Retirement planning: Older Americans face tough long-term care choices
Growing old in America can be wrought with legal problems arising from health concerns, long-term care, and the need for appropriate housing.
The good news is that there are tools and products and strategies that older Americans can use to live as well as possible in the last decades of their lives.
So, what are some of the more common problems older Americans face, and how might they solve or at least alleviate them?
Cognitive decline
Who will make decisions for you when you are no longer able to make them yourself? According to Bernard Krooks, a partner with Littman Krooks and chair of that firm’s elder law and special needs department, the best way to address this problem is by searching for and retaining a certified elder law attorney who can draft the appropriate documents that you’ll need, including durable power of attorney, advance health care directives and the like.
These documents allow others to make financial and health care decisions for you in the event you are incapacitated, according to Krooks, who spoke about elder planning at the most recent Heckerling Institute on Estate Planning conference.
Another useful tool that elder law attorneys use: A revocable trust is a device that gives one or more people – the trustees – the power to manage bank or investment accounts or real estate for one or more other people – the beneficiaries, says Harry Margolis, the president of ElderLawAnswers and a partner with Margolis & Bloom. “If a child is a co-trustee or successor trustee for a senior she can help manage the property or step in relatively seamlessly when necessary,” he says.
Of note, the disadvantages to a durable power of attorney or a trust are that the person may step in before you’re ready or that he proves himself untrustworthy, says Margolis. “Since these arrangements give him access to your accounts, he could use the money for his own purposes,” he says.
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Long-term care
Where will you receive long-term care if you need it? Again, Krooks recommends working with a certified elder law attorney who can discuss the various types of senior housing arrangements available and the different levels of care that each one may address.
According to Krooks, most seniors want to stay at home; but that can be expensive and introduce the risk of elder abuse. According to the Genworth Cost of Care Survey, home health care costs were on average about $4,000 per month in 2017, while an adult day care facility was about $1,500 per month.
“Assisted living is custodial care given in an apartment-like setting; however, it is basically a landlord-tenant type relationship with no federal protections, although there are state laws and licensing requirements,” says Krooks.
According to the Genworth Cost of Care Survey, an assisted living facility cost on average $3,750 per month in 2017.
“Nursing home is the last resort for most,” says Krooks. “It provides 24/7 medical care.”
According to the Genworth Cost of Care Survey, a semi-private room in a nursing home cost on average $7,148 per month in 2017, and a private room was $8,121. Of note, Krooks says the Nursing Home Reform Act of 1987 provides numerous protections regarding payment and admission/discharge issues.
A continuing care retirement community (CCRC) is “a nice option for those seeking one venue to provide the entire continuum of care,” says Krooks.
Of course, you’ll need to address the various financing options available and what’s most appropriate for you. You could, for instance, pay out-of-pocket — if you have the resources — for long-term care.
According to Krooks, Medicare has “very limited coverage of long-term care.” For instance, it doesn’t cover long-term or custodial care, if that's the only care you need. Most nursing home care is custodial care.
Medicare does cover, however, care in a long-term-care hospital; skilled nursing care in a skilled nursing facility; eligible home health services; and hospice and respite care.
The Department of Veterans Affairs also provides some benefits to a few, says Krooks.
There’s also stand-alone long-term care insurance as well as long-care insurance that’s combined with life insurance or an annuity. The trouble with those policies, however, it that they must be purchased while you’re healthy, says Krooks.
“Care costs may be unavoidable, but elder law attorneys can help families stretch dollars by qualifying for Medicaid coverage and certain tax deductions,” says Margolis.
Visit www.longtermcare.gov for information and resources to help you and your family plan for future long-term care needs. Learn more about choices other than nursing home care.
Other options
Some long-term care options you can consider:
- Home- and community- based services
- Home care
- Home health care
- Accessory Dwelling Unit (ADU)
- Subsidized senior housing
- Residential care communities
- Assisted living facilities
- Continuing Care Retirement Communities
- Hospice & respite care
- PACE (Program of All-inclusive Care for the Elderly)
Source: Medicare.gov
Robert Powell contributes regularly to USA TODAY, TheStreet, and The Wall Street Journal. Got questions about money? Email Bob at rpowell@allthingsretirement.com.