planning to pay for long term care douglas g. chalgian, cela & amy r. tripp, j.d. chalgian &...

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

Housing SpectrumMonthly 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 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

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 InsuranceComparing 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, CELAAmy R. Tripp, JD

chalgian 2006

Planning to Pay for Long Term Care