PLANNING TO PAY FOR LONG TERM CARE

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PLANNING TO PAY FOR LONG TERM CARE

• Douglas G. Chalgian, CELA
• Amy R. Tripp, J.D.
• Chalgian Tripp Law Offices
• East Lansing Jackson - Ithaca
• ?chalgian 2006

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Housing Options

• Stay Home
• Independent Living Apartment
• Assisted Living/Adult Foster Care/ Home for the
  Aged
• Nursing Home

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Housing Options

• Stay Home
• With assistance coming in
• With Caregiver respite
• With Adult Day Care
• Independent Living Apartment
• With assistance coming in
• Assisted Living/Adult Foster Care/ Home for the
  Aged
• With assistance coming in
• Lockdown Memory Unit
• Nursing Home

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Housing Spectrum
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Housing Spectrum

• Monthly costs

3,000 - 5,000
5,000 - 7,000
0 - 15,000
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Factors in Determining Options

• Financial Resources
• Level of Need
• Spouse or others dependent upon the same
  resources
• Quality of Care

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Financial Resources

• Private Resources
• Assets and Income
• Reverse Mortgages
• Family Caregivers
• LTC Insurance
• Government Programs
• Medicaid
• Veterans Pensions
• (Service during period of conflict)

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Housing Spectrum
Medicaid
LTC Insurance
Private Funds
Veterans Pensions
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Private Resources

• Assets and Income
• Private agency Home Care 15 - 20 per hour
• 4 hours per day _at_ 18 per hour 2,160 /month
• 10 hours per day _at_ 18 per hour 5,400 /month
• 24 hours per day _at_ 18 per hour 12,960/month
• Adult Day Care 6 - 15 per hour

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Private Resources

• Informal Paid care giving common but fraught
  with potential problems
• Financial Exploitation
• Workers Comp and liability for injuries
• Tax Withholding Issues

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Private Resources

• The realities of family care giving
• Cost in lost wages, benefits and retirement
  planning for caregiver
• Cost in health of caregiver
• Caregiver burnout
• Family dynamics

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Private Resources

• The Good and Bad of Reverse Mortgages
• A source of funds for elder of modest means, can
  be accessed to stay in the home longer
• Sold on overstated benefits the next wave of
  senior exploitation?
• High up front fees
• Compels sale of home when (1) equity is depleted
  or (2) move to higher level of care
• Often contrary to good Medicaid planning.

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Long Term Care Insurance

• Comparing Apples
• and Oranges
• Daily Benefit Rate
• COLA
• Elimination Period
• Coverage triggers Cognitive decline ADLs?
• Covered services in home, skilled care, assisted
  living

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Long Term Care Insurance

• Not the answer for the current crisis.
• Part of the answer for the next wave of elders?
• Whether long term care insurance makes sense is a
  function disposable income after retirement.
• Growth of group coverage will likely continue to
  be main source of expansion of LTC insurance
  sales.
• At this time tax breaks are insufficient
  incentive for those who cannot otherwise afford
  coverage
• Deficit Reduction Act of 2005 opens the door to
  possible Robert Woods Johnson-like public-private
  experiments in Michigan and other states.

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Government Benefits

• Veterans Pensions
• For those who served in Military during periods
  of conflict
• Asset tested
• Available to pay for caregivers in the home for
  assisted living AFC/HFA costs

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Government Benefits

• Medicaid
• Home Help
• Home and Community Based Waiver
• Nursing Home Medicaid

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Medicaid

• Home Help
• Limited hours of personal needs
• Traditional Medicaid financial eligibility
  rules no spousal protections, etc.

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Medicaid

• Home and Community Based Waiver Services
• LTC asset eligibility standards includes
  spousal protections
• Income Cap 1,809
• No spend down or spousal allowance
• Limited slots
• Limited services per client
• Prioritize slots for transition from NH

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Medicaid

• In Nursing Home
• LTC asset eligibility standards includes
  spousal protections.
• Income only capped by NH private pay rate

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The Cutting Edge of LTC Financing

• The Governors LTC Task force
• Single Points of Entry
• Money Follows the Person
• Case Mix Reimbursement

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The Cutting Edge of LTC Financing

• Deficit Reduction Act of 2005
• Robert Woods Johnson Partnerships
• Money Follows the Person Pilot Projects
• Discourage Medicaid planning

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The Cutting Edge of LTC Financing

• Movement toward eliminating the institutional
  bias in LTC
• More efforts to encourage savings and LTC
  insurance
• The pending baby boom crisis
• Public policy debate over the role of Medicaid
  planning. individual responsibility versus
  disease discrimination
• Introduction of means testing to Medicare through
  Part D.

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Planning to Pay for Long Term Care
Level of Need
Quality of Life
Family Care Giver
Nursing Home
Medicaid
LTC Insurance
Assisted Living
Family Dynamics
Private Resources
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Planning to Pay for Long Term Care

• Thank You
• Douglas G. Chalgian, CELA
• Amy R. Tripp, JD
• ?chalgian 2006