Long-Term Care

Financing long-term care was a nightmare for our family. My grandparents initially “qualified” for Veterans benefits, as my grandfather fought in World War II. Initially, my grandfather and grandmother were receiving the maximum benefit of $2,019 per month (for veteran and spouse). Thus, the Veterans Administration was paying roughly 30% of my grandfather’s assisted living home monthly cost until about a year and a half into his care, when they determined he actually didn’t qualify for benefits. At this point, the VA began to demand the $40,000 back that they’d paid out. My mother had to get an attorney and try to fight the VA to get everything corrected.

The Veterans Administration “does not reveal maximum allowable assets” and according to a New York times article, $80,000 (“the house and a car are exempt from this total”). Yet, what the VA told my mother, was that because my grandparents owned a house it disqualified my grandfather from getting long-term care assistance from the VA. (At the time my grandfather entered the assisted living home, he had a caregiver who filled out his paperwork to help him and my grandmother enter assisted living. It is likely she left out what assets he had to make assisted living appear cheaper for him.) Interestingly, it is illegal for someone to help a veteran fill out the 26-page application. According to the September 2012 New York Times article, "A Little-Known Benefit for Aging Veterans," “The department forbids anyone to charge to help veterans fill out these challenging forms.”

In the end, the VA offered my mother a “bargain” if she repaid half of what they paid ($20,000 within 60 days) they would never ask for the final $20,000 they had paid out. My mother took their “bargain” to avoid paying it all back, but within a couple weeks of paying it, the VA demanded the full amount. Her attorney had to help her prove, several times, that she was given a special deal and had met the requirements to qualify for their “deal”. Their demands for the full $40,000 dragged on for sometime, and caused my mother a great deal of stress, but eventually the deal of paying back only 50% of what they paid out, $20,000 stood.

After the VA fiasco, my mother was paying about $8,000/month for both my grandparents to reside in a very nice assisted living facility with an integrated memory care unit (for my grandmother who had dementia). My mother spent all of the money my grandparents had in savings, cashed out her own retirements, and the stress created a variety of health problems for her. She eventually left her job to deal with all the complications, taking an early retirement. A recent segment on NPR, which interviewed Elder Law attorney, Marielle Hazen, highlighted these types of sacrifices. As Ms. Hazen described it, “I see a lot of family members making a lot of sacrifice: leaving the workforce, losing their retirement benefits, losing health care benefits in order to make sure their parents are provided the best care.”

During the time my grandparents were in the cohabitation (dementia care with other residents) assisted living home, my mother kept shopping around for assisted living homes that wouldn’t charge so much. The cost savings created other complications however. Some homes were in bad neighborhoods. Others had the memory care residents locked up in a separate facility, away from their non-dementia spouses. Eventually my mother met with an Elder Care attorney, and learned how to qualify my grandparents for Medi-Cal, and got them into a Medi-Cal Long-Term Care Provider (a skilled nursing facility). This new facility cost about 60% less than the assisted living home they had been in. However, this “solution” was short lived. My grandmother died within 5 days of the move, and my grandfather died less than two months later.

The skilled nursing facility was filthy, noisy, and horrible. The staff moved my grandmother’s bed out of the room that she and my grandfather shared right in front of my grandfather in less than 24-hours after her death. He was nearly in tears as he said to me, “Where are they taking that? I bought that bed for your grandmother.” The staff kept coming in and interrupting my visit with him, their walkie-talkies echoed down the corridors, and because my grandmother was dead and they needed the room, they wouldn’t leave us alone until they could move my grandfather to his new room with a roommate. It was a horrible scene, and when he said to me “I don’t plan to stay here long,” I didn’t blame him one bit.

I did not agree with my mother in moving my grandparents to the skilled nursing facility, though I can hardly say I blame her given the financial situation and costs of keeping them in assisted living. It was not my money to spend, and therefore it was not my choice to make. Yet, considering the short time they lived after the move, it would not have cost much more had they remained in assisted living.

In some ways I do believe that the move killed them. I believe the strain that my grandmother experienced with having dementia and being relocated after nearly 3 years in the same place, to an entirely new place led to her stroke. Her death in turn, killed my grandfather’s will to live after 50+ years of marriage. His decline after her death was swift and deliberate. He was ready to go.

Thus, financing long-term care is a definite strain on families. It can drain their bank accounts, savings, retirements, and tear them apart in time. There is also guilt involved when money becomes the issue. Fortunately for “Schnootzie,” the grandmother of the NPR article on long-term care, her grandchildren were caring for her with resources her son who preceded her in death left in his will to be used for her benefit. “But in most circumstances, people don't have that extra set of funding. And so it could be mom or dad or grandma or grandpa who is paying directly for the caregiver services” according to Ms. Hazen the Elder Care attorney.

Sometimes what families can afford for care is not the best place, or where they would wish their loved ones to be. I know in our family that was the case. The “affordable” skilled nursing facility my mother chose, was in my opinion, a place to die. It’s care and atmosphere would kill anyone’s will to live. When we arrived at the skilled nursing facility, they were removing a resident who had just died through the front doors. An hour later, as we were leaving we noticed an EMT sitting with the survivors of the decedent telling them about the death in public view right out in the lobby. To say the skilled nursing facility was inferior to the assisted living facility is a massive understatement. The assisted living facility had fun activities, kind caregivers, warm decor, privacy, and staff that treated the residents like family. I know where I would want to spend my last years of life, but where I will be able to afford to live is what will determine where I go.

I believe if we can carefully plan for our own futures, we can begin to care for our own successfully. We can purchase long-term care insurance to cover the costs of long-term care. According to Wikipedia, “Long-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities.” Sadly, “Out of more than 313 million Americans, only about 8 million have any such protection, according to the American Association for Long-Term Care Insurance” says NPR in their May 2012 article “Long-Term Care Insurance: Who Needs It?” In the article, Geneva Hunter, a lady interviewed by NPR goes on to say how although her job offered that as an insurance option, she couldn’t afford the $400.00/month from her salary to pay it. When I consider the fact that my grandparents assisted living facility cost $4,000/month per person, the $400.00/month sounds like quite a bargain.

Another benefit of long-term care insurance, according to the May 2012 NPR article, “Waiting To Buy Long-Term-Care Insurance Adds Up” is that “all the money you save for retirement, you can actually use it for retirement, as opposed to having been forced to use that money on your care in a nursing home.” That unfortunately is exactly what happened to my grandparents. The younger a person is when they buy the policy, the cheaper the policy will cost them. However, in NPR’s interview with Kimberly Lankford, a personal finance writer for Kiplinger.com, Ms. Lankford says, “In your mid-50's, we say it's usually kind of a sweet spot. It is, you know, the rates are usually a bit more competitive then. And also, it's before a lot of people have started to develop medical conditions which then also make it more difficult to buy this coverage.”

Ms. Lankford also describes how the long-term care coverage generally gives a person a $150.00 daily care benefit ($4,500/month of coverage) for about 3-years. “A couple could pay about, $3,500 a year for both of them to get these basic benefits.” Although 3 years sounds like too short of a time to have coverage, it is exactly how long my grandparents were in long-term care. They moved into assisted living in June of 2009 and died in June and August of 2012. Had my grandparents purchased long-term care insurance earlier in their lives, their entire care needs during the last 3-years of life would have been covered. Their retirement savings would not have been drained. My mother’s retirement savings would not have been drained. Also, considering how my grandfather thought he had VA assistance, and ended up losing it, I don’t think we can count on the government to pay our way in long-term care. We can only rely on ourselves, and it seems that long-term care insurance is the best bet to cover such financial needs.

Have you been involved with long-term care funding for a loved one? Or do you have long-term care insurance for yourself? Why or why not?