The need and desire for long term care planning changes with time. Most of us first encounter the reality as our parents and loved ones transition into their last decade, in good health or bad. If parents have not planned for the eventuality of disability and dependence, then children and caregivers are left to create the plan. May children are motivated to keep assets in the family and to qualify a parent for no to low cost benefits that depend on poverty to attain.
Develop your own plan while you can: how does each of us plan to pay for long term care if we cannot live independently in the last years of our lives? According to the Genworth 2014 Annual Cost of Care Survey, the average cost of long term care in a nursing home amounts to $11,254 a month!
What’s your plan? Does your financial planner try to sell you long term care insurance every year during your financial check-up? What is the health of the long term care industry? How good is the policy I purchased 10 years ago? What are the options in today’s market?
If the value of your estate is $100,000 or less, likely there are not sufficient resources for the purchase of long term care. In this scenario, your resources would be naturally exhausted within a year, and when assets fall below $2,000, you will qualify for Medicaid benefits, including long term care in a nursing home.
The impact of the Affordable Care Act has yet to be felt on the industry, but federal trends are moving away from care in an institutional setting, back to home care. If you were to receive care at home, is your bathroom to the disabled and their caregivers? Have you discussed the practical options with your family? The nature of aging is continuing change, so talk about Plan A, Plan B, and maybe even Plan C in case things don’t work out.
The federal Medicaid changes in 2006 lengthened the “lookback” from three to five years; changed the start date on the lookback to the date on which you apply for benefits and attempted to eliminate half a loaf planning. Hawaii’s Medicaid system is in crisis and the application back logs have impacted cash flow to such an extent that institutions may not be able tot admit “Medicaid pending”, which means it’s a good idea to keep assets to permit some period of private pay to actually gain entry into a facility. The attempt to eliminate half a loaf planning did not work, and for the last minute folks, there are companies (on Oahu), who can manage and walk you through the process.
Bottom line, get your plan/policy out of the drawer, read it and ask if it works for you today. Is the right person in charge? Do they have up to date forms? Does your doctor know about the Physician’s Orders for Life Sustaining Treatment aka POLST. Does my family know what it means. Can my family find the paper work? Have I left them access to critical family information?
Not making a plan is a plan, meaning that your care will be managed by the dominant person in your family with the time and money to access legal and financial advice, with whatever motivation exists at the time. Is the second wife afraid of the children? Are the children distrustful? Can they communicate and make a decision for you?
Written by Elizabeth A. Ivey, Ivey Fosbinder Fosbinder LLC, A Limited Liability Law Company