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Poor Financial Decisions May be Indicative of Dementia

Poor Financial Decisions May Be Indicative of Dementia

Diminishing brain function due to the onset of dementia can lead to the destruction of your financial well-being. If you are age 50 or older, easy access to your financial assets like stocks and bonds, checking and savings accounts, money market accounts, and other assets can lead to loss of these funds if an unauthorized person gains access to them, or if they are mismanaged. Family members are often unaware their loved one needs help before the unintentionally mismanaged assets, now gone, bring about devastating consequences for both the person living with dementia as well as their family. The Alzheimer’s Association reports that from diagnosis to death, Alzheimer’s disease (AD) care will cost an average of $424,000 per individual, and 70 percent of that cost is out of pocket expenses to the family system of the affected loved one.

It is common to have AD symptoms long before an official medical diagnosis. Difficulty managing money is one of the first signs of Alzheimer’s disease. To spot problems early, look for the warning signs of ill-advised financial transactions through oversight. Unopened or unpaid household bills, overspending on credit cards and making just minimum payments on the debt, falling prey to frauds and scams, and not paying attention to more significant investments that constitute the bulk of a person’s wealth are all indicators of mental decline. As a whole, the situation is very concerning as the poor financial outcomes that asset spending brings about are also happening at a time when expenditures to pay for increasing caregiving needs for dementia becomes extensive. 

Projections are that by 2050, the prevalence of Alzheimer’s will triple in the US. Those individuals suffering from AD who do not have personal or family financial support will most likely become a beneficiary of the US Medicaid program. Total Medicaid spending in the fiscal year 2018 was 593 billion dollars. The federal government paid 62.5 percent, and the states paid 37.5 percent of the budget. Research statistics data from the Centers for Medicare and Medicaid Services (CMS) are projecting that, under current law, from 2018 – 2027 national health spending will be nearly 6 trillion dollars with a substantial portion of that going to underfunded seniors living with dementia.

One of the best ways to protect your finances from the unintended consequence of mismanagement due to cognitive impairment is to accept that this problem exists, and there is a need to put systems in place for financial oversight long before mental decline sets it. Meet with an elder law attorney to put the legal documents in place, allowing for power of attorney, financial control, medical power of attorney, as well as a dementia directive, as early as your 50th decade. You may also allow a trusted adult family member, friend, or financial advisor to review your monthly spending habits and bill paying. If there is a noted error in your financial judgment or a lapse in your standard financial operating procedures, they can call it to your attention well before all of your money is gone.

Alzheimer’s Association

According to the Alzheimer’s Association, only 16 percent of seniors regularly receive cognitive assessments in their annual medical exams. Keep yourself from becoming vulnerable by protecting your liquid assets and your net worth with provisions for financial oversight. The safety net you put in place today can protect your finances and even be an indicator that you require testing for cognitive problems. Currently, there is no solution to the problem of Alzheimer’s disease and other forms of dementia however; there are systems you can put in place to protect yourself financially. It is best to prepare for the possibility that you may develop cognitive problems and have protections in place rather than unwittingly put yourself in financial jeopardy.

5 Reasons to Rethink Your Retirement Investments

5 Reasons to Rethink Your Retirement Investments

Kiplinger.com is suggesting it is time to rethink your financial retirement portfolio. You may have built up a significant nest egg in a 401(k) plan, but it does come with serious baggage during your golden years. It is impossible to argue against the early stages of a 401(k) when employers match your contribution to the plan. You can take advantage of the tax breaks because contribution money comes out of your paycheck before calculating taxes and that money compounds every year. When you retire, however, the tax impact of a 401(k), 403(b), or traditional IRA can become significant.  

You have probably been told at retirement time that you will be in a lower tax bracket however; it is more likely that the opposite will be true. Your tax rate is expected to increase. If you maintain the same standard of living, it will require the same amount of income, which translates to the same tax rate. Additionally, your children will be grown, the house paid off, and those substantial tax deductions are gone which may push you into a higher tax bracket. You will pay taxes on withdrawals from your contribution plan(s) annually irrespective of if the money comes from dividends, capital gains, or your contributions. That money will be taxed at your income tax rate at the time of withdrawal. Currently, the top marginal income tax rate is 37 percent, and taking into account the US deficit that tax rate could increase in time.  

Double taxation can eat away at your retirement savings and is often the norm because you can pay more taxes on your Social Security benefits. Unless you have a Roth IRA, distributions from your retirement plans count against your tax situation when calculating what percentage of your Social Security is subject to tax. The result is you are paying more taxes on your retirement plan distributions and Social Security income. You are also paying more taxes from capital gains, dividends, and interest from your investments.

Required minimum distributions (RMDs) can be frustrating and expensive if you neglect to take them. You have to withdraw funds from your retirement fund accounts when the IRS deems it necessary. Even if you want to leave the money in the account, the IRS will schedule your withdrawals when you reach 70 ½ years old. There are stiff penalties for not taking out the required minimum distribution. You may pay as high as an additional 50 percent tax.

If you are married a 401(k) or IRA is the worst account to leave to your surviving spouse. No one wants to die without leaving their spouse financially secure, but these two financial vehicles are fully taxable accounts. Upon your passing, your spouse is about to change tax filing status from married filing jointly to single. That takes your spouse’s tax obligation from the lowest to the highest bracket. Probably not exactly what you had in mind.

Both your 401(k) and IRA plans are subject to tax law changes. Every time Congress convenes a session, there is the possibility that increases in taxes on your retirement plans can occur. It is highly unlikely that your taxes won’t increase. The US debt continues to grow at an alarming rate. The US government will tax its citizens more than ever to gain some level of financial control. Privatize the gains, socialize the losses is the federal government’s rule of thumb, particularly when considering how massive the US debt is.

Get together with a tax planner to identify ways to move your retirement funds into better financial retirement vehicles. Sometimes conversion can cost a bit of money upfront, but in the long run, you will be far better off with regards to your retirement tax obligations.

If you have questions or would like to discuss your personal situation, please don’t hesitate to reach out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

The Difference Between Medicare and Medicaid

The Difference Between Medicare & Medicaid

Most people who work in healthcare may recognize the acronym LASA, which stands for “look-alike-sound-alike” and is usually seen when referencing medications.   When it comes to federal programs, Medicaid and Medicare, in written form, look alike and they do sound alike but work very differently.

Both Medicare and Medicaid were started in 1965 under Lyndon B. Johnson’s administration in response to the inability of older and low-income people to purchase private insurance.    Medicaid is an assistance program, funded federally and at the state level, that provides coverage for health care to low-income individuals regardless of age.  It is governed federally with each state administering its own plan, which can vary from one state to the next. Medicare is a federal insurance program that provides health coverage for people aged 65 and over or to those under age 65 with a severe disability such as end-stage renal disease or Lou Gehrig’s disease, also known as ALS-amyotrophic lateral sclerosis. Dependents are not typically covered.  

Medicaid eligibility is needs-based, meaning both income and assets are counted when determining eligibility. Both Medicare and Medicaid will cover a broad range of health care services, including hospital stays and physician office visits, yet Medicaid will cover nursing home care, in-home care services, long term care, and transportation to receive medical care which Medicare will not pay for.  It is possible to qualify for dual coverage, which means both Medicare and Medicaid will work together to provide health care coverage and lower costs.

Regarding cost, Medicaid in most instances is free of cost though a small copay may be required depending on the plan.  Medicaid can also recover against assets in a recipient’s estate after the death of the recipient.  This could mean a lien is placed and executed on a recipient’s home, depending on whether a surviving spouse or blind or disabled child is residing in the home. Medicare is not free in that premiums and co-payments may be required for some parts of Medicare, and may be larger for those with a higher income, but eligibility is not income-based.

With Medicare, one has to work for about 10 years (40 qualifying quarters), at which point no premiums are required for Part A, which covers hospitalizations.  Premiums may be necessary if you sign up for a Medicare Advantage plan, which is different from Original Medicare where you are permitted to purchase supplemental coverage for out of pocket costs.  Because Medicare is not administered by each state, a Medicare recipient will usually have the same coverage and pay the same copays and deductibles regardless of the state of residence. Co-pays and deductibles are required for Medicare’s Part B (outpatient services) and Part D (medication) plans.   Also, a financial penalty can be assessed if one does not sign up for Medicare  Part B when you first become eligible, and there may be a delay in getting coverage.

Though basic differences are covered here, there is much more information to know regarding both plans, so research is encouraged before you hit the age of eligibility for Medicare to determine which Medicare plan may be right for you.  Medicaid plans and coverage differ from state to state, and sometimes county to county.  We would be happy to answer any questions you have about your potential eligibility for either program.  Just give us a call at 1.800.660.7564 or email us at info@covertlaw.com.

Sources:  

www.nerdwallet.com/blog/investing/difference-medicare-medicaid/

www.eligibility.com/Medicaid/what-services-does-medicaid-cover.pdf

www.Medicare.gov/sites/default/files/2018-09/10050-medicare-and-you.pdf

Pause Before You Sign That Nursing-Home Contract

Pause Before You Sign that Nursing Home Contract

 

Suppose your mother can no longer make decisions for herself and she now needs nursing-home care. You are stressed and anxious. The nursing home puts a twenty-page, single-spaced contract in front of you. You wish you could flip straight to the last page and sign then and there, just to get it over with.

Do not do this. You could be agreeing to pay, out of your own pocket, many thousands of dollars for your mother’s care.

Try to get your mother admitted and then, before you sign the contract, bring it to us for our review and guidance. Once your mother has moved in, she can’t be evicted just because you want to negotiate the contract.

But if that is not feasible, then sit down and take a few deep breaths. Read the contract carefully. Make a list of questions and ask a facility representative to explain. Ideally, that person would sit with you as you go through the document. Don’t sign until you understand.

Here is what to watch out for.

You should not use your own money to pay

* Do not sign the contract if it requires you to obligate yourself to pay with your own money. Carefully scrutinize any language referring to you as the “responsible party” or “resident representative” or “agent.”  

The suspect buzz-words are “co-signor,” “guarantor,” “personally guarantee,” “personally liable,” “private-pay guarantor,” “surety,” “individual capacity,” or any such language. Words like these obligate you, personally, to pay if your mother doesn’t have the money. Don’t sign even if there are no buzz-words, but the language looks something like this: “If the resident does not or cannot pay, I will pay the amount owed for residency charges, services, equipment, supplies, medication, and other charges.”

Please understand that it is legal for the facility to require you, if you hold financial power of attorney or are guardian, to pay nursing-home bills from your mother’s money and assets. It is legal to require you to spend her money on her care and not for any other purpose. It is not legal to condition your mother’s admission on your agreeing to pay her bills with your own money, which is what the above buzz-words mean in plain English. The nursing home can ask you to agree – and if they ask, refuse – but you cannot be forced to agree to pay with your own money.

If your mother lacks the money, the next step is to apply for Medicaid assistance, not to go digging into your pocket.

Sometimes the contract is confusing. For instance, one nursing-home agreement says that the representative “personally guarantees continuity of payment.” This alarming language is properly followed by an italicized statement that the representative is “not required to pay for Resident’s care from his/her own personal funds.” The agreement proceeds, though, to use the phrase “personally guarantee” in other contexts. Ambiguity like this is why we recommend that you first bring the agreement to us. We can ensure, on your behalf, that the facility clarifies such language and does not misapply it.

Everyone in need has the right to apply for Medicaid

*           The nursing-home contract must not require your mother to waive – give up – her right to seek government assistance like Medicare or Medicaid, nor can it ask her or you to sign any statement that she is ineligible for those benefits.

*           If your mother has no money to pay for care, a Medicaid application will be required. The contract may seek your permission to apply for Medicaid for you. You have the right to decline that option and, instead, seek legal counsel to help you apply. We have seen some facilities mishandle Medicaid applications, which wound up being denied when they should not have been.

In any case, though, whoever files for Medicaid, you must cooperate by immediately providing all records necessary for that application.

If your mother is eligible for Medicaid, Medicaid pays

*          If your mother does get Medicaid, the nursing home must not require an additional payment over and above that designated by the Medicaid scheme in your State. 

*           The nursing home must not demand that your mother receive additional services not covered by Medicaid and then, if your mother declines those services, evict her. It should ask, in advance, whether those services are desired at specified additional cost.

*           The nursing home must not require additional donations to a charity as a condition of admittance.

Do not agree to arbitration

*           The contract may seek your consent to arbitration. If you agree, you will be giving up your right to a jury trial if a dispute arises. The rules are in flux at the moment, but, generally, you should decline such a provision.

The nursing home must protect property reasonably

*           The nursing-home contract may try to fudge its responsibility to take care of your mother’s property, but the bottom line is that it is obligated to care for your mother’s property during her stay. You should, however, use good judgment to safeguard her valuable property like fine jewelry by keeping it elsewhere.

Protect yourself. Cross out, and sign the right way

*           Cross out provisions in the contract that you decline, and put your initials by the strike-outs. 

*           Be sure to sign the contract only as your mother’s agent. Your signature should read: “[Mother’s name], by [your name], her agent.” 

To be fair to nursing homes, they are entitled to be paid and they often have difficulty collecting on legitimate debts. Facilities are forbidden from suing to take a resident’s Social Security or pension income. They must comply with strict federal consumer-protection restrictions. Despite these payment hurdles, they must still protect frail and vulnerable people from all manner of harm. They also suffer public hostility, thanks to the misconduct of some bad actors. We always urge cooperation with nursing-home personnel if feasible, because their job is a difficult one.

On the other hand, you and your family have the right to be protected from the excesses of bad actors – or from the imperfections, for example, of the facility mentioned above that misuses the “personally liable” language. Thus, no matter how reputable the facility, it is good judgment to consult an attorney before you sign an admission contract. If that’s not possible, then take care and time to study the contract, get facility staff to explain it to you, and strike out the objectionable provisions as advised above.

A few moments of care, even despite the stressful circumstances you are surely in at the time, can save you a lot of difficulties later. Please feel free to reach out if you have questions or need assistance by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Autism Cares Act Signed into Law

Autism Cares Act Signed into Law

Much attention over the last ten years has been given to the research for causes and treatment of Autism Spectrum Disorder, also known as ASD. The Combating Autism Act became a law in 2006, was reauthorized in 2011, then again reauthorized and renamed to Autism CARES Act in 2014 (Autism Collaboration, Accountability, Research, Education and Support Act) which provided federal funding for research and monitoring the prevalence of autism and for training providers in detecting and diagnosing autism.  Even still, there is no one single test for autism, no definitive cause for autism in general, and no cure yet.  To be able to continue valuable research, education, social programs, and services to support the autism community, the law needed to be updated so certain parts of it would not expire by the end of September 2019.   With bi-partisan backing and passage through the U.S. Senate, President Trump signed the Autism CARES Act of 2019 into law on September 30, 2019. The 1.8 billion afforded by this law will allow the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and the Health Resources and Services Administration (HRSA) to continue their work on autism.

Autism is a developmental disability that creates social/communication barriers and behavioral changes for a child diagnosed with autism and provides many social and economic challenges for the child’s family as the child grows into adulthood.   Being a spectrum disorder means that autism has many different forms and affects people in many different ways without a consistent degree of severity.   Three conditions that were formerly diagnosed separately are now all called Autism Spectrum Disorder.  These conditions are autistic disorder, pervasive developmental disorder not otherwise specified (PDD-NOS), and Asperger syndrome.  Research has found that many forms of ASD stem from genetics, as well as environmental and biologic factors, and has been proven not to be caused by childhood immunizations.

Because autism spectrum disorder has several serious co-morbid conditions, there is a higher rate of premature death for an autistic person compared to the general population.   As communication issues prevent some patients from being able to describe or even alert parents to symptoms of common conditions that accompany this disability, appropriate treatment for medical conditions could be delayed.  Epilepsy, gastrointestinal conditions such as constipation, sleep difficulties, marked and unexplained irritability or aggressiveness, eating and feeding challenges, obesity, anxiety, and depression are some of the health issues patients and families face and can be costly to treat, both emotionally and financially.

Economically, the cost of caring for an autistic child is estimated to be around $60,000 a year, and more than $26,000 for community support, employment support and possibly daycare if not able to be employed and stay home alone safely.  Once the child reaches adulthood, an autism patient is less likely to pursue higher education and job opportunities are few.  Per the “Autism Speaks-2017” special report, of young adults who are 25 years old at the time of a study, more than half never held a paying job. Once they have aged out of care provided by a pediatrician, fewer adult patients get the specialized help they need to manage their autism-associated health conditions, and of those adults who are able to work, the income of many remain at or below the poverty level.    The CDC considers autism spectrum disorder a public health concern and continues to monitor developmental disabilities with the desire to find out more about risk factors that make a person more likely to develop ASD.  With the help of continued federal funding the Autism Cares Act of 2019 provides, the CDC and other agencies will be able to continue to pursue answers to causes of, new treatments and hopefully a cure for autism.

If you have questions or would like to discuss you or a loved one’s planning needs, please don’t hesitate to reach out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Sources:

https://whnt.com/2019/10/01/president-trump-signs-autism-cares-act-sets-stage-for-research-into-the-disorder/

https://www.autismspeaks.org/autism-cares-act

https://www.cdc.gov/ncbddd/autism/research.html

Medicare Coverage for Long Term Care

Medicare Coverage for Long Term Care

Most people understand that by paying into Social Security throughout their careers, they can receive health care benefits through Medicare starting at age 65.  Individuals under age 65 who qualify to receive Social Security Disability benefits are also covered under Medicare, as well as anyone of any age who has Lou Gehrigs disease, known as Amyotrophic Lateral Sclerosis (ALS), or has been diagnosed with permanent kidney disease (end-stage renal disease) that requires dialysis or a kidney transplant.  But many people may not understand what is covered when long term care is needed.

In general, long term care is medical and non-medical care provided to a person who is unable to perform the basic actions needed on a daily basis to function independently.These basic actions are called activities of daily living and include bathing, dressing, eating, toileting, managing bowel and bladder function, and having enough physical mobility to be able to move safely to and from a bed or a chair, called transferring.  For people with chronic diseases, permanent injury such as from a stroke, or are suffering from the effects of aging, long term care is provided indefinitely without the expectation that the patient will recover.  

Often patients receiving long term care services reside in a nursing home to be able to have their basic needs met.  For others who have become incapacitated due to an illness or injury, skilled nursing care may be needed with the goal of recovering to independent functional status.Medicare will pay for medically necessary acute care services and some long term care services that meet specific criteria.  Most long term care non-medical services are not covered by Medicare, such as nursing home expense or the services provided in the home for custodial-type care.  

There are four specific types of long term care services, listed below, that Medicare will pay for, though certain conditions apply for most services to be covered:

  • Care in a skilled nursing facility for up to 100 days per benefit period
  • Services to treat medical conditions
  • Services to prevent further decline due to medical conditions
  • Hospice care

For a Medicare recipient to qualify for a skilled nursing home stay, the patient must have been provided acute care in a hospital for three consecutive days (often referred to as three midnights) prior to transferring to a skilled nursing facility or must be placed in a skilled nursing facility within 30 days of that qualifying acute care stay.  Being held on observation status for three consecutive days is not enough for Medicare to pay for additional care.

Once in a skilled nursing home, payment for services is based on length of stay with only a portion of the cost is covered after the first 20 days, and Medicare will not pay for the cost of the skilled nursing facility after the 100th day.These days of stay do not need to be consecutive.

When services to treat medical conditions are deemed medically necessary by a physician, Medicare will pay indefinitely on certain services as long as the physician writes an order for continued services every 60 days and these services remain medically necessary.   Services covered include intermittent or part-time skilled nursing care, therapy services provided by a Medicare-certified home health agency, medical social services, and medical supplies and durable medical equipment (of which 80% of the approved amount is covered).  For patients with conditions that may not improve, such as debility from a stroke, Parkinson’s disease, Alzheimer’s disease, Multiple sclerosis or ALS, Medicare will pay for services that could prevent further decline in their health status.   Hospice care for those with a terminal illness who have chosen to stop all active treatment and are not expected to survive longer than six months is also covered with Medicare.   This care includes medications for pain control or relief from the symptoms of the illness, as well as hospice care by a Medicare-approved hospice provider not only in the home but in a nursing home or a hospice care facility.  Lastly, some short-term hospital visits may be covered.

Understanding how to pay for long term care can be overwhelming. We help seniors and their loved ones plan for the possibility of needing long term care, including how to access and pay for it. If we can be of assistance, please don’t hesitate to reach out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Sources:

www.acl.gov

www.medicare.gov

www.ltcFeds.com

Many Wealthy Retirees Are Too Scared to Spend

Many Wealthy Retirees are Too Scared to Spend

While the US economy is in a cycle of more than ten years of economic growth, its citizens, even the “wealthy” ones, are worried about running out of cash and are scared to spend. Bloomberg.com is reporting many retirees, and near-retirees are sitting on their wealth in much the same way large corporations are hoarding stockpiles of cash. Even famed investor Warren Buffet and his multinational conglomerate holding company Berkshire Hathaway Inc are side-lining cash in excess of $122 billion.

 

Americans are experiencing a strong economy. The Gross Domestic Product (GDP) is steadily growing. There are low-interest rates, low unemployment, a stable currency, and more than $1 trillion of available investor cash. For those retirees who are financially well off then, why is there anxiety about money and reluctance to enjoy it in retirement years? Yes, many of the wealthy are planning on leaving a legacy to their heirs, but something else is happening.

 

Wealth in the US is becoming more concentrated among fewer households. Consolidating wealth is like consolidating power. Ultimately there is little difference between the two. The Americans who have most benefited from this ten-year boom cycle in the American economy are averse to spending their money. They want to survive an economic downturn and still maintain their elite financial status. This conservative approach will likely guarantee them a very comfortable lifestyle even in the event of bleak financial times. Former Brookings Institution fellow Matt Fellowes states, “It’s trillions and trillions of wealth that is not benefiting anyone except asset managers.” The rich, sitting on their wealth, create stagnant money, which negatively impacts the vitality of the American economy.

 

The Federal Reserve provides a quarterly balance sheet of all individual and charitable monies and America’s combined net worth now stands at $109 trillion. It is a lot of money; however, it has disproportionately flowed to the wealthy. Celebrity and wealth-obsessed culture saturates Americans with images of the rich with expensive real estate, private jets and yachts, and attending posh philanthropic parties. The reality of the average millionaire in America is far more frugal than their Instagram and paparazzi driven counterparts. Retirement experts often disagree as to why these conservative millionaires are unwilling to enjoy the fruits of their lifelong labors. 

 

Being cautious with money is inherently prudent, particularly at the height of an economic boom cycle. Even without market uncertainty, a key characteristic of modern capitalist economies is a boom-bust cycle. A process of economic expansion (boom) will be followed by economic contraction (bust), and the cycle occurs repeatedly. 

 

 

www.federalreserve.gov

 

All Americans, even the wealthy ones, are experiencing uncertainty about their economic future. Will their rate of return on investments be able to address increasing medical costs? Will they have enough streams of income to support themselves when taking into account their longevity risk? Collectively, Americans are not saving enough to accomplish a successful retirement. However, individually, wealthy Americans are fearful of losing their financial position in a severe market downturn. These wealthy Americans have already lived through harsh economic times, particularly the Great Recession. This economic bust was triggered by the subprime mortgage crisis and the collapse of the US housing market bubble. Market bubbles present themselves from time to time, and if the free market successfully deleverages them, there is little economic incident. But when the bottom drops out, bleak economic times follow.

Once you achieve wealth, it becomes an inherent part of your identity, and consequently spending your wealth is like spending your own identity’s capital. Additionally, as you age, the tendency is to become more risk-averse, according to the National Institutes of Health (NIH). With the bulk of the wealth of America in older households than in previous decades, it is no surprise that risk-averse strategies are in play. A lifetime spent acquiring wealth and watching accounts and investments mature then morphs into retirement years of asset spending and the dilution of wealth. The majority of wealthy Americans are not keen to adapt to the life cycle of asset accumulation followed by retirement spending. Their preference is to live frugally, retaining as many assets as possible to be able to ride out an economic downturn.

Planning for retirement can be stressful. Having a proper estate plan in place can eliminate much of the stress, especially when it comes to transferring assets to children who may not be ready to handle large sums of money. We can help. Give us a call to discuss your wishes, and how to design a plan that will help carry those wishes out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Better Senior Fall Prevention Programs Through Technology

Better Senior Fall Prevention Programs Through Technology

One of the most common injury producers are seniors experiencing accidental falls. Debilitating injuries range from short-term sprains, bumps, and bruises to fractures and head traumas which may require hospitalization. The Centers for Disease Control and Prevention (CDC) reports that one out of five falls causes a serious injury and that each year 3 million older people are treated in emergency rooms for fall-related injuries with 800,000 of those requiring hospitalization. Death rates due to an accidental fall as the underlying cause are on the rise.

 

Technology is providing various ways to combat the problem using balance games fitness programs, diagnosis of potential weak areas of balance and gait, and wearable sensor monitors and boards that measure progress in real time providing feedback as to how well the senior is faring in their overall physical stability.

Nintendo Wii Fit U combined with the Wii balance board was not designed with seniors specifically in mind however several games have been optimized for the needs of seniors and their workouts. One of the great features is that all you need is a TV and the Wii console game system. There is no need for the senior to leave their home and the games do not require a lot of physical space. The balance board allows the game to track your movements and weight distribution, recognizing problems with your form or stance. Immediate feedback enables correction as issues arise. Using the Wii Fit can reduce falls and improve balance in seniors and its fun. Wii Fit U and other game console platforms such as the Microsoft Xbox One with Kinect and Sony PlayStation can provide in-home exercise for seniors that can help avert balance issues and ensuing fall injury. The Wii Fit U, however, is better suited to senior exercise needs and monitoring of progress. 

SmartBalance technology by HUR was specifically designed for older adults who experience balance issues and although there are games that are played the user is on a static sensor platform with grab bars, much like a treadmill minus the rotating belt. This technology is best for seniors who have more significant challenges in mobility. The stabilization games are interactive and fun while they help to build core strength and muscle memory. A unique design is available that allows a wheelchair platform access so the user can train without leaving their chair. Test results can be compared to normative data, and progress tracking is visual, intuitive, and motivational as customization of training and comparisons of previous balance tests provide progress assessment which helps to motivate the user.

QTUG, technology created by Kinesis Health Technologies of Ireland, can provide gate and mobility assessment and fall prevention data in as little as five minutes. Mobility parameters divide into five functional categories that include walking, variability, symmetry, transfers, and turning. The user wears inertial sensors that actively and accurately measure gait and mobility as they engage in simple tasks such as rising from a chair, walking 10 feet and turning to sit in a chair again. Results of the tests are delivered to a mobile device like a smartphone via Bluetooth technology, and the senior or care provider can check the score that rates the seniors fall risk as well as their mobility and frailty. This QTUG technology can export all patient results in an Excel format as well as create a comprehensive fall risk and mobility report for each test in a PDF format. All of the resulting data can be uploaded to the cloud for medical interpretation, recommendation or referral. The testing results are automatically backed up, secure and HIPAA compliant.

Older adults and seniors need to be very mindful about their balance and mobility. Catastrophic medical issues can occur with the simplest of falls and sometimes precipitate an earlier than anticipated death. Technology is at the forefront of detailed, individualized diagnoses and corrective exercise programs that when implemented can help prevent accidental falls. To find out which technology best suits your fitness level and needs, speak to trusted counsel who can point you in the right direction to help keep you secure in your physical movement. Contact our office today and schedule an appointment to discuss how we can help you with your planning.  Call us at 1.800.660.7564 or email us at info@covertlaw.com.

Do I Need a Trust?

Do I Need a Trust?

This is a common question we hear. Read on for information to help figure out whether you need a trust and, if so, what kind fits your specific situation.

For example, maybe you have a disabled child and you want a trust to permit that child to inherit without losing government benefits. Maybe your own or your spouse’s health is heading into difficulties, and you can foresee eventually needing long-term care benefits. Trusts can avoid an expensive, public, and lengthy probate process before your beneficiaries can inherit after you pass. Or, you might be in the classic “trust fund” situation, where you’re concerned that your children won’t be able to manage money wisely.

All these are excellent reasons to consider a trust. But what kind of trust? A quick count shows there are at least thirteen different varieties. Which one is best suited to your needs? Call us. 

Here’s the basic idea behind trusts, to help you understand why you might or might not need one.

 

What is a Trust?

Think of a trust like a treasure chest. You originally bought property or earned money in your own name. You then transfer those assets into the trust’s name – into your treasure chest, in other words. The trust treasure chest becomes a legal entity separate from you, which now holds your property in its, and no longer in your, name.

Then you identify people who will occupy the three roles involved in managing trust property. First, you are the grantor, or settlor, or trustmaker – all those words mean the same thing, the “you” in this case. Second, you appoint a trustee. That person or entity is responsible for managing trust assets and following directions contained in the trust document. Third, you decide whom you want to receive trust assets – your beneficiary or beneficiaries, in other words. 

In legal terms, a trust is a fiduciary agreement among you the original property-owner, your trustee, and your beneficiary. The trust document contains instructions for what you want done with trust property, both for how you want it invested and, also, for how you want trust assets to be distributed when you pass. Trusts are, thus, a highly efficient hybrid between a power of attorney, an asset-management vehicle, and a last will and testament, all rolled into one legal entity and document.

There are two basic kinds of trusts to understand, before they split off into their thirteen-or-more different flavors: revocable or irrevocable trusts.

 

The Revocable Trust

A revocable trust can be thought of like the treasure chest with the open lid. As grantor/settlor/trustmaker of a revocable trust, you can get at trust assets freely.

You yourself can also occupy all three roles in a revocable trust – grantor, trustee, and beneficiary. If need be, you can also tinker with trust terms, by freely amending them to change the directions, beneficiaries, or trustees. Or, you can revoke the whole thing. Before that point, though, the trust document will be there to take care of everything you want it to.

If you should meet with an accident and lose capacity, the terms of your trust will designate a person to step in on your behalf and, thus, avoid the need to go to court to get a guardian for you. The trust will also direct who inherits, thus keeping your affairs private and out of probate court. This feature is especially important if you (formerly) and then the trust (after you created it) owns real property in various states. The savings in court costs in that situation could be significant.

 

The Irrevocable Trust

This is the trust for you if you’re seeing the need for Medicaid long-term care benefits in your future, or you work in a field where suits are common, such as owning a small business or in the construction industry.

The disadvantage to an irrevocable trust, however, is that you will be sacrificing all or almost all control over trust assets, unlike in the revocable-trust situation. Once an irrevocable trust is established, you as grantor/settlor/trustmaker cannot directly alter the terms and, generally speaking, your access to trust money is restricted or entirely precluded – as is required in order to enjoy the potent benefits of this kind of trust.

Think of an irrevocable trust as being like the treasure chest with the locked lid. Your trustee – who generally cannot be you – is the one with the key. You yourself can no longer reach your assets. This relinquishment of control is necessary to shelter your assets from creditors, or to protect your assets when entitlement to government benefits would otherwise require you to spend almost all you own first.

There are ways to draft an irrevocable trust carefully, so you can still exert your will over how assets are to be used. Just as in the revocable situation, you can impose conditions that must be met before a beneficiary can receive funds. You can designate how trust income is to be used for specific purposes like college tuition, business start-up, or travel. You can also authorize a person or entity as “trust protector,” who can alter trust language, correct drafting errors, or create a new similar trust if the law changes.

And there you have the basics. Now you’re ready to decide whether you need a credit shelter trust, or a charitable trust, or a qualified terminable interest trust, or a blind trust, or – just come see us to figure out all the rest!

 

Trust Caveats

Some sophisticated trusts do convey tax benefits, but, for the most part, IRS considers revocable trusts to be invisible. You as grantor/settlor/trustmaker will still pay tax on the revocable-trust income, albeit at your individual rate and not at the prohibitive trust rate.

As for estate taxes, trusts have no effect – but, at least regarding federal estate taxes, those are currently moot for most people. They are not incurred until the value of the estate exceeds $11.4 million as of 2019. Some states do impose estate and/or inheritance taxes; for those states, please consult this website:

https://taxfoundation.org/does-your-state-have-estate-or-inheritance-tax/

Also, keep in mind that revocable trusts provide no protection against creditors. If you lose a legal action, a judge can force you to change the beneficiary of your trust to the winner. Irrevocable trusts are free from that kind of interference.

Still, irrevocable trusts must be established long before you run into that kind of trouble. If you create such a trust while credit problems are looming or have already arrived, you risk that your trust will be undone as a fraudulent conveyance.

 

Trust Your Attorney

Consult lawyers like us, who have experience and expertise in the trusts and estates area. Custom-constructing a treasure chest to fit your specific needs is a job for our specific skills.  Let us know if we can help by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Modernizing Medicare to Leverage the Latest Technologies

Modernizing Medicare to Take Advantage of the Latest Technologies

Many seniors who are financially stable and choosing to age in place already have a “smart” home employing the sorts of technology that can prolong their independent living circumstances. Family caregivers are freer to move about their daily lives knowing they can check remotely on their loved one and that the loved one has a set of controls at their disposal to monitor their environment. Some of these seniors are also tracked directly by medical staff that can assess if any of the patient’s medical vital signs are outside of a safe range. While corporate competition for senior market dollars has made many of these devices within reasonable price points, Medicare is attempting to catch up to the market demand for the use of these products and include them as refundable medical expenses. Private enterprise and public policy are not in synch.

Medicare’s modest step forward in the proposed approval for funding and use of technology, specifically remote monitors for at home Medicare recipients to track blood pressure and other vital signs, is on a slow trajectory. There are two important limitations associated with the proposals. The first is a constraint on the devices eligible for use and the second is there is no provision for Medicare recipients who do not use home health agencies. The Centers for Medicare and Medicaid Services (CMS) will also not directly reimburse home care companies but allow for the expense to be considered when setting overall reimbursement rates. In other words, the bureaucratic acceptance and ability to merge even the most basic of medical technology tools into the mainstream is cumbersome at best.  

While it has not been proven that these monitoring devices improve health outcomes (and may explain why CMS is moving so cautiously), the advocates for the technology make the case that the tools allow the elderly, frailer individuals the ability to continue living at home rather than moving to an assisted living or nursing facility. There is less financial strain on CMS outlays when older adults age in place. Currently, the CMS proposal only allows for technology that monitors and collects physiological data which typically includes blood pressure, glucose monitoring, and electrocardiogram (ECG). All of this data is digitally stored and can be transmitted by the patient and the caregiver. However, this sort of monitoring is currently happening, and what CMS has come up with is merely a payment change and exclusion of those Medicare recipients not associated with home health agencies. Not exactly a significant foray into at home medical technology. Technology can streamline and make effective the remote monitoring process however it becomes less effective when government policy continues to add layers of bureaucracy and exclusions that make the adaptation to remote monitoring technologies at home needlessly complicated. 

What happens to the latest tech tools that can detect how well a senior is moving around their own home, forgotten to turn off the stove, or a senior who is unable to swallow a pill or answer a phone? For the many chronically ill seniors who are regularly monitored and have stabilized prescription medical approaches for their condition, it might be far more advantageous to approve of technologies that can prevent a house fire or data analytics that can be predictive about the increased risk of an unintended fall. Mobility trackers and smart home devices are as important as at home biometric devices for the senior who is choosing to age in place. 

Given that technology will have to be the offset for the growing shortage of personal care workers and their associated expense, remote monitoring will become pervasive in the care of the elderly with chronic conditions. However if the senior does not have financial stability, and many of them do not, how will the costs for these home technologies be addressed?

What are the benefits of the changes CMS has made to the Home Health Prospective Payment System (PPS)? The belief is as put forward by Seema Verma, “The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care.” What this means is if a Medicare recipient uses a home health agency then the remote monitoring tools become an allowable cost on the Medicare report form. The expectation is to use home health agencies as the vehicle to foster the adoption of emerging technologies which is all in support of advancing the Administration’s MyHealthEData initiative. These benefits are doubtful to keep pace with market-driven forces for innovation in the field of at home biomedical devices because healthcare is taking up an increasing share of the US economy. The CMS Office of the Actuary projects that by the year 2026 one in every five dollars in America will be spent on healthcare. 

Another benefit CMS has put into place is the release of the Blue Button 2.0 application programming interface (API). Blue Button is a digital platform that is now the standard for Medicare beneficiaries to receive claims data in a digital format so it can then be securely and privately used in applications (apps) developed by third parties. This platform standardization by CMS is encouraging software developers to leverage its digital architectural design for claims data from Blue Button 2.0.

CMS has taken some cautious steps to ensure that certain Medicare beneficiaries will be able to take advantage of and be reimbursed for the advances in the technologies for home health care. The US healthcare spending is forecast for continued growth reaching over $1 trillion by 2026. There is not a lot of time to get this right. Large government agencies move far more slowly than agile, market-driven technology companies. Thankfully technology developers and CMS are both starting to find ways to blend effectively and efficiently for the benefit of Medicare recipients, but it is a long road ahead.  If you have any questions or concerns, please don’t hesitate to contact us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

The Truth About Social Security Myths

The Truth About Social Security Myths

According to NerdWallet, more than half of Americans apply for social security before reaching their full retirement age, and more than 30 percent of those apply for benefits at 62 years of age. Americans file early for benefits even though researchers claim it would be better to wait to claim their social security benefits. It DOES matter when you opt-in to take your social security benefit. Between the age of 62 and full retirement, your benefits increase by about 7 percent each year and additionally 8 percent each year between your full retirement age and 70. These percentages reflect an actuary adjustment to ensure those Americans who opt for a larger check for shorter periods do not receive less than those receiving smaller checks for more extended periods.

Currently, full retirement age is 66 for those born before 1960 and 67 for those born after that. Social security benefits will max out at age 70 and by waiting that long your checks could be 24 to 32 percent more than what you would receive at full retirement age and a whopping 76 percent larger than what you would receive at 62. However, statistics show that only about 1 in 25 applicants will wait to collect benefits at the age of 70 when monthly benefits hit their peak. Economic hardship for some seniors clearly defines part of the trend in early benefit assumption, but what of those who have retirement planning in place?

Currently, low-interest rates and survivor benefit rules coupled with longer life expectancies generally mean most retirees would benefit by delaying their benefits as long as possible. Those destined to become super-seniors, living well into their 90s and 100s, can quickly run out of savings and may end up depending entirely on their social security benefits check. Having delayed taking social security provides maximum benefits for these super-seniors. Additionally, this older age group typically has qualities in common like a strong work ethic, positive outlook, close bonds with family, and a tendency to be religious. These traits factor into a purposeful life so that even on limited social security benefits when combined with the help of their family and community systems, they can still make ends meet. 

At the other end of the spectrum are those Americans who feel, or know, they will have shorter life term expectancy. The Stanford Center on Longevityhowever, reports that most people underestimate how long they will live. Today a 65-year-old man can expect to reach 84 years of age while a woman of the same age will probably reach 86.5 years. Studies by the Society of Actuaries are reporting life expectancies for those currently in their mid-50s (one in two women and one in three men) will live into their 90s. The cautionary tale is even if you project that you may not live long, you might indeed. It is best to anticipate being around and making financial decisions about social security benefits that reflect a longer life.

Claiming benefits early to invest the money does not mean you will come out ahead and may put you significantly behind. There is no guaranteed investment product with a return as high as delaying your application for social security benefits. Claiming benefits early can also shortchange your spouse. A married couple will lose one of their checks when the first spouse dies. The loss of a check can create a severe drop in income even if the survivor receives the larger of the two checks. This benefit loss should incentivize the higher earner of the couple, with the larger check, to delay taking their benefit so that the survivor spouse benefit is more substantial. 

You do not need to claim your social security benefit as soon as you stop working. Most financial planners will suggest tapping into other sources of income like a retirement fund or additional savings that allows your social security benefit to grow. Just delaying your benefits from age 62 to 66 can translate in a sustainable annual increase of 33 percent, so even a four-year delay can provide substantial returns. 

What about 2035 and the projected insolvency to fund social security benefits? If Congress does not act, the social security system will only be able to pay out 77 to 80 percent of the benefits promised. While this is not good, social security is not going bankrupt. The funding mechanisms must, however, get straightened out by politicians who want your vote to keep them in office. The silver tsunami of voters ensures that Congressional leaders and policymakers cannot overlook the senior demographic, which is critical to their re-election.

Each person’s or couple’s situation is different; their savings, assets, debt, work history, and retirement planning all vary widely. Additionally, according to Barrons.com, every state has a distinct annual spending threshold recommended for a comfortable retirement. To learn your best options and create your plan for a successful financial retirement, including when to take your social security benefit, talk to elder counsel. The social security benefit structure and rules are changing, change with it to maximize your benefits. If you have questions, please don’t hesitate to reach out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com. We are here to help.

Staying Mentally Sharp

Staying Mentally Sharp

Age comes with wisdom. Unfortunately, it also comes with some forgetfulness. Fortunately, there are things you can do to keep the brain sharp, small daily habits which can reduce the risk of cognitive decline. 

Exercise is one such daily habit. It increases blood flow, and thus oxygen to the brain; it also protects brain cells against destructive chemicals in the environment. Exercise also supports the production of new brain cells. Furthermore, research in the 2000s showed a relationship between cardiovascular risk factors and Alzheimer’s. Anything which can impair blood flow can cause strokes leading to cognitive decline, otherwise known as vascular dementia. The same activities that one would consider as beneficial to the heart, such as regular exercise, can therefore also be effective in protecting the brain. And, of course, there are other benefits to exercising regularly: it helps with energy levels, decreases anxiety and depression, and can help with sleep.

Sleep is another factor to maintaining a healthy mind. But as many as half of adults 60 and older are affected by insomnia, which can result in memory loss, depression, and other symptoms. It’s important, then, to pay attention to sleep hygiene and sleep schedules to ensure sufficient duration and quality. If it takes more than 45 minutes to fall asleep, or you have trouble staying asleep, it may be worth looking into treatment.

Eating well is another way to protect the mind. It’s important to ensure you’re getting enough vitamins A, B, C, D, E, folic acid and niacin. The USDA and the HHS describe two eating plans: the USDA food patterns or the DASH Eating Plan. Foods like nuts, fish, and wine have also been linked to a healthy brain.

Art, music, reading, writing, learning, and puzzles… these are also good for keeping the brain sharp. Art has been used as an Alzheimer’s treatment and to restore memory; and arts maintain and improve dexterity and fine motor skills! Adult coloring books have become popular in recent years, and can be found in many stores and online; watercolors and pastels are also relaxing. Meanwhile, music has been linked to improved memory and cognition, and can both elevate your mood and lower blood pressure. Learning and intellectual challenges like puzzles exercise the brain and improve its capacity. Mental exercise is thought to maintain and stimulate brain cells. This includes pursuit of hobby, learning new skills, using brain training apps, or taking on other new kinds of projects at work.

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What is a Continuing Care Retirement Community?

What is a Continuing Care Retirement Community?

There are three distinct living phases associated with a continuing care retirement community (CCRC). The first is independent living when a resident enters into the community with few if any disabilities requiring limited assistance. In this phase of independent living, community residents typically take advantage of the broad range of social, physical, and intellectual offerings. The second phase is assisted living, which includes long-term personal senior care support services that include help with activities of daily living like medication management, bathing, meals, dressing, and transportation. The third phase is nursing home care, also known as a skilled nursing facility. This third phase addresses a resident’s requirement for 24-hour monitoring and medical assistance in the case of serious injury or severe illness. Nursing home care locations within the CCRC are usually located near an associated hospital if the need arises for acute care or hospitalization. The linked three phases of a CCRC provide a continuum of care so that a resident can spend the rest of their days moving between the levels of care as needed. 

These residencies are also referred to as life plan communities, active adult community homes, and lifetime communities. CCRC’s vary from state to state and have no licensing by one oversight entity. There is no reliable data as to how many seniors are living in CCRC’s, but it is evident that continuing care within one inclusive community is gaining popularity. One way to distinguish a well maintained and safe CCRC is through the Commission on Accreditation of Rehabilitation Facilities (CARF). This organization is America’s only accrediting body for these types of communities and is an independent, non-profit organization focusing on advancing the quality of services to meet the residents’ needs and provide the best possible outcome. The Continuing Care Accreditation Commission, also known as CARF-CCAC, is a valuable reference when researching a move into a CCRC.

Opting to live in a CCRC is a costly senior housing option and requires due diligence and careful financial planning optimizing the experience. Payment plan specifics are different at each CCRC; however, an entrance fee is required. These entrance fees can be as little as $10,000 and as expensive as $500,000. Most CCRC’s do not allow ownership of the residence; however, a monthly maintenance fee requires additional monies ranging between $200 and $2,000. The residence is just one part of the contract negotiation. Health care coverage and costs are typically broken down into three fee schedule options. The first is an extensive contract, which is the most expensive. It provides the resident with unlimited access to healthcare with little or no monthly maintenance fee increases. The second is a modified contract which offers a resident unlimited access to healthcare, but health care is paid for as needed, and monthly maintenance fee increases offset this pay for health care as needed approach. The third is a fee-for-service contract, and while it seems like a conservative spending approach if the aging resident eventually requires extensive healthcare, it is costly. This fee schedule option allows residents to pay for all health care costs separately.

Websites that offer advice on senior living options like aPlaceforMom suggest that the admission agreement for a CCRC should cover 

  • The three residence phases
  • Fee schedule options
  • Health care coverage
  • Cancellations and refunds
  • Services
  • Insurance requirements
  • Conditions for transfer within the community to other levels of care
  • What the CCRC’s responsibility is if a resident becomes unable to pay fees.

Contract review by a trusted lawyer or financial advisor is of the utmost importance. Contracts should include a clause that addresses refunds in the event a resident leaves the CCRC and, like the fee for service health care options, most CCRC’s have multiple agreement choices that offer varying degrees of refundability. In the past, most continuing care retirement communities were non-profit organizations, but today, many CCRC’s are a for-profit business. Check into the possibility that the business entity of your retirement living arrangement may one day be sold and understand how that would affect a residential contract.

It is essential to ask relevant questions when researching a particular continuing care retirement community, such as:

  • What if assisted living and nursing home facilities that are part of the CCRC are full when I need them?
  • Is there a reciprocal agreement between the CCRC and nearby communities?
  • What type of background checks are done for staff members?
  • What is the staff-to-patient ratio in each phase of living?
  • How can a resident participate in the organization’s decision making? 
  • What type of memory impairment (or dementia) services are available?

The above questions are good starting points to learn everything possible about a particular CCRC. Some items will be specific to your health, financial situation, and family relationships. We often help families with determining the right type of living situation for senior family members.  If we can assist you or a loved one, please don’t hesitate to reach out by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

What to Include in a Letter of Instruction

What to Include in a Letter of Instruction

A letter of instruction can be a beneficial piece in estate planning. It is an informal document that will give your loved ones important information about personal and financial matters after your death. Letters of instruction are not legally binding and do not replace your need for a will or a living trust, however it can be a nice complement to those documents. The informal nature allows you to create the letter on your own and change it whenever necessary. It is important to keep the letter up to date, as life circumstances change over time. Let’s look at some of the information that may be included in a letter of instruction.

1. Funeral and Burial Arrangements

The first thing you may want to include in your letter of intent is information about your funeral and burial arrangements. Be sure to include any plans you’ve already made, or what your wishes are as this can be very beneficial to grieving family members. Information about the type of funeral service you’d like, including who should officiate the service and special things to be included like music selections, can be a part of your letter of instruction. If you prefer to be cremated rather than buried, be sure to include that in your letter.

Another helpful inclusion would be a list of people you want to be contacted when you pass, and contact information if available. You may also include your wishes for donations to specific charities in your memory.

2. Financial Information

Information about your bank accounts, assets you hold title to, and other accounts can greatly help family members when trying to carry out the provisions of your estate plan. Be sure to include names and phone numbers of professionals who can help locate your accounts or who helped you plan. The location of other important documents should also be included with the letter of intent. These could include but are not limited to birth certificates, social security account information or statements, marriage license, divorce documents, and military paperwork. In addition, be sure to leave behind information related to mortgages and other debts.

3. Digital Information

These days, many of our accounts have transitioned to the digital world. Therefore, leaving behind information about your digital assets in your letter of intent becomes more important. This should include usernames and passwords for digital accounts, social media accounts, and the devices themselves. It is important not to leave family members guessing on this information.

4. Personal Items

Personal items can be a source of contention among family members when a loved one dies. A letter of intent can provide details about who will receive personal effects, including collections, important personal items, and other things that may not have monetary value, but do have sentimental value. In this section you can also include information about the care of the pets you may leave behind. This section of your letter may include personal statements about your wishes and hopes for the future and can address specific family members.

A letter of intent can be a very real source of peace and comfort to your family members in their time of grief. It can be difficult to think about getting started on a letter of this nature, as none of us like to think about our own death. However, if you consider the items to include and create a plan, a letter of intent can often write itself. Taking this step can alleviate much stress and many family squabbles about what you leave behind.

A letter of intent is an important piece of your overall estate plan and should be written with the help of an attorney to make sure the letter compliments and does not contradict your estate plan. We also offer to all of our clients their own private, secure Client Portal where they can give their loved ones access to some or all of their important documents.  If you would like help creating your estate plan or a letter of intent, please feel free to contact us by calling us at 1.800.660.7564 or by emailing us at info@covertlaw.com.

Does Home and Community Based Care Reduce Hospitalizations?

Does Home and Community Based Care Reduce Hospitalizations?

The US Department of Health and Human Services (HHS) projects the number of Americans in need of long-term care (LTC) by 2020 to be roughly 12 million with nearly half those seniors exhibiting some form of dementia. According to Forbes.com, about half of all long-term care insurance claims are from policyholders living with dementia. The federally run program Medicaid is the primary financing mechanism of LTC where most of the monies are spent on institutional care settings which are ill-equipped to handle an increasingly large and longer living elderly population. Federal initiatives have been incentivizing States to utilize Medicaid home and community-based services (HCBS) waiver programs to address the growing long-term care needs of aging Americans. This shift to home and community-based services is often seen as having an obvious benefit. HCBS is seen as an easy fix to offset the increasing demands for long-term care. Evaluation of health outcomes, social equality, and the costs of both settings is necessary to create the most beneficial and efficient systems to care for the aging.

Compounding the complexity in evaluating HCBS versus institutional long-term care is the statistical breakdown of racial and minority ethnic groups, as well as people living with dementia. Racial and minority ethnic groups and dementia sufferers as a whole use these Medicaid services more than non-minority groups. Regardless of the group, people living with dementia tend to need the highest-intensity care. While hospitalization rates for HCBS and nursing facility residents remain similar, nursing facility residents were, in general, older and sicker than their HCBS counterparts. 

If home and community-based care does not lessen rates of hospitalizations and may create potential implications for inequality in access to high-quality nursing care facilities, policymakers may need to reconsider the full costs and benefits of shifting care. In nursing facilities, even elderly, dual-eligible Medicaid beneficiaries who tend to be older and have more chronic health conditions are not more likely to require hospitalization than those in home and community-based care. Therefore, since sicker nursing facility residents with more serious health issues and their home care counterparts have similar hospitalization rates, it would seem that HCBS is not lowering the rates of hospitalizations. 

McKnight’s.com reports a group of researchers at the University of Chicago are citing why hospitalization rates do not decline under home and community-based care. The majority of home care residents receive help at the hands of untrained caregivers in non-facility settings. Even with appropriate tools available untrained caregiving leads to more undesirable health outcomes. Unsurprisingly, patients living with dementia, who generally require the most intense care, had higher hospitalization rates due in part to living in an unsecured facility and the inability for a caregiver to provide non-stop oversight which is a hallmark need of a person living with dementia.  

Medicaid long-term care expenditure is reflecting this shift to home and community-based care, with nearly 60 percent of spending for HCBS. Because hospitalization rates do not substantially decline and inequitable health care for minorities increases while the majority of the budget is expended in the HCBS program it is time to rethink the quality of care and health outcomes and efficiencies of the program. Skilled nursing providers in a facility setting provide better care for all regardless of level and type of sickness, and racial and ethnic groups.

Education and expertise in industries, whether medical, legal, or health care occurs because each field requires a unique skill set to drive optimal outcomes. Understanding how long-term care needs affect an individual’s retirement plan under Medicaid or dual-eligible status Medicare/Medicaid, is pertinent for both positive health outcomes and financial well-being. Please don’t hesitate to contact us to discuss your needs and how to plan for long term care by calling us at 1.800.660.7546 or by emailing us at info@covertlaw.com.

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Covert | Law

Your Plan. Your Family. Their Future.

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NEIL R. COVERT, Attorney at Law

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1.800.660.7564

email: info@covertlaw.com

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