A FEW SHORT THOUGHTS

A FEW SHORT THOUGHTS

·      I have looked at some other blogs on aging, and am intimidated by their thoroughness and professionalism (written by professional journalists).  I am beginning to realize that to make this blog meaningful, much learning and research will be required.  

It is also helpful to these blogs that they have a much broader base of readers (ex. The New York Times subscribers, for instance), and the feedback from the readers helps focus the discussion.  They are a conversation, not a lecture.

·      Some advice to those of you still having families:  Have Daughters!  They are the ones who seem to step up to care for elderly parents.  Sons just don’t cut it.  I believe there is something at the core of daughters – guilt, loyalty, nurturing instinct, something – that makes them unable to walk away from the needs of others.  This must be the reason why most nurses seem to be women.  If you only have a son now, trade him in. 

·      We plan to be cremated, and to have our ashes mingled and scattered.  We have made this clear in our wills and with our estate executors.  But our executors are of the same generation as us.  So, what happens if our executors are no longer executive?  If we are in the care of (somewhat) impersonal hirelings or agents, who don’t have an emotional connection to us, how do we ensure that we end up together in the ocean and not the landfill?  Will we, at that point, even care?

·      Perhaps this project is not just about aging without a support network, but also about keeping control of our lives.  Of being self-reliant to the end.

What do you think?

Michael

If you don’t have a plan for where you are going, anywhere will do.

My wife and I are probably 20 to 25 years away from achieving our objective of becoming “somewhat old-ish” and without a support network.  So we have some time.  This is a good thing, because while we still have all – well, ok, MOST – of our faculties, we can figure out what we will do when we are no longer fully facultied.  At the point where we are not, we need a plan in place that will run on autopilot, working without direction from us, as we may be no longer directorial.  That is why I am doing this blog; to find out if such a plan is possible, and if the answer is yes, what that plan is. 

The burden of caring for the elderly is mostly born by the children of the elderly.  There are several great books on this subject, including A Bittersweet Season, by Jane Gross.  She makes an interesting point about how both parents and children will hide from the truth of declining health.  “Elderly parents who don’t “bother” their children today (with health issues) are setting the stage for a crisis tomorrow.  Adult children who pretend they don’t see trouble brewing are doing the same.  Like it or not, this is now a family affair.”

But, of course, for us, and I suspect many others, it is not a family affair.  With no immediate family support network, the entire burden of being honest about disabilities falls on the Elder.  The Elder, the future We, must accurately assess our ability to make it to the toilet without falling and cracking open our heads or shattering our hips.  We must recognize when we can no longer tell how fast that car is coming, and whether or not they are likely to stop before they t-bone us.  We must admit that a motorized wheel chair will not be allowed in the assisted living facility dining room (some are not!), and that a further change in living arrangements is necessary.  We must be both parent and child.  But is that even possible?

The answer will be, I believe, a resounding “Yes and No.”  Yes for some, but unfortunately no for others.  Yes at one point in time, but no thereafter.  The idea of adopting a plan of action and initiating that plan early, while the faculties are reasonably functioning, may be the best, perhaps the only, way to push through the difficulties to come.  Hiring a professional geriatric care planner may be an important step in ensuring that someone with faculties is helping guide those of us who are without.  If we know now when we are likely to need help, we are more likely to get help when we actually need it.

Planning for what will likely happen as we age will be easier for those with means versus those who think Social Security and Medicare will be enough for a satisfying old age lifestyle.  For example, as I noted in previous posts, a key feature of long term care insurance is that they will engage a professional geriatric care planner to plan your care needs as you become less capable to do so on your own.  But be forewarned:  Medicare will not pay for this, and Medicaid will kick in only after you have exhausted all personal assets.  Having a plan, with no way to pay for that plan, makes not a feasible plan.  If you do not have LTCI and/or sufficient savings, there may be other community services that can help.  I will discuss them in later posts. 

So, in conclusion, memorize this mantra:

Picture it

Just let it happen

See the plan, Danny

Be The Plan

Be The Plan

            - Chevy Chase, Caddyshack (sort of)

So, what IS the plan?

I don’t know yet. 

Michael

A short description of Long Term Care Insurance

Bear with me.  I will be brief.

Long Term Care Insurance is intended to pay for help doing things you have trouble doing for yourself

These things include:

·      Bathing

·      Dressing

·      Cooking

·      Eating

·      Pooping

·      Getting Around

Or, your mind has generally turned to aspic (a French word for beef flavored Jello) and you can’t do anything but stare at that damn squirrel outside your window.

Notice that screwing is not on the above list. The inability to get it on is not the insurance company’s problem.  Also not included are sailing, snowboarding, mowing the lawn, shoveling snow, and dancing to the sounds of Room Full of Blues.  Smoke ‘em while you got ‘em.  Do them while you can.

Now, some of what follows will be redundant with the previous posting on “10 Things You Should Know About Long Term Care Insurance.”  Doesn’t hurt to mention them again – I know how your memory is.

The following is an outline of the terms of the policies that my wife and I took out when we were in our early 50’s.  We will talk later about the finer points to consider when purchasing a policy.  We will also explore each of these benefits in more detail in subsequent posts.  The choices available to you in these areas will have a substantial impact on your ability to age with grace and dignity.   Stay with me on this.

What does our policy cover?

Here is a list of each of the benefits covered by our policy.

1.     Privileged Care Coordination

2.     Home Care

3.     Respite Care

4.     Caregiver Training

5.     Equipment

6.     Nursing Home

7.     Assisted Care Facility

8.     Bed Reservations

9.     Alternate Care

Privileged Care Coordination:  This is the feature that sold us on our policy.  This is a fancy way of saying that the insurance company will assign a LICENSED health care professional to coordinate whatever help we need for the things we need help with.  Here is why it is important to us:  WE HAVE NO IMMEDIATE FAMILY TO TAKE CARE OF US.  And, some of our friends may be reluctant to help with the bathing, dressing and pooping issues.  We wanted to make sure that we had some help lined up before we have that aspic problem I mentioned above.

This Privileged Care Coordinator, or PCC, will meet with you, with your primary care physician, and others to determine what services are best for you.  You will jointly present a Plan of Care to the insurance company.  All other benefit payments will depend on this Plan of Care – if it ain’t in the plan, it is generally not covered.  The PCC will find those services, negotiate the costs, fill in claim forms, monitor your needs.  You will want to feel that you can trust this person.

Home Care:  These are services that you receive at home, to help with the list of things you need help with, performed by professional care providers. Important Note:  This does not include Hospice Care.  More on Hospice in a later posting.

Respite Care:  This is short term care intended to give an unpaid caregiver (such as a spouse, relative, friend, volunteer) a break.  As fascinating as you are, and as hard as it is to believe that anyone would not want to spend every minute of every day with you, your unpaid caregivers will want time for themselves, to go to the Bahamas and to get over the urge to smother you with a pillow. 

Caregiver Training:  If you have an unpaid caregiver, the Insurer will pay to train them on how to get you in and out of bed, deal with medical issues, or handle those awkward tasks no one wants to speak about.

Equipment:  This includes pumps, ramps, grab bars, stair lifts, etc.  Not covered;  artificial limbs, teeth, or anything placed IN your body.  Go ahead and get the penile implant now, because the insurance won’t pay for it.  Also, not covered if it is something that will substantially increase the value of your house.

Nursing Home:  Nursing homes provide 24/7 nursing care under the supervision of a real nurse.  They are licensed by each state.  The LTC Insurance Policy will pay for your room and board, but not drugs.  Or cigarettes. Or scotch.  A rehab center is not a Nursing Home.  Neither is your boat or house. 

Assisted Care Facility:  These also provide 24/7 service but without the nursing care.  These are also licensed.  A rehab center is not an Assisted Care Facility.  Neither is a nursing home, hospital, your boat or house.

Bed Reservations:  Lets say your goddaughter and her husband invite you to visit them on their boat in the Bahamas.  For a whole month.  And, they agree to help you with the things that have caused you to reside in a Nursing Home or Assisted Care Facility.  They are SO thoughtful.  The Bed Reservations benefit will pay the cost of holding onto your “bed”, or room, until you return.  Even godchildren have their limits.

Alternate Care:  This is anything else not otherwise covered, provided the Insurance Company agrees.  Examples:  in-home safety devices, other in-home equipment, medical response devices (“Help, I’ve fallen and I can’t get up!”), Meals on Wheels.  If it makes it into the Plan of Care, it will be covered.

How much will the insurance company pay?

The insurance company is betting that your premiums plus the investment income on that cash will be more than they will pay in benefits.  It is called the Profit Motive.  It is a good thing.  But it does mean that the insurance company is not inclined to pay for everything.  That is why they put limitations and maximums on their liability. 

The detailed terms of the benefits listed above will determine what qualifies and what does not.  In our policies, it is pretty clear.  Not a lot of jibba jabba, just plain English, so don’t be afraid to read it. 

But there are two really important limitations:  How much they will pay in any given month, and how much they will pay over the rest of your life.  Later we will get into the actuarial statistics of how much you are likely to need.  In the interim, here is what our policy says.

I was 53 years old when I bought the policy.  At the time the policy was issued, my maximum MONTHLY benefit payment was $5,000.  This amount would increase by $250 per year to cover inflation.  I picked a fixed amount for the increase (5% of the original benefit amount) rather than a compounded percentage increase each year.  I don’t remember why – probably because the premiums were lower (I have been know to be “frugal”).  My maximum LIFETIME benefit payment was $240,000, increasing by $12,000 per year, same logic.

So, 5k a month.  $240k total.  Later we will look at how figure out the right amount for you, based on how likely you are to need certain types of care, for how long, at what kind of monthly cost.  Hint - Make sure you have enough benefit payments so you do not need to give up the cigarettes and scotch to cover your costs.  Well, OK, give up the cigarettes.  In fact, give them up NOW.  Sorry, I don’t mean to preach, but GIVE THEM UP NOW.  I MEAN IT.  (I feel better now.)

So, what happens when you have spent your life-time maximum and the insurance company is no longer interested in you?  You are on the hook for the balance.  And if you have no cash or assets with which to pay the bills for a Nursing Home or Assisted Care Facility?  We will talk about Medicaid later.  Stay tuned.

How much is all this going to cost me?

Here is the bottom line.  For me, a healthy male, aged 53, married, non-smoker, no major illnesses, no major disabilities, reasonably good ticker, only a few controllable bad habits – annual premium cost is $1,000.  My wife pays slightly more because, well, frankly, she is worth more.  And she is likely to live much longer.

But here is the most important thing you must know about Long Term Care Insurance: 

BE PREPARED TO PAY PREMIUMS ON TIME FOR THE REST OF YOUR LIFE!

That’s right, you heard me.  Our policy requires us to continue paying premiums for as long as we live.  If we don’t pay premiums, the policy will lapse.  Not a good thing.  This is a life long commitment. 

Now that I have your attention, here is the critical exception:  Under our policy (this may vary by policy, so READ the damn thing), once I am in a Nursing Home or Assisted Care Facility, premiums are waived and those benefits will continue until I reach the maximum lifetime benefit, or until I leave (dead or alive).  But remember, if I am in one of those facilities, it must be in the care plan prepared by the PCC.  So don’t piss-off your PCC.

Other Stuff you should think about

There are lots of other little twists and tid-bits in an LTC policy that make interesting reading.  Like, what happens if the insurance company needs to raise premiums (ours have not been increased yet, but stay tuned – I don’t trust those bastards), how do you demonstrate that you really need a benefit, what qualifies as Home Care, what if I move to Costa Rica, etc.   We will cover some of this minutia in later entries.

That is what a typical LTC policy looks like.  Not as complicated as you thought, huh?  And not as expensive ($1,000 a year is only $83 a month, or $19 a week). But, how does this look when you compare the accumulated premiums you are likely to pay over time versus the value of the benefits you are likely to receive?  We will look at this in a later post.  Stay tuned.

For those of us without a family safety net, this is an important component of our plan to survive growing old.  This, and stockpiling enough wine and scotch to make it through.

Michael

Long Term Care

Here is a piece from the National Association of Insurance Commissioners web site on Long Term Care insurance.  Thoughtful piece.  We will go into long term care and insurance more in the future, but this is a good starting place for understanding the concept.

By the way, this blog is not intended to be a technical dissertation on legal and medical aspects of our primary subject.  Its focus is more one of "here is an issue, and if this concerns you I will show you where you can dig further."  Having said that, I recognize that at times we will become somewhat technical.  But we will strive to always explain any complicated issue in everyday language.  I will do this because I know that only my friends will be reading this, and many of them are already suffering from alcohol-induced dementia.

10 Things You Should Know About Buying Long-Term Care Insurance

1.  Long-Term Care is Different From Traditional Medical Care

Someone with a prolonged physical illness, a disability or a cognitive impairment such as Alzheimer’s disease often needs long-term care. Long-term care services may include help with daily activities, home health care, respite care, hospice care, adult day care, care in a nursing home or care in an assisted living facility.

2.  Long-Term Care Can be Expensive

The cost depends on the amount and type of care you need and where you get it. In 2001, the national average cost of nursing home care was $56,000 per year, assisted living facilities reported $22,476 per year and home care costs ranged from $12,000 to $16,000 per year.

3.  You Have Options When Paying for Long-Term Care

People pay for long-term care in a variety of ways. These include using personal resources, long-term care insurance and Medicaid for those who qualify. Medicare, Medicare supplement insurance and health insurance you may have at work usually will not pay for long-term care. Long-term care insurance will pay for some or all of your long-term care.

4.  Decide Whether Long-Term Care Insurance is for You

Whether you should buy a long-term care insurance policy will depend on your age, health status overall retirement goals, income and assets. For instance, if your only source of income is a Social Security benefit or Supplemental Security Income (SSI), you probably should not buy long-term care insurance since you may not be able to afford the premium. On the other hand, if you have a large amount of assets but do not want to use them to pay for long-term care, you may want to buy a long-term care insurance policy. Many people buy a policy because they want to stay independent of government aid or the help of family. They don’t want to burden anyone with having to care for them. However, you should not buy a policy if you can’t afford the premium or are not sure you can pay the premium for the rest of your life.

5.  Pre-Existing Condition Limitations

A long-term care insurance policy usually defines a pre-existing condition as one for which you received medical advice or treatment or had symptoms within a certain period before you applied for the policy. Some companies look further back in time than others. Many companies will sell a policy to someone with a pre-existing condition. However, the company may not pay benefits for long-term care related to that condition for a period after the policy goes into effect, usually six months. Some companies have longer pre-existing condition periods or none at all.

6.  Know Where to Look for Long-Term Care Insurance

Long-term care insurance is available to you in several different forms. You can buy an individual policy from a private insurance company or agent, or you can buy coverage under a group policy through an employer or association membership. The federal government and several state governments offer long-term care insurance coverage to their employees, retirees and their families. You can also get long-term care benefits through a life insurance policy. Some states have long-term care insurance programs designed to help people with the financial impact of spending down to meet Medicaid eligibility standards. Check with your state insurance department or counseling program to see if these policies are available in your state.

7.  Check With Several Companies and Agents

Contact several companies and agents before you buy a long-term care policy. Be sure to compare benefits, the types of facilities covered, limits on your coverage, what is not covered and the premium. Policies from different insurance companies often have the same coverage and benefits but may not cost the same. Be sure to ask companies about their rate increase history and whether they have increased the rates on the long-term care insurance policies.

8.  Don’t be Misled by Advertising

Most celebrity endorsers are professional actors paid to advertise, not insurance experts. It is also important to note that Medicare does not endorse or sell long-term care insurance policies, so be wary of advertising that suggests Medicare is involved. Do not trust cards you get in the mail that look like official government documents until you check with the government agency identified on the card.

9.  Make Sure the Insurance Company is Reputable

To help you find out if an insurance company is reliable, you can take the following actions: Stop before you sign anything, call your state insurance department and confirm that the insurance company is licensed to do business in your state. After you make sure they are licensed, check the financial stability of the company by checking their ratings. You can get ratings from some insurer rating services for free at most public libraries.

10.  Review Your Contract Carefully

When you purchase long-term care insurance, your company should send you a policy. You should read the policy and make certain you understand its contents. If you have questions about your insurance policy, contact your insurance agent for clarification. If you still have questions, turn to your state insurance department or insurance counseling program.

Michael