Preparing
for the possible costs of future impairment and long-term care is,
regrettably, a task that everyone faces as they age. You may
never need long-term care. This year, about 9 million men and
women over age 65 will need long-term care. By 2020, 12 million
older Americans will need long-term care. Four out of five older
adults have a chronic condition. Losses in a person’s ability to
function day to day are a natural part of the aging process, and those
losses become more severe as people get older.
When
the elder’s needs for long-term care can no longer be met either inside
the home or without the intervention of paid providers, the elder
enters what I call the long-term care maze. The elder, and the
elder’s family, are now embarking on an arduous journey through murky
waters. The journey begins with the observation that the current
system in our country for addressing long-term care is a non-system, a
hodgepodge of services that fails to meet the needs of the elderly and
disabled in the variety of long-term care settings. It is
economically inefficient and it fails to assure the quality of services
that are provided.
Currently,
elderly people finance long-term care services from a variety of
sources, including private resources, like personal savings, care
donated by friends and family, and long-term care insurance and public
programs, including Medicaid and Medicare. Medicare pays for
health care, such as the Part A hospital benefit and the Part B
physician’s benefit. Many of our clients begin their initiation
in the long-term care maze with a stay in the hospital, which Medicare
pays for. Hospitals are under increasing pressure to shorten
inpatient stays. Patients who are not ready to go home may
instead be discharged to skilled nursing facilities, under Medicare’s
limited skilled nursing facility benefit. As a result, most
people either stay for a short period of time in Medicare skilled
nursing care or exhaust the benefit during the course of their
stay. Many of our clients and their families believe that
Medicare pays for all long-term care. Medicare pays for health
care, not personal or custodial care and it is strictly limited in
duration. Medicaid pays for intermediate care in a nursing home
provided that the individual meets certain income and asset levels and
exemptions. Veteran’s benefits pays for health care and some
long-term care costs depending upon the facility and the status of the
veteran or the veteran’s spouse.
A
person preparing for possible long-term care needs has several options
from which to choose. One option is to self insure by setting
aside personal savings and assets and then supplementing those personal
resources with the donated, or free care of family and friends.
In fact, the majority of impaired seniors rely solely on donated care
and their own savings. An individual who self insures retains
maximum flexibility and control over his or her savings and assets, but
must bear the full financial risk of impairment, which will depend on
the extent and duration of functional losses. According to the
Congressional Budget Office, seniors in general are not well prepared
to pay for their long-term care needs.
Although
long-term care insurance can be available to pay for long-term care,
spending from long-term care insurance accounts for only about 4% of
total long-term care expenditures. When it comes to paying the
cost of long-term care – whether in a nursing home, assisted living
facility, or community home based care – there are really only two
choices for most people, private wealth or public benefits. These
are not mutually exclusive. Seldom will the public pay all of the
costs of someone’s care, at least not for an extended period of
time. In fact, most public benefits programs in the United States
have a cost sharing or co-payment component. For example,
Medicare’s skilled nursing facility benefit pays all of the costs for
the first 20 days; for the 21st to 100th day, the patient pays a
co-payment that changes annually. Medicaid requires that the
nursing home resident pay all of their monthly income to the nursing
home, less certain allowable deductions, such as the personal needs
allowance.
Most
health care systems are ill-equipped to address the needs of the aging
populations they are meant to serve. Modern health care systems
were founded on the principles of acute care and are dominated by a
focus of growing specialization, efficiency, and expediency. It
is a system that is focused on curing the patient’s immediate illness
and reacting to health care crises. Yet older patients presenting
with chronic illness and comorbidities require continuity of care that
bridges across traditional medical boundaries and care settings.
Three basic flaws exist in the acute care model of health care.
First, it does not support people in the day-to-day self management of
their chronic illness. Second, it does not coordinate or advocate
for good chronic illness care. Third, it does not provide the
necessary support and financing for other than acute care or nursing
home care.
Life
Care Planning is an innovative approach to elder law that helps
families respond to all of the challenges presented by long life,
illness and disability. Peace of mind for the elderly and their
families is the goal of every Life Care Plan.
