Elderly need money to remain independent; Counselors can help find best way for family to plan long-term care; Aging; Dollars & Sense


Pam Moore recently got a call from a prospective client.

Moore, who is education director for Consumer Credit Counseling of Stark County, Ohio, said the caller had a problem that is becoming increasingly common -- what to do about the high cost of getting old.

The caller, a 68-year-old man, wanted to know how he could continue to live independently after his wife, who is also 68 and has cancer, went to live in a nursing home.

The wife is getting ready to go on Medicaid, the federal and state health care program for the poor, Moore said.

The nursing home is ready to take the caller's wife's Social Security check. But, faced with house and car payments, the caller's living expenses are more than he can afford because of his wife's transition in health care.

Similar situations are playing out in households nationwide. Consider the following:

The National Alliance for Caregiving in Maryland estimates that one in four households is caring for a family member age 50 or older.

The American Medical Association estimates that one-third of families that care for a seriously ill member will spend all or most of their savings.

The Congressional Budget Office expects long-term care costs to rise almost 70 percent to $207.3 billion by 2020.

While government Medicare and Medicaid programs will continue to pay most of the expenses, families and private insurance companies are expected to pay $79.1 billion of the long-term care-giving bill in 2020, according to the budget office.

Despite those statistics, the picture is not entirely grim.

As more Americans live to be 80, 90 and even 100 years old -- and more working and mobile couples are unable or unwilling to care for their parents -- a host of health care and financial services are growing up to meet their needs.

Many of the services enable older people to live independently in their homes. But services such as hot meal delivery, housekeeping and noncritical nursing care typically are not covered by government insurance programs unless the older person is poor.

That's why many legal and financial professionals are advising their middle-age clients to plan for their long-term care, as well as for the care of their parents.

Such planning involves the whole family. Or if there is no family, the friends, church, advisers or neighbors of the aging person.

Although it's a hard topic to broach, planning for long-term care can keep a tough family situation from becoming a disastrous one.

"We've planned our education, our work, where we live. We need to plan what's going to happen when we can't take care of our own affairs anymore," said Joe Gibson, elder-rights attorney for the Area Agency on Aging in Uniontown, Ohio.

"We need a wake-up call," Moore said. "Children need to take responsibility to look into this and build up enough guts to sit down with their families."

One way to start talking is to call a family meeting, Moore said.

Another way is to ask the aging parent or couple for advice about long-term care planning, Gibson said.

Another way is to set aside time at family reunions for planning meetings, said Nancy Mahoney, a senior health care insurance specialist at the Bankers Life and Casualty office in Fairlawn, Ohio.

When you sit down with your family, the first questions are financial. Does the older person have enough income or savings to pay expenses? If not, can family members pitch in? Or, can insurance or government programs provide the care?

"The first thing we like to do with our clients is develop a spreadsheet so they can see where their assets really are," said Kay Feagles, a certified financial planner and principal at Portfolio Supervision Inc. in Canton, Ohio.

Next, Feagles advises clients to consolidate and simplify their assets, such as rolling four or five brokerage or savings accounts into one.

Sometimes, simplifying assets means selling your house.

Some older people move to condominiums, where building maintenance is part of a monthly fee. Others move to independent living apartments in retirement communities or to a child's home.

Assisted living, group home and nursing home facilities are available for those who need regular medical or personal care.

Rather than selling their homes, some older people use their homes to generate income by drawing out equity through such products as reverse mortgages or home-equity lines of credit.

List care needs that are not being met, as well as expected future needs. Then, talk about care options, which could include health care, personal care or housing.

One option to consider is long-term care insurance, said attorney Philip Kaufmann of Kaufmann & Kaufmann law firm in Akron, Ohio.

This insurance, largely unknown 10 years ago, should be examined when you or your parents reach age 50, said Ryan Harding, partner in Harding Harding and Associates in Bath Township, Ohio.

The premiums essentially double between the ages of 55 and 65 and again between the ages of 65 and 75, Harding said.

Unlike government insurance programs, this insurance can cover the costs of home health care, as well as assisted living at retirement communities, Harding said.

As an incentive to buy such insurance, the government has made part of the premiums tax-deductible.

It can make sense for a child who has taxable income to make the premium payments rather than the older parent who no longer reports income.

Because of the significant cost of long-term care insurance, Mahoney usually does not recommend the insurance to clients who have less than $100,000 in assets or income, unless having a choice of care is most important.

Another important step in the planning is to find out about community services that can help the older person remain in his or her home.

Most people want to stay at home, Gibson said. Initially, they are going to plan to stay independent.

A good place to start is to call your local agency on aging.

These agencies refer families to private and public care sources, such as adult day care centers, hot meal programs and in-home nursing programs, as well as housing agencies.

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