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Our country may be facing a simultaneous growth and recession… unfortunately, according to journalist John Leland, the two seem to be at odds. What we are referring to is the growth of the elderly population and the recession of funds available to help this aging community pay for the care they need.

The economic downturn of the past few years has hit the elderly with a double-whammy. Many of them lost close to all of their savings when the stock market bottomed out, and now budget cuts to state-funded home-care services threaten to force many of them out of their homes and into hospitals or nursing facilities.

“’I’m not getting a cost-of-living adjustment, and now I’m not getting food,’ said Joyce Plennert, 83, who is on a waiting list for Meals on Wheels in Palatine, Ill. ‘Now I’m worried my home services will be cut. Without that, I’d be in a nursing home, if I could find one with room.’”

According to the above-mentioned NY Times article, a number of states have already made cuts to home-care services, including Alabama, Arizona, California, Colorado, Florida, Kansas, Mississippi, Missouri, Nevada, New Jersey, New York and Texas. “The situation is grim, and it’s safe to say that present trends are expected to continue,”

These budget cuts impact more than just senior citizens—they affect the professional caregivers and home aides who lose their jobs when state programs are cancelled, as well as the families of the elderly. When these seniors lose their ability to live at home it’s their families who will have to pick up the slack either by contributing to the costs of care or more often by become the caregiver themselves.

If you or a loved one is facing a loss of benefits due to budget cuts don’t be afraid to explore your options. Geriatric care managers can help families through confusing times, and other advisors such as elder lawyers, estate planners, financial planners and others can offer invaluable advice when creating your plan for the future.

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“Too rich for most government-funded social programs and not rich enough to pay for full-time, long-term care services.”

Does this sound familiar? It is exactly the kind of financial situation most elderly find themselves in today, and one which requires many adult children who are still raising their own kids to also care for their parents. That is the situation in which Michelle Singletary, Washington Post staff writer, finds herself in today. In her W.P. article Prepare now for a future that might include caring for your elderly family, she describes the feelings of frustration, admiration, and obligation that come with caring for her elderly father-in-law.

Singletary writes movingly about the realities of caring for an aging relative, but what she seems most determined to convey is that it is never too early to start thinking about what your own parents’ future holds. “If you have even an inkling that you may become the caregiver for an aging parent or relative, start planning for it now. Ask questions about the person’s finances. Collect information from community and nonprofit organizations. Get your own finances in order because you’ll probably have to pitch in financially.”

Part of planning for your aging parent or relative is thinking about Medicaid, Long-Term Care Insurance, and the best way to save and protect your assets. Call our firm and let us help you—and help your aging parents.

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Are you ready for the financial implications that come with growing older? As the average American lifespan grows longer the cost of aging becomes more and more prohibitive.

A recent segment on NBC’s The Today Show is takes a close look at long-term care and the price individuals and couples are required to pay as age related illnesses make it more and more difficult for senior citizens to live at home without care.

The show tells the story of “Roberta” and her husband, a couple married for 44 years, who felt there was no choice but to divorce after Roberta’s husband was diagnosed with dementia and the subsequent nursing home bills quickly depleted their assets. After paying no less than $75,000 in care costs, Roberta was advised by her attorney that one of the only ways to conserve her remaining assets for her own support would be to divorce her husband, allowing him to qualify for Medicaid coverage.

With growing numbers of senior citizens being diagnosed with debilitating elderly illnesses, and the cost of nursing care on the rise, more and more couples are finding that without some kind of long term care insurance they simply can’t afford the cost of aging. Medicaid can help, but as the story of Roberta and her husband shows, Medicaid doesn’t come without its own price.

Plan ahead for your own old age by talking to your advisors about Medicaid and your options for long-term care insurance.

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In the estate planning business we help people plan for the future, not only for their children and heirs but for themselves as well; which is why we are pleased to share the news that it just got a little bit easier to plan for your own financial future, because according to this article on Emax Health the IRS has just approved higher tax deductions for long-term care insurance.

Advancements in health care and our standard of living mean that Americans are living longer than ever before, but that doesn’t mean they’re living better in their old age. Very few of us get to be healthy and hearty until our dying days; rather, most aging Americans will experience a slow decline in their mental and physical health, and require some kind of nursing care, either at home or in a nursing facility. Unfortunately, the cost of that care is prohibitively expensive, and once a patient’s own financial resources have been exhausted the burden then falls on their family, or they end up relying on government benefits.

Long-term care insurance is one way of planning ahead to pay for the nursing care that most of us will almost assuredly need. The higher tax deductions approved by the IRS offer one more reason to consider long-term care insurance: by planning for your future you can save on your taxes right now. But do your research and consult with a professional before you jump in, because the deductions are available only on “qualified” policies, and there are limits to how large a premium can be deducted depending on the age of the taxpayer at the end of the year.

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Alzheimer’s disease affects as many as 5.3 million people in the United States; which means it affects as many as 5.3 million families, because Alzheimer’s is a disease that affects everybody it touches—husbands, wives, children and grandchildren—they all bear witness to their loved one’s slow demise.

Sadly, emotional stress is not the only stress that accompanies Alzheimer’s disease; those loved ones serving as caretakers may carry a huge amount of financial stress as well. According to this article by Denise Bonilla the cost of caring for an Alzheimer’s patient can run anywhere from $64 a day to $77,380 a year, and because Alzheimer’s disease can be such a long-lasting disease (a person can suffer from Alzheimer’s for up to 20 years) the costs of care can end up being astronomical. It’s obvious that people can’t do it alone.

Some of the options to help Alzheimer’s patients pay for medical expenses are long-term care insurance or Medicaid (Medicare doesn’t cover the cost of long-term care). Long-term care insurance can be very helpful… if you’ve thought ahead and purchased the policy before you or your spouse began suffering from symptoms of Alzheimer’s. As for the government programs, those also can be helpful… if you fall in the right category and know how to navigate the complex system.

Unfortunately, learning how to navigate the system is not something you can do in an hour or two. Because your experience will depend on a number of unique factors we can’t give you an easy set of instructions to follow. The best advice we can give is to say that right now, the best way to navigate the Medicaid/Medi-Cal system is to find someone who knows the system to assist you. Most estate planning and elder law attorneys help their clients with these issues on a regular basis. If you want to ensure that you and your loved ones will be cared for no matter what the future may bring, don’t be afraid to ask your attorney for help.

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It’s no secret that long-term care insurance companies can and often do raise premiums on policyholders. Still, a few companies have been able to truthfully say “we’ve never had a rate increase.”

Now, one of the biggest players in the industry, Genworth Financial, can no longer claim that. For the first time, Genworth has said it will raise premiums for existing policyholders. The company has filed in all 50 states for premium increases of 8 percent to 12 percent on most of the policies it sold before 1997.

According to the Dow Jones Newswires, Genworth’s move has raised fears that the long-term care insurance industry may return to the dark days when many insurers raised premiums rapidly, and some sold off policies and exited the business altogether.

Pressure on insurers to keep premiums low and level has made the products unrealistically cheap, Cynthia Zalewsky, founder of Saratoga Investment Solutions, told Dow Jones.

“Clients might not think they’re cheap,” Zalewsky said, “but they’re cheap.”

The principal reason for Genworth’s rate rise is that its actuaries overestimated the percentage of policyholders who would let their policies lapse — that is, stop paying for coverage, forfeiting all premiums paid to that point.

Genworth’s actuaries were counting on 5.5 percent of all consumers who bought policies before 1997 at some point voluntarily ceasing coverage. In fact, only 1.5 percent have dropped their coverage before claiming benefits.

According to Dow Jones, “financial advisors who know the products well are almost unanimous in predicting that more [insurer rate] increases lie ahead.”

Without major structural changes, long-term care insurance will never play more than a small role in financing long-term care, according to a new report. The report, from the Center for Retirement Research at Boston College, examined the long-term care insurance industry and found major benefits but also major problems.

According to the report, the benefits of long-term care insurance include a greater choice of care settings and providers than under Medicaid and the potential to reduce Medicaid spending by states. However, despite the benefits, long-term care insurance has not been popular and sales of long-term care policies have not been increasing in recent years.

The report identified several reasons for people’s reluctance to purchase long-term care insurance. The main reason could be that long-term care insurance is expensive–the average premium for a 65-year-old is $2,000 a year. According to the report, policies may be poorly priced. For a mid-range policy, a 65-year-old will receive about 80 cents in benefits for every dollar paid in premiums. Another reason policies aren’t more popular is the confusion over what Medicare covers. Many people incorrectly believe that Medicare will cover a stay in a nursing home.

In order to increase sales, long-term care insurers have tried improving benefits, but this has caused an increase in premiums, according to the report. Carriers may now try to reduce premiums by reducing inflation protection, but this means benefits will cover less nursing home costs. The report concludes that long-term care insurance has a role to play in financing long-term care, but without structural changes and an increase in the pool of buyers, it isn’t likely this insurance will ever have a big role in financing long-term care.

An article on the first page of The Wall Street Journal July 19, 2007, “Note to Medicaid Patients: The Doctor Won’t See You” highlights the need for families to leave funds in trust for children and other relatives with special needs. The article describes the plight of some Medicaid beneficiaries who cannot find necessary care because doctors have dropped out of the program due to low reimbursement rates.

Many parents of children with special needs do not provide for them in their estate plans because they see no need. The children are well taken care of under Medicaid, Supplemental Security Income and state programs, often funded through the state’s Departments of Mental Health or Retardation.

However, we cannot be certain of the future. Will these state programs still exist? Will doctors continue to accept Medicaid?

Insurance against such uncertainties can be created by leaving funds in a specially-drafted trust for a child or grandchild with special needs. While it may be difficult to leave enough funds to pay for all of the needs of the beneficiary, any amount can fill in gaps in publicly-funded programs or supplement the meager support they provide.

The “Myths of the High Medical Cost of  Old Age and Dying” identifies and dispels seven myths about caring for older people at the end of life.

Myth 1: The growing number of older people has been the primary factor driving the rise in America’s health care costs. Fact: Population aging is not the principal determinant of rising health care costs.

Myth 2: As the population ages, health care costs for older Americans will necessarily overwhelm and bankrupt the nation. Fact: Population aging need not impose a crushing economic burden, especially if we start now to conduct the necessary research and develop policies on health care at the end of life.

Myth 3: Putting limits on health care for the very old at the end of life would save Medicare significant amounts of money. Fact: Limiting acute care for the very old at the end of life would save only a small fraction of the nation’s total health care bill. The proportion of Medicare spending attributable to beneficiaries in the last year of life has remained stable over the past two decades.

Myth 4: Aggressive hospital care for the aged is futile; the money spent is wasted. Fact: Many older people who receive aggressive care survive and do well for an extended period.

Myth 5: It is common for older people to receive heroic, high-tech treatments at the end of life. Fact: Only a fraction of people over age 65 receive aggressive care at the end of life. The older people are, the less likely they are to receive aggressive care when dying.

Myth 6: Medicare covers everything that older adults need in terms of their health care. Fact: Medicare does not cover several essential components of health care for older Americans. For example, Medicare pays for custodial services only in the setting of acute illness; it does not pay for long-term care.

Myth 7: If all older patients had living wills or other kinds of advance directives, it would resolve dilemmas of how aggressively to provide care. Fact: Living wills and other forms of advance directives are not a panacea. They often have little impact on or relevance to end-of-life decision-making. Physicians and health care professionals need to be trained in communicating and advising patients and families about their options, potential outcomes, and time-limited trials, especially in the face of advancing medical technology.

To download the full report or purchase a hard copy visit www.ilcusa.org or email publications@ilcusa.org. The “Myths of the High Medical Cost of Old Age and Dying” is part of the ILC-USA’s project on Ageism In America with generous support from the Open Society Institute.

Admitting a loved one to a nursing home can be very stressful. In addition to dealing with a sick family member and managing all the details involved with the move, you must decide whether to sign all the papers the nursing home is giving you. Nursing home admission agreements can be complicated and confusing, so what do you do?

It is important not to rush, but rather to read. Read the agreement carefully because it could contain illegal or misleading provisions. If possible, try not to sign the agreement until after the resident has moved into the facility. Once a resident has moved in, you will have much more leverage. But even if you have to sign the agreement before the resident moves in, you should still request that the nursing home delete any illegal or unfair terms.

Two items commonly found in these agreements that you need to pay close attention to are a requirement that you be liable for the resident’s expenses and a binding arbitration agreement.

Responsible party: A nursing home may try to get you to sign the agreement as the “responsible party.” It is very important that you do not agree to this. Nursing homes are prohibited from requiring third parties to guarantee payment of nursing home bills, but many try to get family members to voluntarily agree to pay the bills.

If possible, the resident should sign the agreement him or herself. If the resident is incapacitated, you may sign the agreement, but be clear you are signing as the resident’s agent. Signing the agreement as a responsible party may obligate you to pay the nursing home if the nursing resident is unable to. Look over the agreement for the term “responsible party,” “guarantor,” “financial agent,” or anything similar. Before signing, cross out any terms that indicate you will be responsible for payment and clearly indicate that you are only agreeing to use the resident’s income and resources to pay.

Arbitration provision: Many nursing home admission agreements contain a provision stating that all disputes regarding the resident’s care will be decided through arbitration. An arbitration provision is not illegal, but by signing it, you are giving up your right to go to court to resolve a dispute with the facility. The nursing home cannot require you to sign an arbitration provision, and you should cross out the arbitration language before signing.

The following are some other provisions to look out for in a nursing home admission agreement.

Private pay requirement: It is illegal for the nursing home to require a Medicare or Medicaid recipient to pay the private rate for a period of time. The nursing home also cannot require a resident to affirm that he or she is not eligible for Medicare or Medicaid.

Eviction procedures: It is illegal for the nursing home to authorize eviction for any reason other than the following: the nursing home cannot meet the resident’s needs, the resident’s heath has improved, the resident’s presence is endangering other residents, the resident has not paid, or the nursing home is ceasing operations.

Waiver of rights: Any provision that waives the nursing home’s liability for lost or stolen personal items is illegal. It is also illegal for the nursing home to waive liability for the resident’s health.