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PLANNING TO PAY FOR LONG TERM CARE
Douglas G. Chalgian, CELA
& Amy R. Tripp, J.D.
Chalgian & Tripp Law Offices
East Lansing – Jackson - Ithaca
chalgian 2006
Housing Options Stay Home
Independent Living Apartment
Assisted Living/Adult Foster Care/ Home for the Aged
Nursing Home
Housing Options Stay Home
With assistance coming in With Caregiver respite With Adult Day Care
Independent Living Apartment With assistance coming in
Assisted Living/Adult Foster Care/ Home for the Aged With assistance coming in Lockdown Memory Unit
Nursing Home
Housing Spectrum
Housing SpectrumMonthly costs
$0 - $15,000
$3,000 - $5,000 $5,000 - $7,000
Factors in Determining Options
Financial Resources Level of Need Spouse or others
dependent upon the same resources
Quality of Care
Financial Resources Private Resources
Assets and Income Reverse Mortgages
Family Caregivers LTC Insurance Government Programs
Medicaid Veterans Pensions
(Service during period of conflict)
Housing Spectrum
Private Funds
Veterans Pensions
Medicaid LTC Insurance
Private Resources Assets and Income
Private agency Home Care: $15 - $20 per hour
4 hours per day @ $18 per hour = $2,160 /month
10 hours per day @ $18 per hour = $5,400 /month
24 hours per day @ $18 per hour = $12,960/month
Adult Day Care: $6 - $15 per hour
Private Resources Informal Paid care giving: common but
fraught with potential problems Financial Exploitation Worker’s Comp and liability for injuries Tax Withholding Issues
Private Resources The realities of family
care giving Cost in lost wages,
benefits and retirement planning for caregiver
Cost in health of caregiver
Caregiver burnout Family dynamics
Private Resources The Good and Bad of Reverse Mortgages
A source of funds for elder of modest means, can be accessed to stay in the home longer
Sold on overstated benefits: the next wave of senior exploitation?
High up front fees Compels sale of home when (1) equity is depleted
or (2) move to higher level of care Often contrary to good “Medicaid planning.”
Long Term Care InsuranceComparing Apples
and Oranges Daily Benefit Rate COLA Elimination Period Coverage triggers: Cognitive decline + ADL’s? Covered services: in home, skilled care, assisted
living
Long Term Care Insurance Not the answer for the current crisis. Part of the answer for the next wave of elders? Whether long term care insurance makes sense is a
function disposable income after retirement. Growth of group coverage will likely continue to be
main source of expansion of LTC insurance sales. At this time tax breaks are insufficient incentive for
those who cannot otherwise afford coverage Deficit Reduction Act of 2005 opens the door to
possible Robert Woods Johnson-like public-private experiments in Michigan and other states.
Government Benefits Veterans Pensions
For those who served in Military during periods of conflict
Asset tested Available to pay for caregivers in the home & for
assisted living AFC/HFA costs
Government Benefits Medicaid
Home Help
Home and Community Based Waiver
Nursing Home Medicaid
Medicaid Home Help
Limited hours of personal needs “Traditional” Medicaid financial eligibility rules:
no spousal protections, etc.
Medicaid Home and Community Based Waiver
Services LTC asset eligibility standards: includes spousal
protections Income Cap: $1,809
No spend down or spousal allowance Limited “slots” Limited services per client Prioritize slots for transition from NH
Medicaid In Nursing Home
LTC asset eligibility standards: includes spousal protections.
Income only capped by NH private pay rate
The Cutting Edge of LTC Financing
The Governor’s LTC Task force: Single Points of Entry Money Follows the
Person Case Mix
Reimbursement
The Cutting Edge of LTC Financing
Deficit Reduction Act of 2005 Robert Woods
Johnson Partnerships Money Follows the
Person Pilot Projects Discourage “Medicaid
planning”
The Cutting Edge of LTC Financing Movement toward eliminating the “institutional
bias” in LTC More efforts to encourage savings and LTC
insurance The pending baby boom crisis Public policy debate over the role of Medicaid
planning. “individual responsibility” versus “disease discrimination”
Introduction of means testing to Medicare through Part D.
Planning to Pay for Long Term Care
Level of Need
LTC Insurance
Medicaid
Family Dynamics
Quality of Life
Private Resources
Family Care Giver
Nursing Home
Assisted Living
Thank You
Douglas G. Chalgian, CELAAmy R. Tripp, JD
chalgian 2006
Planning to Pay for Long Term Care