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PLANNING TO PAY FOR LONG TERM CARE

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.

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PLANNING TO PAY FOR LONG TERM CARE

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  1. 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

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

  3. 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

  4. Housing Spectrum

  5. Housing Spectrum Monthly costs $3,000 - $5,000 $5,000 - $7,000 $0 - $15,000

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

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

  8. Housing Spectrum Medicaid LTC Insurance Private Funds Veterans Pensions

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

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

  11. 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

  12. 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.”

  13. 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

  14. 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.

  15. 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

  16. Government Benefits • Medicaid • Home Help • Home and Community Based Waiver • Nursing Home Medicaid

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

  18. 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

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

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

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

  22. 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.

  23. 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

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

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