Thursday, July 30, 2009

Advance Medical Directives

“It’s a good thing your dad died quickly,” Alice told her son. “He wasn’t stuck on those machines like a vegetable. I don’t want that either. Pull the plug, you hear?”
This is not a sweet "Hallmark" moment, but it does let you know this woman's basic wish concerning life-sustaining measures. More effective--and carrying legal force--is a document called Advance Medical Directives (AMD). Along with the Durable Power of Attorney, the AMD is an important tool in information gathering and in caregiving.

What Are Advance Medical Directives?
Each person has the right to accept or refuse medical treatment. Advance Medical Directives, or simply Advance Directives, protect that right if a person ever becomes mentally or physically unable to communicate his wishes due to serious illness or injury.

The Advance Directives state clearly what life-sustaining measures a person wishes the doctors and nurses to take on his behalf. The Directives:
• Protect a person in extreme conditions such as brain damage, permanent coma or terminal illness when he is unable to communicate; and
• Limit life-prolonging measures when there is little or no chance of recovery.

In most states, law now requires that a statement of Advance Directives be on file for each resident or patient in a hospital or nursing home. Also, each state may use a different document, such as a living will, a medical/durable power of attorney or a general statement. Consult legal counsel in the state in which the Advance Directives will be used.

What Types of Decisions Might You, As Caregiver, Need To Make?
The woman’s off-handed comment above to “pull the plug” actually may mean making a number of decisions concerning:
  • The use of Cardiopulmonary Resuscitation (CPR) to revive her;
  • The use of a respirator (a machine to mechanically work her lungs) to keep her breathing;
  • When and if to treat infections that, if untreated, would shorten her life;
  • The use of feeding tubes to provide nutrition if she could not eat normally;
  • Providing appropriate pain relief;
  • When and if to use dialysis to clean her blood by machine if her kidneys no longer functioned; and
  • Organ donation (specific organs or entire body).

For each of these situations, the health professionals will look to you, as caregiver and decision maker, as well as the AMD for guidance if your parent is unable to express her own wishes.

Perhaps, due to current circumstances, you feel that you won’t have to make these decisions for your parent, but life happens, circumstances change, and you may find yourself responsible for important emergency or end-of-life decisions. Prepare now.

Know What Each Procedure Involves
Each of the life-sustaining measures noted above has many variations and intensities of treatment. While making decisions and preparing the Advance Directives, if you are unfamiliar with a procedure or don't understand the language describing the procedure, consult a physician before completing the Directives.

According to a recent study, only 27 percent of adults have Advance Directives in place. This means that most people, when faced with end-of-life decisions, have no guidance, may be guessing about the patient's wishes and may decide based on their own preferences, not those of the patient. Take the guesswork out--for you and your parent--by having Advance Medical Directives in place. In other studies, stress levels for the family making end-of-life decisions were significantly reduced when Advance Directives were in place. The family could concentrate on the person's quality of life and be guided by her own wishes in the decision to stop life-sustaining treatments. Suffering is not needlessly prolonged. There is less agonizing over a decision; your parent has already told you, in writing, what to do.

This is one of the most powerful ways you can honor your parent. Honor her wishes on the manner in which she wants to live and die.

Do Not Hurry
Because numerous procedures and treatments are discussed in the AMD, be prepared to spend some time compiling this document. You or your parent may not be writing the document yourself (although you can), but deciding what options would be best under what circumstances may take some time. If you are helping your parent with decisions and information, the discussions may carry over several sessions. Do not hurry the process; these are some of the most important decisions your parent--and you--will ever make.

In my next regular post, I'll provide more tips and suggestions for the Advance Medical Directives. Until then, Blessings on your caregiving day!

Tuesday, July 28, 2009

Final Thoughts on the Durable POA

We've been discussing the durable Power of Attorney over the last several posts. Let's wrap up with a few final suggestions.
  • Talk to your parent about a Durable POA now (or Living Will, Living Trust). Stress that this does not give you immediate control--but transfers control only when he gives you control, when he is incapacitated, or when trusted professionals give you control. Reassure him that you want the best care for him.
  • If your parent avoids the issue, try asking the people on your contact list to help. Perhaps one of them can persuade your parent to take this important step.
  • Tell your parent that you are arranging for your own Durable POA (and you should!) and would like to know what he wants, or to help him arrange his.
  • Be involved in drafting the POA. Share the tips from this Blog with your parent.
  • If your parent worries about putting too much control into one person's hands, suggest that two documents be prepared: a POA for financial affairs and a POA for medical affairs. You can be one agent; perhaps another sibling or relative can be the other. This separates the control and may make your parent feel more comfortable.

    Suggest that two agents be named if your parent feels that checks and balances are needed. Be careful of the wording. If the POA names you AND another, then BOTH people must sign documents or give verbal permission for procedures. This can unnecessarily delay care if either of you is unavailable. In my mother's document, my sister and I were named so that EITHER of us could act. We could work independently and quickly when a need arose, but were expected to consult each other.

Is the POA the Only Way To Become an Agent for Your Parent?.
There are other legal ways to become an agent for your parent.
  • You can add your name to your parent’s bank accounts and safe deposit box.
  • Your parent may have a Living Trust, which will cover the financial issues and help you avoid probate. Your parent may also have a Living Will, which will generally cover the health care issues. These are good arrangements to have, but can be complicated to set up. Your parents may balk at the involved process.
  • You can apply for legal guardianship before your parent is mentally incompetent. This is a long and distressing court process which your attorney will probably advise you to avoid. However, once your parent has been declared mentally incapacitated (according to state regulations), gaining legal guardianship is a fairly straightforward process. You may want to wait until incapacity is certain.
The DURABLE POA, signed and recorded while your parent is still mentally alert, is a straightforward document and versatile. It lets you take over when the need is the greatest and goes into effect only when the attorney and the doctors--and your parent, if able--agree. If your parent's condition improves, the POA is no longer in force and your parent takes over his affairs again.

What If My Parent Won't Do This?
Your parent is an adult. The truth is that if your parent is over 21 and mentally alert, she has the right to arrange her affairs in any way she wishes no matter how inconvenient and stubborn it may seem to you. Do what you can, be gently persistent, look for another opportunity to bring the subject up. Use this Blog, the Parentcare 101 Website, and the books in the Parentcare 101 Booklist to prepare yourself in other ways. As I did, you may get the opportunity when the first crisis hits.

Resources to Read More
Haman, Edward A. The Power of Attorney Handbook. Clearwater, FL: Sphinx Publishing, 2006.

Schumacher, Vickie. Understanding Living Trusts: How You Can Avoid Probate, Save Taxes and Enjoy Peace of Mind. 5th ed. Schumacher Publishing, 2003.

**You can request these articles from your public library:
Hochberg, R. Mark. Underpowered? Anything less than full power of attorney could keep your agent from doing the right thing if you’re incapacitated. Financial World, v 164, n20, p78, 9/26/95.

Jamison, Judith J. Are your powers in place? Best’s Review--Life-Health Insurance Edition, v 98, n11, p90, March 1998.

Monday, July 27, 2009

What's In the Durable POA?

We've been talking about the durable Power of Attorney, one of the most important documents that you'll need as a caregiver.

Different laws exist in each state regulating such documents so your parent’s attorney (at least an attorney in the state in which your parent resides) can draft a basic document. From experience I learned that there are some things that must be included:

1. The POA should be DURABLE. This means that it goes into effect when your parent is considered incapacitated, and your role will last until your parent’s death or until he regains competency. "Competency" has a legal definition in each state and criteria for passing control to you. For my mother, her personal physician and her attorney had to verify that she could not take care of her affairs.

2. The POA should include specific financial items. Every POA includes standard language that describes the types of finances for which you will be responsible. In addition, whether you know your parent’s financial holdings or not, be sure that every type of asset or investment is covered.
• Add wording for investments such as stocks, bonds, REITS and mutual funds. Without wording that gives you access, most investment houses and brokerage firms will not permit you to work with your parent’s investment accounts.
• Also insure that you have access to the safe deposit box (especially if your name is not on the box with your parents). Additionally, find the box keys and have them available. There are two keys for each box.

3. The POA should cover Health Care. States are adopting standard language for this. What you want is the right to admit your parent to a hospital (no, it’s not automatic) and to make decisions on all care. In this document can be included a statement of Advance Medical Directives (we'll get to this in a future post) although most health care facilities will also want the Medical Directives in a separate document to attach to your parent’s chart.

Even with specific wording in place, be prepared to obtain a notarized attorney’s statement for some brokerage houses and investment firms. If your parent is receiving Social Security checks and you‘ll handle that money, you will need to apply with the Social Security Administration to be the “designated payee”. But the DURABLE POA will smooth the path with these organizations and clearly state your parent’s intent in the matter.

Some Important Tips

  • Once you have the signed Durable POA, keep the original safe and make plenty of clean copies. You will need to file a copy of it with each organization when you are representing your parent.
  • Find a Notary Public near to your work or home. You may need to send notarized copies of the POA. The Notary will also be used for other documents as you manage your parent's affairs.
  • DO NOT give the original POA to any of the various organizations that will need a copy (such as banks, the hospital, etc.), even if they plead and threaten. Explain your limitations. Send a copy. A copy is acceptable if you are firm about it; suggest a notarized copy.

    I had only one original in my possession, signed with great emotion. In only one instance did I agree to hand over the original--to an investment firm who would not budge—but we agreed that I would send it registered mail with a return envelope to be mailed immediately back.

I'll finish next time with some final suggestions for the POA and talking with your parents about this important planning tool.

Until then, blessings on your caregiving day!

Tuesday, July 21, 2009

The DURABLE Power of Attorney (POA)

As soon as you have noticed that your parent may become disabled in the near future (see your Reality Checklist), your next priority should be a DURABLE Power of Attorney (POA). This legal document allows you to act as your parent’s agent in all matters. If your parent is anything like my Mom, when you approach the subject, you might get responses like:
(1) I’m perfectly capable of handling my own affairs, and I’d rather keep control.
(2) I don’t want to talk about it. How dare you even mention such a depressing subject!
(3) Oh, don’t worry. I have a will in place. I intend to die on my feet (at my job, in my sleep, etc.)
And that was the end of that discussion.

What Does This Document Do For You?
Every practical discussion of eldercare stresses the importance of having some document in place that will permit you to take over if your parent becomes incapacitated. I lend my voice to these authors. Why? Because it’s crucial.

The DURABLE POA, written properly, permits you to:
• Write checks
• Manage your parent’s household
• Admit your parent to a hospital
• Make decisions about his medical care
• Access the safe deposit box, and carry out a host of other daily household activities
• Rent or sell your parent’s house
• Manage financial investments.

In short, it permits you to make decisions that your parent would make himself if he were able.

My Experience
It was in the Spring that my sister and I recognized that our mother's mental condition was failing. We began to gather information and knew about Power of Attorney documents, but did not make the connection to our situation until the Fall and Mom's emergency admittance to the hospital. When I arrived at the hospital, I watched in distress as Mom tried to pack for a trip that we had taken long ago and directed me to find things in the hospital room chest of drawers that clearly would not be there. Her physician was certain that she had normal pressure hydrocephalus, a condition in which spinal fluid backs up into the brain causing damage, hallucinations and dementia. There were tests to perform and treatments he would try; there was a good chance she would recover her mental facility. But that might take as long as a year. For now, Mom needed help to make medical decisions, maintain the house and deal with her finances. I needed a POA.

I called my sister and Mom's attorney. By the next day, the attorney had a document prepared that we could use for both financial and medical decisions. Knowing my mother's efforts to be fair to both her children, the attorney suggested that my sister and I both be named as agents with an "either/or" wording. We could act independently but were expected to consult one another. Then he encouraged me to get it signed any way that I could.

I called the social worker at the hospital who said that Mom was actually lucid in the morning--between 10 and 11 was best. This morning improvement in thinking is common in dementia patients. The social worker agreed to be a witness for the document signing. I entered Mom's hospital room trembling with anxiety. If she really did not understand the document, then we would have to try other, more complicated options. If Mom got stubborn about something in the document and did not sign (as she had done in the past for other things), then we would not be able to help. Long, shaking minutes passed while Mom read the document and asked questions. I silently thanked God and everything divine that she understood what the document was and what its conditions were. Once assured that my sister and I held equal authority and that her attorney (a long-time friend) was in favor, she accepted the help of the social worker to hold her arthritic hand steady and signed her name.

If there is any way that you can avoid this kind of situation with your parent, believe me, you want to.

We'll talk about the POA over several posts, because it is one of the most important documents in caregiving. It will help your parent. Even more, it will help you.

Until next time, blessings on your caregiving!

Monday, July 20, 2009

Talk With an Eldercare Attorney

The physician examined Jeff’s father and diagnosed mild dementia. “I had plenty of medical questions,” Jeff said, “but I had legal ones, too. Like who is liable if Dad causes injury or damage through his actions? I’d like to sell the house, but Dad is resisting. Do I need legal guardianship? What are alternatives to this process? Dad doesn’t have a will. What does that mean in the long run?”
In your plan to gather information, an important source is an attorney who specializes in elderlaw or is familiar with the laws and regulations as they relate to seniors in the state in which your parent resides. Because state laws concerning eldercare, senior rights, facilities certification and property ownership differ significantly between states, it is vital to speak with a lawyer in the state of your parent’s residence, not yours. The attorney is one of your parent's care team but may become a source of advice for you in your role as caregiver.

In general, eldercare law is defined by the age of the clients served and by those professionals who specialize in laws and regulations concerning seniors. Your parent's current attorney may be able to fill this role if he is well versed in state regulations and law for this area.

Topics With Which an Eldercare Attorney Can Help
In addition to legal issues that concern younger people, advancing age brings with it new areas in which to learn, explore options and make decisions. An attorney familiar with elderlaw can advise in the following areas:
• Financial and Estate Planning
Estate planning includes the management of a person’s financial assets during the person's lifetime and planning how the estate will be divided upon the person's death through wills, trusts, asset transfers, tax planning, and other methods.
• Planning for Possible Incapacity
In this area, the senior chooses in advance how health care and financial decisions will be made if he is unable to do so. Legal document which might apply include durable powers of attorney, health-care powers of attorney, an Advance Medical Directives statement, living wills, and other means of delegating the decision making. The attorney may also be able to advise on conservatorship and guardianship proceedings in the event that your elder has not planned for incapacity. I'll touch on some of these in future posts.
• Long-term Care Planning
Long-term care issues such as quality of care, admissions contracts, prevention of spousal impoverishment, and resident's rights. It also includes life care or retirement community issues such as evaluating the proposed plan/contract.
• Retirement and Pension Plans
Counseling regarding Social Security and navigating the system (retirement, disability and survivors' benefits) and other public pensions (veterans, civil service) and benefits as well as private pension benefits.
• Insurance Coverage
Medicare, Medicaid, Medigap insurance, and long-term care insurance.
• Housing issues:
Home equity conversion and age discrimination. Buying and selling property.
• Age discrimination issues
The attorney may bring cases under the Age Discrimination in Employment Act.

The Costs, The Benefits
Consulting an attorney is not inexpensive, but one or two visits may be all that is needed to set you and your parent on the right track. When you think of the cost, also think of the costs to yourself if you don’t consult a professional:
• Consulting an attorney reduces your research time in legal matters. Your time is valuable.
• The attorney can act as a sounding board for your ideas and can determine the legality and legal consequences of what you'd like to do. This will help you avoid legal pitfalls that, in the long run, may cost much more money than the initial consultation.
• Speaking with an attorney about the concerns you have will often make you feel better, give you a feeling of having a little more control and being prepared. Peace of mind is a valuable commodity.

Finally, remember that this is a relatively new area of law and the attorney you choose may not be familiar with all the topics described above. Find out what her area of expertise is and if she is not qualified to give you complete answers, ask her to refer you to someone who can.

Blessings on your day!

Tuesday, July 14, 2009

LTC Insurance: Tips & Suggestions

Long-term care (LTC) insurance can be a good investment and is worth serious consideration. Over that last few posts, we've been discussing the financial and coverage issues surrounding the decision you make for your parent and for you. Today, let's take a look at some other, general, things to consider. I use "you" here to refer to you personally or your parent.

In addition to details about the payout benefits, check that the LTC policy you are reviewing covers the following:

• How will this policy interact with others, such as Medicare, Medicaid or retirement policies? You may need to use other policies first before this one can be used.
• "Take-it-with-you." If you are purchasing the policy through your employer, can you take the policy with you and is there an increase in premiums for doing so? Premiums do not always increase when you leave your company.
• Out-of-state or out-of-country coverage. If you travel a great deal or spend part of the year in a second residence, this coverage might be of interest.
• Suspension of premiums while receiving benefits. While you are receiving benefits from the policy, you should not be paying premiums. What documentation is needed to inform the insurance company of a change in status?
• Reserved LTC comunity bed during a hospital stay. During an assisted living residence or a nursing home stay, there may be times when you need to be admitted to the hospital for treatment. Make sure that the LTC policy reserves the bed in your residence community or nursing home until your return.
• For insurance premiums and benefits to be tax deductible, the policy needs to be "qualified" under the Health Insurance Portability and Accountability Act (HIPAA) of 1996.

As I've mentioned before, saving for long-term care should have as much priority in your financial planning as does saving for your child's education or for your retirement. Given its importance, here are a few final suggestions for planning.

• Consider an LTC policy when you or your parent is young. Age 40 is not too young, and you will be able to purchase a higher daily benefit for a much lower price. The high-end premiums quoted in the example above are for a policy purchased at age 50, but would be higher at an older age.
• Buy an LTC policy when you or your parent is healthy. A fairly clean medical exam permits you to buy a higher daily benefit at a lower rate. Even if you decide to increase the daily benefit later (and the premium), most companies leave the basic premium where it is and base the premium increase only on the increased part of the daily benefit.
• If you wait too long in terms of age or health, insurance companies will refuse to cover you or the rate will be prohibitive.
• Buy a policy even if it covers only half the cost. You and your family may be able to fund the rest of the cost from savings or investments.
• If you have an LTC policy in place, do not cancel it when you or your parent becomes eligible for Medicare/Medicaid. Each state has varying rules for qualifying for Medicare/Medicaid assistance, so have an eldercare attorney review the policy and then decide.
• Before purchasing a policy, get an opinion on its value from an objective source, one not interested in selling you insurance. An eldercare attorney, a financial planner or a knowledgable friend are all good choices. Some states also have an insurance counseling program from which you can request an objective opinion.

To Read More:
Abromovitz, Les. Long-Term Care Insurance Made Simple. Practice Management Information Corporation, November 1999.

Lipson, Ben. JK Lasser’s Choosing the Right Long-Term Care Insurance, Wiley, 2002.

Rowley, Stephen F. The Consumer’s Guide to Long-Term Care Insurance. 1st Books Library, 2004.

For easy purchase, go to the Parentcare 101 Bookstore.

Blessings on your caregiving day!

Friday, July 10, 2009

The LTC Policy by the Numbers

Buying long-term care insurance is not the only way to pay for the care and assistance you and others might need as you age. Another way is to have a savings and/or investment plan in which you put so much money away a month until you have saved enough money to cover several years of care.

Only about 8% of all elderly reside in a nursing home, so you may choose to play the odds and not plan for nursing home care. It's a gamble, but you may be willing to accept the risk if money is tight. But recent statistics show that from 60-75% of the US population will require extra care in the family home or will live in some type of assisted living community. Three out of four people. Those are odds I'm not willing to play.

Saving or planning for long-term care is as important as saving for college, for retirement, or for the big vacation. You use the same priniciples. You have a timeline; you can estimate how much you may need (see the post on Costs of Care); you can estimate how much you'll need to put away each month and how much interest the funds need to earn to meet the total cost. Long-term care insurance can augment or take the place of the savings plan.

So the question is: is an LTC policy really cost-effective? This is something that you will need to judge for your own and for your parent’s situation. Let's look at an example.

As we learned last time, LTC insurance can be used for both in-home care and nursing home care. But nursing home care is the larger burden, so we'll start with that. I'm talking to you or this is you, talking to your parent.

Let’s assume that you’ve purchased the insurance at age 50 and when you're 70, you develop a condition that requires nursing home care. You’ve been paying premiums for 20 years. You can expect to be in the nursing home 3 years (a number from the statistics experts).

Cost of insurance premiums
• High end, high coverage options = $250/mo X 12 mo/yr X 20 yrs = $60,000. Benefit = $120/day
Your Benefit from the policy
• 365 days X 3 yrs = 1095 days X $120/day = $131,400
Nursing home cost
• Average $176/day X 365 days/yr. = $64,240/yr X 3yrs = $192,720

You’ve paid $60,000 in premiums, but the benefit you will receive is $131,400. You’ve certainly gotten your money back in this scenario. The benefit does not cover all the cost of the nursing home, but without the policy, depending on your assets, you could be responsible for most of the $192,720.

You can do the same calculation for in-home care. Remember, the LTC insurance benefit for in-home care may be only a fraction of the $131,400 we calculated above.

Since costs vary widely, it pays to check out nursing home and assisted living costs in your (or your parent’s) area and shop around for insurance to find the best plan for you.

What about Medicare/Medicaid, you ask. You will need to factor the government insurance in, but here are the facts. What will Medicare/Medicaid pay for?
• For a retirement community which may provide meals and some transportation: Nothing.
• For help with activities of daily living (ADL), such as bathing, dressing, eating, medication: Nothing, except for some medication expenses. No professional training is needed to help with these activities, so these are not eligible under the government insurance plans.
• For medical care provided in the home: A large portion of the cost for a limited amount of time.
• For skilled nursing care: A large portion of the cost for a limited amount of time. Professional nursing training and skill are needed for the care.

Consider the LTC policy benefit as a pool of money on which you can draw if you need it. And statistics show that you will need money for long-term care. Consider LTC insurance as a savings plan much like your retirement plan.

Take some time to consider the financial options. Long-term care insurance may be just the thing to give you long-term peace of mind.

Blessings on your caregiving day!

Tuesday, July 7, 2009

Long Term Care (LTC) Insurance

We've been talking about finances and in my last post, I shared some cost estimates for providing care. It's a hefty price tag no matter how you look at it--you and your parent will pay this in money, emotional stress and/or personal effort, no doubt in all three. I'd like to share some options for the money side. One of the most important financial aids to consider is Long Term Care Insurance.

In the 1980's, the company for which I was working offered LTC policies to me as an employee, to my spouse and to my parents or in-laws at a reasonable group rate. I found out that any policy would remain in force at the same premiums if I left the company. I immediately signed up and arranged for a policy for my father-in-law. Three years ago, as Dad's health declined, the family made plans to care for him at home and later in an assisted living facility. Three years ago, that 25-year-old policy kicked in a chunk of change to help pay for Dad's expenses and supplemented his income to allow for him to live in comfort with good care. It was one of the best investment decisions my husband and I ever made.

Care Tip: Talk to your parent about purchasing a policy, certainly, but consider a policy for yourself, especially if you're over 50. The earlier you purchase, the lower the premiums will be and the lower the overall cost.

Let's talk about the basics of LTC coverage. I'm using "you" to mean you and/or your parent; I'm assuming you're considering your own policy.

What Might an LTC Policy Cover?
An LTC insurance policy is designed to cover a variety of care options that you may need if you are chronically ill or have become mentally incapacitated and need continuous care over an extended period of time. A basic policy will pay:
• A daily sum to cover the cost of a nursing home stay.
• A daily sum to cover the costs of supportive services provided in your home, such as 24-hour nursing care, a health aide, meal service, or housecleaning.
• A daily sum to cover the expenses of living in an assisted living community.

Activities of Daily Living (ADL)
Most LTC policies judge a person’s physical competence in terms of how many Activities of Daily Living the person can perform on his own. These activities include such things as bathing, dressing, preparing and eating a meal, and taking medication. Each policy will state what it considers to be “full function”. If a person cannot perform 3 or 4 of the ADLs described (depending on the policy), then the person may begin to claim benefits from the policy. Usually a doctor’s statement is needed to verify eligibility.

Make sure that the policy clearly states when and under what conditions benefits are triggered. Make sure that you understand how the policy is defining each ADL and share that information with your doctor who will be writing the report to send to the insurance company.

Some Benefits of an LTC Policy
When looking for a policy, pay attention to the following:
• The daily benefit for the nursing home. Most insurance companies will give you a choice of the benefit you want from as low as $60.00/day to $200.00/day. Each increased amount also increases the premium cost of the insurance. To choose a benefit level, visit or call several nursing homes in the local area to determine the average price. Even choosing the lowest benefit translates into money you or your parent will not have to pay from current income sources.
• The daily benefit for in-home care and what is covered. The in-home care is usually stated as a percentage of the nursing home benefit. Again check some local sources such as the Volunteer Nursing Association to estimate local costs for such services.
• The assisted living benefit. Some policies include a benefit if the person lives in an assisted-living facility as a result of a decrease in the number of ADLs the person can perform.
• The criteria for invoking the policy. In how many of the ADLs must the person be deficient and what documentation is necessary to gain benefits?
• When do benefits begin? Many policies specify that benefit payments begin 90 days after the patient has met the criteria (qualified) for benefits. Until that time, you are still responsible for paying the premiums.
• Increasing benefit provision. What provision is made to increase the daily benefit (from $60/day to $90/day, for instance)? Most policies allow you to increase with a medical affidavit and an increase in the premium, but some companies only allow changes to the policy once per year during an “open enrollment” period.
• Cost-of-Living increase. Costs are sure to rise and some policies provide an automatic adjustment of the daily benefit based on the current cost-of-living indexes. Some companies charge an extra premium for this adjustment.
• The lifetime limits for the policy. The higher the limit, the better, but higher limits mean higher premiums also.

So, the best LTC policy can provide benefits for home care, assisted living communities and nursing home care. In my next post, I'll share some other things that you need to consider when looking for a policy and a way to decide how cost-effective a policy might be for you and your family.

Until then, blessings on your caregiving day!

Thursday, July 2, 2009

Estimating What Your Parent Can Afford

In my last post, I shared with you some average costs of eldercare, but the most important figure you need to know is what your parent and your family can afford on a monthly basis for caregiving. No matter whether your parent will remain in his home or move, the calculation is an easy one:

For home care, remember that home, food and clothing expenses must be paid in addition to the new expenses of caregiving.
(Parent’s Current Income) - (Parent's Current Expenses) = Funds Available for Care
In other words, the difference between your parent's income and his current expenses is what you have available for care. If you and other members of the family are willing to pitch in, that can be added to the "Income" side. If your parent can economize household or vehicle expenses, then that can be subtracted from the "Expense" side. Be as accurate as you can when making the calculations; this will help when you begin to research available services.

The "Income" side of the financial picture is probably stable at this stage of your parent's life. However, you have room to maneuver with the "Expenses".

Moving to a long-term care (LTC) community, for example, replaces many of the expenses your parent already has. To determine what's available for a new living situation, add up:
  • Your parent's current income
  • House payments or rent
  • Utility expenses (electricity, gas, propane, sewer, water)
  • Telephone
  • Food
  • Transportation (car insurance, gas)
  • Property Taxes
  • Cable fees
  • Home Insurance
  • Home maintenance (gas for the lawn mower or snow blower, light bulbs, carpet cleaning, for example)
Whatever your parent pays for these basics and all her income will now be shifted toward payment for a retirement or LTC community or for living with you. If there are any LTC insurance benefits available or financial help from the family, this allows for more options.

I was speaking with one caregiver at the Caregivers Conference last week who said that her mother resisted moving into a community because she was sure that it would cost her less to stay in her home. When her daughter did the math, she showed her mother that, in fact, moving to the community they'd chosen would cost exactly the same or a little less. And her mother would no longer have to do laundry, cook every meal, or clean. She could join in activities and would have time to explore some hobbies and visit friends. Her mother made plans to move that day.

Take the time to do the math. Keep the figures handy when you start deciding on care and housing options. Open up conversations with your parent about finances and try to work as a partner with your parent to find financial solutions that work for him and for the family. You'll be glad you did.

Blessings on your caregiving today!