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.

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.

A Cryonics Dynasty Trust for the Wood Frog

 

The wood frog in Alaska survives all winter long in a frozen solid state. Its physiology utilizes “cryoprotectants” that enables it to survive and thaw out to resume its life in the spring. The field of Cryonics, advocated by Alcor and The Cryonics Institute, attempts to accomplish the same thing for human beings. Although this may seem unrealistic, it seems more possible when you consider this has been done by the wood frog. For more information on the wood frog see the following links: https://www.youtube.com/watch?v=CraGaGFnMDs     http://voices.nationalgeographic.com/2013/08/21/how-the-alaska-wood-frog-survives-being-frozen/
For more information on cryonics go to: http://www.cryonics.org/   http://www.alcor.org/

A Cryonics Trust is a step-cousin of the Perpetual Dynasty Trust that I have written about in this blog and on my website. I was a speaker on this topic last Fall 2016 at the Barbados International Business Week Conference. Like the Perpetual Dynasty Trust, a Cryonics Trust is drafted to take advantage of trust laws in some States that allow a trust to continue indefinitely into the future without limitation by the traditional rule against perpetuities law. Unlike the perpetual dynasty trust, it is drafted for the benefit of the cryonics patient who will someday hopefully be revived to full life and health. This involves some complicated and unusual trust drafting that is beyond the scope of this simple blog. Remember that this person is legally dead so they cannot simply be stated as a trust beneficiary. Suffice it to say, that the trust provides for the trust funds to be available upon the revival of the cryonics patient. My website has a full page of information on all the estate planning considerations for someone considering cryopreservation.
http://www.michaelmillonig.com/practice-areas/cryonics/

The Prime of Robotic Caregivers

Robots as Caregivers

Robotics is one of the branches of science that is undergoing the fastest advancements, and we can see its fruits in almost every industry: computing, construction, agriculture, military, entertainment, and even health care. Although people who are familiar with Daniel H. Wilson’s Robocalypse, or with Isaac Asimov’s I, Robot may be a little more than sceptical about allowing robots to take over our daily tasks, considering their invaluable role in many aspects of our lives we have to give them at least some credit. Oftentimes, the robots really do make our lives easier.

Why am I talking about this? I’ve just recently read a thought-provoking opinion in The New York Times that got stuck in my mind and led me to do some serious thinking and research on the topic, which concerned implementing robots as caregivers for children, the ill, people with autism, and possibly even the elderly.

Let’s face it: the aging population together with the continual decrease in birthrate is a problem in all parts of the world. Take Japan, for example: “In 2025, 1 in 5 people will be aged over 75, and 1 in 5 seniors aged over 65 will have dementia, according to Health, Labor and Welfare Ministry estimates. … Japan will need 2.53 million care workers in fiscal 2025, but the number will fall short of demand by 377,000.” – japantimes.co.jp

The U.S., Canada, Europe, and other developed Asian countries are following pretty much the same pattern.

But it’s not just the fact that there will be fewer young people available. Another problem is the unpopularity of the job, because it’s very physically and mentally demanding with disproportionate compensation, which, in all honesty, doesn’t really make it a great career opportunity for the challenge-seeking millennial.

But the attention is much needed. I’ll quote a part of the NYT article that inspired me to write about this issue in the first place, so that you can draw your own picture.

“I can, and do, write prescriptions for her many medical problems, but I have little to offer for the two conditions that dominate her days: loneliness and disability. She has a well-meaning, troubled daughter in a faraway state, a caregiver who comes twice a week, a friend who checks in on her periodically, and she gets regular calls from volunteers with the Friendship Line.

It’s not enough. Like most older adults, she doesn’t want to be ‘locked up in one of those homes.’ What she needs is someone who is always there, who can help with everyday tasks, who will listen and smile.”

Many countries — with Japan being the flagship — are investing in healthcare robotics development, in order to come up with a solution for loneliness and various movement and independence restrictions. In some cases, the caregiving robots are being implemented as we speak, such as the Japanese Robear, the Swedish GiraffPlus, or the German Care-O-Bot. Caregiving and nursing robots may be even closer than we realize, simply because the need is so urgent.

As much as I love the idea of robotic household helpers for people with various disabilities, I can’t help but wonder about the ethics of having regular, possibly even emotional interactions with a humanoid robot in your home. How will the software work with personal information? What will the policies be on the possible accidents and injuries related to the machine? Will robotic caregivers be covered by medical insurance?

The questions are many, and so far we have very few answers. That said, I personally can’t wait for the further development of mechanical caregivers.

What is your opinion?

senior gaming: seniors want to play, too

Senior Gaming. Why Not?

Not only our kids are gamers anymore. Our parents and grandparents are becoming gamers, and they’re pretty good at it, too. According to a stud* conducted at the North Carolina State, gaming may actually have a positive effect on better physical and mental health during the course of aging. This is a complete game changer (pun perhaps intended) considering that up until now gaming was seen as a means of entertainment strictly for young people.

But given the chance, older adults are becoming gamers as well, and it does seem to have many positive side effects. The study concludes that “60% of the sample was either a regular or occasional gamer. Differences among the groups were found for well-being, negative affect, social functioning, and depression with regular and occasional gamers performing better, on average, than non-gaming older adults. Findings suggest that playing may serve as a positive activity associated with successful aging.”

The days when gaming was seen as a waste of time and energy are long gone. Now that scientists have actually started looking into the physical and mental benefits of gaming, they are slowly coming to the conclusion that it may be one of the best ways to keep the body and mind sharp, even and especially at an advanced age.

What do seniors like to play?

AARP partnered with the Entertainment Software Association to survey almost 3,000 people in the age range of 50 – 70 and their relationship to gaming. The survey showed a clear preference for specific types of games, such as card or tile games, puzzle or logic games, trivia, word games and traditional board games. But it doesn’t stop there. The Wii gaming platform actually incorporates arm and body movement, and many physical therapists use it as a part of therapy, because of its lightness and effectiveness. That way seniors can play golf, bowling or tennis with all the benefits of movement but a significantly reduced risk of sport-related injuries.

The benefits of senior gaming are astounding.

Playing games is proven to have a positive effect on cognitive activity of older adults by providing constant and varied stimulation and memory training. People recovering from stroke have used Wii games and other gaming systems to improve arm strength and regain physical condition. The distraction that video games offer can also successfully serve as a pain relief.

When done offline in a group or even online with strangers, gaming also brings invaluable benefits from socialization and helps preventing psychological and psychosomatic illnesses connected with aging and a solitary lifestyle, that is so often seen in older people.

One of the greatest things about games is that they often come for free, or at a very low price. The fast development of technology and gaming consoles specifically causes prices of the older pieces to constantly decrease, so getting a second-hand laptop or a console of any kind may be a question of a few hundred bucks. And that is a small price to pay considering the endless hours of helpful entertainment that they can offer in return.

Many seniors don’t trust technology because they don’t know how to operate it, they have issues with trusting the security of online gaming or they simply feel like it’s nothing for them because they feel too old for it. Providing the elderly with patient guidance through the getting-to-know process is an important role that caregivers, relatives and even senior home nurses should consider taking on. The life quality improvement is indisputable.

Senior Smartphone Apps:Care, Health, Entertainment

Smart Apps for Smart Aging

Earlier in May, I asked you the following question: What senior tech are you embracing? Today I’d like to come back to it in a way, and ask you a similar question: being familiar with tech, do you use any good apps to make your older relatives’ lives easier?

Like I said before, there’s absolutely no discussion about our aging loved ones being fully capable of getting online and making use of tech gadgets, given the time and care to teach them the basics. And it’s not just about getting your folks familiar with modern technology, it’s also about making their life easier in so many ways.

Thankfully, there are a number of developers who came up with some brilliant tools to help caregivers keep an eye on elderly peoples’ health and well-being, or to give a helping hand to the elderly themselves when attending to their everyday affairs.

In today’s article I’ve taken the liberty to handpick some useful mobile and tablet apps that will bring some more independence and invaluable help into the daily life of those who need it.

Health

Fall Safety Pro (iOS)
The Fade (Android)

Both of these apps act through activity trackers and monitor sudden movements in the case of a fall. The app will detect a lack of activity or a sudden movement, and after a short warning period, it will notify an emergency contact, providing them with the exact time and place of the fall.
According to the CDC statistic from January 2016, one out of five fall accidents cause a serious injury such as a fracture or a head injury. Prevention is everything, but once it happens, a timely response and treatment is vital.

Medisafe Pill Reminder (iOS, Android)

As we grow older, the amount of medication we have to take on a daily basis keeps growing as well. It gets harder to keep track of all the pills and the appropriate times they need to be taken. With older people the risks of mixing up or forgetting a medication are even bigger, especially if it’s something as important as blood pressure meds or meds for keeping sugar levels under control.

To make sure your loved one will never forget to take the right pill again, MediSafe Inc. presents this free app that will send a reminder to their phone, telling them exactly when to take what, including pill shapes and colors.

Aid

EyeReader (iOS)
Magnifier (Android)

A smartphone has many uses we wouldn’t have even thought of 10 years ago. Becoming a pocket magnifying glass is definitely one of them. Whether it’s for reading a book more comfortably or having a quick look at an antique while shopping, these apps will use the camera of the phone as a magnifier, even turning on the flashlight when additional light is required.

Petralex Hearing Aid (iOS, Android)

This excellent app will test its owner’s hearing capabilities, but the main function is that it works as a regular hearing app. It offers a variety of settings such as the use of the headset or device microphone, profiles for different kinds of sound environments, and many more. And the best thing? You can set the app up in the comfort of your home, without the urgent need of visiting a specialist for it (although a thorough check-up and diagnosis is strongly recommended).

Misc

Park’n’Forget (iOS)
PinPark (Android)

These apps may not only be a great help to your forgetful relative, but the younger generation can make use of this idea as well. I don’t know about you, but even I occasionally forget where I’ve left my car in a garage or mall parking lot. For you and me, this is an annoyance that may well make the app worth it. For the elderly, this can cause a great distress. With this app, it won’t happen again.

VoucherCloud (iOS, Android)

This little app will deliver discount coupons for local shops, restaurants, online shops and more, straight to the screen of your smartphone. You can either search for bargains based on your location or based on your interests, and you’ll always get the best price for anything you set your eye on. For older people, this is a great opportunity to cut down on costs.

Words With Friends (iOS, Android)

I decided to add this app as a little bonus for everyone who loves Scrabble or any other word game. It’s social, mind-stimulating and fun. The app lets you play with people from your contact list, or you can compete against strangers from all over the world.

Do you have any other tips for good apps for making aging easier? If so, please share! I’d love to hear about them and add them to the list, so that everyone can profit from these great tools becoming available in the online era.

senior tech: an elderly person using a smart phone

What Senior Tech Are You Embracing?

Technology has changed the world as we know it. Nearly every industry has been revolutionized by the tech advances of the last 30 years, and yet we haven’t seen the digital world take much of a foothold in the elder-care industry. Many still think that tech is a domain exclusive to the younger generations, and while it can certainly be true that teaching seniors how to use the latest devices and software can be challenging, that doesn’t mean that they should be excluded! In fact, many studies have shown the benefits involved with helping Seniors to integrate into the digital world. The Internet has become an important tool to reduce isolation, loneliness, and other depressive symptoms that we see far too often in our aging loved ones. We are now seeing them becoming proficient in platforms like Skype and Facebook — what’s more, they’re enjoying it!

According to the Pew Research Center Internet use among those 65 and older grew an astounding 150% in just two short years between 2009 and 2011. Seniors are able to not only connect with loved ones but also to take care of practical needs, from visiting government sites, to online banking, even ordering groceries for delivery. For those who have limited mobility or have become homebound, these simple actions represent a vital link to the outside world and allow them to retain a certain level of independence. Seniors have also embraced the ability to connect with others in similar situations. They can discuss health concerns and challenges, giving and receiving support from like minded individuals (and professionals) all from the comfort and privacy of their home. Discussion groups have emerged not just for the elderly, but for their caregivers as well which is an invaluable resource.
It is important that seniors are given the opportunity to learn how to utilize these tools, and it is becoming more and more popular to see computer classes held at senior centers and local libraries. These classes start with the basics, and move on to things like email and social media. Through platforms such as DorotUSA.org, it is even possible for seniors to enroll in online courses and participate in lectures, a truly excellent way to keep them mentally stimulated and engaged. With the links between cognitive health, mental agility and overall physical health being so strong, it’s clear that we must help Seniors to take advantage of these great opportunities.
SeniorNet.org has put together a list of 10 pieces of technology seniors should start embracing — from tablets to Skype to health tracking software.
What about you? What technology have you and the elderly in your life embraced? Any specific applications that have been game-changers? I would love to hear your input!