How to Pay for the High Cost of Long-Term Care

How to Pay for the High Cost ofLong-Term Care

Presented by

Harold Lustig, President

Estate and Elder Planning Associates

• When you need help with bathing, eating, dressing, toileting, continence, transferring, or have a cognitive impairment, then you need Long-Term Care.

What is Long-Term Care?

• Crisis Planning: – When you or a loved one needs help with daily

living; have a cognitive impairment; and do not know where the money will come from, or the services available, you are in a Crisis.

• Pre-Planning: – Planning ahead can avoid a crisis; qualify for

public benefits; protect your assets, etc.

Crisis Planning Vs. Pre-Planning

• You pay

• Medicare

• Medicaid/Medi-Cal

• Veteran’s Administration

• Long-Term Care Insurance

Who Pays for Long-Term Care?

• Nearly 70% of seniors will need some form of healthcare at home, assisted living, memory care, or nursing home.

• At $6,000 to $10,000 per month or more, most people will deplete their life-time savings.

You Pay

• Most seniors mistakenly believe that long-term care expenses are paid by Medicare.

Medicare

• 20 days in SNF at 100%

• 80 days $144.50 daily co-pay by you or

• Med-Sup

• Must be showing improvement

• Only available after three consecutive hospital days

• No assisted living expense covered

Medicare

• Must financially qualify

• Singles must spend-down to $2,000

• Couples have special rules and can protect assets

Medicaid/Medi-Cal

• Giving away assets without talking to an Elder Law attorney

• Assuming your annuity will protect you• Attempting to hide assets• Waiting too long to take action• Taking advise from a Medicaid worker• Picking an attorney who does not specialize

in Medicaid• Applying for Medicaid/Medi-Cal too soon

CRITICAL MEDI-CAL/MEDICAIDMISTAKES TO AVOID

• Home up to $750,000 equity

• Personal belongings

• Jewelry up to $100

• Life insurance up to $1,500

• Funeral Trust up to $15,000 per person in CA.

Exempt (Not Counted) Assets For Medi-Cal

• Cash, savings, checking account

• US savings bonds

• Revocable Living Trusts

• Real estate other than your residence

• More than one car

• Stocks, bonds or mutual funds

• Business Income

Non-Exempt (Counted) Assets

• Up to $24,228 Tax-Free

Veterans Aid and Attendance Program

• 2012 Maximum Accountable Pension Rate:

How Much is Available From the VA?

• Eligibility Requirements: – For Veterans and their spouses or surviving

spouses– Must have served during wartime

• one day during wartime, 90 days total active duty

– Honorable or General Discharge– Disability does not have to be service connected

(over age 65)

Aid and Attendance

• Periods of War– WWII– KOREA

• June 27, 1950 to January 31, 1955

– VIETNAM• August 5, 1964 to May 7, 1975 • (February 28, 1961- if served in Republic of Vietnam only)

– Persian Gulf Conflict• August 2, 1990 to [date not yet determined]

Aid and Attendance

• Who is Eligible?– The Veteran– The Veteran’s current spouse– A surviving spouse

Aid and Attendance

• Who Can Provide Care?– Family, friends, or professional services such as a

Home Healthcare Agency or supervised independent living arrangement.

– A licensed healthcare community. – Care must be started before or simultaneously with

the filing of the application

Aid and Attendance

• Asset and Income Qualification – You must qualify based on both medical and financial

need– There is no maximum income– Current household income less UME determines

amount of pension– There are maximum limitations on the amount of

assets you can have.

Aid and Attendance

• A special provision in VA regulations allows adjusting countable income downward for certain types of expenses. This requires a rating and special documentation.

• The VA does not disclose this special provision to the public.

• Households with a high monthly income can still qualify using this special provision if their expenses are also high.

Why the public is confused…

• Unreimbursed Medical Expenses– Medicare and Med-Sup premiums– Medications and Supplies– Cost of Assisted Living Facility or Home Health Care– Any Other Out-of-Pocket Medical-related Expenses

Aid and Attendance

• An elder law attorney will review all legal aspects of any long-term care planning and will coordinate the financial and legal plans to assure that the original estate plan remains in place.

• The most common problem in planning is the “I Love You” will. You DO NOT want the estate of the community spouse to still be directed to the spouse in the nursing home.

• Other common problems are outdated POA documents, property deeds that need to be transferred, creating healthcare directives, and more.

Working with an Elder Law Attorney is Essential

• Healthy– LTCI– Combo Life Insurance with LTCI– Combo Annuity with LTCI

• Not So Healthy– Simplified Underwriting Life Insurance combo

• Poor Health or Uninsurable– Annuities with LTC features– Medicaid compliant Annuities

Pre-PlanningInsurance Alternatives

(Will pay for care in home, assisted living or SNF)

• Focus on the level of care needed…Not the financial costs.

• Pre-planning will provide the most flexibility in paying for care. (LTC insurance, hybrid products, funds)

• Do not assume you have to spend down all of your assets to receive care.

• Work with an elder law attorney and a qualified financial planner who can advise you and your family of any planning options

Summary

Naked In The Nursing Home

• http://www.amazon.com/Naked-Nursing-Home-Long-term-Without/dp/1933918640

Harold Lustig, CLU, ChFC

Serving the San Francisco Bay Area

415-472-1290

Thank You

•FCA established the National Center on Caregiving (NCC), to advance the development of high-quality, cost effective programs and policies for caregivers in every state in the country. The NCC sponsors the Family Care Navigator to help caregivers locate support services in their communities.

•FCA also operates the Bay Area Caregiver Resource Center in the six-county San Francisco Bay Area. The staff of family counselors works closely with families caring for ill or elderly loved ones. Our services, education programs and publications are developed to offer these families direct support, vital information, and effective tools to manage the complex and demanding tasks of caregiving.

Family Caregiver Alliance is a public voice for caregivers, illuminating the daily challenges they face, offering them the assistance they so desperately need and deserve, and championing their cause through education, services, research and advocacy.

Phone numbers:

(800) 445-8106

(415) 434-3388

Address:

785 Market Street, Suite 750,

San Francisco, CA 94103

Web address:

http://www.caregiver.org

Social Media Channels:

Facebook (Family Caregiver Alliance)

Twitter (“@CaregiverAlly”)

Yelp (seeking your reviews!)

YouTube (“CAREGIVERdotORG”)