Your Options

The Financial Challenges of Funding

Long Term Care/Extended Care needs:

• Deficit Reduction Act (DRA)
• Personal assets
• Medicare
• Medicare Supplement

• Medicaid
• VA Benefits
• LTC insurance

Let's discuss each of these options

You Can Manage Your Finances...
It's by managing your finances that you write the story of your life.
You are both the author, and the story's principal character.
Resolve to perform what you ought.

- Benjamin Franklin -

Strategic Planning for Retirement:

Extraordinary times require extraordinary measures. Retirement planning in this age of longer life spans, lower interest rates, and higher medical costs calls for tactical choices. Success will go to those who can adjust to suit the times.

FACT: Long Term Care is NOT covered by:

•Individual Medical Plans
•Group Health Plans
•Medicare

•Medicare Supplement
•HMOs (Regular or Medicare)
•Disability Income Insurance

Long Term Care planning –It's in your hands.

When President Bush signed the Deficit Reduction Act he“tightened the loopholes that allowed people to transfer assets to their children so they can qualify for Medicaid benefits."

Deficit Reduction Act

Families need to be alerted that the new laws are much more punitive than the previous rules on Medicaid asset transfers.

It has become much more difficult for those with assets to pass off the cost of a long stay in a nursing home onto the state and federal governments.

The clear message from the federal government to

American families.

***Planning for Long Term Care is your responsibility***

Many people think long-term care affects only the individual requiring the care; the reality is that it's about the whole family.

Long-Term Care Insurance allows families to provide a higher level of care in the setting of their choice for a longer time, effectively reducing the tremendous physical and emotional burdens of extended care.

Long-Term Care Insurance protects family income allocated for a comfortable retirement, family members and other needs

Who Pays for Long Term Care?

More than half of nursing home bills are paid out-of-pocket by individuals and their families.

Would you like to write a check for an unknown amount for up to possibly 20 years or more?

How to choose what to spend first?

A study done in 2003 by the American Society on Aging showed that only 37% of them have saved any money to cover their expected long term care costs. There has to be a better solution.

Personal Assets:

These would include your checking, savings, social security, CD's, mutual funds, IRA's, stocks, home equity, Cash Value Life Insurance and annuities;

Anything that can be liquidated.

While these resources may be available, their use for Long Term Care /Extended Care might not be your first choice.

Long lasting negative financial consequences can be compounded by great tax burdens.

Many of these choices can have great emotional

Impact as well.

Without careful planning for extended care, you are

limiting your family choices.

Medicare

Medicare is the national insurance program designed to provide benefits for hospitalization and physicians' care for retired persons.

How many of you think that Medicare will also pay for long-term care needs?

In reality, this is not the case. Medicare will pay for nursing home care if you first have a hospital stay of at least 3 consecutive days (not counting the day of discharge) and are admitted to a nursing home with the same condition within the next 30 days.

The facility needs to be Medicare approved, but only 50% are certified nationwide.

Nurse, Patient

The patient must require daily (and that's a crucial word here) daily skilled care. However, 85% of all LTC is custodial, not skilled.

By custodial we mean help with the activities of daily living: bathing, eating, dressing, transferring, toileting and continence.

These are the things one must be able to do to stay independent and can be provided by people without professional training.

The Medicare definition of skilled is: "The service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, technical or professional personnel." To translate this means care provided by RN's, doctors, physical therapists, or other licensed medical professionals.

Medicare:

If you meet stringent qualifications Medicare will pay for only up to 100 days. After day 100 Medicare will pay for nothing. There are no exceptions, no extensions...after 100 days nothing.

Medicare home care payments are even more restrictive. The government website has a wealth of information available at www.medicare.gov.

Medicare Supplements:

Medicare supplements are very easy to explain. They are designed to pay for the CO-payments and deductibles associated with Medicare.

In essence, if Medicare does not approve of payment neither will your Medicare Supplement.

If you have plan C through J it might pay for the deductible associated with days 21 - 100, but beyond day 100 your Medicare supplement will also pay nothing.

Medicaid: Medicaid is a joint federal and state health program that provides medical assistance to low-income families. But there is a really big downside to Medicaid. It's a very simple explanation needing only 3 words:
	Medicaid equals Welfare. Persons applying for benefits must prove they do not have the ability or means to pay for their own medical care. A lengthy questionnaire must be completed disclosing all assets and income. Once you qualify for Medicaid the government will take control of all decisions as to how, where and when you will receive your care as well as the quality.
	Estate Recovery for Medicaid Benefits: Federal Law requires states to recover what was spent for the care at the death of the second spouse. State rules and practices for estate recovery vary significantly.
	When you receive Medicaid (Welfare), the government is in control. It will tell you where you may receive care and what type of care you can receive. Medicaid = Government choosing for you

When all is said and done, Medicaid (Welfare) will force the three things you never wanted:

“Giving up control of your assets.”

“Giving up your choices.”

“Custodial care in a nursing home."

Consider:

By spending down (giving away) a lifetime of assets and going on welfare (Medicaid planning), individuals lose their independence and can no longer decide how and where they are cared for.

VA

Some veterans are entitled to very limited nursing home coverage from the VA. Even back in 1997 only 2% of eligible vets received help at home.

Also consider that the VA has been promoting individuals to purchase their own LTC policies.

Due to budget constraints in the past couple of years the VA has cut back even more on their available services.

Basically, unless your condition is service connected you should not consider the VA as a source of LTC services.

Long Term Care Insurance:

Transfer the risk. Since the other options are not most family's first choice, consider Long-Term Care Insurance (LTCI).

Plans vary, but in general, they provide an additional checkbook to pay the way. (Knowing the right way to set up a plan is key.)

The government is so aware of the need for protecting choices that many federal employees are being offered the opportunity to purchase LTCI.

Independence— It starts with planning.