Fast review: It’s what you don’t have that creates the problem. Everyone wants the best available level of care at home or in a care community. (Stop using the word “facility”.) LTCI sales will remain stuck among only the most affluent until we change the basic goals of the exercise. The purpose of our professional actions must be to maintain “Private Pay” status. We understand the polarity of the economic spectrum—those wealthier citizens who will never go near the government welfare system and those who by circumstance will have no choice. It gets fuzzy in between. When the adult children assemble and determine who will have the Power of Attorney, the conversation is about The Gap. The difference between what is readily available for a monthly commitment and the best choice for the added need for care. Making up that difference may be complicated by differences in state Medicaid eligibility regulations. Regardless of the size of the shortfall, some careful thought must be given as to where all this may end up. Frankly consideration must be given to the possibility of running out of “sufficient” funds to remain among those receiving the highest level of care.
On the day the family members who care accept the inevitability of the need for custodial assistance, the first order of business is to assemble and attempt to leverage every available source of monthly funding. Remember all ALF leases are month to month. HHC is in essence the same: Ordered and scheduled “pay as you go.” As a target monthly requirement and for discussion purposes only, I am generally comfortable with the notion of “assembling” about $4,000 a month for basic services at an ALF and about $25 dollars an hour for HHC (I know it can vary greatly by state). As a life-long Texan I understand that there may be those who have trouble accepting Texas as average regardless of their viewing perspective.
First I need to fix an image in your mind. Please tell me who would “want” a semi-private room. Of course under Medicaid you will have nothing to say about the relative congeniality of your very near and intimate neighbor. If you can jumpstart your thinking before each conversation with everyone’s obvious and intrinsic desire for a private room today, tomorrow and forever, you begin at the heart of the matter. The most important component of our offered assistance is the combination of personal freedom, choice, respect, dignity and privacy—particularly from Government hegemony!
Again, for consideration only, let’s run down the available inventory. Insurance dollars never stand alone:
- Begin with Social Security, which it may help to remember is the first thing you sign over at a Medicaid nursing home admission. The average monthly payment was $1,360 in 2017. The maximum possible benefit is now $3,538, with many Americans receiving over $2,000 per month.
- American’s do have savings. At age 75 or more, the median available for retirement savings accounts is $35,000, but when you add in all assets including home equity, the family net worth median jumps to $213,000.
- Median home equity at age 75+ is $130,000. Reverse mortgages should be considered but bear in mind only about 10 percent of these were used to fund care. Most are used to establish an early “line of credit” with favorable tax treatment.
- Potential Aid and Assistance VA Benefits for Veterans and widowed spouses should always be recommended. However, if your goal is to die in a government (semi-private) welfare bed, Medicaid income planning must be considered. Monthly benefits for a Veteran and one dependent is $2,160 a month.
- Seniors also walk away from billions of dollars of life insurance death benefits that could have been converted to monthly income for care. On average, as someone currently defined as disabled, they could have gained access to 30 to 40 percent of the face value or approximately 10 times remaining cash values. You wouldn’t walk away from your home mortgage without taking the equity with you, why would you knowingly walk away from the intrinsic value of all those premium years? Particularly when those dollars could be converted into tax privileged income for care.
My suspicions are that if you are reading this column your goal is not to take advantage of our seriously underfunded government bureaucracy social safety net. There is also an extensive conversation concerning filial responsibility that would require another column. Suffice it to say the adult children, the proverbial “loved ones,” may need to kick in to fill the The Gap. Unable I can understand. Unwilling I will never understand! Replacing the risk with insurance (now available in all sizes, shapes and colors) as the primary source of funds for those able to afford that option remains constant and immutable. But, understanding how little it takes to fill a very small gap that can dramatically transform the quality of care is so much more important. Remember that 83 percent of all claims have been less than $100,000. Until we transform our mission into providing “supplemental” assistance in the form of available resources to fill up The Gap we will never move this market forward.
Other than that I have no opinion on the subject.
