Preparing for the possible costs of future impairment and long-term care is, regrettably, a task that everyone faces as they age. You may never need long-term care. This year, about 9 million men and women over age 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Four out of five older adults have a chronic condition. Losses in a person's ability to function day to day are a natural part of the aging process, and those losses become more severe as people get older.
When the elder's needs for long-term care can no longer be met either inside the home or without the intervention of paid providers, the elder enters what I call the long-term care maze. The elder, and the elder's family, are now embarking on an arduous journey through murky waters. The journey begins with the observation that the current system in our country for addressing long-term care is a non-system, a hodgepodge of services that fails to meet the needs of the elderly and disabled in the variety of long-term care settings. It is economically inefficient and it fails to assure the quality of services that are provided.
Currently, elderly people finance long-term care services from a variety of sources, including private resources, like personal savings, care donated by friends and family, and long-term care insurance and public programs, including Medicaid and Medicare. Medicare pays for health care, such as the Part A hospital benefit and the Part B physician's benefit. Many of our clients begin their initiation in the long-term care maze with a stay in the hospital, which Medicare pays for. Hospitals are under increasing pressure to shorten inpatient stays. Patients who are not ready to go home may instead be discharged to skilled nursing facilities, under Medicare's limited skilled nursing facility benefit. As a result, most people either stay for a short period of time in Medicare skilled nursing care or exhaust the benefit during the course of their stay. Many of our clients and their families believe that Medicare pays for all long-term care. Medicare pays for health care, not personal or custodial care and it is strictly limited in duration. Medicaid pays for intermediate care in a nursing home provided that the individual meets certain income and asset levels and exemptions. Veteran's benefits pays for health care and some long-term care costs depending upon the facility and the status of the veteran or the veteran's spouse.
A person preparing for possible long-term care needs has several options from which to choose. One option is to self insure by setting aside personal savings and assets and then supplementing those personal resources with the donated, or free care of family and friends. In fact, the majority of impaired seniors rely solely on donated care and their own savings. An individual who self insures retains maximum flexibility and control over his or her savings and assets, but must bear the full financial risk of impairment, which will depend on the extent and duration of functional losses. According to the Congressional Budget Office, seniors in general are not well prepared to pay for their long-term care needs.
Although long-term care insurance can be available to pay for long-term care, spending from long-term care insurance accounts for only about 4% of total long-term care expenditures. When it comes to paying the cost of long-term care - whether in a nursing home, assisted living facility, or community home based care - there are really only two choices for most people, private wealth or public benefits. These are not mutually exclusive. Seldom will the public pay all of the costs of someone's care, at least not for an extended period of time. In fact, most public benefits programs in the United States have a cost sharing or co-payment component. For example, Medicare's skilled nursing facility benefit pays all of the costs for the first 20 days; for the 21st to 100th day, the patient pays a co-payment that changes annually and in 2008 is $128 a day. In 2009 it will increase to $133.50 a day. Medicaid requires that the nursing home resident pay all of their monthly income to the nursing home, less certain allowable deductions, such as the personal needs allowance.
Most health care systems are ill-equipped to address the needs of the aging populations they are meant to serve. Modern health care systems were founded on the principles of acute care and are dominated by a focus of growing specialization, efficiency, and expediency. It is a system that is focused on curing the patient's immediate illness and reacting to health care crises. Yet older patients presenting with chronic illness and comorbidities require continuity of care that bridges across traditional medical boundaries and care settings. Three basic flaws exist in the acute care model of health care. First, it does not support people in the day-to-day self management of their chronic illness. Second, it does not coordinate or advocate for good chronic illness care. Third, it does not provide the necessary support and financing for other than acute care or nursing home care.
Life Care Planning is an innovative approach to elder law that helps families respond to all of the challenges presented by long life, illness and disability. Peace of mind for the elderly and their families is the goal of every Life Care Plan.
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