Mark Ward 0000-00-00 00:00:00
Ensure some future TLC—tender loving care—by planning for long-term care for yourself, your spouse and your parents. THE HEADLINES ON JANUARY 1, 2011, PROCLAIMED A MAJOR EVENT: Kathleen Casey- Kirschling, a retired teacher living in Maryland, that day became the first baby boomer to turn age 65. Born in Philadelphia just one second after midnight on New Year’s Day 1946, she was the first member of what became known as the postwar Baby Boom Generation: those born between 1946 and 1964. Today, some 40 million Americans are 65 years of age or older. And with 10,000 people turning 65 every day, the National Center for Health Statistics projects that the number of older Americans will reach 55 million by the end of the decade. Happily, Baby Boomers can look forward to healthier aging than previous generations. But as the Hastings Center, a bioethics research institute, points out, “Death may not have changed, but dying is quite different from what it used to be, thanks to medical technologies that have extended life and made dying frequently a lingering process rather than a sudden event.” For that reason, the Center estimates that between 10% and 12% of the nation’s annual healthcare expenses are devoted to end-of-life care. On average, women aged 65 can expect to live another 19.9 years and men an additional 17.2 years. Older women are far more likely than men— currently the figures stand at 58% versus 22%—to be unmarried or widowed. Thirty percent of non-institutionalized older Americans live alone, a figure that rises to 50% for women aged 75 and above. But as life spans lengthen, increasing numbers of Baby Boomers also are joining the “Sandwich Generation” of middle age persons, who care for aging parents while working to save for their own retirements and helping their children pay for college and launch their own careers. The American Association of Retired Persons (AARP) reports that 65 million Americans—one in four adults—provide care at home or at a distance for an ill or aging parent; 24 million of these are women who also have children at home. One of eight Americans ages 40 to 60 has a minor child and an aging parent in the home simultaneously, reports the Pew Research Center. These are life realities that can be difficult to embrace, while also being stressful and confusing to navigate. Is it any wonder that planning for longterm care—and for the end of life—often winds up being simpler to avoid or postpone? After all, whether as an adult child of aging parents or, later, as the aging parent of adult children, at minimum it means “having a conversation” that is uncomfortable for many families. That conversation, and the subsequent planning that is so essential, can be eased when you have some straight-up facts and options to discuss. This article is intended to be a basic introduction to the key issues and alternatives, and it’s particularly developed to help procrastinators get focused. LTC by the Numbers Seven of ten older Americans will need long-term care (LTC) services during their lifetimes, including four of ten who will require nursing-home care. According to the U.S. Department of Health and Human Services (HHS), women who are age 65 today will, on average, need LTC for 3.7 years; men will require it for 2.2 years. Those averages include one-third of today’s 65-year-olds who will never require LTC, but also one-fifth who will need care for more than five years. Altogether, an estimated two-thirds of older Americans will require two years of at-home care, while one-third will spend a year in a facility. It’s important to start a family conversation about this stage of life and the real possibilities of providing for LTC. The National Clearinghouse for Long Term Care Information, an HHS agency, suggests breaking the issue down into three steps: understanding, planning for and paying for LTC. Step 1: Understanding Long-Term Care The phrase “long-term care” generally does not include medical care, but instead refers to two levels of assistance with everyday personal tasks. At the most basic level is assistance is six “activities of daily living”: bathing; dressing; eating; moving to and from a bed or chair; toilet use; and caring for incontinence. At the next level is assistance in “instrumental everyday activities”: housework, meal preparation and cleanup, money management, grocery and clothes shopping, communicating by phone and other devices, taking medications and caring for pets. Understanding LTC also means knowing the alternatives for how services can be delivered and who can deliver them. In both cases, basic options boil down to three choices: At-home caregivers, traditional-model services and participant- directed services. A caregiver is often a partner or family member, but might also be a friend or neighbor, who provides LTC in the home. Eighty percent of the time, reports HHS, caregivers are unpaid. Some 65 million American adults are unpaid caregivers, averaging 20 hours per week in their responsibilities. Nine million caregivers are themselves aged 65 or older. Traditional-model LTC is purchased from agencies or facilities that then make the determination of when in-home or resident services are provided and who will serve as caregiver. But through participant- directed service, you can hire the blend of providers that works best: home- and community-based services, in-home service agencies and facilitybased services. Since most LTC is provided at home, many community-based services have evolved to provide support to both the individual requiring care and the caregiver. These include senior centers; adult day service (“daycare”); caregiver respite programs; transportation and emergency response services; visitor and companion services; homemaker and chore services; Meals on Wheels and similar programs; and private membership associations, often called “villages,” which pool resources to arrange an array of services, from home healthcare and transportation to lawn care and shopping. Many local medical centers or social service agencies will provide case managers— often nurses or social workers—to help older adults (and their loved ones) choose and manage LTC options. Most states sponsor Aging and Disability Resource Centers (ADRCs) and Independent Living Councils (ILCs), and many localities have an Area Agency on Aging and a Center for Independent Living, to provide older adults with a single contact for finding services. When ongoing help is needed beyond what community-based services can provide, a home care service agency may be engaged to assist with basic and instrumental daily activities. And when doctorordered, skilled medical care is required, a home healthcare service may be hired. Finally, while the concept of facility based services brings to most people’s minds either assisted living situations or nursing homes, there is a wide array of 24-hour residential LTC options. For example, adult foster care matches those in need of LTC with licensed foster families. Licensed residential care facilities generally board up to 20 adults in private or semi-private rooms, while group homes usually board up to six; supervision, housekeeping, meals, activities and personal care are provided, but nursing and medical care are not. Assisted living facilities accommodate more persons than most residential care facilities, meeting a need for older adults who require personal care but desire apartment living in a community setting. Nursing homes or skilled nursing facilities, which combine living assistance with nursing care and rehabilitative services, accommodate both long- and short-term residents. Continuing care retirement communities provide a mix of services in a single location, from independent housing to assisted living and skilled nursing facilities. As residents’ needs change, they can transfer from one service to another. Because facility-based services follow the traditional model, residents do not choose their caregivers but can still expect to direct their service plans and have a say in, for example, what they eat or how their rooms are arranged. In contrast, home and community-based services, supplemented as needed by home care and home healthcare agencies, are participant directed. Be aware, however, that regulations and licensing standards for service agencies and facility-based services can vary widely from state to state. Step 2: Planning for Care There are six personal factors that affect LTC planning: age, gender, lifestyle, health status, financial resources and housing preferences. Some you can do little about—others are very much a personal choice. Advancing age increases the likelihood that LTC will be needed in the future; so does being a woman, since women tend to live longer than men. Individuals with unhealthy lifestyles, chronic conditions or family histories of chronic diseases also are more likely to require care someday. By the same token, you can decrease the likelihood or length of LTC through healthy eating and exercise; being physically, mentally and socially active; getting regular medical checkups and preventive screenings; moderating alcohol and ceasing tobacco use; refraining from risks that may cause injuries; and ensuring your home environment is safe. Setting aside the issue of financial resources for the moment, next, consider your housing preferences. If you wish to stay in your current home, then ask yourself: ■ What home modifications might you need to accommodate different ability levels? Think about everything from shower grips to stairway chairlifts. ■ If you rent your home, is your landlord willing to have the modifications made? ■ Is your home likely to remain in good condition? ■ Is public transportation nearby? ■ Are community-based services for the elderly readily available? ■ Are family, friends and neighbors around to help you with some daily activities? If “no” is the answer to the majority of the questions, then it may be time to consider options for moving to a different home and/or neighborhood. You may want to look into a home with “universal design” features—suitable for both abled and disabled persons. Or you might consider relocating to an active adult community or securing an independent living unit in a continuing care retirement community. Most people want to stay in their current homes as long as possible. Happily, many of the needed products— and contractors to install them—are readily available. Access can be improved by installing wheelchair ramps, handrails, wider doorways and stairway chair lifts. Daily activities can be made easier with lever-style door and sink handles, walk-in or roll-in shower stalls, bathroom grab bars and rearranging rooms so a master bedroom and bath are available on the ground floor. To plan for the day when someone may be needed to provide at-home care, perhaps a separate apartment can be built or a basement or garage area renovated. Along with structural modifications to the home, many technologies can be installed to make life safer and easier. These range from room monitors and emergency alert devices, to voice amplification and recognition tools that facilitate the use of telephones, computers and even household appliances. Planning for long-term care cannot and should not be done alone. Consult an attorney, insurance agent and financial planner or advisor. And, of course, talk candidly with family and friends about their ability—and willingness—to someday assist you with daily activities. Do their work schedules permit them to take you shopping and to doctor appointments during the day? Can their vehicles accommodate you? How do they feel about bathing or dressing you? Do they have the strength to lift you to and from cars, beds and chairs? Finally, while the concept of advance care planning deserves its own article, it’s important to touch on here. Any adult, but especially those who are into their middle years and beyond, should complete two advance directives documents. Through a medical power of attorney, you name someone to make medical decisions in case you cannot do so yourself. And through a living will or medical directive, you provide the instructions for that person about your wishes for treatment. Discuss these with family members, give copies to your designee and keep copies in multiple places that can be accessed easily in an emergency. Step 3: Paying for Care The third agenda item in any family conversation about long-term and nursing care is how to pay for it. According to HHS figures for 2010, one year of 18-hours-a-week care from a home health aide costs an average of nearly $20,000; a year in a one-bedroom unit at an assisted living facility costs about $40,000; and a year in a semi-private room at a skilled nursing facility averages nearly $75,000. If you have $100,000 in retirement savings, it would pay for about five years of home healthcare, two-and-a-half years in an assisted living facility and 16 months in a nursing home. There is widespread public misunderstanding about what coverage is provided by Medicare, Medicare Supplemental Insurance and employer-sponsored or private health insurance plans with regard to long-term care. Remember, LTC is generally defined as non-medical personal care and assistance with daily living activities. Since the aforementioned programs are mostly intended to fund medical care, they may provide you with little coverage for non-skilled personal care services. For example, Medicare—the federal health insurance program for persons 65 and older—does not pay for LTC, except when skilled or rehabilitative care is medically required for a short time. Most employer-sponsored or private health insurance plans mirror Medicare. Medicaid may provide some coverage of personal care, but only for persons with high levels of disability and who have low income and savings. Some LTC coverage also may be offered by programs funded through the Department of Veterans Affairs and the Older Americans Act but, again, only for targeted classes of eligible persons. A chart that summarizes LTC coverage limits for Medicare and most private health insurance programs can be found at www.schoolnutrition.org/snmagazinebonuscontent. As age spans lengthen, the private sector is stepping up with new ways to pay for LTC, including long-term care insurance, reverse mortgages, annuities and life insurance options. In determining options, your health status and age are the keys. Persons in relatively good health are the best candidates to consider long-term care insurance and deferred long-term care annuities, while persons in poor health might look to life insurance options. (And when health status is not important, private savings and reverse mortgages are leading options.) Obtaining long-term care insurance may require a certification of relatively good health; those in poor health, who have chronic conditions or who currently need or are receiving LTC may be ineligible. Premiums depend on your age at the time the policy is purchased and the benefits and coverage you choose. While most policies cover all types of long-term care services, few offer lifetime or unlimited benefits. Instead, once you start drawing benefits, then LTC costs are paid for a defined period and until the coverage limit is reached. The “benefit trigger” for an LTC policy is often when you have a cognitive impairment or need assistance with at least two of the six “activities of daily living” (bathing; dressing; eating; moving to and from a bed or chair; toilet use; or caring for incontinence). Decisions about how much LTC coverage to purchase are not easy. While fear of the future may be a motivating factor, it shouldn’t cloud judgment. Your personal resources and retirement income, along with family members who are willing to provide unpaid care, may be enough to cover most of your LTC needs. On the other hand, younger persons can buy LTC coverage at lower rates and then decrease coverage later if their situations warrant. HHS reports that LTC insurance is sold nationally by more than 100 companies, though most policies are sold by the 15-20 largest insurers. Increasing numbers of private and public employers are offering LTC insurance as a voluntary benefit. Though most employers do not contribute toward monthly premiums, they often can obtain group rates and make it easier to qualify. Industry statistics show that most people choose comprehensive policies—with automatic inflation protection—that cover both at-home and facility-based long-term care. A deferred long-term care annuity contract with an insurance company is another option for persons who enjoy relatively good health now to pay for LTC later. Through an annuity, whether immediate or deferred, you give the insurer a payment and in exchange receive back regular payments over a specified period. Since an immediate annuity may be purchased without regard to health status, it also may be an option to pay for LTC if you are in poor health. A deferred long term care annuity sets up two funds, one for paying out a guaranteed monthly cash income and another for LTC expenses. The latter may be accessed when needed, but the cash portion is unavailable until a specified date. Tax consequences for either annuity are complicated, and it’s also important to understand that inflation may erode the annuity’s value. If your health status precludes purchase of LTC insurance, you may be able to pay for long-term care through life insurance options. For example, if your policy has an “accelerated death benefit,” then you may be able to request a cash advance—usually capped at 50% of the death benefit—should you need LTC for an extended period, cannot perform the activities of daily living, are permanently confined to a skilled nursing facility, have a life-threatening diagnosis or are terminally ill. Monthly cash advances are commonly limited to 1% of your policy’s face value for home care and 2% for nursing care, and any funds received are deducted from your death benefit. Clearly, when purchasing a life insurance policy with an accelerated death benefit, you should check to see whether the rider includes inflation protection. If you are a woman aged 74 or older, or a man aged 70 or older, you may be eligible to sell your life insurance policy—in a process called a “life settlement”—to obtain funds for long-term care. Or, if you are terminally ill, you can make a “viatical settlement” by selling your life insurance policy to a viatical company. The cash you receive is tax-free and the company becomes the policy’s beneficiary when you die. However, viatical companies reject more than half of all applicants—and, depending on your expected longevity, you will only receive between 50% and 70% of your policy’s face value. Finally, in addition to private savings, a last option to consider in paying for long-term care is a reverse mortgage. Persons age 62 and above who own their primary residences free and clear can take out such a mortgage—actually, a type of home equity loan—and receive a line of credit, monthly payment or lump-sum payment. You continue to hold the title, live in the home and are responsible for property taxes, hazard insurance, maintenance and repairs. No income or credit history, nor good health, is required to secure a reverse mortgage. You must use all the monthly income afforded by a reverse mortgage during the month it was received in order for the funds to remain tax-free. Though this monthly income must first be used for home-related costs, anything left over may be spent as desired—which includes paying for home care, home healthcare or premiums for LTC insurance. Unlike a conventional mortgage loan, borrowers with a reverse mortgage do not make monthly payments on their loans. Instead, when the remaining spouse or title-holder dies, sells or vacates the home, the loan amount is due. Most borrowers pay it off through the proceeds of selling the home. You or your heirs will never owe an amount greater than the home’s value. But once you take out a reverse mortgage, know that it is difficult to borrow further against your home. Moreover, given the high costs of long-term care and of LTC insurance for older adults, the income from a reverse mortgage may not be enough to cover your care needs. To ensure adequate planning and information, potential borrowers cannot initiate the loan process unless they have first met with an approved reverse mortgage counselor. Avoid Ostrich Thinking No one wants to contemplate the prospective loss of ability, either physical or mental. We don’t want to think about it for ourselves—or for our loved ones. But while we may always be young at heart, we shouldn’t let rose-colored glasses obscure a 20/20 pragmatism about the future. We are not immortal. And while we can hope to emulate the most active and energetic nonagenarians we know (Betty White and Ernest Borgnine come to mind), it’s more realistic to expect that we are going to require help to ensure our golden years glitter brightly. This article has only skimmed the surface of a very complex topic. But you can use it as a catalyst for that important initial conversation—with yourself and your loved ones—about what you want and need should your health decline. SNAPSHOT ■ Seven of 10 older Americans will need long-term care (LTC) services during their lifetimes. ■ LTC generally does not involve medical services, but assistance with activities of daily living. ■ Six personal factors affect LTC planning: age, gender, lifestyle, health status, financial resources and housing preferences. BONUS WEB CONTENT Did you know that persons aged 55 and above are the only age group since the 2008 recession to actually increase their numbers (by 12%) in the workforce? Go online to find out more statistics about how working, the economy and retirement affect the Baby Boomer generation, as well as access a chart that summarizes long-term-care coverage limits provided by Medicare and most private health insurance programs. Visit www.schoolnutrition.org/snmagazinebonuscontent to access these web-exclusive features. Mark Ward is a freelance writer based in Victoria, Texas. Photography by Comstock Images, iStockphoto, Ryan McVay, Ron Chapple Studios and Altrendo Images.
Published by School Nutrition Association. View All Articles.
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