Special Edition: 10 reasons financial professionals need asset-based LTC in their retirement toolbox

No issue keeps clients and financial professionals awake at night more than the prospect of running out of money during retirement. But the reality is that retirement nest eggs — and financial professional’s assets under management — are highly vulnerable to a costly health care crisis or long-term care event unless steps are taken to plan for those very real possibilities.

That’s where an asset-based long-term care (LTC) life insurance or fixed indexed annuity product can help. Here are 10 reasons financial professionals should consider these asset-based LTC products in the context of retirement planning:

1. Versatility: They allow financial professionals to multi-purpose client dollars. Asset-based long-term care products are life insurance policies (such as whole life) or annuity contracts (such as a fixed indexed annuity) that come with a built-in long-term care benefit that allows the contract holder to access the death benefit or contract value to pay for qualifying LTC expenses. Meanwhile, the contract’s cash value continues to grow and, if it isn’t used to cover an LTC event, it remains in the contract, to eventually transfer to beneficiaries. “They get benefits either way,” said Dennis Martin, FSA, FCIA, MAAA, vice president, senior business & product development officer, OneAmerica companies. “People are willing to pay for the certainty of not having to deplete their assets. There is great value in that, especially for people approaching retirement.”

2. They address a pressing need for retirement nest-egg protection. At least 70 percent of people over 65 will need some form of long-term care services and support during their lifetime, according to longtermcare.gov, a U.S. government website. And that need can put quite a dent in retirement savings. A 2015 report from HealthView Services estimates that a healthy 65-year-old couple retiring in 2015 will pay an average of about $395,000 in lifetime retirement health care costs. For a 55-year-old couple retiring in 10 years, that figure rises to about $464,000. The report also notes that the U.S. Department of the Actuary projects health care inflation remaining at a lofty 6% for the next decade.
3. They provide cost certainty, with premiums that are guaranteed never to increase. Asset-based products can either be purchased with a single premium, or maintained with an annual premium that is guaranteed never to increase.
4. They’re tax-efficient. Rather than parking money in a low-yielding CD or savings account, asset-based LTC products give financial professionals the means to leverage those dollars inside a tax-favored vehicle. Distributions from an asset-based LTC product that are used to cover qualified long-term care costs typically come out tax-free to the recipient. And if funds from the contract aren’t used for LTC, the death benefit from the contract passes tax-free to beneficiaries. In addition, using money that must come out of a retirement account in the form of a required minimum distribution to fund acquisition of an asset-based LTC product can be an effective planning strategy.
5. They allow financial professionals to protect their assets under management and preserve the integrity of their retirement. A catastrophic health crisis or extended LTC event can quickly drain client assets. Having asset-based LTC in place protects assets while also preserving the integrity of the financial professional’s retirement income planning. “You create this distribution plan for a client that won’t execute if there’s a hole in the client’s long-term care planning,” said Michelle Prather, Regional Marketing Director, Care Solutions. “Everything you have helped them build as far as accumulation and everything you planned for in terms of retirement income goes instead to paying for long-term care.” There is also the added benefit of knowing a client’s retirement is protected with asset-based LTC. As a result, the financial professional can appropriately position other parts of the portfolio more aggressively to generate growth and income.
6. They’re a solid asset on the client’s balance sheet. Unlike most stand-alone traditional LTCi products, asset-based products build cash value over time.
7. They overcome underwriting issues. With simpler, less onerous underwriting, clients who might not qualify for an affordable traditional LTCi policy because of age and/or health may be more apt to secure affordable LTC coverage with an asset-based product.
8. They can be customized to meet the specific needs of an individual or a couple. The Care Solutions products offer a unique joint benefit pool to two individuals. “To get two people covered with one contract is what people are looking for,” said Prather. Clients can also elect optional features including lifetime benefits and inflation protection.
9. They’re increasingly appealing to Baby Boomer and Gen X clients. Protection products are increasingly sought after by people who saw their retirement assets dwindle during the recent financial crisis. Annual premium for “combination” LTC products increased from $455 million in 2007 to $2.6 billion in 2013 on the strength of five consecutive years of double-digit growth, according to the trade group LIMRA. Approximately 98,000 life combination policies were sold in 2013, up 18 percent from the prior year.
10. They’re not traditional long-term care insurance policies. Rising premiums and dwindling product options have made traditional LTCi less appealing to financial professionals and consumers alike. According to the American Association for LTCi, overall costs for new LTCi coverage in 2014 increased 8.6 percent compared to the prior year. Meanwhile, according to a 2014 Broker World survey, the number of carriers offering stand-alone LTCi decreased to 16 in 2014 from 45 in 2008.

 

“The traditional long-term care product line is broken,” said Pat Foley, CLU, ChFC, President, Individual Life and Financial Services, OneAmerica companies. “On the other hand, products such as asset-based long-term care work for everybody—the consumer, the financial professional, the distributor and the manufacturer by providing stable, predictable and guaranteed benefits.”

How would you pay for long term care?

You can’t control the future,
but you can control your next move.

Control risk. Don’t let risk control you.

AT LEAST 70%
of people over 65 will need long term care services and support at some point.

One reality that is almost inevitable is the need for long term care — for yourself or someone you care about. In fact, about 70% of Americans over 65 will need some
form of long term care. Even those under 65 face the risk of injury or illness that could require long term care. And it can be expensive.
The good news: Planning for these expenses might be easier than you think.
Long term care insurance is specifically designed to help cover those expenses,
and it can be configured in any number of ways to fit your needs. That puts you back in control.

How much could long term care cost?

According to the Genworth 2014 Cost of Care Survey, nationally, the cost for long term care can range from $45,188 a year for a Home Health Aide to $87,600 a year for a private nursing home.
Using a 3-year stay in a nursing home as an example, a person needing care today would spend $261,000 for a private nursing home room. Receiving care at home for the same period would cost $135,564.

Putting it all together

When it comes to paying for long term care, you have options.

Self-Funding
If you have a significant pool of money set
aside that you won’t need for retirement expenses, it could be a source of funds for long term care costs. Or, if a loved one needs long term care, your income may be adequate to cover their expenses.

Family and Friends
Some people plan to rely on family or friends. This may be a great solution for families committed to providing care, but it is often far more physically and emotionally demanding than people realize and it may put stress on cherished relationships.

Medicare/Medicaid
Some people plan to use programs like Medicare if they need care. Medicare generally covers skilled nursing home care after a hospital stay of at least three days, but its coverage for other long term care services is very limited. Medicaid can contribute toward long term care, but it requires recipients to use their income to pay for care and spend down most of their assets to qualify.

It’s your move.

You already insure against other risks.

You wouldn’t think of not protecting your health, your family, or your home from a loss that could threaten your quality of life. That’s why you have taken steps to protect against those risks.
Long term care is another risk that could threaten your quality of life. Recognizing that the possibility exists, understanding your options for addressing it, and deciding how you would deal with such an eventuality are important steps in planning for a long term care need.
There’s a lot to consider. Involve your family in the process, because how you decide to address the long term care risk may affect them as well. The outcome of the process should be a plan that you all can live with.
But the most important outcome will be the confidence you’ll gain from having a plan.

Long Term Disability Insurance vs. Long Term Care Insurance: Understanding the differences

Many people confuse Long Term Disability Insurance and Long Term Care insurance. It may be because the names are so similar or because they both are triggered by health related causes. However the two insurance plans serve vastly different purposes in helping you manage the financial risk in your personal life:

• Long Tern Disability Insurance is used to help protect your future earnings. It is designed to protect a portion of your income if you are not able to work due to a debilitating illness or a  disabling accident.
• Long Term Care Insurance pays a daily or monthly benefit towards the cost of care services from a skilled nursing home, assisted living facility, adult day care or in-home assistance when you can no longer care for yourself or perform the acts of daily living such as bathing, dressing, eating etc.

The differences between the two types of coverage are outlined below to help you better understand these two important types of coverage, and how they fit into an overall risk-management plan.

Special Edition: Fitting Long-Term Care Insurance Into Estate Planning

We have created a special edition to our blogs geared specifically towards financial professionals. While we encourage EVERYONE to read these posts, we do understand that some of the content may be dry or less relatable to some individuals.  Here is our first special edition post.

The widely held belief that wealthy persons don’t need long-term care insurance because they can self-fund the cost may be correct regarding out-of-pocket care expenses but it overlooks the risk of potential estate shrinkage. “The amount of what’s left of your estate is going to be impacted if you and/or your spouse needed long-term care for any period of time and had to draw down your estate,” said William R. Borton, CLU with W.R. Borton in Marlton, NJ. “So, from a standpoint of long-term care planning, not only do you want to make sure you have all the [estate planning] documents in place, but you also want to make sure that you don’t end up with estate shrinkage if you don’t want it.”

Consider a simple example of LTC’s potential impact. The Genworth 2015 Cost of Care Survey reports that the current national median expense of a private nursing home room is $250 per day or $91,250 per year, an amount that’s been increasing by about 4 percent annually for the past five years. If the client is age 65 now and requires that level of care in 20 years, the first year’s cost will be about $200,000 (at 4 percent annual inflation). Assuming a four-year stay, the total outlay would exceed $850,000.

Run the Numbers

Of course, an objective analysis would also consider the impact of paying LTCI premiums should the client decide to purchase the insurance for ages 65 to 85. Sontag Advisory in New York City provides that type of analysis when it discusses LTC planning with wealthier clients. Kevin Couper, CFP, a financial advisor with the firm, said they run simulated scenarios to project the impact of buying and not buying LTCI.

“We can simulate that out and say, well, if you don’t have any insurance at all, here’s what happens to your portfolio, is that a significant deal?” said Couper. “Also, the big thing to notice is how their portfolio is structured. Do they have a lot of liquidity or is a lot of it non-liquid like in real estate so in the event of a long-term care situation would they have to liquidate some things?” To date, their high net worth clients have been comfortable with LTC’s potential impact on retirement cash flow and portfolios and have decided to self-insure the risk, he said.

Using Trusts

In cases where a wealthy client decides to purchase LTCI, buying and owning a life insurance policy with a LTC benefit through an irrevocable life insurance trust (ILIT) can leverage the financial benefits, said Kim Natovitz, CLTC with the Natovitz Group in Bethesda, MD. The strategy works when the policy’s LTCI benefit is paid on an indemnity basis versus a reimbursement plan. The mechanics are somewhat complicated but essentially the insured funds the trust with irrevocable gifts. In turn, the trust applies for and owns the life policy on the insured.

If the insured incurs LTC expenses, he or she pays them out-of-pocket but the trust files for and receives the benefit payments. “The trustee can choose to file a claim and benefits are paid on an indemnity basis, which means that regardless of actual utilization, as long as that individual is receiving qualified long-term care services, then the trustee of the insurance policy can file a claim and long-term care benefits are paid into the trust at that point in time,” Natovitz said.

This arrangement provides flexibility. The trustee can distribute the insurance benefits to the trust beneficiaries, for example, or loan the proceeds to the insured and charge interest on the loan, she said. Outstanding loans reduce an estate’s value, which facilitates additional wealth transfer out of the estate and into the ILIT. Using an ILIT also provides asset protection, she notes. If the insured never files a claim or uses only part of the policy’s LTC benefit during his or her lifetime, the policy’s death benefit is paid into the trust.

An ILIT must be structured properly to reap these benefits but that’s not usually a problem, according to Natovitz. “The good news is that most people who draft ILITs are very comfortable with creating the language and many of the insurance companies that offer these policies also provide a lot of the attorneys with some specimen language for drafting purposes,” she said. “So, they recognize that that could be a hurdle for some people so they are offering a lot of support from that standpoint.”

Long term Care Insurance… Who Needs It?

Given that the cost of long-term care can quickly deplete your life’s savings, you should seriously consider adding long-term care insurance to your financial plan. Plus, there’s about a 70% chance you’ll need some type of long-term care after age 65.

Should you ever require it, a home health aide visit costs about $19 an hour, while full-time nursing home care in a private room, the most expensive type of care, now has a median cost $84,000 a year. In some regions of the country, like the Northeast, the cost may be well above that amount.¹ While financial considerations cannot be understated, long-term care insurance is also about peace of mind and control. Having it ensures you’ll have access to first-rate care when you need it, and that you won’t have to be dependent on others or be a burden to your children. The odds you’ll need long-term care insurance are greater than you might imagine.

Long-term care services are not just for older people: Anyone who’s has been in an accident or suffers from a debilitating illness may also require round the clock care. In fact, 40% of patients receiving long-term care are under age 65. If you can afford to pay for care without significantly impacting your assets, you may not need long-term care insurance. Conversely, if your assets, not including your home, are less than $80,000 if you’re married, or $30,000 if you’re single, you may not be able to afford the premiums. But If you’re somewhere in between, long-term care insurance should be part of the discussion the next time you sit down with an advisor to review your financial plans.

Genworth 2013 Cost of Care Survey, conducted by CareScout

Women, Retirement and Long-Term Care

Have you ever wondered why nursing home residents are primarily women, and why they never seem to have visitors?

Data confirms this, according to the Centers for Disease Control and Prevention (CDC). Of the roughly 1.4 million nursing home residents in 2013, about 67.7 percent — or roughly 960,000 — were women. The question that should be asked is: How did it get this way?

Yes, it is understandable that women tend to outlive men in general. The CDC is reporting that the average life expectancy for a person who was 65 years old in 2012 is another 19.3 years: 20.5 years for women, and 17.9 years for men. Is the fact merely that they live longer the primary reason why women tend to make up the vast majority of residents in nursing facilities, or are there other factors at play?

Just ask Michael Gerali, co-author of “What You Don’t Know About Retirement Will Hurt You.” He has stated numerous times that one of the main factors as to why women make up the bulk of residents in nursing facilities is how we as a nation plan (or, rather, don’t plan) for retirement. “The problem isn’t how we accumulate assets. It’s how we distribute them, along with the advice we receive to never insure certain aspects of life, and tying up the equity of our homes that are a few of the main driving forces behind this,” Gerali says.

“As we prepare for retirement, the oft-given advice is to plow as much money into our employer retirement plans as possible, and that we should take advantage of traditional or tax-deferred investments, along with forgetting about insurance, as well. Ergo, they  buy term and invest the difference.”

To get a clearer picture of what Mr. Gerali is saying, let’s take a typical couple, “John and Mary,” who want to retire at age 67 or as soon as they can in order to enjoy their lives on their own terms. They have been told for years to invest as much as they can afford into the stock market, as that tends to generate the highest rates of return over time. This is usually done by taking advantage of their employer’s 401(k) or 403(b).

They are also told to buy term insurance while their kids are still home in order to protect the family and any income needs they have, since it just happens to be the cheapest way to obtain that coverage. Other popular advice is to take advantage of Roth accounts if available, as well as to pay down as much debt as possible. The goal is to hopefully live debt-free in retirement — and with the mortgage paid in full, John and Mary will be able to pass their home to their children if they so choose.

In their first 10 to 15 years of retirement, everything is going great. They are experiencing everything they could possibly have ever dreamed of. Yes, there have been some bumps along the way, and there have been a lot of unexpected expenses, but they have weathered every storm and once again, it’s smooth sailing. Unfortunately, one day, John happens to get sick, and this time the illness is far worse than just a severe cold: it may be a chronic ailment that is robbing him of the ability to walk or eat. It could even be something as serious as cancer or cardiovascular disease. Either way, John’s health is deteriorating and Mary is now faced with another obstacle that they both have to overcome.

Mary, like any loving spouse would do, decides that she will take care of John and his rapidly deteriorating health as her husband does his best to still be active and contribute, because there is no way that John, in his mind, can’t overcome this. As Mary sets her retirement plans aside and begins her new role as caregiver and nurse, the added physical and mental stresses begins to take a toll on her own health. As she is spending all of her time tending to her husband, she is not focusing on her own needs, her diet or getting proper sleep. Even the daily routines of paying bills and general upkeep of the house take a backseat to the care and attention that John requires.

And this is where the real problem raises its ugly head: Mary is not well-versed in household finances, seeing as John was the one who made the big financial decisions. Yes, Mary most likely paid the bills, ran the budget, and gave John an allowance each week, but the long-term investments that they built typically fell under John’s responsibility. Mary is now stuck in the situation of not really knowing what to do, and like any smart person, she seeks advice from their trusted financial advisor.

Their advisor does do his/her best to help. She gives Mary the typical advice that almost every “Mary” receives in times of crisis:

• Take a tally of all your investments
• Find any accounts, wills, trusts and deeds that you may have
• Create a distribution plan that will best suit the needs of Mary and John, while mitigating any tax consequence they may face

This distribution plan will mostly unfold as follows: First, distribute any cash, then move to
liquid investments like stocks and/or bonds, then Roth IRAs, and finally tax-deferred accounts like IRAs and rollover 401(k) accounts. The rationale is to use what is taxed today and leave any investments that are tax-deferred for later, as this will allow them to grow even more while delaying any tax consequence.

So as Mary heeds this advice, she first uses the cash, then any stocks or bonds that they may have, and as John’s health is worsening and the liquid assets have been depleted, she is now faced with using either their Roth accounts or traditional IRAs like their 401(k) plans.

John unfortunately passes away, and to Mary’s horror, she finds that after all of that financial advice, there really isn’t any life insurance on John, as they both decided to buy term insurance and invest the difference. So Mary now has a larger problem:

• Her health is deteriorating.
• She is now receiving even less Social Security, as John has passed away and his benefit has ceased.
• She still has all of her current bills: water, electric, property taxes, groceries, etc.
• She does have those tax-deferred accounts, as she did save those instead of the others, but is now in a different tax and Medicare bracket, which means every withdrawal will increase her tax liability and possibly her Medicare premiums, as well.
• She also has the house, but with John now gone and her no longer working, she is in the predicament of not being able to tap any equity from her home.

Mary is now in the position of having to use even more of the assets in those tax-deferred accounts to help pay for her well being and her home, but each time she makes a withdrawal, she is in the unfortunate position of being in a higher tax bracket and a lower Medicare income bracket. Those withdrawals are now being taxed as ordinary income by the IRS; she no longer has any write-offs since the house is paid for; the children are gone; and by being single, her tax bracket has changed, as well.

Not only is the goal to delay paying the government now starting to backfire on Mary, but to top it off, Medicare is also counting those withdrawals as income. So instead of being in a Medicare income bracket of $170,000 as a couple with John, her new Medicare tax bracket is lowered by half, with her new limit being only $85,000. This is leading to even higher Medicare premiums, which is leading to less Social Security income, which is leading her to withdraw even more money from those tax-deferred accounts, and on and on…

The vicious cycle has now begun for Mary. Towards the end, Mary is bleeding assets in every direction, and just staying in the house is becoming next to impossible. Her only choice? A nursing home. Her dream of living in her own home until the end, and leaving her children with something in terms of assets, is over. She is now faced with having to try to qualify for Medicaid, which means she will most likely have to give away any assets she has left (including her home) and hope that there will be a nursing home somewhere in the vicinity of her family that not only has an opening, but also accepts someone with only Medicaid, since she has no way to pay for herself.

Does Mary have any choices left? Does this story sound in any way familiar? Is there a woman going through this right now (and yes, it could be a man, but at a much lower percentage)? Well, it doesn’t have to, and it doesn’t have to happen to any more Marys or Johns. All that is needed is a simple revamp of distribution with something everyone should have in one form or another: long-term care, some permanent life insurance and a possible reverse mortgage, all coupled with a much different income distribution plan. With these, the ending for Mary is quite different.

By just changing the distribution of those assets, along with a couple minor adjustments to their financial plan, and having the equity from their home still be available, the story could simply be: Before entering retirement, John and Mary speak with a financial advisor who places some of their investments into a standalone long-term care insurance policy, or a “hybrid” policy. Or it could even be something as simple as an annuity or life insurance product that has some form of an LTC insurance rider which will allow them to tap some monies for care.

They investigate a reverse mortgage where they can take the equity out of their home when they want. Yes, they may lose the house in the end, but Mary does have the option to stay there for the rest of her life. Do their adult children really want to inherit another home they then have to pay taxes on, along with the other bills and responsibilities associated with owning a second home?

Some permanent life insurance is purchased on both of their lives — nothing grand, but enough to supplement any lost Social Security benefits if one of them passes away before the other. Finally, they start using those tax-deferred accounts first while they are younger, healthier and in a higher Medicare and income tax bracket. They also look into possibly converting some of those traditional IRA/401(k) assets to Roths, as Roths are much more friendly to both health costs and tax obligations.

If John does finally get sick, instead of using the cash first, they opt to deplete those tax-deferred accounts instead. They then move to those investments such as stocks and bonds. Remember, John and Mary each have some form of LTC, so Mary can afford to have professional care brought into the home for John so she can maintain her lifestyle and her health. When John does finally pass away, Mary is still in the position of having less Social Security (as she can only receive the higher of the two benefits), but that life insurance policy helps offset the loss of income.

She also has the ability to tap the equity from her home with that reverse mortgage, along with the right to live there, along with also having some form of long-term care coverage, the cash she never spent, and hopefully those Roth IRAs. By the way, those Roth IRAs, long-term care benefits, and the equity from her home are not considered as income by the IRS (or even Medicare for that matter), so her tax bill is lower and her Medicare premiums are standard.

Mary now has options. She has the choice to stay at home, hire someone to take care of her, and have the means to make any changes to her house to fit her current health situation. She also has the opportunity to become a resident at a nursing facility if she so desires, since she will most likely have the means to afford that care.

What is currently happening to women near the end of their lives — living in a nursing facility, alone and broke — doesn’t have to happen. All that is needed is a decent understanding of what really happens in retirement to those who don’t plan accordingly.

About the Author

Dan McGrath

Dan McGrath, author of “What you don’t know about retirement will hurt you!” is one of the country’s leading experts on how the high costs associated to healthcare will impact retirement, Social Security and the overall economy. Mr. McGrath is the Co-Founder of  Jester Financial.

Article available through Jester Financial 

Who Will Provide Care For Childless Boomers?

By Denise Foley, Next Avenue Contributor

The last piece of real estate Pam and Bruce Boyer purchased together was more than 20 years ago: adjoining plots in the cemetery across the street from their home in historic Bethlehem, Pa.

“We chose a place we really like. We walk there – it’s like a park in London,” says Pam Boyer, 68, a retired magazine researcher whose husband is a freelance writer. “We got it taken care of early before it seemed morbid – or too homey,” she adds with a laugh.

‘Elder Orphans’

It wasn’t the only accommodation the Boyers made to the fact that they are childless, a circumstance an estimated one in five boomers find themselves in as they age.

One study predicts that about a quarter of boomers may become “elder orphans.” That’s a newly coined term for people who reach old age with no family or friends left, like the 81-year-old North Carolina man who made the news in May when he called 911 for food because he had no one else to turn to.

Fewer Caregivers

Family members provide about 70% of long-term care services, according to a survey by the American College of Financial Services. Not only are more boomers childless, those who do have children, have fewer than the previous generation. Trendsetters from the start, the boomers have spawned a new phenomenon: caregiver shortage.

As of 2010, there were more than seven family caregivers for every person 80 and over. By 2030, estimates say, there will only be four and by 2050 there will be fewer than three.

That raises the question: Who will take care of the childless boomers when they’re old?

Avoiding the Serious Questions

What alarms many experts is that it’s not the boomers who are asking that question.

“I’d say of every four people I meet, three have not made any decisions at all about their health care when they age,” says Bert Rahl, a licensed social worker and director of mental health services at the Benjamin Rose Institute on Aging in Cleveland, Ohio.

Understanding the Truth

The Boyers chose to be proactive. What made it easier: In light of their circumstances, they’d given it a lot of thought.

They knew when they married more than 30 years ago that they were never going to have children. Pam Boyer is an only child who cared for her grandmother and both her parents — her father had Parkinson’s disease, her mother, Alzheimer’s — in their later years.

“We’re not a healthy family,” she says ruefully.

And neither of them was squeamish about talking about death — even their own.

Take Charge of Your Life, and Your Future Finances

So not only did the Boyers pre-plan their burial, they downloaded documents from the Internet that allowed them to create an advanced directive (a living will that spells out your wishes for end-of-life care) as well as durable power of attorney (POA) so a trusted friend could handle both health care and financial decisions for them when they couldn’t.

(Unlike an ordinary POA, a durable POA stays in effect if you’re incapacitated. The medical version of the POA is called a durable POA for health care.)

They also bought long-term care insurance to help cover expenses if they develop chronic illnesses that require treatment over a long period of time. Premiums for this kind of insurance can range, on average, from as low as $600.00 to more than $5,000 a year depending your age, the level of coverage you choose and the overall condition of your health when you apply. They offer peace of mind that a catastrophic illness or long term care needs won’t bankrupt them. Long term care insurance also gives them a mechanism for preserving their retirement income and savings for the surviving spouse should one spouse need a nursing home or prolonged care. Cost of that care could easily wipe out a lifetime of savings, leaving the surviving spouse nearly penniless, when they are least able to make up the loss.

Preventing Falls

They also did some preventive remodeling. They added grab bars to their bathtub and moved their washer and dryer from the basement to the main floor of their house to reduce their risk of falls. Falling is the No. 1 cause of hospitalization for older adults in the United States and a leading reason those 75 and older wind up in long-term care.

“Making your home fall-resistant is one of the best things you can do. Your injury potential goes way down,” says Louis Tenenbaum, a former carpenter and contractor who founded the Aging in Place Institute. The organization advocates for housing modifications to meet the needs of seniors who want to stay in their own homes as long as possible.

Every step the Boyers have taken to protect themselves in old age is a wise move even if you have children who say they’re ready and willing to be your caregivers, says Dr. Bruce Chernof, president and CEO of California-based SCAN Foundation, a nonprofit dedicated to improving the range of health care for seniors.

Finding Strong Supporters

Chernof, who himself is a married boomer with no children, says “family” needs to be defined broadly.

“It’s not just children. We all should be thinking about how we want to live our lives with dignity and independence and we should be building a circle of friends and family around us to help us realize that plan,” Chernof notes.

The key thing is choosing someone who will enforce the decisions you’ve already made, Rahl says. “It’s very important to communicate ahead of time what your wants and wishes are, and choose someone who will honor your wishes, not impose their own personal values,” he adds.

Draft Documents, Get Insurance

Having that “circle of support” isn’t enough without the conversation about what you want done when something happens to you. “Seventy percent of those over 65 are going to need long-term service, including help around the home, dressing, transportation and more,” Chernof says. “Not only should you be talking about what you want, it’s incumbent on you to have tools in place — like durable power of attorney and an advanced directive document and long-term care insurance if you can afford it — to support your circle of support when you hit a speed bump.”

Having those conversations isn’t easy.

Alice Alexander, 57, admits she’s one of those “typical people who have their head in the sand” about growing older.

But she took one step that she knows is in the right direction, though she did it for other reasons: She and her husband of three years recently moved into a co-housing condo community in downtown Durham, N.C. Like the Boyers, they’re childless.

Being There for Each Other

“I wanted to live in a community and with co-housing, community is there when you want it,” says Alexander, executive director of the Co-Housing Association. “I wanted one of those neighborhoods where you know your neighbors, where you remember each other’s birthdays and feel comfortable knocking on the door when you need help but you can always close the door. I think together as a group we’ll all find the courage to have the conversation, because we really do need to think about this.”

Alexander’s multigenerational co-housing neighbors — the Durham Central Park Co-Housing Community — haven’t set up a legal covenant spelling out how neighborly they’re going to be. But they have agreed that they want to be there for one another.

The plan was tested during the month of move-in, when one of their single neighbors broke her arm and couldn’t care for herself.

Rather than see her go to rehab, “We scheduled visiting with her, bringing her food, and some people volunteered to help her bathe,” Alexander says.

Revisit the Decisions

While setting plans in place for the potential and the inevitable are a good idea, they’ll sometimes require some tinkering. Over the last couple of years, the Boyers realized that asking a close friend to be their support was probably not the best idea.

“Unfortunately, he’s our age, which is not going to be a practical solution,” Pam says. “We’re going to ask an attorney to take over for us.”

Her advice: “Talk about it while you’re still feeling good and revisit it from time to time. It’s not once and done.”

Denise Foley, former editor at Prevention magazine, has also written for Good Housekeeping and Time.com. She lives in the Philadelphia area.

Why Aging Parents Won’t Ask for Help, And How You Know They Need it

By Dr. Barbara Nusbaum

Aging parents often won’t ask for help, and sometimes for good reasons. Imagine realizing you can’t do, actually do, the very basic things you never have had to even think about. Picture struggling to turn on the shower or climb into a tub, button a shirt, drive. It’s scary, frustrating, depressing and can be downright shaming. No one wants to give into this frailty, let alone admit it. Who wants to admit declining competence and independence? And the final rub: Asking for this help, at some level, acknowledges losing vibrancy, vitality, and relevance—and approaching mortality.

Here are four specific reasons your parents may not ask for the help they need:

4 Reasons Parents Won’t Ask for Help

1. Worry and shame around finances. Money is one of the hardest things to talk about. As we age, money can be very scary and a source of great shame. Aging parents most often live on a fixed, limited income, and are acutely aware that more money won’t be coming in. Parents are supposed to provide for children- not the other way around! Yet now, they may need money. But from a limited and shrinking pot, parents need to cover housing, food, clothing, entertainment, health care and more. And they worry about the unknowns: paying for long term care or a serious illness, like cancer.
2. Resisting very difficult, but necessary life changes. Thinking about the life changes of aging is hard enough. Talking about and making plans for them is even harder. Changes such as moving (downsizing or moving to a care facility), giving up driving, or having to budget can be hard for an aging parent to face. Most of us, when we age, would rather just not deal. Better to not think, talk about or make changes.
3. Denial: very understandable, but dangerous. Parents can easily deny the seriousness of their situation, and deny troubling signs of aging. Losing weight, for instance, is a serious aging problem, yet parents often frame it as finally getting rid of those extra 20 pounds. A fall down the stairs is rationalized as that darned loose step. Significant lapses in memory are due to an overly busy day. Additionally, parents often aren’t aware they are having problems, making it impossible to tell their children they need help. Another form of denial: parents can feel they have many years ahead to make necessary changes, denying that they don’t have all the time to make moves, or the plans necessary to keep them safe.
4. Powerful desire for independence. Simply put: no one wants to give up independence. So parents will hold onto it until they absolutely have to give it up. That means not asking for help.

Given all the reasons your parents may not ask you for the help they really need, you should know what to look out for:

Signs That Aging Parents Need Help (Even When They Don’t Ask)

1. Finances, mail and bills are ignored and pile up. Mail and bills pile up because dealing with finances and paperwork becomes overwhelming. Managing bank accounts, investments, credit card bills, and regular payments become too much to handle. So keep an eye on finances.
2. The house becomes cluttered, messy or unkempt. This is especially important if you notice a significant change.
3. Eating and food become less important, and you notice significant weight loss. Aging can cause less interest in eating, due to losses in smell and taste, difficulty shopping and cooking, or no interest due to depression and the isolation of always eating alone. A parent might eat just enough to get by, but suffer from not eating enough and not eating nutritiously.
4. Burns on the bottom of pots and pans. Check out the pots and pans. With short-term memory loss, parents can forget they are cooking and scorch their pots, creating a fire hazard.
5. Appearance is messier and less clean. An aging loved one may wear the same clothing repeatedly, may not button correctly, or wear clothes with stains. Doing laundry can become too challenging, due to lack of energy, strength or caring if it’s done or not. Or parents can be afraid to fall while doing it. Also, watch for other personal hygiene issues.
6. Neglected health care. Watch for parents missing doctor’s appointments (you may need to actively ask about it). This happens due to forgetfulness or not having easy transportation. Parents can also stop taking medications regularly or correctly due to memory loss, depression (feeling it doesn’t matter), not refilling or not being able to afford prescriptions. This is a serious health risk. Also, watch for parents who might not be getting enough exercise, another serious risk.
7. Isolation, depression, anxiety. Isolation has been found to be as great a health risk as smoking, obesity and heart disease. It also can easily cause depression and anxiety. Depression can be seen in hopelessness or despair, lack of interest in once pleasurable activities, crying, listlessness, and not wanting to get dressed or go out. One concrete sign is an increase of frequent phone calls, often at odd hours.
8. Inappropriate, unusual behavior, clothing or speech. Friends, neighbors, community members may notice that your parent seems off, is dressing inappropriately for the season, or saying odd things. If you start noticing this, ask others who are around your parent, if they have noticed anything concerning. And ask them to keep an eye out and be in touch with you, if they do.

If you start to notice these behaviors in your parent or loved ones, seek to help them, even though they may repeatedly tell you they do not need it. You can either help them directly or find home care for them through agencies in their area.

We Need to do a Better Job Caring for 40 Million Family Caregivers

Family caregivers are invisible.

Those children, spouses, or other relatives who provide personal assistance to loved ones with physical or cognitive limitations are often taken for granted or even ignored. But without them, our system of long-term supports and services would collapse. Frail elders and younger people with disabilities would get sicker. Hospitalizations would increase. Medicare and Medicaid costs would explode.

There are at least 40 million family members caring for adults in the US. According to a new study by the AARP Public Policy Institute, they provided 37 billion hours of assistance in 2013, or an average of 18 hours a week. And AARP figures the economic value of that care was $470 billion. To put it another way: that’s roughly what it would cost to replace that family assistance with paid services.

Yet, we have a care system with only a vague sense that those families are there. It does little to understand their needs or what could be done to make their role easier and more effective.

Earlier this month, AARP updated its snapshot of caregivers, called Valuing the Invaluable. It builds in part on a study released in June called Caregiving in the U.S. that was done jointly by the National Alliance for Caregiving and AARP. Together, the two reports paint an important picture of those caregivers, and their enormous physical, financial, and emotional burdens.

Adult children, mostly daughters, reduce their own paid work to care for parents, at a lifetime cost that can reach hundreds of thousands of dollars. They struggle to provide complex medical care with little or no training. And, yet, the physicians treating their loved ones rarely talk to them.

The Caregiving study found that only one in three family caregivers reported that a doctor, nurse, or social worker asked their advice about caring for their loved one. Just one in six caregivers said a health provider ever asked if they needed help themselves.

At a time when hospitals are focused on preventing readmissions (thanks to Medicare penalties for those that have too many), health professionals who fail to ask these questions are ignoring key allies in their efforts to assure patients comply with, for example, post-hospitalization discharge instructions.

For instance, imagine how useful it would be for a physician to know whether an 80-year-old woman recovering from hip surgery will have transportation to her physical therapist once she returns home. Or has someone to help her take her pain pills on schedule. Or help cook her meals so she does not become malnourished.

None of this is high-tech medicine. But for the well-being of that surgery patient it can make all the difference between a good outcome and a poor one.

Similarly, if an over-burdened family caregiver crashes from the stress, the patient is highly likely to end up in a hospital or nursing home. A decline in a caregiver’s health often sends her loved one from home to a facility.

So when an adult daughter accompanies her mom to the doc, that physician could take a minute to ask the daughter how she is doing. True, she is not his patient. But knowing more about her physical and psychological state could be critical information.

Person-and family-centered care is all the rage in medicine these days. But while health professionals have learned to say the words, few really know what they mean.

As the AARP study notes, we are beginning to acknowledge the role and needs of caregivers. Thirteen states have enacted the Caregiver Advise, Record, Enable (CARE) Act that requires hospitals to take three steps for all patients: If a patient agrees, designate a caregiver at admission; notify her before the patient is discharged; and describe the tasks she will need to perform at home and provide instruction in how to do it.

In addition, 15 states now include a formal assessment of family caregivers for Medicaid recipients getting long-term supports and services at home.

These are important, though modest, steps. Slowly, policymakers are beginning to understand that in many cases, it is literally not possible for people with long-term care needs to live at home without the support of family caregivers. And they are starting to realize that hospital discharges will often fail without that family help.

We have a long way to go, but it is at least a start.

Care Coordinators Help Lighten the Load

“They’re angels in disguise.”

That’s how one long-term care advisor, who has worked with care coordinators both personally and professionally, describes the coordinators she’s encountered.

Care coordinators, also called care managers, are not caregivers—they don’t help clients with chores, personal hygiene or related tasks. They act instead as consultants who assist clients navigate elder services, according to Emily Saltz, MSW, LICSW, who is CEO of LifeCare Advocates in Newton, Mass. “We act as consultants to families, as advocates in shepherding them through the overwhelming maze of services and resources that are available for their elderly loved ones,” she says.

The process generally starts with an assessment of the elder’s physical, emotional and cognitive functions in the elder’s living situation. Doing the assessment “in the field” is important, Saltz said, so the care manager can understand the challenges encountered in the elder’s natural environment. The assessment’s results influence the care manager’s recommendations about the services and resources the family can use to help the elder have a good quality of life, whether that means remaining at home or transitioning to the next step.

The work often takes place in a crisis atmosphere, she said. Adult children become concerned about their parent but they frequently live too far away to provide any practical help. A care manager can provide that local presence.

“We can be boots on the ground assessing the situation, giving valuable feedback and helping to coordinate and monitor the care of that elder. We see a lot of people with cognitive decline. I would say in my practice about 90 percent of our caseload is folks who are experiencing some kind of dementia and families are worried about their decision-making capacity and their safety and all those kind of issues,” Saltz said.

LTC Policy Coverage

Long-term care insurance (LTCI) can include a benefit giving the insured access to a care manager. Some insurers will have a preferred vendor arrangement with a national care management service; others will offer a benefit to work with an independent care manger, although that benefit is usually relatively small, Saltz’s said. “[With] Most policies that I’ve worked on the maximum benefit is usually something like three to five times the daily amount, usually amounting to $1,500 or $2,000. But that could go a pretty far ways toward assessing the situation, giving recommendations and getting things going,” she said.

Working with an independent care manager can help insureds in other ways, she maintains, because the manager understands how insurers evaluate claims and care share relevant information about the insured’s status. The elder who’s affected and needs the policy is usually trying their best and doesn’t want to show need during the evaluation interview, she says. By sharing additional background information with the insurer’s interviewer, the care manager can help the evaluating professional draw a fuller picture.

Finding a care manager

LTC-advisors and elders’ family members who haven’t worked with care managers face the challenge of finding the right professional. Saltz is the immediate past president of the Tucson, Arizona-based Aging Life Care Association™. The association has over 2,000 members and has developed standards of practice, a code of ethics and a certification process for elder care managers. Its website (aginglifecare.org) also provides a national ZIP code-based referral service.

Saltz said the association membership helps distinguish care managers and benefits clients, but she also stresses that clients evaluate managers as they would with any other health care professional. “The consumer who is using a professional that is part of the Ageing Life Care Association network can be assured at least that these minimum standards have been met and that the care manager has been vetted through the professional association to have the appropriate skills,” she said.

In addition, “families need to look at the background of the professional that they’re inquiring about and making sure that they have the health care background that is appropriate to this task.”