What’s the Middle Class to Do about Rising Nursing Home Costs?

The Problem

According to the U.S. Department of Health and Human Services, someone turning 65 today will have a 70 percent chance of requiring some long-term care service and support during his or her life. A woman’s average nursing home stay is 3.7 years. For men, it is about 2.2 years. Of the 70 percent that will need long-term care, 20 percent of those will require it for more than five years.

Unfortunately, Medicare will only pay for nursing homes in specific circumstances. For example, it will only cover a

skilled nursing facility for the first 20 days. For days 21 through 100, it only pays a portion. After 100 days, Medicare will not pay anything. Most cannot afford long-term care insurance.

With the average nursing home cost in Louisiana exceeding $5400 per month, most Americans don’t have enough savings to handle it.  Costs can run hundreds of thousands of dollars over a few short years.  Most retirement will be depleted very quickly with nothing to pass on to the next generation.  So, what is the middle class to do?

There is another way – Medicaid LTC.

Because Medicaid LTC is a needs-based program, many mistakenly believe that one has to get rid of (“spend down”) everything they own to qualify. Although the general rule is that one is not allowed to keep more than $2,000 in assets, there are many exceptions.  Often an elder law attorney can preserve more than half of a single person’s assets. Moreover, there are even more exemptions available for married couples, allowing the elder law attorney preserve a much higher percentage – in some circumstances all — of a couple’s assets.

However, it is very important that you tread carefully. There are many traps for those without a thorough understanding of the nuances of the rules. One misstep, such as getting a lawyer to draw up a document to put property in a child’s name, having a CPA utilize the “federal gift tax exemption,” or letting a financial advisor tie your assets up in the wrong kind of annuity or insurance product, can cost you tens of thousands of dollars in care costs. The regulations have too many “exceptions to the exceptions” to rely solely on those types of professionals. An elder law attorney experienced in Medicaid long-term

care planning can preserve a surprisingly large portion of the wealth that a person has worked so hard to accumulate and can work with your other advisors if they’re needed.

Chances are you will need long-term care during your lifetime. It is important that you understand what legal options are available. So, choose your guide wisely.

To learn more about how you or a loved one may be able to qualify to have some or all of your or a loved one’s nursing home costs deferred, please contact Ruston elder law attorney Add Goff by clicking the links on this page. 

Playing the Blame Game with Nursing Homes and COVID-19 Deaths

According to a report in the Minnesota Star Tribune, they account for more than 40 percent or approximately 45,500 of the US 115,000 COVID-19 deaths, even though nursing home residents are less than one percent of the total US population. Seema Verma, the administrator for the Centers for Medicare and Medicaid Services (CMS), asserts that nursing homes following federal infection control guidelines were largely able to contain the coronavirus.

Harvard researcher David Grabowski, a member of a nonpartisan commission, advising Congress about Medicare, states that “The federal government needs to own this issue,” about the need for federal efforts to routinely test nursing home staff and residents for COVID-19 and make more protective gear available. Grabowski agrees with other advocates for the elderly that the federal government has not provided consistent virus testing and sufficient protective equipment to nursing homes, its staff, and residents.

High Risk for Elderly Care During This Election Year

In this Presidential election year, the stakes could not be higher to garner support from older voters. Partisan overtones affect the discussion and subsequent policies to guide safer nursing home outcomes from the ravages of COVID-19. The blame game is on between political parties fighting for votes and states legally protecting health care workers and facilities from coronavirus lawsuits by residents or their families.

The Trump administration deflects accountability by criticizing nursing home facilities with low federal ratings for infection control and a handful of Democratic governors, New York in particular, who mandated that nursing homes accept recovering coronavirus patients. The number two House Republican, Steve Scalise of Louisiana, states that this NY policy, and other states with similar policies, “ended up being a death sentence.” Verma echoes the nursing homes with low federal rating criticism, saying CMS has data equating low safety ratings with outbreaks of COVID-19. Several academic researchers dispute this data citing their research has found no such link. Amid the finger-pointing, shamefully, more vulnerable senior nursing home residents are dying because of the coronavirus.

Nursing Home Concerns During Coronavirus

In agreement with other academic researchers, Harvard’s David Grabowski opined that neither state policies nor proverbial bad apples among nursing homes were responsible for driving the coronavirus outbreaks. The reason is simply because of the virus’s nature, which can spread via individuals displaying no symptoms and do not feel unwell. The illness’s very nature indicates it is already spread throughout communities. Without routine testing, nursing home staff can unknowingly bring COVID-19 into a facility where it then spreads easily among frail residents living in tight quarters. Ricardo Alonso-Zaldivar of the Associated Press quotes Grabowski, “The secret weapon behind COVID is that is spreads in the absence of any symptoms,” Grabowski told lawmakers at a recent briefing. “If COVID is in a community where staff lives, it is soon to be in the facility where they work.”

Advocacy group Justice in Aging’s long-term care expert Eric Carlson cites the lack of federal coordination as impeding the ability to identify people who are infected by and require care for the coronavirus. Other advocates agree that the White House directive for the testing of all residents and staff has had an uneven response, accounting for why some facilities suffer higher rates of infection than others. The Associated Press report from the end of May 2020 concurs with these opinions reporting “White House goal on testing nursing homes unmet.”

Meanwhile, at CMS, administrator Verma believes her agency has provided necessary safety guidelines, COVID-19 reporting requirements, and Medicare payment for testing residents since the outset of the virus. She continues that states have the money required from the federal government to support the nursing home staff’s testing. Let’s hope that is the case, as the nursing home industry reports one-time testing for every resident and staffer would cost 440 million dollars.

The coronavirus pandemic is not going to go away. New spikes of cases across the country are being reported and not even considered the “second wave” of infection that many experts anticipate. Third-ranking House Democrat Representative and chairman of a special panel on the coronavirus pandemic James Clyburn of South Carolina seems to match wisdom with temperance about the finger-pointing saying that the crisis in nursing homes should not be a partisan issue. Instead, stating, “Nursing home residents have died from the coronavirus in states governed by Republicans and Democrats, in big cities and in small towns, in rural and urban communities.” Capitol Hill law and policymakers seem to be very adept at identifying problems but slow in resolving them. In the meantime, our vulnerable senior nursing home population and their families are paying the price.

We help families with loved ones in a nursing home deal with a variety of issues. If you have a loved one in a nursing home, please don’t hesitate to reach out to see how we can help. Contact our office by calling us at (318) 255-1760 and schedule an appointment today.

Did you Know? Wartime veterans can qualify for a VA Pension without being disabled.

Many wartime veterans receive a disability pension due to injury. It is a challenge to keep up with US Military benefits as they are always changing, and many veterans miss out on what can be life-changing aid. But did you know that wartime veterans age 65 or more may qualify for a VA Pension without being disabled? The Veteran’s Administration qualifications for this type of VA Pension include:

  • Your military service discharge is deemed anything other than dishonorable conditions,
  • Your service was 90 or more active duty days with at minimum one day of service during a period of wartime.
  • You are age 65 years or older,
  • Your countable family income is below a threshold set every year by law.

2020 Family Income Limits (Effective December 1, 2019)

If you are a… Your yearly income must be less than…*
Veteran with no dependents $13,752*
Veteran with a spouse or a child $18,008**
Housebound veteran with no dependents $16,805
Housebound veteran with one dependent $21,063
Veteran who needs aid and attendance and has no dependents $22,939
Veteran who needs aid and attendance (A/A) and has one dependent $27,195
Two veterans married to each other $18,008
Add for each additional child to any category above $2,351

 

*Some income is not counted toward the yearly limit (for example, welfare benefits, some wages earned by dependent children, and Supplemental Security Income. It is also important to note that your medical-related expenses are considered when determining your yearly family income. *To be deducted, medical expenses must exceed $687 ** To be deducted, medical expenses must exceed $900

 

The financial information chart above, published by military.com, is commensurate with the numbers posted on the Veteran’s Administration website.  Be aware; there is a look-back period that will determine if you have transferred assets in the three years previous to filing your claim. There would be a penalty period rate of $2,266 if you did move assets for less than fair market value during this period.

The VA will pay a qualified veteran the difference between personal countable family income and the yearly income limit category into which they fall. Payments are made in 12 equal installments per month and rounded down to the nearest dollar. As an example, a single veteran with a $5,000 annual income qualifies for an annual limit of $13,752. Subtracting that veteran’s income from the income limit yields an annual pension rate of $8,752, which translates into a VA monthly pension check of $729.33 or $729.00 rounded down to the nearest dollar value.

The VA website recognizes the following wartime periods that determine if your service was during an eligible wartime period:

  • World War II (December 7, 1941, to December 31, 1946)
  • Korean conflict (June 27, 1950, to January 31, 1955)
  • Vietnam War era (February 28, 1961, to May 7, 1975, for Veterans who served in the Republic of Vietnam during that period. August 5, 1964, to May 7, 1975, for Veterans who served outside the Republic of Vietnam.)
  • Gulf War (August 2, 1990, through a future date to be set by law or presidential proclamation)

In addition to VA pension, wartime Veterans may also qualify for an additional allowance called Aid and Attendance. To qualify medically for VA Aid and Attendance, one of the following must be true:

  • Another person is required for you to perform daily activities such as bathing, dressing, and feeding, or
  • You spend a large portion, or all of your day in bed due to illness, or
  • Due to a loss of mental or physical abilities related to a disability you are a patient in a nursing home, or
  • Your eyesight is severely limited (wearing glasses or contacts your eyesight is 5/200 or less in both eyes or your concentric contraction visual field is 5 degrees or less)

There are similar benefits available to surviving spouses of wartime Veterans. If you are a wartime veteran or the surviving spouse of a wartime Veteran, we can help you determine whether you could qualify for pension benefits.

While eligible veterans or surviving spouses can apply for benefits on their own through the www.va.gov  website, it is advisable to seek the advice of counsel before applying. There may be planning options available to avoid a penalty period and speed up the qualification process. If you would like to explore whether you might qualify for VA pension benefits. Please contact our office by calling us at (318) 255-1760 and schedule an appointment to discuss how we can help you with your VA planning needs.

Baby Boomers in the New Decade

According to the US Census Bureau (Bureau of Census), their numbers are estimated to be 73 million strong in 2020. The baby boom generation is comprised of those Americans born 1946-1964. This generation represents nearly 20 percent of the American public. As they enter their 60, 70, and 80th decades, their influence will help to guide how billions of federal funds will be spent on critical public services like health care, housing, and social safety net programs like social security. The guiding forces behind baby boomer life in the 2020s are high expectations during a much longer retirement, more investment choices but less investment safety, and rising interest rates. There is more of a reliance on personal savings instead of pensions (which are often underfunded), while the gap of aging success between the rich and the poor remains.

As a demographic group, baby boomers wield the most financial power of any living generation.

Business Insider

As such, they continue to have a powerful impact on the direction of the US economy. Aside from federal spending, baby boomers are a significant focus of the marketing campaigns and business plans of many corporations. As a generation, they are also shifting focus from lifespan to healthspan. The all too cliché phrase 60 is the new 40 is rooted in how many baby boomers feel, more active and vibrant than ever before, and with a bank account to command attention and buy freedom of choice. An extension of this wellness trend is a retiring populous that is busy traveling, running marathons, building homes, starting new businesses and new chapters of life. Mindfulness and wellness are hallmarks of this generation, and it is leading them to a higher quality of retirement life.

Despite this aggregate of optimistic financial data, there is evidence suggesting the current poverty rate of 9 percent in the elderly American population will remain steady in the coming decade. Approximately 7 million older people will be living without sufficient income to meet housing, utilities, food, and medical needs. Many more baby boomers may fall into the poverty category in the 2020s because of insufficient retirement planning. Addressing this inequality will be challenging as successful aging is in large part due to financial stability as the rich are living longer while the poor are dying younger. Measuring retirement security then is based on overall healthspan (the number of years you can live independently) and wealth span (the amount of money over time you have available for your non-working years). The success of baby boomers’ retirement is generally defined decades earlier by a person or their spouse’s education level, work history, economic affluence and accumulation throughout their working years with a bit of luck tossed in.

The time in which baby boomers have had to accrue wealth has been primarily an economic boom cycle with a couple of economic corrections and downturns, most notably the Great Recession of 2008. Depending on how a baby boomer may have been financially positioned during these times can be the difference between substantial personal savings and struggling to meet retirement income needs. The equivalent purchasing power of one dollar in 1980 is $3.12 in 2020. A steadily increasing interest rate and an overall lessening of the dollars purchasing power can make fixed income living a precarious situation. Additionally, the cost of living adjustment (COLA) through social security benefits is not favorably weighted to living expenses of the aging US population. The deregulation and rules of financial vehicles that offer low to no tax rates like IRAs, Roth IRAs, annuities, life insurance policies, and more are continuously amended, mostly in the economic favor of the government or corporations offering the financial options. Even private and government pensions are not safe from payout reductions. The Social Security Administration (SSA) is admitting that without legislative reform to its program, social security benefits will only meet 75 percent of scheduled benefits by the year 2035.

The socioeconomic impact of the baby boomers will be an active force throughout the 2020s. As a generation, they are morphing the word “retirement” into the notion of a transitional life phase as they seek to repurpose their lives rather than sit on the proverbial front porch swing. Creative and inventive life shifts are inevitable as baby boomers spend down their wealth and money-making institutions, private or government, are poised to earn or tax those dollars.

We help baby boomers create comprehensive estate plans that focus on their current health and financial needs and the needs of those they wish to leave an inheritance to. Give us a call at (318) 255-1760 and schedule an appointment to discuss how we can help you.

A Guide for Purchasing Special Needs Housing

Before beginning the search for special needs housing there are some tips to consider. The US Department of Housing and Urban Development (HUD) website lists state and local government agencies, along with other organizations, that can help you. At the federal level, the agency also provides information about HUD’s Section 504 regulations that define federal financial assistance.  In particular, Section 811 outlines it’s program for Supportive Housing for Persons with Disabilities. It is important to research what assistance is available before contacting a realtor.

Once you have a strategy in place to utilize available programs to minimize costs, it is time to think about the housing location. Is the individual with special needs employed or a student? Can they drive a car or do they need to be near public transportation to get to work or school? If the individual is a K-12 student, pay particular attention to school and after-school programs. Research what is available as many schools have programs for children with special needs that are offered outside of the standard school zoning in some neighborhoods. Also, take into account the proximity of hospitals and doctors. Consider the location of shopping (food and otherwise), dining and entertainment. Also, consider if there are any restrictions regarding support animals if that is relevant to your special needs.

Once the location list is narrowed down talk to others who have faced the same housing challenges; whether it is a support group, school parent message boards, housing assistance advocacy group, or online forum.  You can save a lot of time and money by learning from others who have gone before you. In these discussions, ask a lot of follow up questions because it is hard to ask about what you don’t know. Dialing into the details can help save you missteps in your process.

Once you have identified a general location that meets some of the criteria above, it is time to canvas the availability of appropriate homes. When thinking about the layout and design of a home, consider the rambler or ranch style house. They have a long low profile, very few stairs to navigate (if any) and have minimal exterior and interior decoration. These rambler attributes make the home reasonably easy to modify.

If mobility is an issue, look for a house with smooth floorings, such as hardwood floors or laminate flooring. Smooth surfaces provide easier access to shower and bathroom areas. Also, check to see that the doorways in the home are wide enough to accommodate a wheelchair. Assess how many modifications would be required to address the special needs while remaining within a budget. Grab bars, ramps, and other similar amenities are reasonably simple to add, and some states, cities, and counties will help pay for the modifications.

Not only are there federal, state, and local agencies to help you meet the requirements of a special needs home, there are also lenders and realtors who specialize in financing and purchasing this type of home. A good lender and realty agent will be familiar with the agencies and government programs that can help their client get approved for a loan and maneuver the housing marketplace for the right fit.

Get online and look. Realtor.com, Zillow, Homesnap, and Redfin are just a few of the online options to explore real estate from your home or mobile device. Just plug in an address of a home in the area that meets your criteria and you will get stats on that home as well as an aerial map of the neighborhood that allows you to click on and get information about homes that are not currently on the market but maybe soon.

Realize this process takes time. Identify a strong, competent real estate agent who understands your special needs parameters and is willing to put forth the time to find the right housing solution for you. Also, speak with a trusted attorney to ensure you have maximized all potential program benefits available to you. Buying a home is probably the biggest purchase you will make in your life. Buying a home that accommodates special needs adds a layer of complexity that should be well thought out before hiring a realtor. Contact our office by calling us at (318) 255-1760 and schedule an appointment to discuss how we can help you with your planning needs.