Anyone born between 1946 and 1964 is a Baby Boomer – the explosion in population during that time was the result of the homecoming of veterans after a five (5) year long WWII “male” absenteeism followed by the prosperity of the 50’s and 60’s. The first of the boomer population just hit retirement age in 2011 and will over the next three decades be the new elderly and infirm.
Half the population over age 85 currently needs some type of long term care for one or more chronic conditions so prevalent in contemporary societies. These conditions are all unfortunately household words today:
- Dementia and Alzheimer’s Disease
- Heart Disease
- Rheumatoid Arthritis
- Falls, sprains, breaks and Osteoporosis
B. Prospective Payment Systems
Medicare: covers only 100 days in a skilled nursing facility per spell of illness.
Medicaid: Federal-State program to pay for custodial care at home and skilled care in a nursing home. This program pays for 2/3 of all the millions of individuals in nursing homes in America.
Private Pay: Just like it sounds – the bill comes and you pay it from your savings. For a good quality nursing home in Long Island the annual cost is about $200,000 - $240,000.
Long Term Care Insurance Policies: Great option if you can afford the premium and pass the medical and cognitive screening.
Charitable and Religious Nursing Facilities: May take some extensive research and applications but there are some facilities that will take in elders in need for very little cost.
Long term Care is a creature of Government. It originated as part of government benefits laws over the years since it was a growing problem that needed to be addressed. The insurance companies caught on the 1980’s until most realized they could not quantify the number of people that would need future care, the type of care, the cost of that care and how long they would survive. They found mortality was a much safer event to actuarially determine and in turn, insure. Only a few carriers offer long term care insurance today. Genworth, John Hancock MetLife and Transamerica are among the biggest.
Medicaid is a poverty level insurer and payer of last resort. You must be indigent to qualify (sometimes).
In NYS a 72 year old individual that has no assets other than his lifetime accumulated $2,000,000 IRA rollover that is in payout status can qualify for Medicaid tomorrow provided they are otherwise eligible.
A 72 Year old individual with their life savings of $40,000 in a bank account is not eligible due to excess resources over $14,850.
An 82 year individual who owns a 5,000 square foot home valued at $1,800,000 is eligible if they have an adult child move in the house for 2 years prior to applying for Medicaid and then transfer the deed to that child (and is otherwise eligible).
An 82 year old individual who rents a subsidized studio apartment with their social security income and has $20,000 in the bank is ineligible for Medicaid due to excess resources.
An individual whose only asset is a 2015 Bugatti ($1,000,000 + super car) is eligible for Medicaid.
If the same individual owned a 2001 Toyota ($7,000) and a 2013 Minivan ($30,000) they are ineligible due to excess resources.
C. Health Care Reform and LTC Funding
Hillary Care: Major LTC Reform was first attempted in 1996 under the HIPPA health care reform act set forth during the Clinton Administration. Under that law any person who “knowingly and willfully disposes of assets to become eligible for Medicaid may be fined $10,000 and imprisoned for one year”. It was pet named the “granny goes to jail law”. It was repealed shortly after its enactment after major public criticism.
DRA 2005: The Deficit Reduction Act of 2005 was a major piece of legislation that profoundly changed the Medicaid rules and its accessibility. It was really a surprise to practitioners and dropped in the laps of Americans and their advisors in the last week of the year in 2005. The main goal in the reform was to come down hard on middle class elderly to keep them from engaging in Medicaid Planning by transferring assets to financially qualify for long term care benefits.
There were committee reports from Congress that showed the intention of such a hard line of legislation against the elderly was born not just out of current fiscal concerns about Medicaid budgeting but more so enacted to send a clear message to the glut of aging baby boomers that they should self-insure for their future.
Obama Care – The Patient Protection and Affordable Care Acts sets forth an expansion of Medicaid rather than reform to a program that is already struggling to stay fiscally afloat. These laws offer greater access to Medicaid by increasing the eligibility resource minimums and enticing States with funding provided they expand their own programs with an obvious goal in line with all of Obamacare of having more Americans dependent upon the government for their health care.
D. Elders Refusing Help
Anyone is entitled to accept or refuse help with their own affairs. That is one of the very freedoms that inures to every American citizen. Personal decisions such as driving an automobile, health care, financial and end of life are the key to maintaining one’s own self-respect, integrity and independence.
Sometimes elders refuse care for the wrong reasons such as not being aware that their refusal of help could put them at harm either physically or financially. When a person can no longer make rational decisions necessary to manage their own property or personal affairs, the law allows someone else to make these decisions for them.
All adults are presumed competent to make their own decisions so the only way to override that presumption is to petition the Court for a guardianship. The court must then balance the elders right to refuse help and their right to self-determination versus appointing a child or another person to make those decisions for them.
In some states there is a psychological evaluation and cognitive analysis completed to determine the need for a guardian. In New York however, the analysis reverts to what is called “function limitations”. A functional assessment involves the basic activities of daily living such as dressing, eating, walking, hygiene and paying bills. A court appointed evaluator will make a personal visit to the elder’s residence and write a report for the court. The court evaluator will make a determination of the need for a guardian and then present it to the Judge. If the parties involved or the elder disagree with the determination, then there will be a full court hearing. Ultimately, a final decision is rendered by the Judge.
Guardianship should be a last resort but many times it is the only option when an elder is putting themselves at risk of harm and refuse outside assistance.