Eldercare In An Age of Scarcity:Who Will Care? Who Will Pay?

By: Bob OToole
Submitted: 2007-01-17 16:20:55
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America is rapidly moving to a two-tiered system of long-term care services. One provides a broad spectrum of services ranging from an optimal amount of high quality home care to elegant and well staffed continuing care retirement communities for those who can afford to pay; while the other offers very limited services ranging from a few hours of home care per week to often dreary, poorly staffed, nursing homes funded by Medicaid.

State and federal officials are about to implement newly legislated budget cuts that will further limit care options for those who rely on public funding for their care. Meanwhile, the pool of workers in the labor intensive, long-term care industry continues to shrink as the numbers of frail and disabled elders grows at an ever-increasing rate.

Many Americans still don’t understand that most health insurance coverage, including Medicare pays only for short term, skilled care. We are expected to pay for the rest from our savings, other assets, funds from family members, or from the benefits of a private long-term care insurance policy.

When they discover this harsh reality, older Americans and their family members wonder if they can protect their home and their life savings without depleting them to pay for the costs of a chronic illness. Because care is so costly, an increasing number of older Americans need assistance from their grown children, many of whom live far from their aging parent’s home.

The evidence continues to grow that the choices and quality of care provided to those who rely on public funding is much more limited than for those who can pay privately. Nursing homes that rely on Medicaid funding are seriously under-staffed, their personnel are often poorly trained, staff turnover exceeds 50 percent a year, and the situation is expected to get worse, not better as our population ages.

Today, placement in a nursing home when we become frail and in need of help, can usually be avoided. If you'd rather receive care at home, in an Assisted Living Facility, or otherwise maintain your independence and your choice of care providers, consider such long term care financing alternatives as private long-term care insurance, a federally guaranteed reverse equity mortgage, or a Life Settlement which allows you to sell existing life insurance and use the funds to pay for your care now.

Because long-term care insurance requires you to be in good health, this planning option is not available to everyone, especially older applicants for whom the premiums may also be prohibitive. Some newly developed financing alternatives such as life insurance policies with a long-term care rider and fixed annuities that also have long term care riders should also be explored before deciding on the planning path that best suits your unique needs.

Because a review of these options can put the average person on "information overload", Informed Eldercare Decisions, Inc. has developed an information service designed to provide an overview of long-term care planning alternatives in a consumer friendly format.

Here are some suggested steps to take to help help you to make an informed decision, rather than succumbing to a high pressure sales pitch from someone who may not be the most qualified professional to advise you about the complicated process of planning for long-term care.

1. Schedule an initial consultation with an elder-law attorney who is a member of the National Academy of Elder Law Attorneys. (NAELA. Elder law specialists deal with legal issues affecting the elderly and disabled including, health and long-term care planning, probate and estate planning, guardianship & conservatorship, and eligibility for publicly funded services when you can no longer afford to pay for the costs of your care.

When planning for long-term care, don't overlook the possibility that incapacitation -- or even the strains of caregiving -- could impair your ability to manage finances with your usual thoroughness.

You should plan for and document your desires concerning incapacitation in a living trust. A power of attorney can be used to enable a trusted designee to conduct transactions on your behalf.

2. Schedule an initial consultation with an elder care specialist who is more than just an insurance broker.

To help you select among the many alternatives available to plan for the costs of long-term care, an eldercare specialist should have extensive experience in, and knowledge about, the complex spectrum of services that make up the long-term care system in the U.S. They should also have well developed relationships with several of the top rated insurance carriers, banks who are qualified to participate in the federally insured reverse mortgage program, and also be knowledgeable about such financing alternatives as the new long-term care annuities and life insurance policies that allow the insured to use the death benefits to pay for home care, assisted living and nursing home care, rather than a long-term care policy when these approaches are better suited for you.

Robert E. O'Toole, LICSW, is President of Informed Eldercare Decisions, Inc., a private company specializing in elder life planning. A founding member of a national network of social work and health care professionals known as the National Association of Professional Geriatric Care Managers, he is a former editor of the Geriatric Care Management Journal.

Bob has contributed chapters to two books on elder care and geriatric care management issues, and has written numerous articles on the delivery of elder care in the private marketplace.

An experienced speaker and workshop leader on elder caregiving issues and financing the costs of long-term care, has also been a lecturer in gerontology at Boston University, Northeastern University, the University of New Hampshire and Stonehill College.

He can be contacted at bob@elderlifeplanning.com

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