By Jessica Federkeil, Point Park News Service:
Sherry Wimer has many concerns when it comes to caring for her mother, Ladonna Herbertson, 79, who suffers from dementia.
“I do everything for her,” Wimer, of Sarver, Pa., said. “I do all her finances; she wouldn’t even know where to begin. I do her shopping. I make sure she gets to the doctors. I give her her medications. I’m already doing things a nurse would be doing.”
One of Wimer’s biggest worries is how her mother will afford care as her health declines.
“I am always concerned about something, but I can’t worry about everything otherwise I’d go nuts,” Wimer said. “If she was more financially set – if she had money – there would be some things I wouldn’t worry as much about.”
According to the Pennsylvania Heath Care Association (PHCA), the annual spending in the United States on long-term care alone has reached nearly $275 billion. Many individuals and families cannot cover the costs and services of care with their income and assets.
“It can be very expensive especially when you have no real income coming in,” Eric Kiehl, 47, PHCA spokesman, said. “Social Security isn’t meant to cover those kind of costs.”
So how do people pay for long-term care?
According to the PHCA, in Pennsylvania 47% of costs are covered by Medicaid, 23% by Medicare, 23% by families’ out-of-pocket expenses, less than 4% by Veterans and state programs, and less than 3% by private long-term care insurance policies.
The long-term care continuum often begins with a caregiver providing assistance with the six basic activities of daily living or ADLs. The ADLs are eating, bathing, dressing, toileting, transferring (walking) and continence. The long-term care continuum includes a full-time nurse, respite care, adult daycare, assisted living or a nursing home facility.
“There are a lot of options in the long-term care continuum. Most of those options are based on an individual’s acuity levels. An acuity level is their level of sickness,” Keihl said.
What’s the plan?
David Jeter, a financial advisor for more than 25 years, has to prepare his clients for the expense of living longer.
“When we meet with retirement and estate planning clients, we create a desired life-plan scenario,” Jeter said. “Then we spend time on the what-ifs.”
With retirement planning, Jeter said they also plan for the costs of long-term care.
“As you get older, health issues arise,” Jeter said. “You need to know what the plan will be when that happens. The hope is you will never need it, but the reality is that everyone probably does.”
Jeter said it is a conversation that he needs to have with his clients by their late 50s to early 60s. His diligent clients will bring up the topic themselves in their 40s.
“Most people have some personal experience of someone in their life growing older,” Jeter said. “That personal experience inspires a plan.”
Jeter said the cost of the whole spectrum starts from an in-home licensed nurse at $20-$22 per hour. Then the Pennsylvania average assisted living facility is $51,000 per year, and a full-time nursing home averages $90,000 a year.
What help is out there?
“Knowing what the different levels of care, and how care can be paid for are two of the biggest challenges most long-term care consumers face,” Kiehl said.
Michelle Knox, the administrator at Shelbourne Personal Care in Butler, Pa., said that many people are under the impression that Medicare will help pay for long-term care.
“Medicare itself does not cover any long-term care beyond the 100 days [of] skilled nursing,” said Brittany Buzzelli, the community liaison/APPRISE coordinator with the Butler County Area Agency on Aging. “Under Medicare, skilled nursing is more of rehabilitation – after surgery, stroke, hospitalization, etc. It is not meant to be a supportive service for long-term care.”
For someone to get funding for long-term care from Medicaid, they must be clinically eligible for a nursing facility in terms of health condition.
“What’s the difference between what Medicare pays for, and what Medicaid pays for? Medicare’s shop is to help you get better,” Kiehl said. “If you go to the hospital they pay for that visit, they pay for the surgery and they pay for you go to the doctor to get better and then they are done paying. It’s just a health insurance program. It will pay for you to go to the hospital for the first three or four weeks; they only pay for one hundred days. Once you are as good as you are going to be, it’s done paying for it.”
Patients also must have limited personal resources to qualify for Medicaid.
“Medicaid helps those with limited economic means,” Jeter said. “In most facilities, they allow you to keep your home and a certain amount of your assets, but they take any income you may have like a pension or social security.”
Because the needs of healthcare consumers vary from case to case, policies are better planned on an individual basis. The Social Security office refers individuals to APPRISE, Pennsylvania’s free health insurance counseling program, when they are new to Medicare so they can understand the program.
“APPRISE does community educational seminars, but the best way to approach insurance options with seniors is to consult them individually,” Buzzelli said. “Everyone’s health insurance needs differ, everyone has different medications, doctors, income, health requirements. Medicare is not one-size-fits-all and it’s not something you can sort of say, ‘Hey, so and so, what do you have?’ and then get whatever they have. So much of what I do is individual appointments with beneficiaries.”
There are a lot of long-term care consumers who simply do not know what aid is available to them, experts said.
“It can feel like you are pretty much on your own figuring everything out,” Wimer said. “Lots of services I have only found out about by word of mouth and asking questions.”
Knox said she tries to do what she can for residents and their families in terms of aid and resources.
“We try to get them help wherever they can get it,” Knox said. “One of the first questions I ask people when we sit down to talk about cost is, is the potential resident a veteran?”
The Department of Veterans Affairs offers aid and pension benefits to veterans and their surviving spouse.
“A lot of people do not realize that the VA aid attendance program exists,” Knox said. “Those benefits can really help them to be able to afford long-term care.”
Knox said she helps inform families before they make any decisions, but she does encourage them to look at other options to find the right fit.
The calculated value of uncompensated care provided by family and or friends is estimated be $450 billion annually, according to the Pennsylvania Healthcare Association.
“The biggest set of care for the aging population is uncompensated care by family, friends and other groups in the community,” Kiehl said.
Knox said she works with very supportive families at Shelbourne.
“The families of our residents are incredibly important,” Knox said. “Family members may do their loved one’s laundry, or they may take them to their doctor’s appointments.”
She said that some families pay the difference in the monthly payments that the resident themselves cannot afford.
Kiehl said that a person’s ability to stay at home is often based on what supports they may or may not have in their communities.
Personally, Jeter said his family cared for his grandmother in her old age.
“Caring for our families is what we do, and it’s always without regret,” he said.
Burning through personal assets
“If people are wealthy they are, in a sense, self-insured.” Jeter, 48, who works at Allegheny Financial Group, said. “If a couple has $5 million and one of them needs any kind of care for, let’s just say the average, three years, that’s $270,000 to $300,000. Their assets would be fine.”
What if they both need long-term care?
“If they both need that level of care, that’s $540,000 to $600,000,” Jeter said. “They still would be fine. They would just have a lot less money.”
Jeter said the uncertainty of how to pay for long-term healthcare begins below $1 million.
No one knows how long they will need or how much they will need for their long-term care.
“Life expectancy has risen in age and there just is not a lot of money left anymore,” Knox said. “No one plans on living to 100. I sure don’t.”
Knox said it can be hard for the resident to plan on selling their house in order to pay for their medical care.
“There is a struggle for the resident when it comes to giving up their assets for their long-term care,” Knox said. “We will have residents say, ‘I planned on leaving my house to my kids.’ It’s tough on the residents.”
Knox said that the families in these situations just want the best care they can get for their parents.
“My parents have told me there is no inheritance to have. All of their money is going to go towards their long-term care,” Kiehl said. “I already knew that, and I am perfectly okay with that.”
Long-term Care Insurance
A very small percentage of long-term care in the state of Pennsylvania is paid for using long-term care insurance policies. The market for these insurance products has been rocky and remained small.
“It’s a market that has tried and has not been doing terribly well,” Kiehl said. “Less than 3% of long-term care is paid for by long-term care insurance.”
Knox shared experiences of residents with long-term care insurance that had policies that didn’t cover personal care.
“With long-term care insurance you may be paying a lot for a long time, and then find out it doesn’t cover everything,” she said. “So if you are going to go that route make sure it’s something that covers everything you want it to.”
Buzzelli said long-term care insurance can be a gamble due to the high monthly premiums.
“Sometimes people pay these premiums all their life and don’t even end up using the insurance,” she said. “Or say they are 70 and have been carrying the insurance since they were 50: They have yet to use the insurance, but the premium keeps going up and up. Then, they get priced out and end up having to cancel the policy without ever using it.”
Jeter said long-term care insurance is a way to limit the damage, if you can afford to cover the premiums.
“They are very pricey,” he said. “But if you get a policy that can cover half of the cost of your care, that leaves you only having to pay $40,000 to $50,000 a year versus $90,000 to $100,000.”
Jeter also said that picking out long-term care insurance helps people bring up the conversation about what kind of care they want.
“It does answer a lot of questions ahead of time,” he said. “You have to talk about what you want, in terms of care, with your spouse or children when you are picking a policy.”
The long-term care insurance also takes some of the financial burden off of loved ones when the time comes to use it Jeter said.
“Then you have all or at least some of your care paid for,” he said. “When you can afford care that really helps, answering the emotional questions when the time comes.”
Kiehl said the best way for people to choose what type of care facility they want to be in is to go and look at them in person, while they are healthy enough to do so.
“There are so many websites out there that will rate nursing homes, but nothing beats walking in and visiting multiple facilities in your area,” he said. “Getting to talk to the residents and their families, to the administrators and staff. It helps get a real sense of where you want to go or where your family member should go.”
Jeter said he joins his clients on every step of the long-term care journey.
“I go with my clients as we meet with the resident coordinators of area nursing homes,” he said. “I go through the numbers with them. We start with questions and follow all the way through to the execution of the long-term care plan.”
Knox says that while the cost of care options, like an assisted living facility, may seem high, you need to keep one thing in mind.
“In terms of cost, yes, you may be looking at one big number,” she said. “You do need to keep mind that the cost is consolidating all of your monthly expenses into just one expense.”
As for Wimer, she wants to give her mother the best care she personally can at home for as long as possible.
“I would like to care for my mother for as long as I can before she has to necessarily go into a home,” she said. “Hopefully, that will be a little further out in the future. I’m hoping it is.”