorney can help clients prepare or deal with an immediate need to find appropriate resources in dealing with dementia. We can support the loved one in making sure the dementia patient has access to the care and medical attention they need. Please contact us if you have a client or their loved one who has been diagnosed with dementia or is at risk for developing this debilitating syndrome. We would be honored to help.


[1] www.alz.co.uk

[2] http://www.rand.org/news/press/2013/04/03.html

[3] The Wall Street Journal, Dementia Will Take Toll on Health-Care Spending, April 8, 2013

 

category: Elder Counselor (Newsletter)

Elder Counselor Newsletter An Overview of Long Term Care Options

One of the greatest concerns for the elderly we serve and their families is that of long term care.  Two-thirds of seniors will need care at some point in their life and many have not planned for this likelihood.  It is an emotional and unpleasant topic to broach, but helping those we serve to plan ahead empowers them.  This issue of the ElderCounselor™ newsletter will focus on information necessary to assist elderly in making decisions that will likely eventually affect them and their loved ones.

Plan Ahead
According to the Centers for Disease Control, the average life expectancy at birth in the U.S. is projected to be approximately 79 years by 2015 and is projected to continue to rise.  Someone already 55 years of age has a higher life expectancy of around 84 years.  Since health declines as we age and we become more likely to need help with everyday activities, it is smart to consider what options will be available if and when assistance is needed.  Thinking about these things now helps people avoid making bad decisions during more stressful times when health has already declined to the point of needing assistance.

Care Options
There are several different levels of care available to elders as they age depending on their need for assistance.  Each level of care may include a medical and health component, a personal care component and/or a social and recreational component.

The first, and least invasive, type of care is adult day care which costs, on average, $18,200 per year.  These services may include medical and health services, social services or both.  This is a supportive group environment for seniors with cognitive and/or functional impairments.  These types of facilities are regulated differently in each state and are not federally regulated.

Home care is another type of assistance available to seniors.  The national average cost for Home care is between $20,800 and $21,840 per year based on a $20-$21 per hour rate.  Home care consists of either a home health aide or a companion / homemaker.  This type of assistance allows the senior to “age in place” as an outside service comes into the home to help.  Caregivers are hired through a variety of methods including agency, registry or private hire.  Each state licenses and regulates its home care agency system except for Medicare-certified agencies, which must comply with Federal regulations.

The next level of care is an assisted living facility (ALF).  The national average cost of staying in an ALF is $42,600.  Depending upon the chosen level of care, an ALF may provide services ranging from care management, assistance with every day activities, housekeeping, medication management, security, transportation, meals and social and recreational activities.  ALFs are governed by state standards and may include increased standards for communities with residents suffering from Alzheimer’s or other forms of dementia.  ALFs may also have staff training requirements or disclosure requirements relating to these diseases.  Medicaid, a federal program administered by the state that assists with long term care costs, may be available for residents of an ALF depending on current fiscal funding.

Finally, nursing homes are available to those who require the most assistance.  The national average annual cost of nursing homes is $81,030 for a semi-private room or $90,520 for a private room.  Nursing homes typically provide a secure environment and services to meet the physical, medical and social needs of their residents, such as:  room and board; nursing care; medication management; personal care; and social and recreational activities.  Many patients in nursing homes require assistance with multiple everyday activities (bathing, dressing, eating, toileting, transferring in and out of chairs or beds, and continence) and/or have cognitive limitations due to Alzheimer’s disease or another form of dementia.  Nursing homes, like ALFs, are subject to state and federal regulations.  Certain nursing homes accept patients who are qualified for Medicaid, which helps cover the costs of nursing home services.

Placement Considerations
It is important for the senior and family members to be clear on the services needed.  The service provider’s policies on included services must be considered.  The provider will likely have a basic services contract which lays out the services provided.  Any services falling outside of the basic agreement will be an additional charge to the senior.  It is imperative that the senior or the senior’s advocate has a clear understanding of the contract being entered into on the senior’s behalf, including who is obligated to pay for the services provided.
Another important consideration is the service provider’s policy regarding staff qualifications.  For example, some providers have staff trained in handling patients with Alzheimer’s disease and other forms of dementia while others may not.  It is important to find out what the facility’s training and education requirements are.

Another consideration is whether the service provider is a freestanding facility/entity or whether it is connected to another facility.  For example, there are ALFs that are freestanding and ALFs that are associated with or somehow connected to an assisted living community and/or hospital.  This is important in the event a patient can no longer live in an ALF environment and must transfer to a facility that provides more services or a more comprehensive level of care is required.

Finally, personal preferences should be considered in determining the proper placement for anyone requiring long term care.  For example the aesthetic value of the facility, the proximity to his/her family and friends, familiarity with his/her surroundings, and the personalities of other residents and staff are all very important to consider in making a decision.
It is important that the senior’s specific needs are considered in determining a proper placement.  Preparing a list of questions to ask of residents and staff is one way to assist in making the right choice.  Also, the senior and the senior’s loved ones should make their own list of necessary services to be provided and specific preferences desired.  Financial, medical, social and spiritual needs must be considered as well as the senior’s personal preferences.

Conclusion
Determining the appropriate level and type of care is one of many challenges facing seniors and their loved ones.  Other challenges include figuring out how to pay for the care, knowing what rights the senior has, understanding what Medicare will and won’t pay, and making sure that the right legal documents are in place to carry out the seniors’ wishes.   We have helped numerous families overcome these challenges through proper legal planning, and by taking a comprehensive look at each situation to determine the best course of action for the senior.

If you would like more information or if we can be of assistance to you or a family you are working with, please contact us.

Statistics from:  *The 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, November 2012.  www. Metlife.com

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.

category: Elder Counselor (Newsletter)