Current information tends to indicate that up to 80% of seniors will spend the last 2-5 years in some type of care facility. If this information is accurate, then all seniors should make their best effort to plan for this consequence as best they can today. This booklet is a supplement to my “Orange Booklet” which covers the financial opportunities that married seniors can take advantage of under the Spousal Resource Allocation provisions and Decree of Separate Maintenance provisions recognized by Nevada Medicaid law.
In this “Blue Booklet” we will consider the goals, steps and strategies of planning for long term care other than the financial options offered through Medicaid qualification. I will use the analogy of planning a vacation to help illustrate a successful planning process by including brackets as examples [example].
Primary Planning Goals
Just like planning a vacation, although the individual options available for long term care for seniors can be overwhelming and complicated, if the process is broken down into its essential parts, a clear strategy emerges. Successful long term care planning breaks down into two primary goals:
#1 – Selection of proper residential placement [where you are going and how you will get there], and
#2 – Financial planning for placement [how much will it cost and how to pay for it].
Placement and “Needs Analysis”
In order to make plans for both of the above primary goals, some essential information must first be obtained:
Diagnosis of Physical or Cognitive Challenges: The first key area of information necessary to make a solid long term care plan is the determination of any potential physical or cognitive challenge existing [what will the quality of your journey be like? Will you go by airplane or have to hitchhike?].
If you have physical or cognitive challenges you must have an accurate diagnosis of the challenge you are facing. For example, if you have been diagnosed with “dementia”, you need to know which of the ten different kinds of dementia you have. Just as it is not effective for your doctor to just tell you that you are sick, a specific diagnosis will allow you to better plan for future challenges that will arise. [Without this information, its like trying to plan a vacation without knowing how you are going to travel.] As we age, we understand that is not just the quantify of life that is important, but more so the quality. Knowing how your quality of life may be affected by some diagnosis is critical to a successful planning process.
The next critical information we need is the prognosis for any physical or cognitive challenge. If our quality of life is going to affected by the progression of a physical or cognitive challenge, then the more information we have about future developments will improve our ability to craft an effective plan. The difficulty here is that most doctors are reluctant to give any prognosis. But, if they are asked in terms of using such information to better plan a life journey, they will usually provide a qualified opinion based on their experience. [For example, a “prognosis” may tell us if we will be able to drive on some of our journey or what assistance may be required to maintain optimal quality of life as you travel to your destination.]
You may be surprised to know that there are professional folks who can provide a comprehensive assessment of needs and consequences of any diagnosis and prognosis. These folks are called geriatric care managers. Their written assessments are called “life care plans” and cover suggestions for present circumstances and suggestions for future needs. Not only are these plans created by caring people who are very experienced in the planning process, but their “neutral” perspective helps overcome many of the natural limitations and biases of family members. Additionally, if you implement any of their specific suggestions, any expense incurred can become tax deductible.
Types of Residential Placements
Home: Clearly, the best of the placement option is your own home. It is familiar and emotionally the best option, especially if you are experiencing any form of dementia. Before considering other options, consider bringing in someone to assist with areas of present needs. This will be more cost effective than other options until you reach a level of assistance approaching 24 hour care. Even when 24 hour care is needed, if it can be afforded, staying in your home is the best emotionally supportive environment. Additionally, this is the best place for a “hospice” level of care to be provided, if needed.
Group Home: If staying in your own home is physically or financially impractical, consider living in a “group home”. This placement is a regular single family home or larger home where several folks, usually with similar challenges, live with someone who resides in the home with them to provide care, prepare meals and provide other services.
The challenge with group homes is finding the right fit. There are over 800 group home in Washoe County, so you will need someone who is familiar with these facilities to select the one that best suits your needs both physically and emotionally. This is another service that can be provided a geriatric care manager.
Costs can range from $2,500 to $4,000 a month.
Assisted Living: This option can either be like being in an apartment complex or staying at a hotel that has its own restaurant. The level of care available is usually limited, but you can supplement with your own care givers. To some extent, this option is limited to a range of people that can effectively deal with the limited care giving or medical treatment provided by assisted living. The challenge with assisted living facilities is usually finding the right “social fit”. Some folks want to be left alone and not want to be social by going to group meals or encouraged to participate in group activities
Costs can range from $3,500 to $6,000 per month.
Skilled Nursing Care: This is the highest level of care provided outside of the hospital environment and is also the most expensive level of care ($7,000 to $10,000 per month). All other care options should be exhausted before this level of care is considered.
Care Givers: Hire only qualified, licensed, and insured care givers. All others are a false bargain and could subject to you to significant liability for injuries, wage & hour claims, and other unhappy results. Use an agency if possible and interview prospective care givers for best results.
Durable Powers of Attorney: These are must have documents that can save you thousand of dollars and many headaches. There are two kinds: one for health care and the other for financial management. Without these forms only two bad things can happen: either a stranger may wind up making decisions for you; or, because there is no one with authority, no decision can be made without going to court. There are two things that powers of attorney cannot do: grant authority to make residential placement, or effectuate a Spousal Resource Allocation to assist in Medicaid qualification.
Revocable Living Trusts: While some people use these only to avoid probate, a better use is to make detailed provisions for how you want your assets used during your life (or how you don’t want them used, such as residential placement outside of your home) or how you want your estate managed after you pass away for the benefit of someone who would not be served by an outright distribution. Make sure you get thorough advice before considering a trust.
Wills: Remember, all property over $25,000 in value that passes by use of a will (to someone other than a spouse) creates some form of probate. Almost all property of significant value can easily be passed on by use of beneficiary designations, even cars and real property.
“Special Needs Trusts”: If you leave property to someone who is receiving government assistance, your gift may disqualify them from receiving benefits until after your gift is spent, after which they may need to re-qualify for their benefit. Not a good result! Consider using a Special Needs Trust to “supplement” their government benefit which will not disqualify them. This is also true for leaving a gift to a spouse who is receiving Medicaid. If your spouse qualifies for Medicaid, your estate plan should be updated to include a Special Needs Trust.