With premiums increasing drastically, should I keep my long-term care insurance?

This is a question that I receive on a regular basis in my estate planning and elder law practice. By way of full disclosure, I am not a licensed insurance agent and I am not licensed to be able to sell long-term care insurance or any other insurance product. I am an attorney with approximately 20 years of experience in estate planning and elder law and I happen to be a Certified Elder Law Attorney under the authorization of the Pennsylvania Supreme Court. While I am not the person who will sell the products, I am certainly an individual who has been advising numerous clients over the years and definitely believe in the benefits of a long-term care policy and what they can provide. We have done numerous other logs about long-term care insurance and the benefits of said policies.

When long-term care insurance first gained popularity, many companies completely missed out on the actuarial tables and in predicting what people were going to need. Because of this drastic miscalculation, most of the companies who originally were in the markets for long-term care insurance are no longer there. The few standing companies that are left are trying to figure out ways to make up for the mistakes of the past. Because of that, they are often forced to increase premiums and decrease benefits. Although these companies do have to get permission from the insurance board, it is not a very difficult proposition and in most cases, they will almost always be able to receive permission. The most difficult part is that individuals have been paying into a plan for a number of years and now are learning that they’re going to have to decrease their benefits and even then they may have to increase the premiums that they are paying. It is heart-wrenching to have to provide guidance in these situations and ultimately I always encourage them to bring in their financial professionals to try to make the decisions.  This is as much about the numbers and common sense as it is about the emotion involved. This becomes very easy for us to get disgusted and upset about what is occurring, but it is a cold, harsh reality of the miscalculations that were made in the past.  In some instances increasing premiums and decreasing benefits is the only way some of these companies will survive. 

My best advice to any and all people who are faced with this dilemma is to write out the pros and cons and to try to make the evaluation and determination about numbers and as little as possible about the emotion of the situation. It is too easy to get hung up on the principle of the manner, but the truth is principals are expensive and cause wars. Make the best decision for you and your family based upon the information that you have in front of you. Long-term care is not going away and dropping the policy out of spite is not going to help anyone. 


My Loved One Will Stay Home Forever

This is a statement that we hear on a regular basis in our office when we talk about aging and potentially needing assistance for our loved ones in the future.  Most people, if asked, would choose or want to stay home as long as they possibly can.  We often are abruptly interrupted when we start talking about alternatives such as assisted living facilities or personal care homes or long-term care facilities.  

It is certainly admirable to want to stay home as long as possible and there are a lot of things that can be done to help ensure that that can occur.  The time to start discussing what it is going to look like for a loved one to stay home is now.  Take a look at the house and the configurations of the house to determine if it is suitable and adaptable to allow somebody to age there.  Is there a possibility of putting ramps in or having a stair lift installed to assist with getting up and down steps within the home.  Are there appropriate handrails or grab bars in bathrooms and other places.  We highly recommend that you ask a geriatric care manager to come to your home to assist with evaluating its adaptability and suitability for people as they age.  

If you find yourself in a situation where a loved one needs care now, we highly recommend that you look at non-medical options to have someone come into the person’s home to assist them with their needs.  Non-medical options are plentiful in the York and surrounding areas and allow families to know that their loved ones will have a companion during the day and potentially get reminders throughout the day about taking medication, going to the restroom, or getting meals.   Oftentimes all that people need is simple reminders and someone just taking a look to make sure that they are remaining safe in their home.  If the situation gets worse and the individual begins to need medical care we are also very lucky in our area that we have several medical options for care in the home.  I would highly recommend that you research both the medical and non-medical options in our area to see how plentiful and wonderful these companies are. 

As a person ages in place, and as their care needs increase, sometimes it is impossible to have somebody continue to remain in their home because it may become unsafe.  There are certainly a lot of options before this becomes a possibility but if a person begins to wander from the home or if the home is not able to be adapted to be safe for them we may have no choice but to move them into another type of setting.  However, with proper planning and assistance from outside companies and family members it is possible to age in place in your home for a long time.   We highly encourage you to have these conversations ahead of time so that you’re not having them in a crisis situation which makes the conversation much more difficult.  

If you would like to learn more about estate planning and elder law, please give our office a call at 717-845-5390.


Taking Care of an Elderly Parent Can be a Full-time Undertaking

Old lady gardening“Each year over 43 million Americans provide unpaid care to a family member, usually a parent.”

Adult children who care for an elderly parent will typically be asked to oversee and provide medical care and finances. However, sometimes the caregiving goes far beyond this.  As a result, many adult children caregivers fail to think about the financial impact that this can have on their own monthly budgets and retirement funds.

MarketWatch’s article, “Read this before becoming your parents’ caregiver,” reports that, in many instances, the adult child caregiver is still able to maintain a full career and family life. However, in certain situations, the family member who’s assumed the role of a full-time caregiver must reduce his or her work hours or forego a promotion because of the time commitment. In the majority of situations, we see adult children answer the call of caregiving in a crisis when there’s an imminent need. A short-term assignment can be doable for a professional with his or her other family and personal responsibilities, but when the duties last longer, he or she will realize there isn’t enough time or resources to do it all.

A caregiver needs to take the actions necessary to help without putting his or her own family’s financial future at issue. When there are siblings and other family members involved, it is necessary to communicate realistic expectations of what areas of care are needed, responsibilities, time commitments and whether there will be any financial compensation.

A Personal Care Agreement can be a good guideline.  It will help to detail which individuals are responsible for various aspects of care, the amount of time required and any compensation. The biggest question that people have about this agreement, is how to get paid to be a family caregiver.

A Personal Care Agreement can give an adult child caregiver the peace of mind and security that he or she won’t suffer undue financial consequences, as well as provide clear details for other family members as to the expectations when assuming these important caregiving responsibilities.

This agreement can help avoid some of the misunderstandings that can occur when many siblings and loved ones are trying to help (or fail to pitch in). It also can protect a family member who is losing his or her own income and time to provide caregiving. This is because reduced hours or an exit from the workforce to care for a loved one, can have a major personal financial impact. In addition, the time for a personal and immediate family life with one’s own spouse and children can nearly evaporate with caregiving demands.

You can work with an Elder Law attorney to draft a Personal Care Agreement. Having an attorney review your Personal Care Agreement can even help to confirm that care payments were a legitimate and necessary expense, rather than a way to conceal assets from Medicaid.

Reference: MarketWatch (February 22, 2017) “Read this before becoming your parents’ caregiver”


Tennessee Eyes New Law on Elder Abuse

Old lady“A group of lawmakers have teamed up to address what they said is a growing issue across the state – elderly abuse.”

Tennessee state lawmakers recently announced legislation that would address the abuse of elderly or vulnerable adults in the state.

Nashville News Channel 5’s report, “New Legislation Targets Elder Abuse,” explains that Senate Bills 1192, 1230 and 1267 would help protect against physical, mental and financial abuse. They also aim to increase penalties for people who commit such crimes.

The bills would add more criminal penalties for those found guilty of elderly abuse. They would also increase communication between government agencies to raise awareness of scams that target the elderly and ease restrictions on financial confidentiality laws, which permit family members to report problems.

The bills are from the Elderly and Vulnerable Adult Abuse Task Force.

The Tennessee Bankers Association noted that the new laws would also give financial institutions additional authority to act, if an employee thought that a customer was being taken advantage of financially.

“Bankers are often on the front lines. We see our customers being scammed and under current law, there isn’t really anything we can do,” said Tim Amos, Executive Vice President of the Tennessee Bankers Association. "To have a process to allow us to ask you to pause the transaction or wait until tomorrow or until you consult with family, is a pretty big step.”

The National Council on Aging reports that about 10% of Americans who are age 60 and older have experienced some type of elder abuse. The lawmakers in Tennessee found studies over the past 10 years showing that the reported cases of assault and financial exploitation of vulnerable adults has gone up by at least 20%.  It is estimated that as many as one in 23 cases of elder abuse go unreported.

The 2010 census found that the portion of the U.S. population over age 65 is 13.4% of the total. The fastest growing segment includes those who are age 85 and older.

The elder abuse protection bills in Tennessee are expected to be sent to committees in the coming weeks. Lawmakers say they are confident the bills will receive overwhelming bipartisan support.

Reference: Nashville News Channel 5 (February 28, 2017) “New Legislation Targets Elder Abuse”


Use Caution in Helping with Seniors’ Finances

Old lady on computerAssisting someone with his or her finances sounds simple, right? Your mom, a neighbor or the person for whom you provide home health care may ask you to write a few checks out of her checkbook because it’s difficult for her to see. She may ask you to pick up a few groceries and gives you some cash. You’d think that folks would understand your good intentions and maybe even thank you.

But Bankrate’s article, “Be cautious before helping seniors with their finances,” warns that, unfortunately, it may turn out differently. Unless you’re an only child helping your parent, when you start writing checks, suspicions may arise, with or without justification.

Elder law attorneys hear of financial elder abuse suspicions and actual abuse on a regular basis.  Therefore, just because a senior asks for your help, doesn't mean you should help. This is because things can get complicated.

Once you get involved, you may see that there are many moving parts.  There could be an already-troubled senior who’s paying some bills twice and some not at all, or donating money to questionable organizations. Their finances may be in disrepair. Remember, if you don't have the time and aren’t ready to take on a complex process with legal implications, just say no.

Power of Attorney. A power of attorney gives the holder authority to execute certain transactions. While you don't need an estate planning attorney to create up a power of attorney (POA), you're taking a chance if you choose the do-it-yourself route. If you need to obtain a guardianship (or conservatorship) for the senior, you’ll need an elder law attorney. A guardianship gives you the authority to take control of the senior’s finances. There will be a court hearing, and you’ll have to present medical records and be represented by an attorney.

Minimize Risks. It is important to try to minimize the risks for the senior and maximize financial accountability. Monthly bills like utilities can be directly debited from the senior's bank account.  You should never sign the senior’s name on checks or credit card purchases. They may insist that it is okay, but they would be wrong.

Record-keeping. Regardless of the amount of authority you have been given to help a senior or control their finances, it's crucial that you keep meticulous records to protect yourself. POAs should hang on to receipts for everything and never combine their money with the senior's money. You should never borrow money from them, and don’t fall into the trap of believing you’re entitled to money because their family is never involved. That’s financial exploitation, and it is a criminal act.

Communication. If a senior has adult children or close family members, you and the senior should maintain a strong line of communication. One suggestion is monthly reports to at least one other person. It is important to document everything and to make certain that all family members are informed.

Reference: Bankrate (February 15, 2017) “Be cautious before helping seniors with their finances”

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