Costs of Some New Long-Term Care Insurance Policies Going Down in 2018

While long-term care insurance costs are up in general, some policies are going down in 2018, according to the 2018 Long Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance (AALTCI), an industry group.

A married couple who are both 60 years old would pay an average of $3,490 a year combined for a total of $333,000 of long-term care insurance coverage when they reach age 85. This is down from 2017, when the association reported that a couple could expect to pay $3,790 for the same level of coverage. Jesse Slome, the AALTCI’s director, cites two reasons for the change: “There are fewer insurers offering traditional long-term care insurance policies currently and some of the higher priced insurers sell so few policies that we excluded them from this year’s study as they really were not representative of the market conditions.”

Rates for single men and women have gone up in 2018, however. A single 55-year-old man can expect to pay an average of $1,870 a year for $164,000 worth of coverage, up from $1,665 in 2017. The same policy for a single woman averages $2,965 a year, up from $2,600 in 2017. Overall, women still pay more than men.

One thing that remains the same year to year is the importance of shopping around. The survey shows that costs for virtually identical policy coverage vary significantly from one insurer to the next.

This year’s index compares policies sold in Illinois and was conducted in January 2018.

For the association's 2018 index showing average prices for common scenarios, go here: http://www.aaltci.org/news/wp-content/uploads/2018/01/2018-Price-Index-LTC.pdf

 

Planning for a Child with Special Needs

Americans are living longer than they did in years past, including those with disabilities. According to one count, 730,000 people with developmental disabilities living with caregivers who are 60 or older. This figure does not include adult children with other forms of disability nor those who live separately, but still depend on their families for vital support.

When these caregivers can no longer care for their children due to their own disability or death, the responsibility often falls on siblings, other family members, and the community. In many cases, expenses increase dramatically when care and guidance provided by parents must instead be provided by a professional for a fee.

Planning by parents can make all the difference in the life of the child with a disability, as well as that of his or her siblings who may be left with the responsibility for caretaking (on top of their own careers and caring for their own families and, possibly, ailing parents). Any plan should include the following components:

  • A plan of care that carefully establishes where the child with special needs will live, who will be responsible for assisting the person with special needs with decision making and who will monitor the person with special needs’ care.  It will help everyone involved if the parents create a written statement of their wishes for their child’s care. They know him better than anyone else. They can explain what helps, what hurts, what scares their child (who, of course, is an adult), and what reassures him. When the parents are gone, their knowledge will go with them unless they pass it on.
  • At least one type of special needs trust.  In almost all cases where a parent will leave funds at death to a disabled child, this should be done in the form of a trust. Trusts set up for the care of a disabled child generally are called “supplemental” or “special” needs trusts.  Trusts designed to aid a person with special needs are commonly known as “special needs trusts”.  There are three main types of special needs trusts: the first-party trust, the third-party trust, and the pooled trust. All three name the person with special needs as the beneficiary, but they differ in several significant ways, and each type of trust can be useful in its own way.  Choosing a trustee is also an important issue in supplemental needs trusts. Most people do not have the expertise to manage a trust, even if they are family members, and so a professional trustee may be a wise choice. For those who may be uncomfortable with the idea of an outsider managing a loved one’s affairs, it is possible to simultaneously appoint a trust “protector,” who has the power to review accounts and to hire and fire trustees, and a trust “advisor,” who instructs the trustee on the beneficiary’s needs. 
  • Life insurance.  A parent with a child with special needs should consider buying life insurance to fund the supplemental needs trust set up for the child’s support. What may look like a substantial sum to leave in trust today may run out after several years of paying for care that the parent had previously provided. The more resources available, the better the support that can be provided the child. And if both parents are alive, the cost of “second-to-die” insurance–payable only when the second of the two parents passes away–can be surprisingly low.

For more on special needs trusts and special needs planning, visit our SpecialNeedsAnswers Web site at www.specialneedsanswers.com. While some ElderLawAnswers attorneys practice in this area of the law, all attorneys listed on SpecialNeedsAnswers devote a significant part of their practices to working with individuals with special needs and with their families to plan for the future.

Three Reasons Why Giving Your House to Your Children Isn't the Best Way to Protect It From Medicaid

You may be afraid of losing your home if you have to enter a nursing home and apply for Medicaid. While this fear is well-founded, transferring the home to your children is usually not the best way to protect it.

Although you generally do not have to sell your home in order to qualify for Medicaid coverage of nursing home care, the state could file a claim against the house after you die. If you get help from Medicaid to pay for the nursing home, the state must attempt to recoup from your estate whatever benefits it paid for your care. This is called “estate recovery.” If you want to protect your home from this recovery, you may be tempted to give it to your children. Here are three reasons not to:

1. Medicaid ineligibility. Transferring your house to your children (or someone else) may make you ineligible for Medicaid for a period of time. The state Medicaid agency looks at any transfers made within five years of the Medicaid application. If you made a transfer for less than market value within that time period, the state will impose a penalty period during which you will not be eligible for benefits. Depending on the house’s value, the period of Medicaid ineligibility could stretch on for years, and it would not start until the Medicaid applicant is almost completely out of money.

There are circumstances under which you can transfer a home without penalty, however, so consult a qualified elder law attorney before making any transfers. You may freely transfer your home to the following individuals without incurring a transfer penalty:

  • Your spouse
  • A child who is under age 21 or who is blind or disabled
  • Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
  • A sibling who has lived in the home during the year preceding the applicant's institutionalization and who already holds an equity interest in the home
  • A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

2. Loss of control. By transferring your house to your children, you will no longer own the house, which means you will not have control of it. Your children can do what they want with it. In addition, if your children are sued or get divorced, the house will be vulnerable to their creditors.

3. Adverse tax consequences. Inherited property receives a “step up” in basis when you die, which means the basis is the current value of the property. However, when you give property to a child, the tax basis for the property is the same price that you purchased the property for. If your child sells the house after you die, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price. The only way to avoid some or all of the tax is for the child to live in the house for at least two years before selling it. In that case, the child can exclude up to $250,000 ($500,000 for a couple) of capital gains from taxes.

There are other ways to protect a house from Medicaid estate recovery, including putting the home in a trust. To find out the best option in your circumstances, consult with your elder law attorney. 

GOP Tax Plan Could Deal Blow to Seniors Paying for Long-Term Care

The tax plan put forward by the Republican-led House of Representatives would eliminate many current deductions, and getting rid of one of them in particular could deal a serious financial blow to seniors and individuals with disabilities. The plan proposes eliminating the medical expense deduction, a change that will especially affect those needing long-term care.

Currently, taxpayers can deduct certain medical expenses from their income taxes if the expenses add up to more than 10 percent of adjusted gross income. These expenses can include health insurance premiums, deductibles, nursing home fees, home health care costs and even assisted living fees, if a doctor certifies that the individual must live in the facility due to health care or cognitive needs.

While most taxpayers don't have health care expenditures exceeding 10 percent of their income, many seniors and others with disabilities do. According to the IRS, 8.8 million households — almost 6 percent of tax filers — claimed medical deductions in 2015. The AARP estimates that 74 percent of those who take the deduction are age 50 or over and half have incomes of $50,000 or less. 

“It tends to be mostly … older people who do not have long-term care insurance, and end up in a nursing home,” Richard Kaplan, a professor who specializes in tax policy and elder law at the University of Illinois College of Law, told CNBC. “For people who are receiving long-term care and are paying for it themselves, this is going to be a huge deal.”

For them, having the deduction can mean that they do not run out of funds and have to rely on Medicaid, or are at least able to postpone applying for Medicaid. Eliminating the medical expense deduction will likely mean that more people will spend down their assets more quickly, requiring them to apply for Medicaid. In addition, adult children who pay for their parents' care can sometimes use the deduction. For more information about how ending the medical deduction might affect you, click here.

In addition to eliminating the medical expense deduction, the tax bill cuts corporate tax rates. The bill’s proponents argue that the tax changes will unleash huge economic growth that will result in higher tax revenue. However, if the bill’s supporters are wrong and the growth in tax revenues is not as large as hoped, the reduction in tax revenues will likely cause sharp cuts in government spending or an increase in budget deficits, or both. A reduction in spending could affect seniors and individuals with disabilities through cuts to Medicaid, Medicare, Section 8, Meals on Wheels, and food stamps.

The tax proposal would benefit a small number of wealthy seniors by eliminating the estate tax. Under the proposal, the estate tax exemption will be increased from $5.45 million to $10 million for individuals dying in 2018 through 2023. After 2023, the estate tax will be eliminated completely. The Tax Policy Center estimates that only about 0.2 percent of estates pay any federal tax under current rules.

The House’s tax plan is not final, and the Senate plan preserves the medical expense deduction.  The two bills, if passed, must be reconciled.

For an AARP fact sheet on Medicare beneficiaries who spend at least 10 percent of their income on out-of-pocket medical expenses, click here.

Consumer Reports: Who Will Care for You?

The October issue of Consumer Reports has its cover story entitled “Who Will Care for You?” The article focuses on elder care decisions at the assisted-living level. See https://www.consumerreports.org/cro/index.htm

It is generally an instructive and helpful article. I am going to add my own comments and information to go along with this article.

The first obvious answer to the question posed by the article is missed by Consumer Reports. Many people would answer this question by saying that a family member will take care of them. That is not necessarily the best option but is often the plan for many people. More importantly, it is an important issue to be addressed in this context. It is very difficult to care for a family member 24/7 year after year. This may work out for some period of time if the person’s needs are not that demanding. However, at some point in time it simply becomes too much and a person does need to move to a nursing facility. I never discourage any of my clients to at least not try to care for a family member at home but the practical realities and the difficulty of doing so need to be addressed.

The article very accurately points out that the dividing line between an assisted living facility and a skilled nursing facility is not clear. This is true as a matter of the legal definitions and in practice. The first step in determining what type of care a person needs is to obtain a level of care assessment. This is usually done by a social worker, nurse or other personnel from a nursing facility. Is not usually done by doctor although it certainly could be.

As the article points out, some persons are in an assisted living facility longer than they should be. Conversely, some persons are told to leave and go to a skilled nursing facility when they really are not ready for that level of care yet. In these situations is very important for the resident to have a family member or other person monitoring their care and making sure they are not involuntarily transferred out of the assisted-living facility.

The article refers to use of an aging life care expert. This is the new terminology for what used to be referred to as a geriatric care manager. This person is usually a social worker or nurse by training. They can provide invaluable advice and advocacy for families and residents of nursing facilities. Our office had a geriatric care manager for over eight years. Our experience was that not too many clients saw the need for this service. Many people naively assume that the nursing home will take care of their loved one and that you should not need any additional help. In an ideal world this would be true. However, nursing facilities just do not have sufficient staff to be on top of every possible need or request of every resident. A geriatric care manager can make up for this shortfall and also provide valuable advice and training for the family members in dealing with the nursing facility. Our clients we helped with their loved ones greatly appreciated our assistance and expertise. However, most people just didn’t seem to see the need for this service which is why I no longer offer it. You can find an aging life care expert in your area at https://www.aginglifecare.org/ I also refer my clients to a local aging care life expert. http://www.1specialcare.com/

The article also wisely points out the empty promise made by many marketing representatives that “We will take care of your mother for the rest of her life.” “We will never kick her out.” This is pure sales talk and is probably not supported by any of the legal clauses in the resident’s contract. The resident will be kicked out if they run out of money and don’t pay their bill. The resident will also be kicked out if their medical condition worsens such that the facility is not capable of taking care of them. The marketing person perhaps doesn’t fully understand this or chooses to ignore that reality. Promises are also often made that there is some type of fund that can be used for residents who run out of money. Do not believe this. What this really means is that if the person runs out of money they will be able to apply for Medicaid which will pay the nursing home bill.

The article also gives good advice by saying you should never agree to a mandatory arbitration clause. However, simply crossing off a clause on the standard form may not be sufficient. Most nursing facilities will not allow you to do so but is worth a try.

I think the underlying theme and general point of the article is that you should get professional advice and as much reliable information as possible before making these elder care choices.

Social Security Beneficiaries Will Receive a 2 Percent Increase in 2018

In 2018, Social Security recipients will get their largest cost of living increase in benefits since 2012, but the additional income will likely be largely eaten up by higher Medicare Part B premiums.

Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a small boost in 2018, amounting to $27 a month for the typical retiree. The 2 percent increase is higher than last year’s .3 percent rise and the lack of any increase at all in 2016. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $127,200 to $128,700.

The increase in benefits will likely be consumed by higher Medicare premiums, however. Most elderly and disabled people have their Medicare Part B premiums deducted from their monthly Social Security checks. For these individuals, if Social Security benefits don't rise, Medicare premiums can't either. This “hold harmless” provision does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who get both Medicare and Medicaid benefits. In the past few years, Medicare beneficiaries not subject to the hold harmless provision have been paying higher Medicare premiums while Medicare premiums for those in the hold harmless group remained more or less the same. Now that seniors will be getting an increase in Social Security payments, Medicare will likely hike premiums for the seniors in the hold harmless group. And that increase may eat up the entire raise, at least for some beneficiaries.

For 2018, the monthly federal Supplemental Security Income (SSI) payment standard will be $750 for an individual and $1,125 for a couple.

For more on the 2018 Social Security benefit levels, click here.

Elder Care Choices

The October issue of Consumer Reports has its cover story entitled “Who Will Care for You?” The article focuses on elder care decisions at the assisted-living level. See https://www.consumerreports.org/cro/index.htm

It is generally an instructive and helpful article. I am going to add my own comments and information to go along with this article.

The first obvious answer to the question posed by the article is missed by Consumer Reports. Many people would answer this question by saying that a family member will take care of them. That is not necessarily the best option but is often the plan for many people. More importantly, it is an important issue to be addressed in this context. It is very difficult to care for a family member 24/7 year after year. This may work out for some period of time if the person’s needs are not that demanding. However, at some point in time it simply becomes too much and a person does need to move to a nursing facility. I never discourage any of my clients to at least not try to care for a family member at home but the practical realities and the difficulty of doing so need to be addressed.

The article very accurately points out that the dividing line between an assisted living facility and a skilled nursing facility is not clear. This is true as a matter of the legal definitions and in practice. The first step in determining what type of care a person needs is to obtain a level of care assessment. This is usually done by a social worker, nurse or other personnel from a nursing facility. Is not usually done by doctor although it certainly could be.

As the article points out, some persons are in an assisted living facility longer than they should be. Conversely, some persons are told to leave and go to a skilled nursing facility when they really are not ready for that level of care yet. In these situations is very important for the resident to have a family member or other person monitoring their care and making sure they are not involuntarily transferred out of the assisted-living facility.

The article refers to use of an aging life care expert. This is the new terminology for what used to be referred to as a geriatric care manager. This person is usually a social worker or nurse by training. They can provide invaluable advice and advocacy for families and residents of nursing facilities. Our office had a geriatric care manager for over eight years. Our experience was that not too many clients saw the need for this service. Many people naively assume that the nursing home will take care of their loved one and that you should not need any additional help. In an ideal world this would be true. However, nursing facilities just do not have sufficient staff to be on top of every possible need or request of every resident. A geriatric care manager can make up for this shortfall and also provide valuable advice and training for the family members in dealing with the nursing facility. Our clients we helped with their loved ones greatly appreciated our assistance and expertise. However, most people just didn’t seem to see the need for this service which is why I no longer offer it. You can find an aging life care expert in your area at https://www.aginglifecare.org/ I also refer my clients to a local aging care life expert. http://www.1specialcare.com/

The article also wisely points out the empty promise made by many marketing representatives that “We will take care of your mother for the rest of her life.” “We will never kick her out.” This is pure sales talk and is probably not supported by any of the legal clauses in the resident’s contract. The resident will be kicked out if they run out of money and don’t pay their bill. The resident will also be kicked out if their medical condition worsens such that the facility is not capable of taking care of them. The marketing person perhaps doesn’t fully understand this or chooses to ignore that reality. Promises are also often made that there is some type of fund that can be used for residents who run out of money. Do not believe this. What this really means is that if the person runs out of money they will be able to apply for Medicaid which will pay the nursing home bill.

The article also gives good advice by saying you should never agree to a mandatory arbitration clause. However, simply crossing off a clause on the standard form may not be sufficient. Most nursing facilities will not allow you to do so but is worth a try.

I think the underlying theme and general point of the article is that you should get professional advice and as much reliable information as possible before making these elder care choices.

 

New Protections for Nursing Home Residents

New Obama-era rules designed to give nursing home residents more control of their care are gradually going into effect. The rules give residents more options regarding meals and visitation as well as make changes to discharge and grievance procedures.

The Centers for Medicare and Medicaid finalized the rules — the first comprehensive update to nursing home regulations since 1991 — in November 2016. The first group of new rules took effect in November; the rest will be phased in over the next two years.
Here are some of the new rules now in effect:

Visitors. The new rules allow residents to have visitors of the resident’s choosing and at the time the resident wants, meaning the facility cannot impose visiting hours. There are also rules about who must have immediate access to a resident, including a resident’s representative.

Meals. Nursing homes must make meals and snacks available when residents want to eat, not just at designated meal times.

Roommates. Residents can choose their roommate as long as both parties agree.

Grievances. Each nursing home must designate a grievance official whose job it is to make sure grievances are properly resolved. In addition, residents must be free from the fear of discrimination for filing a grievance. The nursing home also has to put grievance decisions in writing.

Transfer and Discharge. The new rules require more documentation from a resident’s physician before the nursing home can transfer or discharge a resident based on an inability to meet the resident’s needs. The nursing home also cannot discharge a patient for nonpayment if Medicaid is considering a payment claim.

CMS also enacted a rule forbidding nursing homes from entering into binding arbitration agreements with residents or their representatives before a dispute arises. However,a nursing home association sued to block the new rule and a U.S. district court has granted an injunction temporarily preventing CMS from implementing it. The Trump Administration is reportedly planning to lift this ban on nursing home arbitration clauses.

In November 2017, rules regarding facility assessment, psychotropic drugs and medication review, and care plans, among others, will go into effect. The final set of regulations covering infection control and ethics programs will take effect in November 2019.

Importance of a Funeral

 

Every person deserves some sort of funeral service no matter how brief or inexpensive. A person has lived a life with some friends and family and their life should be acknowledged in some manner. It is certainly difficult to organize and participate in a funeral after the death of a loved one. Talking with many friends and relatives can be exhausting and emotionally difficult. However, it is an important part of the grieving process. It allows everyone to express their feelings and provide emotional support to each other. It is also important simply to say goodbye to your loved one. If you avoid having a funeral or memorial service, you will just prolong the grieving process. If your concern is about the expense of a funeral, there are ways to have an inexpensive service. Remember that the funeral is for the benefit of the family and friends not for the deceased. Even if the deceased had stated they did not want you to have a funeral, you should still have one for the reasons stated here. Please also realize that the deceased had other family and friends that are also grieving. You should reconsider your decision to not have a funeral in consideration of the feelings and needs of others. If you have some reasons for not having a funeral, I strongly advise you to overcome all your objections and issues and plan a short, simple and inexpensive memorial service.

My webpage on funerals has suggestions and ideas on how to plan for a funeral and do so at a low cost. See http://www.michaelmillonig.com/practice-areas/funerals-burial/#arranging-for-funeral

Simple acts of kindness towards the lonely seniors in your community

Ways To Help Out Seniors In Your Community

When it comes to seniors, every helping hand counts. Not every senior has a caring family, and not every family can afford a professional caregiver. If you’re not a caregiver yourself or don’t have anyone in your close family who needs your assistance but you’d still like to help, you can get involved with helping the elderly in your street or town. I’ve put together a few elder care volunteering ideas for you. Let’s get inspired and change a few lives for the better.

Computer learning & Internet Safety

You don’t need a degree to be able to teach the elderly how to handle a smartphone or a computer, or introduce them to the basics of Internet safety. Every year, hundreds of seniors become victims of shameless frauds and scams, many of which happen online.

Bring a couple of your senior neighbors together and give them a few examples of how to handle technology and information. Adding contacts, answering texts, or googling, dismissing spam and searching for news — it’s a routine for us, but many elderly people struggle with what we consider to be the simplest tasks. And just a short and friendly informational gathering at the local community center can make a world of difference.

Holiday season events

A bit more planning but much more joy — that’s the result of organizing a holiday season event for your lonely senior neighbors or the people in your local nursing home. Become a Santa to people with no family, or create a birthday calendar, sending a small gift and a greeting card to the birthday boy or girl. Make a Facebook group for people in your commu, maybe even ask the local media for a bit of promotion. You will be surprised how many kind strangers are there in your community. Plus, the happiness of the people receiving those little, thoughtful gifts will make up for all the efforts.

Raise funds

Medical insurance is often not enough to cover all the expenses related to illnesses and injuries, and since seniors are especially at risk of these, a little bit of financial help will go a long way. Medication and treatment costs, tools for improving movement ability, even helping out with nursing home costs — there are more underprivileged seniors with no family than we like to admit, so making sure that their lives are not only better is a very noble deed, and anyone with a few dollars to spare can chip in.

Share a meal

I know many people who love to cook, especially for others. But love for cooking often goes hand in hand with excessive portions — and leftovers that don’t always get used. If this ever happens to you, the next time you cook way too much lasagna, try offering a portion to that lovely lady living next door. It’s not something that you must do every day, but making it a once-per-week event will not only give you a chance to check on your neighbor’s well-being, it will also be an excellent chance for some socialization and friendly talk.

Be a good neighbor

Have you heard Chris Salvatore’s story? It’s very intense, and absolutely beautiful. In reality, hardly anyone can afford moving their ill neighbor in, but everyone can be a good neighbor. It all comes down to this simple rule: offer to help, at least every now and then. Offer help with cleaning, taking out the trash, helping with bills and correspondence, or grocery shopping . Come over for a friendly chat over a cup of tea, or join them for an afternoon walk with their pet. Even the smallest acts of kindness can make a lonely life much happier.