Caring for your parents and yourselves

jkom51February 15, 2007

I was doing some research on the web and came across an excellent set of articles from Money magazine:

"When your parents need a hand"

"Make your nest egg last"

"Invest for the long (long) term"

"Is Medicaid still an option?"

"How to keep the 'bad guys' from Mom & Dad"

Here is a link that might be useful: CNN-Money articles on website

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These are good eye-opening articles. I speak from experience, as someone whose parents were nursing home residents within the past 2 years, dying there.
Fortunately, my parents did have a bit of forethought, granting to me (their only child) joint ownership with right of survivorship of their house, more than 10 years ago. Had they not, the house would have been a "countable asset" under Medicaid rules, and would have been liquidated to pay for my mother's nursing home stay because she wouldn't have qualified for Medicaid.
Parents should consider the probability of ending up in a nursing home. If you do, your assets could drain QUICKLY. Nursing homes here in Massachusetts run about $8000 a month.
If you want to preserve a legacy for your heirs, call an estate planning or elder law attorney NOW. There are many LEGAL ways to protect your assets.
Also, be VERY cautious about signing documents from healthcare providers or services, on behalf of your parent(s). I was not, and ended up paying a $2100 bill for an oxygen concentrator, which MediCARE will NOT cover for private-pay nursing home residents. (But they WILL cover it if you are in your own home. Go figure...)

    Bookmark   February 16, 2007 at 11:23AM
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Spent the last 3 1/2 yrs. taking care of my frail, elderly mother. My brother is now doing it, preparatory to her commission to long term care. We set aside a year + of funding in a fund that will return decent returns in grim years.

I echo Hrajotte's post. My parents were not nearly as assiduous in their estate planning... they did NONE. My brother and I were lucky... we intervened at a propitious moment and were able to institute "damage control" just about "in time". For us it was a "living trust". But the gov't. is closing off the avenues yearly.

THINK ABOUT IT! more people tapping into gov't. mandated services (that have been under funded for years!) and more people living "fat, dumb, and happy" blithely thinking everything will be fine... UNHUH!

The single greatest transfer of real wealth is going on RIGHT NOW and our bankrupt government is moving to put the kibosh on it... .

I'm nearly 50 and my brother and I just beat the last "call". Our parents were absolutely oblivious... lambs to the slaughter. And that's what OUR gov't. is bankin' on!

Smarten up...

    Bookmark   February 16, 2007 at 9:17PM
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I don't think making sure you leave all of your money to the kids and expect the taxpayer to pick up the bill for the nursing home qualifies as good planning. It's hard enough to even have those type of savings, but as someone who pays a large chunk in taxes, I disagree with the gov. footing the bill with Medicaid so someone else can have the money.

I'll be paying for my mom's nursing care when I can't take care of her, since my parents never made enough to have that kind of savings. I'm also trying to put away enough for my own nursing home care.

Yes, the money will be drained quickly, but isn't that what it's for? And I'm 50 with an 89 yo mother, so I'm facing this also.


    Bookmark   February 16, 2007 at 10:38PM
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I agree with Gloria (quiltglo). It's absolutely wrong for people to give their assets (such as a house) to their kid/s while the taxpayers pay for their nursing home and medical care. In fact, I think it's against the law.

By age 60, if we are responsible people, we should have long term care insurance to help defray costs should that type of care be necessary. This type of insurance has been available for a long time, but few people buy it. By getting this type of insurance, we won't bankrupt our family, or the spouse who is left after the money is gone, for long-term care. People insure their homes and cars, but they forget this one, and it's a necessary one. Even more now than ever with the prices of things today.

Yes, it's nice to leave our "wealth" to our family, but not until AFTER our personal debt is paid.

I went through hell with my parents before they died, and it has affected my health the last few years from the stress and strain. I'm not sorry I did all I did for them, but I won't inflict that responsibility on my children.



    Bookmark   February 17, 2007 at 6:58AM
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Another one that agrees with Gloria and Grainlady. I would never have considered putting my mother on medicade/welfare nor would I ever want to be on any aide. Just another example of loss of pride in our country. I believe any "countable assets" should cover care expenses first. Some people don't realize that medicaid pays a fraction of the cost to run Long term care facilities and then they complain they are understaffed & don't respond quickly enough etc.

    Bookmark   February 17, 2007 at 8:56AM
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+3. There's something quite unseemly about making sure "I got (kept) mine" and sticking the U.S. taxpayers with the bill. It does not serve the public good to welsh on one's debts. Your parents (the vestiges of "The Greatest Generation") likely would never have considered going bankrupt from having purchased more than they could pay for. So why would an engineered transfer of their assets away from a future debt (long-term care) be alright with them?

My apologies if this seems harsh, but, as a post-Boomer who hopes he continues to earn enough money to retire without Social Security -- because it spent years paying people who didn't need it at all instead of preserving its capital at current tax rates -- and who will be funding government out of his salary for another 20 years more, I'm all for whatever it takes for people to pay their own way if it's possible for them to do so. Save the government aid for those who could not do it themselves.

    Bookmark   February 17, 2007 at 11:17AM
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Another in agreement with above. I am a former 24/7/365 caregiver for my almost 91 year old Mother, who, as of late October 2006, is now a private pay resident in a fine facility. It never once occurred to me or my brother that we were somehow "entitled" to her estate in lieu of it being used for her long term care.

Fortunately, my parents were good financial planners, made good investments, established revocable living trusts, had all their legal documents routinely updated and in order. And although Mom never worked she does get the survivor's benefit of my Dad's government pension and health plan. And neither one of them would have contemplated "spending down" to shift the burden of any needed long term care to the taxpayer. While we are somewhat confident that she can't outlive her ability to pay, the time could come where interest earning principal would be impacted.

The deliberate spend down does rankle, particularly if the sole motivation is to leave an estate to heirs. In a sense, those who do this are hedging bets, too - you just never know when the time for long term care is going to come and if you don't time it right, you might be picking up the full tab before assistance kicks in anyway. The example I saw was:
X gave her son cash and securities totalling $100k one year before she had to go into a nursing home. The private pay rate was 5k per year at the time she entered the home. Accordingly, X suffers a 20 month penalty before receiving Medicaid benefits and must pay those costs out of her own funds (or more likely the funds of her son). Probably not something her "heir" was counting on having to do.

One thing though and then I'll quit - one thing generally missing from threads on this topic. A lot of gossip in some nursing homes settles on "so and so is on the government and here I am paying my own way." What these gossipers may forget is that many (though not all) residents are turning over their own pensions, survivors's pensions, social security, etc.

It's a tangled web we weave. I'd like to think I'll do the right thing when my time comes.

    Bookmark   February 17, 2007 at 3:29PM
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Just to clarify some issues raised here:

Medicare does not pay for LTC, except in very limited instances for short periods.

MEDICAID is what funds 80% of the current inmates of nursing home care. Medicaid is funded by both the Federal government and the individual state.

Bush's new healthcare proposal aims to cap funding to hospitals and nursing homes, no longer allowing for inflation increases. This means that less and less funding will come from both government agencies, and more funding from YOUR pocket.

The Medicaid budget proposals proposes to shift the majority of costs to states. The Center on Budget and Policy Priorities estimates this will likely cause substantial reductions in health coverage.

To quote:
"Such a cap would represent a profound change in the Medicaid program. It would end the entitlement to coverage for beneficiaries who are covered under the parts of the program that would be subject to the cap, with the result that eligible low-income uninsured people could be turned away or put on waiting lists. A cap also would end the guarantee that states would receive federal funding at a specified matching rate for the health care and long-term care costs they incur in covering eligible beneficiaries. A cap would result in the federal government reducing its share of Medicaid costs over time and would shift more of the burden to the states. In response, states would likely cut back on Medicaid coverage, benefits, and payments to providers."

If it irritates you that the folks currently in nursing homes are "sponging off you", be assured that the chances are good that 20 yrs in the future when you are ready to go into a nursing home, the Gen X- and Y-ers will bear less of the fiscal responsibility of your care.

So plan ahead, however you want to....but please, do plan!

    Bookmark   February 18, 2007 at 3:35PM
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Any "irritation" expressed in these responses is with those who deliberately divert assets to take advantage of government benefits for no other reason than preserving an inheritance.

There is no question that there are individuals in long term care who require government assistance; some people never had the financial resources or common sense to save and/or plan ahead for LTC for themselves (and these are probably the same folks who don't have a diverted stockpile of assets for their heirs either). Heaven knows, even those who initially enter as private pay residents may eventually exhaust their funds.

I guess the invidious comparison can be made between "those who can but won't pay versus those who simply cannot pay."

It's a given that people who face LTC totally lacking in funds (for any reason from simply being on the low end of the economic scale to making unwise choices) have to be taken care of.

    Bookmark   February 18, 2007 at 4:44PM
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There is nothing wrong with using the law to your advantage. I understand the frustration expressed here. I also understood the look of horror on my mother's face when she was told she could no longer simply change the deed to her home to include my brother and I... . There are a lot of seniors out there who labor under the false understanding that they may do with their property however they so chose. We did everything within our power to see that my mother's wishes were given "teeth" legally. Many may not agree, but using the law to advantage is your right. We used it for Mum's benefit, as did Duluth.'s parents.

It isn't an easy decision, either. You must carefully survey the assets, and you must make choices about what to isolate (ALL of them is not "right", but how much is too much?), how much to invest for future care needs, how to invest those monies, and how to forestall the final move to LTC until it is necessary. For us, it has been caring for our mother in our homes, using her monthly income to defray costs and investing whatever is not needed for future needs. I did it for 3 1/2 yrs. and she is presently with my brother. For how long is unclear. There are waiting lists for LTC facilities (it's rare to move right into one), and there are various degrees of care offered (all at different tiers of price). Which one is the right one? can the level of care be elevated when/if required? The amount of time and effort required to come to an answer is staggering. And wrenching.

Long term care insurance is certainly viable for those in lower age brackets, and it's a good one. But for seniors with moderate savings, and limited pension income it's often too costly when faced with the reality of monthly/yearly budgets.

There are no easy answers and nothing is as black and white as so many would believe.

    Bookmark   February 18, 2007 at 7:25PM
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For those who need more information on Medicaid and the new 5-year lookback period (the period of time when you cannot transfer assets solely to qualify for Medicaid assistance), there was an excellent article in 2006 in the Washington Post. A link is provided, below.

Here is a link that might be useful: New Rules on Medicaid may hurt seniors and middle-class

    Bookmark   February 20, 2007 at 3:41PM
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There have been some excellent articles in this thread.

I know from whence I speak. My mother's health "crashed" in 2003 and it required months of intensive care and moving her out of her home to get the crisis under control. She was unable to accept that the situation was out of her "control", unable to understand that neither my brother nor I could make a 2 1/2 or 1 1/2 hr. drive to pick her up and get her to every appointment she needed to keep. No "living will/health directive" ("you'll know what to do to meet my wishes"), just a basic will and the cheerful, "that's all that's needed, dear.". My mother had NO clue; even though she'd been through the "dress rehearsal" when my father died and discovered HER name wasn't on the deed to her home!

Many seniors have no idea of the legal pitfalls their heirs will face. My mother truly believed that her basic will (dated 1985) would ensure that everything would pass, unfettered, to my brother and me. Did her lawyer add our names to the deed? did he suggest it? did he broach the subject of health care directives? did she ever bother to ask? I don't know. My mother did not understand that my brother and I had no LEGAL right to conduct the requisite business of her life ON HER BEHALF without a legal document defining the breadth and scope of our "powers of attorney". But this is the case with many who enjoy a comfortable "middle class" lifestyle.

Only when faced with surgery at age 77 and asked bluntly about "health care directives" did she really start to "get it"... she could suffer a stroke, be incapicitated and have no control... WORSE, the two people she trusted most in the world would have NO SAY. That's when she "got it"!

But for years beforehand, she never wasted a moment on the dreaded, "what ifs". I am routinely shocked by the number of friends who have KIDS, assets, and have don't even have a will! So it should come as no surprise that the relatively healthy "elderly in waiting" have given the grim reality of life such small consideration.

"Compassionate conservatism"... right. The "middle class" begins to wise up to what the wealthy have known for years and the "loopholes" vanish. And when their alert kids move to assert their LEGAL RIGHTS it's insinuated that it's about greed or self-interest.

Just because you see a lawyer who specializes in elder law and you move boldly to isolate and preserve assets (that you can move and USE for the benefit of the LTC patient with EASE) DOESN'T necessarily mean you are out to screw over your fellow taxpayers. It saddens me that that seems to be the immediate reaction.

BY LAW, my brother and I could have washed our hands of our mother in early 2004. But we didn't.

    Bookmark   February 20, 2007 at 6:39PM
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Chelone: It appears that several of us read something into your post that was not there. And for that I apologize.

So many of us are caught up in this reversal of roles, finding ourselves having to actively manage the lives and finances of our elderly parents. To be honest, I don't think either one of my parents ever truly believed they could someday be infirmed or would actually die. And if they did, somebody would surely "do the right thing". For years they too believed a will would be enough and even if the lawyers they solicited had some expertise in elder law, back then they might not have asked the right questions or taken advice that seemed alien to the way they always did things. Finally the idea of each having revocable living trusts sunk in and they realized they could still be in charge and "not be put on an allowance" as so many oldsters think having things in trust means. Dad was able to manage the trusts up until his death, but by that time Mom's Alzheimer's was taking a foothold so my brother assumed his duties as trustee and I assumed 24/7 caregiving.

Fortunately, Mom is in the LTC facility we'd wanted for her. We'd enrolled her in the facility's adult daycare program about 18 months ago and that gave her priority for permanent placement when the time came. It all fell into place for us, but I belong to a couple of Alzheimer's/Dementia support groups and many of the participants are struggling, like you, with finding the right place with graduated care levels as their loved ones require them. And yes, those tiers of care do come at a price.

Whether we're dealing with dementia or the frailty of advanced years, we all have a common bond - insuring a loved one is taken care of.

    Bookmark   February 21, 2007 at 12:03AM
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I was responding to hrajotte's post where he/she clearly has a house which belonged to the parent, but the parent is now on Medicaid rather than utilizing personal money. That's the example where junior has the money while the taxpayers are picking up the bill.

    Bookmark   February 21, 2007 at 1:08AM
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I too am referring to people that will spend down, get things signed over to avoid paying for LTC. I strongly believe anything I/we have should care for us first including a house. What is left if anything left heirs would inherit. Taxes are getting out of control and that is one reason some elderly can't stay in their homes. I know people that have had everything signed over to them and they are the first to complain about taxes. They will also complain about the short staffed LTC facility.

    Bookmark   February 21, 2007 at 8:47AM
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Same here. chelone, you and I usually are on the same wavelength here. I have no problem with legally assuring succession or making sure one's wishes for final care are carried out. I do have a problem with people who essentially "loot" the system when they're more than financially able to pay their way -- at least for a while. Ironically, these people often are the same ones who insist that the poor and the sick can pull themselves up by their bootstraps to join mainstream society.

The fact that some aspects of this spend-down remain legal doesn't make it right, either. The last refuge of someone who knows they've been caught with their hand in the cookie jar: "I've done nothing illegal."

    Bookmark   February 21, 2007 at 9:09AM
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I've followed this thread with some interest. My 82 year old mother has Alzheimer's Disease. She's been living with my sister for nearly 5 years now and my sister has just put her name on a waiting list for a nursing home.

A number of years ago (long story), Mom sold some pretty valuable property and gave the proceeds to her church group setting aside a very small amount for herself. Later, she began exhibiting symptoms and my sister and I finally were able to have her diagnosed and moved her. The small amount of funds that Mom had have been spent on cataract surgery, prescriptions, etc. She gets a very small SS income (less than $100/mo of which about $35 goes toward Medicare). Needless to say, my sister and BIL are supporting Mom who will have to go into a nursing home on Medicaid.

My sister has taken out an LTC policy for herself and I'm researching it for myself now....

    Bookmark   February 21, 2007 at 1:22PM
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My work involves evaluating people for guardianship and placement through the courts. For whatever reason, these folks have no viable POA (power of attorney) arrangements and it is way too late to make one legally. Usually a huge mess.

I have seen the best and the worst in family members' behavior. So many are shocked that it is too late. And frankly, too many are really disappointed they won't 'get the house' or whatever. Greed. I have also seen a chilling number of situations where the durable POA was activated, the assets baldly cleaned out, and the person has neither assets nor any functional agent and ends up in court anyway. Disgusting.

In addition to that long term care insurance, can I add: please make your health care POA arrangements!!!! Choose carefully and name backup agent(s)!

And FWIW, I too believe assets should be deployed for care, not for inheritance.

    Bookmark   February 21, 2007 at 1:54PM
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When faced with situations so fraught with raw emotion and uncertainty it's easy to simply REACT. It's far harder to settle back on one's haunches and think about all the issues at hand. I understand that, very well.

"Estate planning" carries an unwarranted stigma. Spectres of greedy, no-account kids salivating at the prospect of Mom and Dad's property... well, you know! But what it's really about is organized and methodical preparation for the day when the owners (parents) can no longer make informed decisions for themselves. They have to name an advocate for themselves and they have THE LAW to make sure their wishes are followed when they are no longer able to speak for themselves. Nowhere is it written that the trustees of a trust have to be THEIR KIDS.

Frankly, when you are, it complicates your life greatly. ;)

    Bookmark   February 21, 2007 at 3:36PM
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Great thread! I'm so glad I found this.

My MIL is 84, is living on her own, and has the beginning stages of Alzhiemer's. She refinanced her home last year to pay off her credit cards. She lives 4 hrs away from us In Indiana. Her other son (my brother-in-law)
lives in Arizona. He has POA and recently contacted us and requested $4,000 to help her pay off the new credit card balance. He is closing down one of the cards and leaving a $1,000. limit on the other but intends to let her pay down an additional 3,000 in debt on that card. I'm upset because I don't feel that my BIL has fufilled his duty as POA and is not doing anything now that will change MIL's habit of paying $20.00 every other month. As the in-law, (or outlaw), I have to tread carefully but I think it would be reasonable to ask that someone oversees her finances so that this doesn't happen again. MIL has no savings but about $40k equity in the house. We are middle class with 2 kids in college. With health and mind failing, I am very concerned about the finances. I would be happy to spend the $40K on her future healthcare & expenses but I feel "bullied" by my BIL to keep quiet and write checks.

Any suggestions??

    Bookmark   March 24, 2007 at 5:58PM
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patrice, there are a lot of people on these forums who can empathize with you. The initial difficulty is dealing with this situation by long distance - MIL in Indiana, BIL in Arizona and you elsewhere. Second, challenging a POA could be daunting - you hear cases of POA's being revoked because an estate has been raided, assets embezzled, or because of sheer incompetence. In no way am I implying any of this applies to your BIL or that you would be considering any challenge.

Does your husband share your concerns? Or is he relieved his brother is handling things so he doesn't have to?

You indicated your MIL is exhibiting the early stages of Alzheimer's. From my experience in dealing with my Mother's Alzheimer's, this is the most troubling stage of the disease. They're in their own home and sort of wavering between normalcy and a little dementia, but in their mind still functioning as they always did - still driving perhaps, shopping, paying bills, fixing meals, taking medications. This was the stage where just letting Mom answer the phone was fraught with danger - wouldn't have taken much for a telemarketer to get her to give out her SS#, bank account etc. They become almost childlike in their inability to comprehend safety issues, etc.

Having refinanced the house to pay off CC debt and still having credit cards to potentially rack up more debt is troubling. And being bullied into writing checks to assuage this debt is only a short term solution to a problem that needs a major fix - like someone actually handling her financial affairs. Do you see the time coming when she might need a guardian or conservator, any possibility of her being brought to live with any of her children, assisted living facility? Maybe it's time for the brothers to get together and form a plan.

That might be the place to start. I'd express my concerns too - just because you're an in-law doesn't mean you aren't impacted by this and don't have a vested interest. Being asked to pony up $$$ gives you the right.

    Bookmark   March 25, 2007 at 3:36AM
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Duluth -

DH shares my concerns but is reluctant to give BIL & MIL any kind of ultimatium. He also recognizes that BIL is not handling things and that is a problem. We are visiting MIL in a few weeks and I hope to set up an appointment with her attorney. I hope that if some common sense suggestions come from a neutral party they will pay attention. I want a plan and a timeline. BIL says she should be out of her house by September but is making no effort to have it appraised and MIL won't even discuss it. Your description of your mom in the early stages of ALZ describes her perfectly. However, she does have a mean streak and will frequently lash out at people - physically and verbally.

I think the time has already come for her to have a guardian. Her 2 sons set arranged for a nurse to visit daily to make sure she was taking her meds but after a few weeks, she refused to let her in. BIL did nothing.

DH had a heart attack 4 years ago (at 49) and he still has issues relating to the brain injury he suffered as a result of the oxygen deprivation. I hate to put more stress on him but I can't help feeling this is a time bomb.

Thanks for your help.

    Bookmark   March 25, 2007 at 11:53PM
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This is a very interseting post as I am dealing with my very ill parents. My brothers and I expect to exhaust all of their assets before any funds will come from the state/federal government. Even before that, we expect to contribute what we can. My parents have the same understanding.

In my opinion, the legacy that we leave our heirs is the money that is left after we have spent all of our assets in extending and providing for the end of our own lives. If one has enough forsight to have good insurance, then one will have more to leave behind for the heirs.

Just because something is legal does not make it morally and ethically the right thing to do. I think many are in agreement on this point from the above replies.
One of our uncles has transferred the deed of the house to his son (our cousin) so that the elder couple can qualify for state/fed assistance on state funded low income senior housing and medicaid as well as medicare. Most of their life, they sustained their livelihood on low wage jobs and cash economy. The elder couple is healthy and probably has a long life ahead of them. What they did seem legal (I don't really know the law on this). In essence what some people are saying is that they have the right to give their money to whomever they chose while they can; however, in my opinion, it does not make it morally the right thing to do when the money is given away with the motive of not paying for the cost of health care at the end of one's life. All of my siblings agree with me on this point as we have discussed this particular relative among ourselves.

In defense of their behavior, they feel entitled to what they have accumulated because they worked so hard for it, working on minimal wage or even less well paying jobs and barely scraping by. I who have an enormous wage compared to them, may not fully understand the sense of economic uncertainty and the desperation with which they are holding on to their wealth.

    Bookmark   March 26, 2007 at 1:42AM
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Everyone seems to be responding to the above poster as tho she and her brother are taking the parents' assets solely to avoid paying for healthcare for the parents. And yet, they've been expending money and energy caring for the parents themselves. Are they not entitled to some kind of remuneration for that? Or should they use up all their own money too, leaving themselves broke and old just when the govt has decided to make up for poor planning over the decades by eliminating public health assistance?

There's also an assumption in all these posts that the relatives getting the parents' assets don't need them. What about the daughter who quits her job and moves in w/ Mom to care for her? Then when Mom goes into the nursing home, her house is sold out from under the daughter, leaving her homeless? Is that somehow right?

My grandmother cared for both her parents until they died, in their house. She inherited the house--and only the house. Her sisters saw to that (they both had houses, and plenty of money, but begrudged her). She would have been much better off staying out of her parents' business, like they did.

So before making judgments about people trying to grab whatever they can and foist off their parents' costs onto taxpayers, it might be well to think about what they've already invested in those parents' care. Getting your mother's house in return for 3 years of round-the-clock care is a bargain compared to what the taxpayers would have had to cough up to pay someone to provide that care.

Taxpayers would be better served demanding accountability for wasted funds in the govt (unnecessary wars, pork-barrel projects, etc) rather than getting all up in arms about ending public health assistance. There but for the grace of god, and all that. The only way to avoid getting old is to die young.

    Bookmark   March 26, 2007 at 1:30PM
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Good post, housenewbie.

My in-laws sold their house in 1976 at a loss and never bought another one, so they didn't have even the basic assets that most middle class seniors have -- basically, they made some bad financial decisions well before their children could have intervened or offered advice. The good side is that they were quite frugal and had no debts. My widowed MIL went from subsidized independent living to assisted living and is now in a nursing home (luckily, it's a good one, and she will be able to stay there when Medicaid kicks in). If she had been able to stay in the independent living situation, her money would have lasted her for many years, but it was just not possible. She is currently paying down what remains of her meagre assets and will soon qualify for Medicaid. It would be very difficult, probably impossible, for us to pay for her stay in a nursing home indefinitely, even if the costs were split between DH and his brother. We're helping out where we can, and DH is handling all of her legal and financial business without even thinking of compensation for it. So I don't know -- do we qualify as the "greedy children" here? We're certainly not going to inherit any money, nor did was that ever a consideration.

    Bookmark   March 26, 2007 at 2:43PM
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I think if you carefully go back over the posts on this thread you'll see what almost everyone is against is the deliberate "looting" of assets in order to become impoverished and to qualify for government assistance. There is a big difference between divesting one's life time accumulation of stocks, bonds, real property, etc. and someone who had worked hard and needed everything just to get by day to day. For the sake of simply being kindly toward one another, do what you have to do with or without anyone's approval... certainly not any of us cloaked in the anonymity of the internet - whatever feels right for you in your circumstances and within the new five year lookback period guidelines.

I retired from my career, moved back to the family home to spend the last five years taking care of my Mother. I wasn't forced to do this and never thought of it as a "job" for which I should and would receive compensation. It just seemed like the right thing to do. And of course, a secondary benefit was delaying her inevitable move to long term care. Because my folks were savvy financially my Mom will never qualify for any kind of government assistance during the rest of her lifetime in a nursing home. Have I somehow been cheated out an entitlement? What's with this entitlement stuff!!! The greatest gift I may have been given is that my brother and I won't have to spend our personal assets to insure good care for our Mother.

    Bookmark   March 26, 2007 at 4:07PM
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Duluth -

I'm with you on this. No judgement on what others think is right for themselves. However, I do worry that when it's time to "pay the piper", our kids are going to be the ones left holding the bag in the form of higher taxes to pay off our irresponsible federal spending which funds these entitlement programs.

    Bookmark   March 26, 2007 at 11:27PM
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Unfortunately, there will be a mess for the generations behind us to clean up. Wonder if diseases, like Alzheimer's, are going to force such a health care crisis that something will ultimately have to be done? People are living so much longer; in times past we would have died before these awful diseases had a chance to set in. To make ends meet, maybe we'll see several generations of families living under one roof again - kids staying home longer saddled with college debt and having a hard time becoming financially established on their own; parents moving in because they can't live alone; married children with a child or two returning because they can't afford to buy a house or rent a decent apartment. There could be no end of scenarios that alter even the most conscientious planning.

And speaking of conscientious planning possibly going awry - our paper ran an article from the NYT on Long Term Care Insurance describing a growing number of incidents of companies denying claims. The most egregious tactic being stonewalling clients' claims until they either gave up or died. Unfortunately, the article was a little short on specifics, but there have been some threads on LTCI on these forums and as you might expect those who have the insurance are happy with their decision and those who don't are equally happy putting those insurance premium payments elsewhere.

When you see your MIL you'll have a better sense of what might have to be done. Being with my Mother 24/7 I didn't always pick up on some of the subtle little changes that my brother could see immediately when he would visit.

    Bookmark   March 27, 2007 at 3:38AM
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I'm posting a link to the NYTimes article referred to above by duluthinbloom. Part of my own research is to select a company and this issue is waaaay up there on my criteria.
(Registration is required, but is free)

Some of the companies mentioned:
Conseco, Penn Treaty American,Bankers Life

"By comparison, Genworth Financial, the largest long-term-care insurer, received only one complaint for every 12,434 policies." (Genworth is one of the companies I'm considering)

Here is a link that might be useful: Aged, Frail and Denied Care by Their Insurers

    Bookmark   March 27, 2007 at 11:05AM
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Thanks zone 8grandma for posting the link. I'm a real Luddite when it comes to figuring out what I actually can (or can't) do with a computer.

I went to a free lunch seminar a couple of year's back, and the agent represented Genworth Financial. It was just not something I was interested in; it was a gut reaction and sometimes I go with my gut. But for those considering that LTCI is right for you - learn everything you can.

    Bookmark   March 27, 2007 at 3:06PM
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The scary part is, it's hard to tell what these insurance companies will do. You'd think that if something is spelled out in the policy that they would honor it, but in the situation described in the article, that doesn't appear to be the case.

    Bookmark   March 27, 2007 at 3:27PM
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You just never know how good any kind of insurance is until you have to make a claim. We'll probably be hearing a lot about this and the statistics are apt to change.

    Bookmark   March 27, 2007 at 5:14PM
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It's not just ltci companies. The book (and movie) "The Rainmaker", although fiction, is about insurance scam by a multi-million health insurance company.
State Farm has had class action lawsuits regarding their refusal to pay for original body parts in auto repairs.

Although no one can predict what any company will do, a look at their history certainly gives a clue. And the insurance industry needs to be better regulated (which won't happen as long as the anti-regulatory control the government). In the meantime, careful research is part of the "shopping". It's sure not like buying a sofa.

    Bookmark   March 27, 2007 at 5:23PM
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Common sense would tell anyone that with the domestic population ageing, health care in crisis, the single greatest transfer of wealth in its first incarnation, and SAVINGS at an all time low, that people will be grasping at straws. They'll be looking for ways to buffer the fall.

Insurance is the most likely alternative. Give us your money now... we'll take care of it... and it will be there (with interest) when you need it. MAYBE it will.

I, however, have a sneaking suspicion that particular branch of the industry will suffer a calamatous default; through bad investment and a simply overwhelming tide of policy holders "looking to collect".

Katrina and homeowner's policies are a good example... companies doing everything in their power to avoid the big payouts required.

    Bookmark   March 27, 2007 at 7:41PM
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I've been watching this post and I agree that no one should have any legal way to give away, hide or sign over assets so mom and dad can have the tax payers pay for end of life care and the kids end up with the house and bank accounts.

But in the last 20 or so years everybody seem to think they are entitled. I can remember when people were to proud to even ask for any help even if they really needed it. What happened? I know of a women in our small town that actually collect a check to cover 8 hours each day she cares for her own mother. She is not poor but her mom has nothing so she qualify's. Or what about the mothers of the working welfare mothers who get paid to watch there own grandchildren. What happened to pride in this country?

And since I'm ranting why is it that candy, soda, and lobster can be purchased with food stamp. And did you know when soda is bought with food stamps they don't have to pay tax or the redemption value.

When did having children become an entitlement. Tax credits that allow people to get back more money that they paid in just because they have children! Head start, pre school, subsidized housing, utility bills, car insurance, even bus passes. The list goes on and on. All paid for with our tax dollars. If head start worked the way they said it would work back in the 60s when it was started we wouldn't need it in 2007. To me all it is free baby sitting for people who don't work. Every one I know that works has to pay for day care.

OK rant over. I'm really not a heartless person. If someone I know about need help I always do whatever I can and I know we need programs like welfare to help people get a start. But it should be a stepping stone not a way of life

If anyone thinks the government is going to pay for all of us in our old age I would like to know how. All of us saving for when the day comes that we have to have LTC will either get lucky and have timed it just right so our money runs out the month we die or if anyone can ever find the perfect policy for LTC and it really pays maybe we have a chance. I guess it's a crap shoot. If we have to spend everything, sell the house, cash in it all that's ok. I never expected anyone to have to take care of me but me. As far as my parents, only my dad is left, there is enough monthly income to cover what even is needed or will be needed to cover any type of care but if I had to I would spend every penny that is in trust for us kids before I would expect the government to pay anything.

Question for zone 8grandma

Are you sure about the class action with State Farm? My DH sell GM auto parts and State Farm is one of the only insurance companies that only uses genuine parts. No question about it. It's one of the reasons we have State Farm Insurance. We live in Ca. maybe it a state by state thing?

    Bookmark   March 28, 2007 at 3:03AM
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Yes, I'm sure about State Farm. They NOW use genuine parts.
About 10 years ago (I had been a State Farm customer for over 20 years), I had an accident. They would only pay for third party parts. I called my agent (who would not return my calls). I called and talked to several people at State Farm. They would not budge. We ended up with third party parts.
This link gives State Farm's side of the issue

Here is a link that might be useful: National State Farm Class Action Suit to Affect Local Lawsuits

    Bookmark   March 28, 2007 at 10:45AM
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I don't want to hijack the thread - but since the last few posts concern insurance companies who avoid paying out, I do need to point out that State Farm was not the only company who refused to pay for genuine parts. Other companies named were: USAA, Unitrin, Geico, Farmers, and Allstate.

My point is that the payout issue is universal among insurance companies whether it's auto, health, or ltc. (I suppose life insurance would be another matter - how would they avoid paying out there???)

So.... I would not buy auto insurance because they might not pay out? Probably a bad idea. I'd look at their record and decide which company based on their record.

LTC ins, of course, is different, because not everyone needs it nor can everyone afford it. I've come to the conclusion that we can afford it, and we are not in an income class that could pay privately without some real financial pain. I've also seen what can happen when people do not plan for the possibility that they could become incapacitated, and I absolutely do not want to be a burden on my son.

    Bookmark   March 28, 2007 at 11:09AM
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ne 8grandma,

Thanks for the link, interesting, but I know in 1994 or 5 someone backed into our 55 chevy and DH located genuine parts, door and finder, and after speaking to the State Farm adjuster we purchased them from different places and State Farm reimbursed us no problem. Probably because after market parts were not available

DH works for the biggest GM dealer in town and they have the State Farm contract for body work and he says it's never been an issue. They have always used genuine parts for the 20 plus years he has worked there. Maybe it was more an issue with foreign cars.

The whole state of affairs with any kind of insurance is in a mess. Our health premiums doubled when Kaiser contracted with the state to cover medical patients. I guess someone had to pick up the tab. Our home owners got revamped, and not in our favor, after the Oakland fires in the 90s. And even after that people still did not understand why they didn't have enough coverage when they have been paying for the same policy for years.

Our agent is also a personal friend and I ask her who has the responsibility. The insurance company to tell you that building cost have triples, especially after Katrina, or is it the policy holders responsibility to keep track of anything that would effect the replacement cost. She couldn't answer it. She said if the company kept up with costs policy's would be in a constant state of change. I answered back that as a policy holder I expected she would have my best interest in mind and inform me when I should upgrade. She came back with the stock answer. Read your policy and see if its what you need. I said send me a list of everything I could be covered for that I don't currently have. Boy was I surprised. I thought we had the best coverage going. When I added several things I ask why didn't I know about any of these and she said I should have ask! How can you ask for something if you don't know about it? If we had a total loss and had to rebuild why wouldn't I have foundation removal when it only cost penny's compared to what it would cost if I had to pay out of pocket. But I had to ask. It is not part of the standard home owners policy.

And who can read policy's? The IRS forms are easier to figure out than an insurance policy. I used to be involved with employee benefits and I usually understand insurance but I have read quite a lot of information on LTC and it makes no since. All it seems to want to tell you is what is not covered. I would like to have this coverage. I figure we could afford it but it just seems that if you don't jump through the right hoops at the right place and time you wouldn't be covered.

I hope someone here can figure out if there is a LTC policy that is worth paying for. Who would have thought that insurance would be such a big issue when planning for retirement. Insurance is our biggest monthly expense now and I don't see it getting any lower. I jokingly told my dad that he pays less for medicare and his AARP supplement than we do for our medical coverage but he faxed me a news article on how they are now going to be charging more for medicare depending on your income. His will be going up quite a bit and boy is he not happy. I just keep reminding him how lucky he is that he is in a position to pay it. Who is kidding who! I am lucky he is in a position to pay it.

    Bookmark   March 28, 2007 at 4:55PM
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The State Farm issue probably did vary from state to state (I'm in WA state). And it is no longer an issue anywhere...

Those policies ought to be printed in layman's English.
They aren't of course, since mostly they seem to limit the responsibility of the company.

I've been sent more info on ltc ins from our financial advisor. I have not yet had a chance to really sit down and study it, but I'm going to. Then I'm going to make an appt with the financial advisor and we will talk about it.
After that, I'll be happy to post any conclusions I've reached.

I did talk to my sister. She and her husband have a policy that sounds pretty standard. Daily benefit amt is $200. Max benefit about $480,000. 90 day elimination period. Prem is about $4000/yr. Her rational is that if she pays for 10 years, she'll have paid $40,000. If she needs assistance (assisted living, in home care, or NH), the first year alone could cost about $75,000 in today's dollars. She's 60 and with our family history of Alzheimer's, it seemed to her to be a no-brainer. Paying the premium is not a hardship, but paying $75,000/year for several years would be a strain.....

    Bookmark   March 28, 2007 at 5:09PM
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How is the figure of $75K derived? Is that the portion of care the LTC insurance will pick up or the total cost?

I'm asking because my brother and I have yet to find a nursing home for Mum that won't top 8K/mo.. And the prices increase every few months.

    Bookmark   March 28, 2007 at 5:15PM
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The nursing home my MIL is in costs about that (the $75k/year). That's the total cost for the nursing home itself, but does not include medications or any extra medical supplies.

    Bookmark   March 28, 2007 at 5:54PM
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I used the 75K figure because that is the cost of the NH where my mother is on a waiting list. She has to wait because she will be entering as a medicaid patient, not as a private pay. There is a limited number of medicaid beds (and I suspect that an opening occurs only when someone dies).

I've learned one interesting thing - there are nursing homes that do not accept medicaid patients. They tend to charge less because they don't have to supplement the inadequate medicaid payments. So for someone who will be paying privately, that is good news. (Paying with LTC ins is the same as private pay as far as the facility is concerned).

One book that I'm reading right now is predicting that in the future, there will be more an more facilites that will not accept medicaid patients. The author predicts that there will be two categories of facilities: those that do accept medicaid (2,3, and 4 or more patients to a room), and nicer facilites that only accept private pay patients. Makes sense to me. The NH that has mom on a waiting list has some very nice private rooms, but those are only for private pay patients.

    Bookmark   March 28, 2007 at 7:04PM
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grandma, many nursing homes don't do Medicaid. When my MIL left the hospital with Medicare skilled time, we made sure the place she went also had Medicaid beds. She had some funds for private pay, but less than a year's worth if she remained skilled care. With the home having Medicaid beds, she could go into one when her funds ran out. A place which is only private pay basically tells you to pick them up at the door. So, even if one has private funds, it's prudent to make sure the home has some Medicaid beds if the funds ever run out.


    Bookmark   March 29, 2007 at 1:53AM
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There really is a wide swing in facility costs from region to region, from larger metro areas to areas not so large. My Mother will top out at paying a little under $60k per year. At least for now; there will be increases over time to be sure. Playing the "glad game", it's a tax deductible expense. This facility does not accept Medicaid; however, if someone should go in as private pay and exhausts their resources, they're not farmed out to another facility that does accept Medicaid. The worst that would happen would be moving the resident from a private room to a double.

I did think of a few questions for anyone considering LTCI to ask:
1. Does it provide coverage for an inhome caregiver as well as assisted living, long term care, or adult daycare facility?
2. Will it really give me a choice of providers or will I be limited to government approved facilities?
3. Will LTCI give me a benefit for life so I don't run out of coverage?
4. Will it cost me more in premiums to get an increase in benefit to counteract inflation?
5. Is there a plan offering me the ability to pay for coverage over a certain number of years so I'm not paying forever? (This would scare me - how convenient to screw up my paperwork and deny coverage because I stopped paying the premiums!)
6. Are LTCI premiums tax deductible as a medical expense?

I'm always skeptical when the sun and the moon are promised - for anything, not just insurance - I would like to think I'm reasonably bright but I can't read through the hype on this and a lot of what I read tends to start off with a mild scare tactic: 60% of all people who live to be 65 will spend some time in a nursing home before they die; 1 in 4 will spend more than a year in a nursing home; 1 in 11 will spend 5 years or more... And naturally if you accept that you are going to be one of those statistics they've got you on the hook. It is indeed a crap shoot as a poster said.

If the max benefit is $480,000 divided by today's annual cost of $75,000, what happens if the care term needed exceeds 6.4 years?

    Bookmark   March 29, 2007 at 3:12AM
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Good questions -
On # 3 and #4, those features can be had, but they increase the premium. Some companies no longer offer lifetime benefits - the policy my sister has is capped at 480,000 (in today's dollars).
Most of the advice I read says that it's worth it to pay for inflation coverage even though that adds to the premium.
LTCI premiums are tax deductible (subject to the 7.5% of AGI)

I'm currently reading two books:
"The Complete Idiot's Guide to Long-Term Care Planning" by Marilee Driscoll and "Long-Term Care Insurance Made Simple" by Les Abromovitz

Both authors point out that what frequently happens with an elderly couple is that one (usually the husband) falls ill. The spouse cares for the ill one until death. Then the surviving spouse has no one to care for her when she becomes ill. That's why most of the residents in NH's are female - women generally have a longer life span.

The authors also address your last question:what happens if the care term needed exceeds the benefit?
Essentially, they recommend a 3-5 year benefit period. Statistically most who do go into facilities die within 2 years. If you live beyond that time, then your family has time (2-3 years) to make a plan for when the LTCI and private funds run out. The whole thing is a statistical gamble.

You can have a plan that promises the moon, but the premium will be around $10,000/year and do you really need all the whistles and bells? That's what I'm sorting through right now. I want just enough coverage to ease the financial pain without making myself insurance-poor.

    Bookmark   March 29, 2007 at 9:44AM
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