Robert M. Slutsky Associates
Elder Law Newsletter

Newsletter 9: October 2006         

Time for ghouls, goblins and pumpkins is here.  Read on. . . .

PACE

PA is paying the Medicare Part D premium for pace members up to $32.54 per month. For dual PACE/Medicare enrollees there will be no doughnut hole. www.aging.state.pa.us

Tips on Choosing a Nursing Home

1. Call the local Area Agency on Aging to get a listing of all the nursing homes in the county.  The number will be in the blue pages of the local phone book;

2. Find out the ownership of the home.  Has it been sold recently?  Is it in the process of being sold?  How long has the management been there?

3. Check with the local ombudsman.  Each Area Agency on Aging has a Long Term Care Ombudsman who addresses complaints about nursing homes.  Too many complaints may indicate that management does not promptly address problems.

4. Check the state survey for the last several years.  It should be easily available and telling.  While even the best homes can have deficiencies they should be limited and the best homes will not have the same unresolved deficiency year after year.

5. Visit. Frequently. Unannounced. On a weekend.  Care should be good all of the time, even on weekends.  Is staff interacting with the residents or are the more demented residents simply sitting in the hall screaming?

6. Have a meal. Remember that people who live in a nursing home have 3 highlights to their day (breakfast, lunch and dinner) and do not have the luxury of going through the Wendy's drive thru or getting a Pan Pizza if they do not like the meals.  If the food is not good, this can make a tough situation worse.  If it is good it can ease help the pain of not being independent.

Tips on Reducing Long Term Care Insurance Costs

1. Reduce the Benefit Period: When you buy a LTC policy you are buying a daily benefit for a period of time, usually 1 year to lifetime.  Most people use the benefit for 3 years or less. 5 years is probably the maximum needed in any event;

2. Buy Younger: The younger you are (though not below age 50-55) the rates are lower;

3. Shared Policy: You and your spouse can buy a single policy and split the benefits;

4. Longer Elimination Period: The elimination period is the time between when you qualify for benefits for health reasons and actually start receiving benefits under the policy.  You choose this period from 0 days to usually 180 days.  During this period you are paying for the care out of pocket.  The longer you pay the lower the cost of the LTC policy;

5. Lower the Daily Benefit: By reducing the daily benefit you buy (usually $100-300.00 per day), you can reduce your premium but still have some coverage.

Tips for Seniors for Preventing Elder Abuse

1. Arrange for direct deposit of your Social Security check;

2. Do not allow anyone access to your ATM cards or password;

3. Choose your POA wisely.  Blood relations do not matter.  Do not choose someone because they are related, only choose them if they are responsible;

4. Be careful about letting friends, family etc. live in your home.  Have a written agreement for expectations, services provided, rent;

5. Remember that house help or aides are your employees.  Treat them with respect but be careful about requests for money and other gifts;

6.  Never, ever, give out personal information on the telephone;

7.  This also means that you should generally not make charitable contributions on the telephone.  If it is a charity you contribute to tell them to mail to your home on record (do not give your address, they should have it) and confirm the address where you are sending donations;

8. Keep valuables from sight and your money in the bank.  Large amounts of cash in the house are simply a bad idea;

9. Maintain contact with friends, family and community resources like the area agency on aging.

Will Baby Boomer Retirements Destroy the Stock Market?

There has been discussion in the financial press that the mass retirement of the Baby Boomers will hurt the stock market.  The theory is that because Boomers influence a disproportionately large portion of the market (through their own stock ownership and the massive transfer of wealth they will be receiving from their expiring parents over the next twenty years) they will start to liquidate all of this wealth all at once to finance their retirements.  By selling their investments at once they will cause the markets to decline precipitously.

A recent study by the Government Accounting Office suggests this fear may be overblown.  The bulk of financial assets are owned by a small share of Boomers.  Those Boomers tend to work longer and have enough income so that liquidation all of their assets is unlikely. 

Furthermore, while not in the study, Boomers are a hard working crew.  Many will work in retirement reducing the need to sell their stocks.  Further with Social Security in question and the likelihood that Medicare will cover less in the future, many Boomers will choose to work to insure against needing to sell all of their assets.

Interest Rates and the Housing Market

Rates have stabilized in the low to mid 6% range for a 30 year no point loan.

The Federal Reserve Bank has paused raising short term interest rates.  However indications that the job market is tight and other structural inflation (despite the recent drop in fuel prices) indicates there may be one or two more rate hikes in the near future.  This may be good or bad for mortgage rates depending if the markets perceive the rate hikes as stamping out inflation or as a harbinger of stronger inflation ahead.

Contrary to what most people believe the Fed does NOT set mortgage interest rates. Mortgage rates are set in the bond markets by traders.  The pricing of the 10 year Treasury Bond is the best indicator of where rates on mortgages are going.  If the 10 year is going up, so are mortgage rates.  Rates on mortgages (and the 10 year Bond) go up when bond traders anticipate that  inflation is likely to increase in the future. They then require a higher rate of return believing that the bonds they trade may be worth less in the future.

Remember that most Home Equity Lines of Credit are adjustable.  You may have taken them out when rates were lower but they can skyrocket (and may already have) as rates rise.  Refinancing into a fixed rate mortgage may be advisable.

People who have seen their adjustable rate and negative amortization loans adjust upwards should consider refinancing NOW.

In addition to Elder Law, our firm practices real estate law and originates mortgages. Please call us at (610) 940-0650 with any questions or for rate quotes.

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Robert Slutsky, Esq. has been practicing Elder Law for 14 years.  He helps families in Montgomery, Delaware, Philadelphia, Chester and Bucks Counties.  Mr. Slutsky has represented  local Area Agencies on Aging, long term care facilities and was a member and officer on the CAPS Board of Directors for over 10 years. Home visits are available. You may reach him at (610) 940-0650, robslutsky@comcast.net or the website at www.slutskyelderlaw1.com.

DISCLAIMER: The content of this Newsletter is for general information only.  It is not intended to be legal, tax, financial, medical or other advice.  The reader should obtain legal, tax, medical or other advice from a competent professional to address his or her specific needs. We do not endorse any particular service provider. If a service provider is mentioned in an article it is simply because we may have come across them in our travels and cannot speak to their quality of service or integrity.