Medicaid
CORONAVIRUS AND LONG TERM CARE
COVID-19’s added costs likely will lead to increases in insurance premiums and long-term care costs!
More than 18 million people have been infected by coronavirus worldwide, about a quarter of them in the United States. It is likely to be years before the costs for those who have recovered can be fully calculated, according to Reuters interviews with approximately a dozen physicians and health economists.
These experts point to the potential for billions of dollars in long-term healthcare expenses, as studies of patients with COVID-19 continue to uncover new complications associated with the disease. They say the costs stem from COVID-19’s toll on multiple organs, including heart, lung and kidney damage that likely will require costly care, such as regular scans and ultrasounds, as well as neurologic deficits that are not yet fully understood.
The added costs likely will lead to increases in insurance premiums and long-term care costs. Bruce Lee of the City University of New York Public School of Health estimated that if 20% of the U.S. population contracts the virus, the one-year post-hospitalization costs would be at least $50 billion. This is before factoring in longer-term care for lingering health problems. Without a vaccine, if 80% of the population became infected, that cost would jump to $204 billion.
“On a global level, nobody knows how many will still need checks and treatment in three months, six months, a year,” Marco Rizzi, M.D., a physician in Bergamo, Italy told Reuters. Rizzi has seen nearly 600 people with COVID-19 for follow-up. He is co-chairing a World Health Organization panel recommending long-term follow-up for patients. Even those with mild COVID-19 “may have consequences in the future,” he added.
LTC Comment: Covid-19 hit LTC when it was already down. The perfect storm of an oncoming economic catastrophe and growing long-term health care costs may finish the welfare-financed system. Will private financing markets, including home equity conversion and private LTC insurance, fill the breach?
How will you or your clients pay for their LTC costs?
Assets have lost value, LTC costs are up and likely to go higher. LTC insurance with an automatic 5% compound inflation factor WILL keep up with increasing costs and allow those insured to get the care they need where they want it, instead of relying on a Medicaid nursing home.
Homes Might Turn Away Medicaid Residents
Some homes might have to turn away residents covered through Medicaid!
Some homes might have to turn away residents covered through Medicaid because the operation simply can’t afford the low reimbursement rate in return. If a home accepts too many Medicaid residents, it’s at risk of closing permanently and not having the ability to serve its current Medicaid residents, Vander Meer said.
A version of that happened at a Marshfield assisted living facility in 2015. Stoney River Assisted Living told nearly 20 residents they could no longer live there because it couldn’t afford to accept the reimbursement rate from public assistance. Instead, Stoney River officials said they would shift to only private-pay clients, or people who can pay for their care without government subsidies.
Sunday, June 14 Green Bay Press Gazette
Medicaid is a welfare program you don’t want to end up on!
Assisted living facilities will not accept it, home care agencies avoid it as well. Only the welfare nursing homes have (had, apparently) to accept it and now even they are trying to avoid it.
Hiding your money to get on Medicaid might sound good while planning (it’s free from the government) until you find yourself driving between NO VACANCY signs. On the other hand, LTCi, chosen appropriately, and while still healthy enough to get it, can be less expensive than divestment. It will give you choices and the welcome mat will be out for you, no matter where you want care – home or facility.
You won’t have to sell assets (fire sales never produce high values), have your family agonize over what to sell first, and can leave your savings intact for your spouse and/or heirs.
Call me at (920) 884-3030 to schedule a visit or just ask questions.
Families Forced to Find New Long Term Care Facility After Policy Changes
Families Forced to Find New Long Term Care Facility After Policy Changes
Families forced to find new long term care facility after policy changes
Is it possible to lose money on every customer and make it up in volume? Of course not! Aren’t you glad you have this covered?
You will know people who need care and did not plan. I can still help some of them at least protect their burial money–Medicaid requires that beneficiaries cash in life insurance before they receive benefits, so life insurance benefits won’t be available to pay for final expenses. Contact me for more information!
Romeo Raabe, The Long Term Care Guy
www.TheLongTermCareGuy.com
(920) 884-3030
Why Medicaid Long Term Care is a Bad Choice
Most assisted living facilities don’t accept Medicaid, so often Medicaid recipients needing LTC are left with only one choice—a nursing home.
Many people don’t realize that, in addition to traditional health care, Medicaid actually pays for most long-term care (LTC) in the United States. In fact, less than 40% of Medicaid dollars are used to pay for traditional health care. The small portion of Medicaid recipients (just over 20%) whose long-term care services are paid for by Medicaid use over 60% of the Medicaid budget dollars.
Most assisted living facilities don’t accept Medicaid, so often Medicaid recipients needing LTC are left with only one choice—a nursing home. This is because the federal government requires nursing homes to accept Medicaid payments if they want to accept Medicare for the rehab care they provide–and this rehab care is a major source of revenue for many nursing homes.
Wouldn’t you rather receive care, when needed, at home or in an assisted living facility rather than the nursing home? Most people would, but if you cannot afford this care – your only option might be the nursing home.
Many people mistakenly assume LTC insurance is too expensive. It can be, if it’s not chosen appropriately. Do you have a deductible on your car insurance or does it cover every last penny? Mine has a deductible, so that I pay the first part and insurance pays the expensive part.
LTC is similar. Your lifestyle will change when care is needed. You will spend less money on vehicles if you cannot drive, and spend less on golf, travel, toys, and so on. The money freed up by not spending it on these things needs to be taken into account in order to see how much care you can pay for. Then you only need enough insurance to cover the shortfall. If you have a nest egg, and do not want to use it all up, you can always take the interest it generates to help lower the insurance need even more—and never touching the principal.
Think you cannot get LTC insurance because of health? I have solutions for nearly every situation – even some for people already in care.
So, you can ignore this and hope you will not be among the 70% of us who will need care – or you can investigate options to see if this concern can be handled affordably. Your choice!
www.TheLongTermCareGuy.com Romeo Raabe is here to help, even with just advice.
What Can I Do About Long Term Care?
Long term care is very expensive. Few people are prepared for the cost when they determine they need care.
Long term care is very expensive. Few people are prepared for the cost when they determine they need care. Fortunately, there are ways to deal with the bills even if you do not have much money.
Medicaid requires beneficiaries to spend all savings and other assets down to impoverishment before they will pay for care. This includes a requirement that any life insurance with a value over $1,500 be cashed in—some people have life insurance so that there is money to pay for their funeral. If someone needs Medicaid to pay for their care, this insurance will need to be cashed in, leaving no money for final expenses as planned. Medicaid does, however, let you set aside up to $15,000 to pay for final funeral expenses if this is done in an irrevocable burial trust. I set these up for people at no cost.
Medicaid also allows you to set these irrevocable trusts up for the final funeral expenses for each of your children and their spouses in addition to the one set up for you. This allows you to leave funds to family instead of spending it all on the costs of long-term care.
Few people know of these Medicaid rules and then leave nothing but the funeral bill for their children.
You have some savings in the bank, earning very little interest. The irrevocable trusts also earn interest, cost nothing to open, and protect money from the Medicaid “spend down”. No need to spend money to open these, other than the amount you want to place in the trust.
At TheLongTermCareGuy.com, we help people deal with the costs of long-term care. We also offer alternatives to help those planning ahead to pay for long term so they don’t have to spend their assets down to impoverishment. There is no charge to meet and explore options. Call us at (920) 884-3030 to schedule a free consultation.
Happy Holidays – How is Grandma?
How is Grandma? Are bills piling up unpaid? Is hygiene slipping? Are they not eating as well as they should, or is the house unkempt?
While your family was together at Thanksgiving, was there evidence that older family members are not taking care of themselves as well as they could be or used to?
Perhaps your loved one is not driving as much as before, or perhaps should not be driving at all. Are bills piling up unpaid? Is hygiene slipping? Are they not eating as well as they should, or is the house unkempt?
It is never easy to meet with siblings and parents to talk about how and where they will be helped with future living arrangements. Then you check into costs at senior living facilities and wonder how can this possibly work.
Hello! My name is Romeo Raabe, and I am a long-term care (LTC) planner at www.TheLongTermCareGuy.com. I help families learn how to convert homes into income to pay for LTC facilities.
I help families navigate the federal Medicaid programs that can pay for LTC. I even have ways to help protect the money for family, rather than all going toward LTC costs.
If this discussion has started, or is about to, call me at (920) 884-3030 and let’s schedule a time to visit and see if I can help you and yours. It’s never too late and you don’t know what you don’t know.
What’s it Really Like Paying for Long-Term Care
Annual cost range is $18,720 for adult day-care services to $100,375 for a private room in a nursing home!
As written by Michelle Singletary and published in the Washington Post on November 26, 2018
One of my favorite Spock quotes from the Star Trek television series is, “Live long and prosper.” Who doesn’t want a long life, right?
But what if the longevity means spending down your money for long-term care? And that’s if you’ve been prosperous and have the funds to pay a facility or home health aide to care for you.
Genworth Financial recently released its 2018 Annual Cost of Care survey and found that the annual median cost of care now ranges from $18,720 for adult day-care services to $100,375 for a private room in a nursing home.
I asked readers to share their long-term care experiences, and here’s what they had to say:
“My mother had Alzheimer’s and was in a memory unit for two years,” wrote Chris Gonzales from California. “My dad has been in assisted living for two and half years and for the last two years has needed round-the-clock care. The cost, when my mother was alive, totaled $230,000 a year. The cost to care for dad is now $170,000 a year. This is in Fort Smith, Ark. My brother and I are very lucky that our parents lived below their means, saved, and did extremely well investing their money in the market, so money has not been an issue. We are also grateful for the ladies that watch over our father and consider ourselves extremely lucky to have people we can depend on as we both live out of state.”
“I managed the care of my mother (who had Alzheimer’s disease) from 1998 through 2006,” wrote Debbie Trice of Sarasota, Fla. “Even that long ago, the cost of her care approached $100,000 annually once she had to move from an assisted-living facility to a skilled nursing facility. The actual cost of long-term care goes way beyond the monthly or daily facility charges. Personal expenses (e.g., adult diapers, toiletries, laundry, haircuts) can be significant. I saved some money by purchasing diapers from a wholesaler and toiletries from a discount store and doing mother’s laundry myself. Medications cost more for residents in long-term care, too. Some states require that all medication, including over-the-counter items like aspirin and vitamins, be specially packaged by a pharmacist in blister packs — at extra cost, of course. Staffing is a critical issue. To keep their rates competitive, many facilities limit their staffing levels to the minimum required by law. But then some patients’ needs can’t be adequately addressed. I found it necessary to hire private duty aides to supplement facility staff for a few hours each day.”
Lane Beckham of New Jersey wrote, “Four years ago my wife (then 71) suffered a fall which led to numerous complications over the next year. She has since been bedridden going from a home hospital bed to a wheelchair. She can feed herself, converse, watch television and read catalogues, but that’s about it. We’ve had a 24/7 home health care aide since April 2015 at a current cost of $215 a day or $78,475 a year. A long-term care policy kicks in $100 a day but only for 5 years of benefit days.”
“My mother died two years ago and for the last two years of her life, she had progressively worsening dementia,”
One reader wrote. “We (mainly my sister) arranged for her to be cared for at her home. The cost was running at about $85,000 a year and that was two years ago! Why? At times, she was simply too much for one person to handle, so we often needed two people to stay with her. And while we went with the better-rated agencies, we still had problems with sitters stealing, using drugs, having friends over and even taking my mother out when they needed to run errands. What a nightmare.”
David Treece, an investment adviser and financial planner based in Miami Shores, Fla., has a client with Alzheimer’s who has a Genworth long-term care insurance policy, which so far has paid out about $323,000.
“I have learned nothing will ruin a retirement plan faster than long-term care expenses,” Treece wrote. “Try having to come up with nearly a third of a million dollars like my client if you don’t have coverage. It’s just unimaginable for most people. My biggest concerns for my clients are a group I call ‘the alones.’ These are people who have no spouse, no children, no close siblings and really nobody else. They can’t even name a beneficiary let alone someone to serve as a power of attorney or health-care surrogate. This group seems to be increasing as so many people never had children, are divorced or never married, or are estranged from family. Who is even going to help them? Our society isn’t really set up for this, and I don’t see any easy solutions.”
*****
How comfortable do you feel paying for care out of pocket when your health changes?
- Have you thought that Long-Term Care insurance would not be needed?
- Do you plan on spending down to Medicaid, a welfare program and then search for a place that will accept it – and you?
If you are concerned, contact www.TheLongTermCareGuy.com at (920) 884-3030 and schedule a time to investigate with someone who understands and can help you find a way to handle this!
Who is Going to Pay for Your Funeral?
Who is Going to Pay for Your Funeral?
Asking who is going to pay for your funeral might seem like a silly question–you probably have money in savings, a vehicle, a house, even life insurance. There should be plenty of money to pay this bill, right?
The problem is, you are gone, so now who has access to your assets?
Your Power of Attorney ends at the moment of your death. How your assets will be distributed and who has authority will all be determined in the probate process in the next few months. So, who will come up with the funds now to pay for the funeral? Even life insurance does not pay out for some time once claim forms are submitted.
Just recently, I received a call from a La Crosse funeral home who wanted to know how to get in touch with the Wisconsin Funeral Trust. This is the organization that funeral directors set up to hold prepayments for funerals. The association chose to invest the funds very aggressively and now only has money to pay out 65% of what people deposited. The funeral home that called me was caring for two individuals who had passed, and the home was trying to determine how much money the trust actually has for them. They called me is because they found me in an internet search. (If you Google “funeral trust Wisconsin”, my website comes up.) They hoped I could either help them or direct them to the correct place.
This shortcoming of the state funeral trust is important to those planning ahead for their end-of-life needs. I am a long-term care planner and, as such, include protecting funds set aside for funerals as part of my work. I help people set aside funds for their funeral using a licensed trust company who specializes in just this. The company that I use for this purpose is a licensed and bonded insurance company, required by law to retain adequate funds to cover claims. There is no cost to set up such a trust and the funds deposited earn interest. These funds are available immediately at death, even before a death certificate has been produced, to pay all the bills in full.
There is another important reason to fund a funeral trust –many people need long term care in the years leading up to their death. This can cost as much as $50,000 to $90,000 per year or more. If they did not plan in advance and purchase long-term care insurance to cover these bills, they may have to apply for a welfare program called Medicaid to pay for their care. Medicaid is a payer of last resort and will only cover long-term care expenses once you have spent down everything you own (house, car, checking, savings) to under $2000. You must also cash in life insurance before Medicaid pays for long-term care. This balance is not enough to pay for a funeral.
Medicaid does allow you to set aside money for funeral expenses, but only in an irrevocable burial trust account. Setting these up for people who did not plan for long-term care expenses has become a large part of my work.
Death happens to everyone. Don’t leave the bills for this to your children. Make sure the money is there AND accessible to them when it is needed.
Long-term care happens to 70% of adults who make it to age 65. What is your plan to pay for this care when your health changes?
For answers to either of these predicaments, reach out to Romeo Raabe at www.TheLongTermCareGuy.com or call (920) 884-3030 to schedule a time to investigate solutions. There is never a cost to investigate.
Observations from a Recent Hospital Stay
Nearly every one of the CNAs at a recent hospital stay started their careers in a long-term care (LTC) facility.
Recently, I was an inpatient in a hospital after having surgery. While there, I visited with a number of nurses and CNAs (certified nursing assistants) while they were caring for me. Nearly every one of the CNAs had started their careers in a long-term care (LTC) facility. The reasons these workers moved on to a hospital setting for work is the main problem with LTC today.
Caregivers (CNAs) are in very high demand and very short supply.
LTC workers especially are underpaid and overworked. They rarely receive merit or cost of living raises. The facilities that desperately need them are having a very difficult time making ends meet. This is because Medicaid, which pays for nearly half of all LTC in the United States, pays nursing homes significantly less than the cost of care.
Nursing homes which accept Medicare for rehabilitation care (their main source of revenue) must also accept Medicaid—the welfare program which pays for care when the patient cannot afford it. Thus, the nursing home has become the main place that will accept a person if he/she cannot pay for care in an assisted living facility. Assisted living facilities cost between $4000 and $8000 a month depending on care needs. Since they do not receive Medicare for rehabilitation care, they are not required to accept Medicaid, and many do not.
Most people cannot afford the monthly charges for long without LTC insurance.
The problem is that many people do not plan for care in later life, with investments or insurance that pays for LTC. Many of the residents in LTC facilities are on Medicaid, and most of them are in nursing homes. This is because the very nice assisted living facilities are rapidly deciding not to accept Medicaid because of its inadequate reimbursement for care.
Back to the CNAs I met in the hospital. While there is a desperate need for caregivers, those caregivers need a living wage, and many long-term care facilities are unable to provide that. So, they migrate to the hospitals who can pay them and provide benefits.
If you want to have good long- term care, in a place that appeals to you when your health changes, you need to have a plan to pay for that care or the odds may be good that a nursing home may be your only choice. Years ago, I purchased LTC insurance that will pay for the care I need, in a setting I will be happy in when that time comes. Will you?
For more information, browse all of our resources at www.TheLongTermCareGuy.com.
A Different Need for Long Term Care Insurance
Don’t get stuck searching for a place to take you or a loved one with only Medicaid!
People used to purchase this insurance to prevent them from spending all their hard earned nest egg paying for Long Term Care (LTC). That is still a reason but there is a much more urgent reason to have this insurance when it comes to Medicaid.
When your assets have all been drained paying for care, you can qualify for a government welfare program called Medicaid, which will pay for your LTC when you cannot. It is good that we have such a program, but it pays so much less than the cost of care, most facilities will not accept you if you are on it.
They simply cannot afford to lose money on every resident and try to make up the loss with volume.
So, they can and do say no at the door to people who cannot prove that they have the means to pay for their care for at least two years. This has been growing until now there are few and far between who will accept someone on Medicaid or who will soon be on Medicaid.
But someone HAS to take me, you say. Yes, there are facilities who HAVE to take Medicaid, and they are nursing homes. Nobody wants to live in a nursing home.
The reason a nursing home will accept you on Medicaid is because they get a significant income from Medicare for providing rehab care for people leaving the hospital. Medicare pays them well for this care and if they accept Medicare, then they HAVE to accept Medicaid.
So, if you want care at home, or in an assisted living facility that is nice, you had best find a way to pay for such care. LTC insurance is a reasonably priced solution – if you purchase it while still healthy enough to get it.
Most people do not even need as much of this insurance as they might think. When someone needs help with day to day activities your budget will change considerably. No second car when one cannot drive. No boat, camper, snowmobile, motorcycle, travel, cruises, etc. Even less eating out if it is difficult to get into the bathroom.
With less toys, travel, golf, etc., most people can put some of their disposable income towards the costs of care. The interest earned on your nest egg can also contribute to the costs. Only the shortfall needs to come from insurance.
Investigating this with an expert who understands the true costs, how care is utilized, who can guide you through how much of the cost you can cover, is essential. We have been doing nothing but LTC planning for 25 years now. We can help you find out how much or how little coverage you need as well as the best prices for you.