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Long Term Care Insurance 101

Don’t Taint Nostalgia

Only 11% of Americans aged 65+ own long term care insurance (Source: Urban Institute). For people between 55-60, only 5% have long term care insurance. So it’s likely that you – the one reading this article – are not prepared financially for long term care. That’s a problem, because if you are not prepared financially for long term care, you can ruin your family and exhaust the assets you’ve accumulated throughout your life.

So imagine this…you’ve worked your whole life. You’ve been a successful business person that has provided a wonderful life for your family. You’ve watched your family grow from perhaps just the two of you, to four of you to now eight little grandkids jumping on your knee while enjoying a cool summer night at your cottage at the lake.

But here’s the rest of the scenario, and you’ll see how quickly things go from “Hmmm…” to “My goodness, this is a crisis!”

You’re 70 years old now. You’ve got your physical issues – a bum knee, a dull pain in the shoulder. But otherwise, you feel good, and still work a little bit to keep your mind fresh.

A year or two goes by, and now you’re starting to become more forgetful – or at least that’s what your spouse and children have started to tell you.

A few more years go by, and you’re 77. In your mind, you don’t think you’re any different, but the people around you are noticeably irritated because they keep on saying you’re repeating yourself, and forgetting the grandchildren’s names. Another year or two go by, and it’s now a health care crisis that puts you in a memory care facility with beautiful grounds and a lush garden of flowers – and it costs $6,000 per month.

With Long Term Care Insurance

This is simple…it kicks in, and the financial burden on your family is minimal allowing them to provide loving care to you every day. Long Term Care Insurance is the tool that allows you to be the one coordinating care for your loved one, not providing it.

Without Long Term Care Insurance

Your spouse, who is also getting older, is reeling every day, going from sadness to anger to an odd feeling of empowerment. But in addition to the emotional roller coaster, he or she now needs to figure out how to pay for this new level of care. There’s no insurance, so the family is brought together to discuss how this is all going to be paid for.

“Well, we have his pension plan still a little bit. That, plus social security and Medicare help some.”

“Yeah, but not $6,000 per month some! And you have your own expenses, don’t forget.”

“So maybe we need to liquidate some of our investments. We have some stock, mutual funds…I’ll call my financial advisor tomorrow.”

“OK, that’s a good start. But that also needs to be available to you as you continue through retirement. We need to find a balance.”

“We can tap a bit into the trust for little Jimmy. Not much…it’s still there to hopefully pay for his higher education.”

“We could do that. It would be a real shame, but we could that.”

“We could sell the cottage. That would cover the majority of care from here on out.”

“Yes, I suppose we could do that. We’re going to need to make a decision quick, because the bills are going to start racking up. I have a real estate agent that can probably get to work now.”

“That’s great. I’ll call the financial advisor. You call your real estate friend. We can hold off the nursing home for a week or so, but we’re going to need to get this moving fast.”

“Such a shame. We all loved coming to the cottage. It’s been our most special place for decades.”

“I know, honey. We’ll always have the memories, though.”

The memories of the cottage and the hope for what the family trust would provide for the next generation are now associated with your long term care needs.

Nostalgia tainted.

Long Term Care – Until You Live It

As many of you know, our family made a tough decision to transition my father, Ed, into the memory care unit of a local Assisted Living Facility. Frankly, for my mother, his primary caregiver, it’s been a huge relief, and our family is very happy the decision was made. Having a family member in need of extended care can cause emotional, physical and financial hardships that you can’t imagine, until you live it. But the “financial hardship” is the only one that can be proactively addressed. By doing so, you can now focus your attention on the care giving and where it is to be received as opposed to having to search for ways to keep up with long term care costs.

Now that my family is living it, I want everyone to know one thing…SENIOR CARE IS VERY EXPENSIVE.

If my parents had not addressed long term care before it became an issue, a huge financial drain on our entire family would have been the result, at best! As our baby boomer parents continue to age – and as us Gen-Xers continue to age – long term care insurance is going to be as important as life and disability insurance. So with that, I hope you take the time to read this article about long term care costs going up. Now is the time to protect yourself and your family from these rising costs. A small investment now will pay off significantly in the future.

Families struggling to care for elderly turn to mediation By Encarnacion Pyle

EAMON QUEENEY | DISPATCH FILE PHOTO
Trained mediators increasingly are helping families at odds when it comes to resolving emotional disputes over the care and finances of aging parents.
By Encarnacion PyleThe Columbus Dispatch  •  Tuesday October 27, 2015 4:55 AM
When she called her out-of-town daughter, the elderly woman spoke with a slur and could barely put words together.Medical officials at the hospital determined that the 89-year-old woman had had a series of small strokes. They also diagnosed dementia.After she went home, it became clear that the central Ohio woman was neither physically nor mentally capable of caring for herself, but she refused to leave her home of 50 years.

One daughter lives 500 miles away, making it difficult to oversee her mother’s daily care. The other lives nearby but said she was overwhelmed with other family and work obligations.

So the out-of-town daughter, who had power of attorney, hired a home-care agency and took their mother’s checkbook away because she was giving money to anyone who asked.

It wasn’t long before tensions between the sisters escalated to an all-out war. At an impasse, it was suggested the family seek the help of an elder-care mediator.

Trained mediators increasingly are helping families at odds when it comes to resolving emotional disputes over the care and finances of aging parents.

The mediators come from a wide range of professional backgrounds, including business, education, law, social work and psychology.

At the heart of many of the disputes are “misunderstandings, miscommunications and underlying issues that have nothing to do with the problem at hand,” said Christopher Scott, who with a partner runs Capital Mediation Associates, a private practice in Columbus.

“The beauty of mediation is, it provides an opportunity for all sides, including the aging adult whenever possible, to talk and find common ground,” said Scott, who worked with the elderly woman and her two daughters.

Lawyers and mediators have helped resolve disputes involving aging adults for years. But more recently, experts have pushed for specialized training in the unique and increasingly complex issues related to helping people live well into old age.

Caring for an older loved one can be an emotional task, said Shirley Whitenack, president of the National Academy of Elder Law Attorneys. There often are difficult decisions to make, and the aging parent or adult is not always able to make those decisions.

Common issues: When should an elderly person give up driving? Should the older person move from home? Who should provide which care-giving duties? Who should get guardianship or power of attorney?

Other issues that often have to be resolved include the older adult’s end-of-life decisions and how assets will be distributed after death.

“A lot of times, what they’re really fighting over, like the Smothers brothers, is who mom liked best,” Whitenack said.

In the worst situations, difficult discussions can drive a lasting wedge between brother and sister, child and parent, or family members and critically important outside caregivers, said Shelley Whalen, executive director of Community Mediation Services of Central Ohio, a nonprofit conflict-management resource center in Columbus.

Unlike lawyers who usually represent one side, mediators are an impartial third party who can help families come to a consensus through a voluntary process designed to be less adversarial — and cheaper — than going to court, Whalen said.

To be effective, all relevant family members should take part, she said. Geriatric-care managers, financial planners and other professionals familiar with the older person’s needs also can be helpful in finding solutions.

Mediators don’t make decisions for people as a judge or arbitrator would. And the conversations happen in private, Whalen said.

“The whole goal is to help parties come up with solutions that are acceptable to them and not to dictate those decisions,” she said.

Though faster, cheaper and, most important, less acrimonious than the alternatives, there’s still a lack of public funding to make mediation available to people of all incomes, especially if the mediation hasn’t been court-ordered, Whalen said.

Her nonprofit group charges a sliding fee of $40 to $120 an hour for elder mediation because she hasn’t been able to find outside funding to subsidize the costs. By comparison, the mediation fees for people dealing with child-custody issues drop as low as $10 an hour.

As a result, Whalen said, she is able to take on fewer elder-care cases at a time when the aging population is increasing.

In 2013, about 45 million adults 65 or older lived in the United States. By 2030, about 1 in 5 Americans — 72 million people — will be in that age group, according to U.S. Census figures.

Every month, 15,000 Ohioans turn age 60.

“The need for mediation is only going to explode,” Whalen said.

Franklin County Probate Judge Robert G. Montgomery started one of the state’s first court-run mediation programs shortly after taking the bench in 2011.

“It’s been very successful,” he said. “About 7 out of 10 cases that have been referred to mediation have resulted in a resolution.”

The court has sent an average of 30 matters to mediation each year since, which would mean about 150 disputes since then that didn’t have to go to trial, he said. The services are free to families, as long as they use court-employed mediators.

“It saves a lot of time and money,” said Michael Moran, director of the probate court’s program who does most of the mediation work himself. “Let’s face it: Who wants to spend $40,000 to $50,000 on legal fees when you don’t have to?”

It also promotes healing between family members, in ways going to court can’t, Moran said.

In 2004, lawmakers passed a law that allows probate courts to charge up to $15 a case to create a dispute-resolution fund. The Franklin County court did that and last year spent a little more than $29,000 from the money it collected.

For even more difficult elder-care cases, the Montgomery County Probate Court in Dayton is testing an “elder-caring coordinator” program similar to those designed to help parents in contentious divorce cases.

“Mediators are good for simple issues, but complex cases often take a lot more time and need much more hand-holding,” said Arvin Miller, a magistrate with the Montgomery County court.

Say you have an older husband and wife who both need guardians, he said. And they each have children from a previous marriage who don’t agree what should be done.

The coordinators for that case would be more social worker than mediator and would work with families for up to three months, much longer than regular mediation, Miller said.

As for the 89-year-old central Ohio mother and her daughters, they came to an agreement after three one-hour mediation sessions.

On the urging of her geriatric-care manager, the mother agreed to accept caregivers into her house.

The daughter who lives in town promised to visit the mother twice weekly and keep her sister apprised of how she is doing. And the out-of-town daughter agreed to provide her sister with monthly finance reports.

epyle@dispatch.com

@EncarnitaPyle

Baby boomers will drive explosion in Alzheimer’s-related costs in coming decades, study finds

Models show that the number of patients will more than double in 40 years, and costs associated with their care will nearly quintuple

Perkins_Robertby Robert Perkins
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As baby boomers reach their sunset years, shifting nationwide demographics with them, the financial burden of Alzheimer’s disease on the United States will skyrocket from $307 billion annually to $1.5 trillion, USC researchers announced today.

Health policy researchers at the USC Leonard D. Schaeffer Center for Health Policy and Economics used models that incorporate trends in health, health care costs, education and demographics to explore the future impact of one of humanity’s costliest diseases on the nation’s population.

Other key findings include:

    • From 2010 to 2050, the number of individuals aged 70+ with Alzheimer’s will increase by 153 percent, from 3.6 to 9.1 million.
    • Annual per-person costs of the disease were $71,000 in 2010, which is expected to double by 2050.
    • Medicare and Medicaid currently bear 75 percent of the costs of the disease.

In late stages of the disease, they need help with personal care and lose the ability to control movement which requires 24-hour care.

Julie Zissimopoulos

“Alzheimer’s disease is a progressive disease with symptoms that gradually worsen over time. People don’t get better,” said Julie Zissimopoulos, lead author of the study and an assistant professor at the USC Price School of Public Policy.

 “It is so expensive because individuals with Alzheimer’s disease need extensive help with daily activities provided by paid caregivers or by family members who may be taking time off of work to care for them, which has a double impact on the economy,” she said.

“In late stages of the disease,” she added, “they need help with personal care and lose the ability to control movement which requires 24-hour care, most often in an institutional setting.”

Zissimopoulos collaborated with Eileen Crimmins of the USC Davis School of Gerontology and Patricia St.Clair of the USC Schaeffer Center on the study, which will be published in Forum for Health Economics and Policy on Nov. 4.

The team found that delaying the onset of Alzheimer’s even a little can yield major benefits — both in quality of life and in overall costs.

According to the U.S. Census Bureau, in 2012, 43.1 million Americans were 65 and older, constituting 14 percent of the population. By 2050, that number will more than double to 83.7 million, constituting 21 percent of the population.

Medical advances that delay the onset of Alzheimer’s by five years add about 2.7 years of life for patients. By 2050, a five-year delay in onset results in a 41 percent lower prevalence of the disease in the population and lowers the overall costs to society by 40 percent, according to the team’s research.

“Our colleagues in the medical field are working on ways to understand how the disease interferes with brain processes — and then stop it,” said Zissimopoulos, who is also an associate director at the USC Schaeffer Center. “Investment in their work now could yield huge benefits down the line.”

The research was funded by the National Institutes of Health.

Alzheimer’s disease_graphs