There has been much news in recent days about the need for Long Term Care (LTC) Insurance and the recent reports of large increases in premiums and big insurance companies announcing that they will not sell any new policies.

The subject deserves more time and space than one blog article, so today I will touch on the need. I will follow this blog next week with interviews with Long Term Care Insurance Brokers and Financial Planners discussing the problems the LTC insurance industry is going through.

People are living longer these days, but the human body still continues to break down.  As such, more and more seniors – an estimated 9 million in 2008 – need long-term care.  But do you need long-term care insurance?  It’s a smart way to defray the enormous costs of care, but really, it depends.

Premiums this year cost individuals an annual average of $2,180, but the average rate this year for a private nursing home room is $229 per night, or $83,585 a year, and the average rate for a home healthcare aide is $21 per hour.  The New York Times had an article last week (“Ignore Long-Term Care Planning at Your Peril”) reporting that some major long-term care insurance companies are looking to raise premiums by as much as 40 percent.  And, the longer you wait the more likely rates will rise, and the older you get, more likely you’ll develop a so-called pre-existing condition that affects plan availability and premiums.

There is a misconception that Medicare will cover long-term care costs.  While Medicare may pay for short-term nursing home stays in certain circumstances (for example, while you are convalescing after surgery or undergoing rehabilitation after a qualified hospital stay), it will not pay for long-term care.  And, Medicaid will cover nursing home costs, but only after you’ve expended most of your own finances, and then your access and options in care providers becomes severely limited.

The new Class Act, passed under the health care bill, provides long-term care insurance through the government, but enrollment doesn’t start until 2012 and benefits aren’t likely to exceed $100 a day and then only after you’ve paid premiums for 5 years prior.  However, it may be easier to qualify under the Class Act, as some private plans won’t cover care for certain pre-existing conditions.

One up-side is that there are tax breaks available for qualified long-term care insurance premiums where benefits received under such policies are tax-free.

So, how likely are you to need care to make purchasing an insurance plan worth it?  It largely depends on your family’s health history and your financial situation.  If you’re at risk for a serious illness that requires regular care, and you want to leave something to your children or grandchildren upon your death, it’s probably smart to at least investigate the specifics of a LTC policy.

Next time, update on the Long Term Care Policies and Insurance Companies.

James D. Perry

Having a pet in the house has a number of benefits to our overall physical and emotional health. But I’ve heard many friends and clients question whether it would be better to remove a pet from their aging parents’ homes to prevent injuries or to eliminate the added responsibility of caring for an animal.

Carolyn Rosenblatt of AgingParents.com wrote recently for Forbes about the problems pets can present in the home of an elderly person.  If your parent has a large dog or a cat that is old and can’t see or hear a human coming to get out of the way, there is the risk that your parent could trip and fall sustaining serious injuries. And if your parent suffers from dementia, there is concern for the pet that it won’t get fed or taken outside for walks.

But whatever the risks, it is likely they can and should be mitigated to preserve the parent-pet bond.

According to research in the Journal of the American Geriatrics Society, caring for a pet serves as a buffer against isolation and loneliness. And further studies suggest that petting a dog for a few minutes a day can relieve stress, lower a person’s blood pressure, and alleviate depression. Pets also aid elders in their socialization with others, serving as a conversation starter.

If the pet is unruly, offer to pay for training, Rosenblatt suggests, or shop together for a collar or harness that provides more control. If your parent is frail, find someone to walk to dog to prevent falls or suggest that your parent’s home care worker go along on walks to monitor your parent’s safety.

Whatever the risks, it is probably more beneficial to your parent’s health to protect that owner-pet bond. Safety is a family issue, but don’t forget that Fido or Fluffy is family, too.

James D. Perry

An Alameda Superior Court judge decided this month not every felony conviction will disqualify you from helping the elderly or disabled.

Gov. Arnold Schwarzenegger originally wanted to ban everyone with a felony record from working in the In-Home Supportive Services program (IHSS). As the law stands, workers are barred from the program for 10 years if they have been convicted of child abuse, elder abuse, or defrauding MediCal or any patient.

Outside those restrictions, though, Judge David Hunter says in-home patients can employ anyone they want.

IHSS helps pay for in-home care to 430,000 low-income elderly and disabled Californians. It allows patients to remain in their homes under the care of individuals of their choosing, as approved by the state, to render help with daily tasks, such as bathing, house cleaning, meal preparation, laundry, grocery shopping, personal care services, accompaniment to medical appointments, and protective supervision for the mentally impaired.

The state argues that its interest is protecting Californians and preventing fraud.

One of the plaintiffs to the suit is a Sacramento woman who provides in-home care for her 90-year-old-mother. She was initially disqualified under the governor’s plan because of a 1976 conviction for felony grand theft.

The program costs about $5.5 billion annually, half of which is paid for by the federal government, 35% by the state, and 15% by individual counties.

“We are following the court order, but we do not believe convicted felons should be eligible to care for elderly and disabled Californians in their homes,” said Lizelda Lopez, spokeswoman for the Department of Social Services.

The state could appeal the ruling, and Ms. Lopez says the Department is already reviewing it.

This is tricky ground. The state has a legitimate interest in protecting its citizens and taxpayer dollars, but how long should it punish people for their crimes at the expense of the elderly and disabled?

James D. Perry

Brooke Astor was a New York philanthropist and socialite who married into the wealthy Astor family. She died at the age of 105 in August 2007 with a $200 million fortune.

In the year before she died, a battle was raging in the courts as friends and family members attempted to have her only son, Anthony Marshall, removed from his position of guardianship over her on suspicion of elder abuse. Their reasons included allegations of financial fraud and medical neglect.

Just a few months ago, Marshall – himself now 85 years old – was convicted on 14 of 16 charges against him in his scheme to steal millions from his mother, including grand larceny and forging Astor’s signature on an amendment to her will.

You don’t need money to be a victim of elder abuse, though. Elder abuse includes financial, physical, and emotional abuse or neglect.

There are a great number of consumer scams and unscrupulous individuals (some in your own family) who are willing to take advantage of the elderly.

Last week I spent about 2 hours dealing with my 94 year old father’s bank because one of the sham mail order “charity” sweepstakes he entered used his $4 check to create phony checks and wrote one against his account for $300. I got them to reverse the charges, but they demanded that the account be closed.

To protect your finances, you should watch out for fake charities; ask to see a business permit from door-to-door solicitors; be wary of get-rich-quick investment schemes; and check references of repairmen and contractors.

Also, be extra careful in selecting people (including family members) for power of attorney, trustee status, or other access to your finances.

If you suspect elder abuse, or are a victim of elder abuse, don’t be afraid to report it to your local Adult Protective Services agency or the California Attorney General’s Elder and Dependent Adult Abuse Hotline (1-888-436-3600). If the abuse is occurring in a licensed long-term care facility, report it confidentially to your local Ombudsman (1-800-231-4024).

James D. Perry

Nearly 70 percent of those 65 and older will need some sort of long-term care before they die, and already Americans are spending an estimated $160 billion on long-term care services, such as nursing home stays and in-home care.

Emerging within the health care debate is a national discussion on the cost of long-term care for the elderly and disabled.

A news story out of Miami this week highlighted the plight of Gillian Lloyd who is struggling to continue caring for her aging parents despite the sizable nest egg they put together prior to their retirement.

Her 84-year old mother suffers from Parkinson’s and her 85-year old father has dementia. Their retirement fund of nearly a half-million dollars is almost gone after paying aides for in-home care, and Lloyd doesn’t know where to turn next.

Medicare doe not cover long-term nursing home stays, and Medicaid is unavailable to all but the poorest. With the increasing costs of long-term care on Medicaid, officials say the spending is unsustainable. And yet, the current proposed health care plan in Washington D.C. doesn’t really address long-term care.

The late Sen. Ted Kennedy’s proposal included provisions for Americans to buy long-term care insurance from the government at a minimal cost, but since his death, none of his colleagues have taken up the cause or proposed alternatives, and the Obama administration remains silent on the issue.

As of now, it remains to be seen how Congress will choose to address the issue of long-term care costs, but this is definitely an area of policy to watch.

James D. Perry

I recently learned about  a new website sponsored by the federal government that rates nursing homes.  For those of you who are doing your best to find the best facility to care for an elderly family member, the new option in locating higher quality homes is welcome.

In addition, The Centers for Medicare and Medicaid Services (CMS) will start a pilot program this summer to track how cash incentives to nursing homes improve care, specifically in nurse staffing and preventable hospitalizations. 

There are roughly 16,400 nursing homes nationwide and taxpayers spend about $72.5 billion annually to subsidize nursing home care through the medi-cal and medicare programs.

CMS began ranking nursing homes “based on government inspection results, staffing data, and quality measures” via the “Nursing Home Compare” system, which is available at medicare.gov/NHCompare.  

When reviewing the Web site, be sure to follow up with additional research, such as in-facility visits, speaking to other residents, data review, and state and other source review. 

The Advocacy group, the National Citizens’ Coalition for Nursing Home Reform, warns some nursing home-provided data may contain errors and that consumers should check regularly for monthly updates. 

Check out the website and compare it’s rating with your own observations. 

James D. Perry