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

Housing Options  Stay Home  Independent Living Apartment  Assisted Living/Adult Foster Care/ Home for the Aged  Nursing Home

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

Housing Spectrum

Monthly costs $0 - $15,000 $3,000 - $5,000 $5,000 - $7,000

Factors in Determining Options  Financial Resources  Level of Need  Spouse or others dependent upon the same resources  Quality of Care

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

Housing Spectrum Private Funds Veterans Pensions Medicaid LTC Insurance

Private Resources  Assets and Income Private agency Home Care: $15 - $20 per hour 4 hours per $18 per hour = $2,160 /month 10 hours per $18 per hour = $5,400 /month 24 hours per $18 per hour = $12,960/month Adult Day Care: $6 - $15 per hour

Private Resources  Informal Paid care giving: common but fraught with potential problems Financial Exploitation Worker’s Comp and liability for injuries Tax Withholding Issues

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

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.”

Long Term Care Insurance Comparing Apples and Oranges Daily Benefit Rate COLA Elimination Period Coverage triggers: Cognitive decline + ADL’s? Covered services: in home, skilled care, assisted living

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.

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

Government Benefits  Medicaid Home Help Home and Community Based Waiver Nursing Home Medicaid

Medicaid  Home Help Limited hours of personal needs “Traditional” Medicaid financial eligibility rules: no spousal protections, etc.

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

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

The Cutting Edge of LTC Financing  The Governor’s LTC Task force: Single Points of Entry Money Follows the Person Case Mix Reimbursement

The Cutting Edge of LTC Financing  Deficit Reduction Act of 2005 Robert Woods Johnson Partnerships Money Follows the Person Pilot Projects Discourage “Medicaid planning”

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.

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

Thank You Douglas G. Chalgian, CELA Amy R. Tripp, JD  chalgian 2006 Planning to Pay for Long Term Care