Reverse Mortgage Loans

For many seniors the equity in their home is their largest single asset, yet it is unavailable to use unless they use a conventional home-equity loan. But a conventional loan really doesn't free up the equity because the money has to be paid back with interest.

A reverse mortgage is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage".

Many seniors are finding they can use a reverse mortgage to pay off an existing conventional mortgage, to create money for a down payment for a second home or to pay off debt. Popularity is skyrocketing. Over the last five years the number of reverse mortgages nationwide has tripled. The uses of this untapped wealth are only limited by a person's imagination.

For those seniors who earn low incomes but own a home, a reverse mortgage can allow them to remain in the home by creating extra income. It can also allow for remodeling or repairs and when the time comes to sell, the investment in the home can make it more valuable.

False Beliefs about Reverse Mortgages

“The lender could take my house.” The homeowner retains full ownership. The Reverse Mortgage is just like any other mortgage; you own the title and the bank holds a lien. You can pay it off anytime you like.

“I can be thrown out of my own home.” Homeowners can stay in the home as long as they live, with no payment requirement.

“I could end up owing more than my house is worth.” The homeowner can never owe more than the value of the home at the time the loan is due.

“My heirs will be against it.” Experience demonstrates heirs are in favor of Reverse Mortgages.
Virtually anyone can qualify. You must be at least 62, own and live in, as a primary residence, a home [1-4 family residence, condominium, co-op, permanent mobile home, or manufactured home] in order to qualify for a reverse mortgage.

There are no income, asset or credit requirements. It is the easiest loan to qualify for.
A reverse mortgage is similar to a conventional mortgage. As an example:

•The bank does not own the home but owns a lien on the property just as with any other mortgage.
•You continue to hold title to the property as with any other mortgage
•The bank has no recourse to demand payment from any family member if there is not enough equity to cover paying off the loan
•There is no penalty to pay off the mortgage early
•When the loan becomes due, you can refinance and keep the house.

The proceeds from a reverse mortgage are tax-free and can be used for any legal purpose you wish:

•daily living expenses
•home repairs and improvements
•medical bills and prescription drugs
•pay-off of existing debts
•education, travel
•long-term care and/or long-term care insurance
•financial and estate tax plans
•gifts and trusts
•to purchase life insurance
•or any other needs you may have.

The amount of reverse mortgage benefit for which you may qualify, will depend on

1.your age at the time you apply for the loan,
2.the reverse mortgage program you choose,
3.the value of your home, current interest rates,
4.and for some products, where you live.

As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.

The loan is not due and payable until the borrower no longer occupies the home as a principal residence (i.e. the borrower sells, moves out permanently or passes away). At that time, the balance of borrowed funds is due and payable, all additional equity in the property belongs to the owners or their beneficiaries. If the heirs want to keep the home with the additional equity, they can refinance with a conventional loan.

There are three reverse mortgage loan products available, the FHA - HECM (Home Equity Conversion Mortgage), Fannie Mae - HomeKeeper®, and the Cash Account programs. Over 90% of all reverse mortgages are HECM contracts.

The costs associated with getting a reverse mortgage are similar to those with a conventional mortgage, such as the origination fee, appraisal and inspection fees, title policy, mortgage insurance and other normal closing costs. With a reverse mortgage, all of these costs will be financed as part of the mortgage prior to your withdrawal of additional funds.

You must participate in an independent Credit Counseling session with an FHA-approved counselor early in the application process for a reverse mortgage. The counselor's job is to educate you about all of your mortgage options. This counseling session is at no cost to the borrower and can be done in person or, more typically, over the telephone. After completing this counseling, you will receive a Counseling Certificate in the mail which must be included as part of the reverse mortgage application.

You can choose 3 options to receive the money from a reverse mortgage:
1) all at once (lump sum);
2) fixed monthly payments (for up to life);
3) a line of credit; or a combination of a line of credit and monthly payments.

The most popular option, chosen by more than 60 percent of borrowers, is the line of credit, which allows you to draw on the loan proceeds at any time. The line of credit also earns interest which in essence is allowing the equity in the home to grow. For example $120,000 in a line of credit earning 5% would be worth almost $200,000 10 years from now.

Keeping money in a reverse mortgage line of credit in most states will not count as an asset for Medicaid eligibility as this would be considered a loan and not a resource for Medicaid spend down. In other words, keeping the money in the line of credit will not disqualify you from becoming Medicaid eligible.

However, transferring the money to an investment or to a bank account would represent an asset and would trigger a spend down requirement and delay eligibility. Please note however that distinguishing between what portion of reverse mortgage proceeds might be counted as a loan and what portion as an asset is not a simple black and white decision. It is best to get an opinion from an elder attorney in your state.

If a senior homeowner chooses to repay any portion of the interest accruing against his borrowed funds, the payment of this interest may be deductible (just as any mortgage interest may be). A reverse mortgage loan will be available to a senior homeowner to draw upon for as long as that person lives in the home. And, in some cases, the lender increases the total amount of the line of credit over time (unlike a traditional Home Equity Line where the credit limit is established at origination). If a senior homeowner stays in the property until he or she dies, his or her estate valuation will be reduced by the amount of the debt.

At the death of the last borrower or the sale of the home, the loan is repaid from equity in the home. Any remaining equity (which is often the case) goes to the heirs.

Almost all reverse mortgages are the HECM loan which is guaranteed by FHA mortgage insurance. If there is not enough equity to cover the loan, the insurance satisfies the loan by paying the deficit. With a HECM loan, the bank will never come after the heirs to satisfy the mortgage obligation.



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Medicaid Planning

Introduction

A person facing the prospect of long-term care with moderate income and assets may eventually have to rely on Medicaid to pay part or all of the cost of care.

Medicaid planning, using a qualified elder law attorney, allows you to correct inequities in the system. Medicaid planning has gotten a bad name because some individuals, who would normally have too many assets to ever qualify for Medicaid, deliberately use it, many years in advance, to give away everything to their family so as to qualify for Medicaid. It is wrong to abuse the system in this way and to use taxpayer dollars to insure an inheritance for the family. And if that person is not anticipating immediate care, this strategy is just plain dumb. A list of practitioners who specialize in this area of helping people with Medicaid issues can be found at http://www.longtermcarelink.net/a7medicaidplanning.htm

Income Annuity in the Name of the Community Spouse

This technique relies on two Medicaid rules. The first rule is that income between couples is attributed to the spouse who owns the income. Unlike assets which have to be shared for Medicaid eligibility, income does not have to be shared. For example if the Medicaid recipient has a total income of $500 a month and the community spouse has a total income of $4,000 a month the community spouse is not required to contribute any income towards the care of his or her spouse. Medicaid will cover the bill less the $500 a month, which, less a monthly allowance must be spent towards the cost of care. The second rule allows a spouse to transfer any amount of assets to another spouse without penalty of losing Medicaid eligibility.

Using these two rules, here is how a Medicaid annuity strategy works.

The person needing long-term care -- the institutional spouse -- applies to Medicaid in order to receive Medicaid services. In this case suppose the couple has $100,000 of cash equivalent assets and owns a home and a car. As long as the healthy spouse -- the community spouse -- lives in the home she can keep the home and the car and those assets do not prevent the institutional spouse from receiving Medicaid help. In this example, the institutional spouse must spend $50,000 of the couple's assets down to less than $2,000 and have an income insufficient to cover the cost of care and then Medicaid will take over.

Once the Medicaid application has been submitted, instead of starting the spend down to $2,000 and then receiving approval and having Medicaid pick up the balance of the cost, the institutional spouse transfers his $50,000 to his wife. This is allowable and will not disqualify the Medicaid approval process but it does not yet take away the responsibility to spend down the cash. The community spouse then uses the money to purchase an immediate income annuity for a period equal to or less than the allowable life expectancy in the HCFA transmittal 64 table. Assets have now been converted to about $800 a month in income. The income belongs to the community spouse and does not have to be shared with the institutional spouse. Therefore the spend down has been avoided. Evidence of this transaction is presented to Medicaid and because the institutional spouse no longer has any attributable assets, Medicaid starts paying its share of the bill.

This strategy serves two purposes. First, it may give the community spouse a larger income than she otherwise would have had under Medicaid rules. Second, even though it represents income, the community spouse has managed to keep $50,000 that would normally have to be spent.

In the past, some planners have set up annuities that provide a remainder payout should the community spouse die too soon. This is usually paid to the children and in the past was used as a way to transfer assets to the children without penalty. Under the Deficit Reduction Act of 2006, the state must be named as beneficiary for any remainder payout. This new rule discourages the use of these annuities to transfer assets to the next generation.

It is important for the planner to follow Medicaid guidelines in order to avoid a penalty. If the payout period of the annuity exceeds the life expectancy in Medicaid tables, then the excess amount of total income payment over the life expectancy becomes a transfer for less than value and represents a penalty. This in turn results in a penalty period equal to the amount of excess divided by the monthly Medicaid rate in that state. Medicaid will not start paying for care until this penalty period has been met with someone else paying for that care. It's important to use a qualified adviser to make sure you do all of this properly.

Prepaid Funeral Instead of or in Addition to Burial Funds

Federal rules allow a person on Medicaid to keep up to $1,500 for funeral expenses. Most states allow a recipient to buy a prepaid funeral plan. The limit for such a plan is usually higher than the $1,500 allowed by Federal rules. As an example, if your state allows $7,000 for a prepaid funeral plan then you should use the full amount you have money for to buy a plan.

Your state may also allow additional costs such as the burial plots, caskets and vaults to be tacked on, thus raising the limit.

Use of Spend Down Resources

People assume money being spent down for Medicaid eligibility needs to be applied to care costs. In reality, Medicaid is only interested in seeing the potential Medicaid recipient's resources reduced to less than $2,000. How the money is spent is only questioned if there has been a transfer for less than value.

In order to qualify for Medicaid more quickly, you may want to use some of the spend down money to pay off debt, trade in the old car and buy a new one. (Medicaid typically allows a community spouse to retain just one car), or fix up the house.

Intend to Return Home

If a single person receiving Medicaid care in a facility has a house, that property could be subject to sale to pay for Medicaid expenses. The house is only protected if a qualifying child or dependent lives there or if the recipient intends on returning home. Some states require a medical doctor to certify a return home, but in many states it only requires the signature of the recipient whether that recipient has justification or not. In the states that allow it, always have your loved one sign an intent to return home. At least you have use of the property while your loved one is still alive.

Most families sell the home and end up with a large amount of cash that must be spent down before the loved one qualifies for Medicaid. Keeping the home avoids losing the entire value of it to spend down. By retaining the home, Medicaid recovery may not come after the full value of the home when the loved one dies.
Potential rental income from the house would also go towards paying the the facility cost and reduce the amount that Medicaid would have to pick up. This could mean that Medicaid recovery using this strategy might go after a smaller share of its cost in the recovery process.

Medicaid treatment of a Home

If the community spouse lives in the home then the home is exempt from determining Medicaid eligibility. It does not count as an asset and prevent the institutional spouse from receiving Medicaid help. On the other hand any other real estate property, not the primary residence, will have to be converted to cash and spent down before Medicaid will start paying the bill.

If the community spouse living in the home does not in turn need Medicaid help in the future then one of two things can happen to the house after the death of the institutional spouse. Legally Medicaid has a claim against the property for recovery services. And in some states a lien against the property, called a TEFRA lien, can be filed in anticipation of Medicaid's cost. The lien can be filed before the death of the care recipient but only a few states actually do that. States that have authority to file these liens often don't so until after the death. At the death of the community spouse, the property cannot be sold until the lien is satisfied. But in states where there is no lien, if the community spouse dies after the institutional spouse it's unlikely that state Medicaid recovery will use the property as an asset for recovery.

And in many states if the property is inside a trust, the state may not consider the house an asset for recovery even though most states have altered their definition of estate to include a trust. Many states still rely on filing a claim in probate court to initiate recovery. The bottom line is very few states are efficient at recovery especially when it comes to a primary residence. Always contact and work with a competent adviser when dealing with recovery issues. You can never assume what your state recovery program will actually do.

Special Home Exemption Rule

It's often the case that a daughter will move in to take care of Mom or Dad or both. In this case Medicaid has a special leniency rule to allow transfer of the home to the daughter and not result in a penalty for a transfer for less than value. If the child provides care for a parent in a parent's home for at least two years, and that care kept the recipient out of a nursing home, the property can be transferred to the child without penalty and the property will not be a subject asset for Medicaid recovery. Medicaid will require some proof of this. Typically an affidavit from a third-party care provider such as a doctor or an agency stipulating that the care was given for at least two years and resulted in keeping the care recipient out of a long-term care facility, will be sufficient evidence. It's important to use a legal adviser to make sure you do this properly.

Joint Tenancy

Many people anticipating Medicaid services are tempted to put a child's or sibling's name on property titles to avoid probate and Medicaid recovery. It may not be a good idea.

There are at least four problems.

• If the other person on the title becomes subject to a judgment, even one arising from an accident, then at least 50% of the property can be lost to the judgment.

• The other person on the title must consent to any disposition of the property. He or she might not be in accordance with what the original owner wants to do.

• Redoing the title must occur at least 5 years prior to claim in order to avoid look back rules and a sanction on a gift to a non spouse owner.

• The person assuming joint ownership has received a gift and loses the step-up in basis at death. Capital gains taxes may have to be paid. And if the property is not the principal residence of the new tenant, the capital gains exclusion cannot be used either.

Transfer Title of the Property to The Community Spouse

Transfers to a spouse of any assets are exempt from Medicaid eligibility rules. An institutional spouse, anticipating Medicaid, can transfer title in the home to the community spouse and it has no effect on Medicaid eligibility. This can be done either with a quit claim deed or through a trust. With the asset no longer in the name of the care recipient, Medicaid recovery cannot use the house as a basis for recovering its costs. And the community spouse can transfer the house to a member of the family and as long as this is done beyond the five-year look back period, then Medicaid can't assess a penalty period for a transfer of assets for less than value. It's important to use a legal adviser to make sure you do this properly.

Trust to Avoid Probate

Common trusts to avoid probate are called "living" or "inter vivos" trusts. A trust never dies, thus it is not subject to probate. Most arrangements make the trust the owner of the property with the original owner(s) as trustee(s) (caretaker as it were) and beneficiaries(s). Thus the property reverts to the estate at death. Most people initiate these trusts to avoid probate. Assets in these trusts, other than a primary residence, are transparent to Medicaid. These trust assets are subject to Medicaid spend down rules.

The trust can be used in states where Medicaid recovery only uses primary residences passing through probate as being subject to recovery. However, a growing number of states do not recognize these arrangements to avoid probate estate recovery and go after primary residences in revocable trusts regardless of ownership.

To do it right for these states requires an irrevocable trust with no life interest, set up 5 years or more before a Medicaid claim. Very few people are willing to do these kinds of trusts.

Some people also include a so-called "life interest" in property in arrangements where property is gifted or in irrevocable trusts. The life interest gives them use of the property until their death even though they don't own it. Medicaid in many states does not recognize life interest and the property is considered to be in the ownership of the person who gifted it and subject to look back rules and recovery.

Move Loved One Needing Care to Another State

A person needing Medicaid covered care in one state may not qualify under that state's rules but might qualify under the rules of a neighboring state. Of particular concern are candidates suffering from dementia or Alzheimer's. It's difficult to quantify their need for care and in some states, those people who are cognitively impaired might not get help with Medicaid even though their needs might be greater than the needs of those who are physically disabled.

Families should consider moving loved ones who have been declined in one state, to live with a member of the family in another state and possibly qualifying in that state. In addition the new state may be more lenient with Medicaid recovery procedures.

A second reason may be that the current state of residence has a very tight supply of Medicaid beds and there is a waiting list. Moving the loved one to a state where there are more available Medicaid beds may avoid the family having to temporarily cover the cost of a non-Medicaid nursing home bed while waiting for one to become available.

Give Away Assets

We have already discussed the moral implications of using Medicaid planning strategies for unfairly qualifying for Medicaid and shifting the burden of cost to the taxpayers. New look back rules under the Deficit Reduction Act have effectively done away with gifting strategies used in the past to accelerate eligibility for Medicaid. This does not mean that gifts cannot be used, but planning must be done many years in advance. Under these new circumstances the whole concept of gifting in order to qualify for Medicaid probably makes little sense.

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Seniors Relocation and Real Estate Services

As people age, they often become overly attached to their homes and even though there may be compelling reasons to find other living arrangements, these folks will go to extreme lengths to remain in their homes.

Notwithstanding the affection for their dwellings, there is oftentimes undeniable pressure for seniors to move out and into a different living arrangement. Consider the following:

•The challenge of maintaining a yard and providing upkeep has become too great.

•There is a need for long term care that can't be handled in the home.

•The older person needs supervision that can't be provided in the home.

•The neighborhood has deteriorated and safety is a concern.

•There is a desire to be near children or grandchildren (70% of those 65+ live within 1 hour of a child).

•The home cannot accommodate disability needs.

•There is a need to avoid climbing stairs.

•Assets are tied up in the home and cash is needed through selling the property.

•Driving is no longer possible and available local transportation is not adequate.

•There is a desire for a warmer climate, a yearning for new vistas or a need for challenging new experiences.

Typically, the thought of giving up their residence, finding new accommodations, downsizing personal possessions and executing the move can seem overwhelming to many older people.

Perhaps another obstacle for many seniors, contemplating a move, is the lack of support or help from family members. In fact, some seniors have no children. For others, the children are living far away or are extremely busy with their jobs or their own families. And in some cases -- because people are living so long -- the children are elderly as well and find it difficult to help with the move.

This overwhelming pressure and stress relating to moving can often result in gridlock -- a failure to make any decision at all.
Because many elderly people face such a daunting task with moving, a growing number of seniors relocation specialists are stepping forward to provide assistance. These individuals or companies provide or arrange for the following services:

•advice and counseling,

•help with finding new accommodations,

•downsizing possessions through personal, caring assistance with discarding, donating or arranging estate sales,

•selling the existing property,

•organizing, arranging and scheduling the move,

•unpacking at the new location and removing boxes and other debris,

•setting up and arranging furniture.

And it isn't just the elderly person, contemplating a move, who is hiring these specialists. Active senior communities, independent living facilities, nursing homes and assisted living often retain a relocation specialist to provide advice and arrange services to help seniors with a move. Family members of seniors have also found it more convenient to hire a specialist to help their loved ones with relocation.

So who are these companies or individuals who provide seniors relocation and real estate services? (A list of these providers can be found at www.longtermcarelink.net.)

Seniors Real Estate Specialists

A Seniors Real Estate Specialist (SRES) is a real estate agent who specializes in helping the elderly transition to a new location. The specialist has been trained to recognize the special needs of seniors and understand the various living arrangements available to older people. Most of these specialists concentrate on selling the property and do not directly provide relocation services but they will arrange for companies or individuals or advisors who can provide these other services.

Senior Move Managers

A Senior Move Manager is a member of the National Association of Senior Move Managers. These people often have a background in social work or case management and have experience working with the elderly. As such, they understand the needs and desires of seniors. Senior Move Managers can provide or arrange for any needed service such as counseling and advice, selling property, downsizing or relocating their clients.

Moving Companies

Many independent moving companies recognize the special needs of seniors and they will provide moving services, storage and other specialized programs for this unique group of customers. These companies will often work together with senior advisors and relocation specialists.

Specialists with Developers or Senior Communities

Active senior community developers, senior residences and care facilities have recognized that providing relocation services will help their clients or residents transition more quickly into the new living arrangements. This not only relieves the stress on the seniors but also results in less cost to the providers who might be holding open properties or rooms for a long period of time -- while receiving no income -- due to the difficulty of selling the old residence and relocating.

Professional Organizers

Professional organizers -- many of whom are members of the National Association of Professional Organizers -- have found a unique niche in helping people reduce clutter in their homes or provide a more efficient office or living environment. Because of extensive experience in reducing personal possessions, a professional organizer can be particularly useful in helping to downsize in anticipation of a move.

Professional or Geriatric Care Managers

Care managers help the elderly and their families deal with the issues of long term care. Most care managers also help people, needing long term care, to find appropriate living arrangements. A natural outgrowth of finding new accommodations has resulted in many care managers specializing in relocation services as part of what they do.

Adding Value by Helping to Obtain the Veterans Aid and Attendance Benefit

About 30% of seniors over the age of 65 are war veterans or they are the surviving spouses of these veterans. Under the right circumstances these people could be receiving a veterans benefit called "aid and attendance" which, under the right circumstances, could furnish up to an additional $1,800 a month in income. This is such a well-kept secret that only a fraction of eligible veterans are receiving the benefit. Relocation specialists who are experts on obtaining the veterans aid and attendance benefit are helping seniors find additional income to pay for assisted living or nursing home costs. Seniors are also seeking out these veteran-savvy relocation specialists for help with moving and creating new income after the move. Click here to learn more.

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Medical Care at the End-of-Life

Medical Care Immediately Prior to Death

In the first half of the 20th century, most people who died had an accident or contracted a disease or they had a physical disorder that inevitably lead to death. Life-saving medical interventions such as sophisticated resuscitation, complicated surgeries, life-saving treatments, ventilators, feeding tubes and other life-support were rarely used or even available. Nowadays there is great emphasis on curing medical problems sometimes to the exclusion of recognizing that death might be a more welcome outcome.

Surveys indicate that older people are often more afraid of death than younger people. But for all Americans -- young and old -- there is a great fear of death and oftentimes the families of those loved ones, who are near the end-of-life, will go to great lengths to try interventions that may be ineffective in prolonging life. We need only look to the Terri Schiavo case as a reflection of the attitude of many Americans who are unwilling to let loved ones pass on. Estimates are that about 30% of Medicare reimbursements are spent on people in the last year of their life. It is a fact that much of this medical care did little to prevent death and prolong life.

According to the Dartmouth Atlas study on death:

"The quality of medical intervention is often more a matter of the quality of caring than the quality of curing, and never more so than when life nears its end. Yet medicine's focus is disproportionately on curing, or at least on the ability to keep patients alive with life-support systems and other medical interventions. This ability to intervene at the end of life has raised a host of medical and ethical issues for patients, physicians, and policy makers.






The Dartmouth Atlas project uncovered some startling differences in what happens to Americans during their last six months of life. In some parts of the country, nearly 50% of people are in the hospital at the time of death, rather than at home or in a nursing home or other non-hospital setting. In these areas, the likelihood of being admitted to an intensive care unit during the last six months of life is also higher than average - as is the likelihood of being admitted to an intensive care unit during the hospitalization at the time of death. In other parts of the country, the likelihood of a hospitalized death is far smaller, and people who are dying are much less likely to spend time in hospitals during their last six months of life.






The Atlas asked why this was so - why someone living in Miami was so much more likely to receive a great deal of high-tech, expensive medical services, while someone with the same condition who lived in Minneapolis received so much less. The answer appears to be that the capacity of the local health care system - the per-capita supply of hospital beds, doctors, and other forms of medical resources - has a dominating influence on what happens to people who are near death. Those who live in areas like Miami , where there are very high per capita supplies of hospital beds, specialists, and other resources, have one kind of end of life experience. Those who live in areas like Minneapolis or San Francisco , where acute care hospital resources are much more scarce, have very different kinds of deaths.






The question, then, is which is better? From the dying person's perspective, more is not necessarily a good thing - more visits to doctors for someone who is very sick can be stressful and exhausting. For many people a hospitalized death is something to be avoided if at all possible. From the perspective of the health care system, much of the care being given is futile, and accomplishes little. People who live in areas with very high utilization of hospital resources do not live longer than people who die in areas where utilization is lower - and if extension of life is not the goal of intervention, what is? From society's perspective, the cost of this kind of intervention is high, futile, and takes resources away from places where the money might be spent far more productively."
Deciding How and When to Stop Curing and Start Caring

Some people are content to leave decisions regarding their death in the hands of others. By doing so, they may expose themselves to unnecessary and futile treatments as outlined above. They may experience numerous visits to the emergency room in the last stages of their life. And their dependency on others often results in great stress to family members when loved ones at the end-of-life lose their capacity and didn't make their last wishes known. Families are often forced to make decisions about life-support and treatment without knowing whether their loved one would have wanted these interventions.

Medical providers have come up against this situation many times and as a result there are written guidelines for doctors dealing with end-of-life issues. Here is a listing of the titles of official positions taken by the American Medical Association on a number of end-of-life actions. The actual content can be found online on the AMA website.

• Do-Not-Resuscitate Orders
• Futile Care
• Medical Futility in End-of-Life Care
• Quality of Life
• Withholding or Withdrawing Life-Sustaining Medical Treatment
• Optimal Use of Orders - Not-To-Intervene and Advance Directives
• Surrogate Decision Making
• Advance Directives

One of the most important ways for a person to express his or her intent for the end-of-life is through an advance directive. Advance directives for medical treatment ordinarily involve the four following written documents.

•Living will
•Health care treatment plan
•Health care power of attorney
•Do not resuscitate at-home (for states that allow a legal procedure for this action)

We will go into greater detail on these forms in a future article but will mention here some important points to consider with these documents.

•Many if not all healthcare organizations have standard forms for living wills. Some providers may also allow for signing a do-not-resuscitate order. Some of these documents may not be what they claim to be. Read them carefully.

•A health care treatment plan is usually created between a patient's physician, the patient and an attorney. This is a detailed agreement on how to handle certain medical interventions.

•A health care power of attorney is a legal document that would not usually be available as a standard form from a health care provider. This document should supersede any other guidelines that physicians use for making medical treatment decisions.

•The do-not-resuscitate-at-home arrangement is a very complicated procedure where a person needing emergency medical treatment in the home and not desiring resuscitation makes that wish known to emergency medical personnel. This involves an identification bracelet, a complicated verification procedure and an OK from a central clearinghouse not to perform any life-saving actions.

A patient or his or her spouse or a family member will typically call 911 in the event of a life-threatening emergency. Very seldom will the living will, the health care treatment plan or the health care power of attorney end up with anyone in the emergency room. Medical decisions for someone who cannot make those intentions known, generally devolve to family members who show up at the hospital. The actual health treatment wishes of the patient may be at home in the desk drawer. It is therefore extremely important to remember to take these documents to the emergency room whenever a crisis arises.
Without the advance directives in hand for an emergency room or for a hospital admission, many patients or family will be given the opportunity to sign a standard form from the health care provider. Many hospitals, nursing homes and home health agencies provide forms that allow or disallow a number of treatments. It is extremely important for the patient or the family to read these institutional advance directives thoroughly before signing. Some of these documents, claiming to be a living will, are in fact not, but are other types of advance directives that may not fit the needs of the family.

More detailed information about this subject and about other issues dealing with long term care planning can be found at http://www.longtermcarelink.net/.

We will discuss in more detail, specific issues dealing with end-of-life, in future articles.

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Troy Freesemann

Life Insurance and Annuities for Long Term Care Planning

Life insurance and annuities are useful products that help solve problems with the estates of elderly long term care recipients. We discuss below a number of situations where these insurance products are used to rescue assets from long term care costs, reduce or eliminate taxes, protect the lifestyle of the healthy spouse and increase inheritances for the family. A good website to learn more about all of the issues dealing with long term are planning is http://www.longtermcarelink.net/.

Deferred Annuities Provide Tax Advantages and Potentially Better Earnings

The appeal of deferred annuities is the deferral of taxes on earnings until money is withdrawn or the annuity is converted into a guaranteed income stream. Deferred annuities can also avoid probate if the owner chooses not to create a living trust for this purpose. As a general rule, annuities have the potential of producing an average yearly rate of return somewhat better than a bank CD or savings account. Annuity returns also tend to be more stable than short-term savings.

Life Insurance for Long Term Care Planning

Life insurance companies have become more competitive in recent years for policies issued on people over age 70. Good health is still a major consideration for low premiums, but policies have been redesigned to provide more death benefit and less cash value. Some term policies and certain universal life permanent policies are designed to provide a guaranteed death benefit up to age 95 with a guaranteed premium and no cash value at all. This design generally results in more death benefit for each premium dollar. Also, policies designed for couples -- second-to-die policies -- can provide a significant amount of insurance for a one-time single premium even if one of the partners is in very poor health.

An important concept to consider is that single premium life policies with no cash value and purchased for estate planning purposes, many years in advance of applying for Medicaid, can be a valuable planning tool if the need for Medicaid arises. Medicaid does not apply the death benefit of a life insurance policy to the asset spend down rule. But the cash value of any policy that has more than $1,500 in cash will count towards the asset test and could disqualify a Medicaid applicant. As an example, a person could have $1 million of life insurance with cash value less than $1,500 and it would not prevent that person from receiving Medicaid. However, cash value of more than $1,500 in this example will apply toward the asset test. It is important to know, for planning purposes, that people who apply for Medicaid and then transfer assets to a life insurance policy, while they are going through spend down, could be in violation of their state's Medicaid transfer rules and such an act may disqualify the applicant.

Life insurance can be used as an alternative for funding the cost of long term care. If someone planning for the eventuality of long term care is concerned about losing assets that would normally be passed on to the children or be needed by a surviving spouse, that person can invest a portion of those assets in life insurance and leverage a death benefit payout -- sometimes for up to $3.00 in death benefit for every $1.00 in single premium. The death benefit is also income tax-free. A person creating such an estate can then use remaining assets for long term care needs in the future but still be assured that the children or a surviving spouse will receive an inheritance at death through the life insurance. And, as discussed above, if the money runs out and Medicaid has to start picking up the costs, a single premium life insurance policy with less than $1,500 cash value will not disqualify the applicant owning the policy

Another use for life insurance for the elderly is in paying the cost of final expenses such as funeral and burial. A number of companies will issue policies without any health questions for people who may not have very long to live. Most of these policies will provide little or no death benefit in the first two years after issue and so there is some risk, but most companies will also return the premiums paid if death occurs in the first two years.

IRA or 401(k) Income Life Annuity to Buy Life Insurance

Tax qualified investments such as IRAs, 401(k)s, Tax Sheltered Annuities and other plans are great for saving taxes while one is working but many seniors find they don't need that money during retirement and they may want to pass on some of this tax sheltered money to their children. New "stretch IRA" rules have made it easier to reduce the immediate tax burden on these transfers at death but income tax that was deferred must still be paid. The income tax on these transferred assets can eat up a significant portion of the investment.

One way to create a tax-free transfer at death is to convert the IRA or 401(k) into a life annuity income while the owner is alive and use part of the income to purchase a life insurance policy that would equal the amount of money in the IRA -- intended as an inheritance. A life insurance death benefit is income tax-free and thus the loss of a significant part of the account to taxes has been avoided.
Medicaid Spend down for Funeral Trust

Medicaid will allow a Medicaid applicant to transfer a certain amount of assets into a trust that will pay for funeral and/or burial costs at death. In many states the maximum allowable amount is $15,000. These trusts are often funded with special life insurance policies. The trust must be irrevocable and meet Medicaid rules for such trusts.

Medicaid Annuities

If one spouse in a couple needs long term care costs to be covered by Medicaid, the couple must divide combined assets in half and the spouse needing care must spend his or her half of the assets down to less than $2,000 remaining. This loss of assets may reduce the standard of living for the healthy spouse at home.
Medicaid will allow the spouse needing care to convert his or her share of the assets into an income annuity that belongs to the healthy spouse. This legal strategy provides the healthy spouse with more income and avoids the impoverishment imposed by the spend down. These annuities must meet strict rules imposed by Medicaid and an expert in this area should be sought out.

In the past, advisers also recommended these income annuities for single Medicaid beneficiaries in order to transfer some of the spend down assets to members of the family at the death of the annuitant. The Deficit Reduction Act of 2006 changed the rules for these single Medicaid beneficiary annuities and did away with their use as a planning tool for asset transfers. Under certain circumstances partial transfers can still be done using a Medicaid beneficiary income annuity called a "half-a-loaf" transfer. As with a spouse annuity, an expert should be sought in order to make sure this is done properly.
Medicaid Anticipation Deferred Annuity

Money can be invested in deferred annuities anticipating the eventual annuitization (conversion into guaranteed income) for Medicaid purposes. Many practitioners set up these investments inside of living trusts which also avoid probate. These deferred annuities should be designed so that the money can be turned into a guaranteed income stream for either spouse of a couple. The income stream must go to the healthy spouse -- the one not requiring Medicaid assistance.
Charitable Annuity Remainder Trusts

Many people have investment property that has accrued a significant capital gains tax liability in the event of a sale. Some people prefer to give their assets to charity and a charitable remainder trust is a way to transfer property with capital gains liability to a charity and avoid the taxes. These arrangements also include a lifetime income option for the individual or couple making the donation. The charity provides the income and in many cases will use a single premium income annuity to create the monthly cash flow. In the case where a person receiving this income anticipates needing Medicaid or the VA benefit in the future, the income must be set up as an irrevocable annuity and the charity must be the owner and not allow the annuitant any control over the income.


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Caregiving Stress -- Hazardous to Your Health and Sometimes Deadly

UNDERSTANDING CAREGIVER STRESS

A 2003 study of caregivers by a research team at Ohio State University has proven the off-repeated adage "stress can kill you" is true. The focus of the investigation was the effect the stress of caregiving had on caregivers. The team, led by Dr. Janice Kiecolt-Glaser, reports on a 6-year study of elderly people caring for spouses with Alzheimer's Disease. The study not only found a significant deterioration in the health of caregivers when compared to a similar group of non-caregivers but also found the caregivers had a 63% higher death rate than the control group.

The demands on a caregiver result in a great deal of stress. It is often observed in aging publications that stress can induce illness and depression. The resulting poor health can further decrease the effectiveness of the caregiver and in some cases, as proven by the study mentioned above, even cause premature death.

Stress can be defined as a physiological reaction to a threat. The greater the threat -- the greater the level of stress. A threat is a real or perceived action against our person. Threats may include the anticipated possibility of death or injury but may also include challenges to our self-esteem, social standing or relationships to others or a threat may simply be a potential or real disruption of our established routines. What is stressful to one person may not be to another. For example, bumper-to-bumper traffic might be stressful to the woman executive who is late for an important meeting but to the delivery man who has no deadline and is being paid by the hour, it may be a welcome respite to relax and listen to the radio.

Stress produces real physical changes. In some unknown way the fears in our mind, both conscious and unconscious, cause the hypothalamus and pituitary glands, deep in our brain, to initiate a cascade of hormones and immune system proteins that temporarily alter our physical body. This is a normal human physiological response inherent to the human body when a threat is perceived--real or not. It is often called the "fight-or-flight response" or the "stress response". The purpose is to give us clearer thought and increased strength as well as to activate the immune system to deal with potential injury and to repair potential wounds. When the perceived threat is removed, assuming no damage is done, the body returns to normal.

A team of researchers at Ohio State University Medical Center has found a chemical marker in the blood that shows a significant increase under chronic stress and is linked to an impaired immune system response in aging adults. The team, led by Dr. Janice Kiecolt-Glaser, reports in the June 30, 2003 issue of Proceedings of the National Academy of Sciences on a 6-year study of elderly people caring for spouses with Alzheimer's Disease. With the caregivers, the team found a four-fold increase in an immune system protein -- interleukin 6 (IL-6) -- as compared to an identically matched control group of non-caregivers. Only the stress of caregiving correlated to the marked increase of IL-6 in the caregiver group. All other factors, including age, were not significant to the outcome. Even the younger caregivers saw an increase in IL-6.

The study also found that the caregivers had a 63% higher death rate than the control group. About 70% of the caregivers died before the end of the study and had to be replaced by new subjects. Another surprising result was that high levels of IL-6 continued even three years after the caregiving stopped. Dr. Glaser proposes the prolonged stress may have triggered a permanent abnormality of the immune system.

IL-6 is only one cytokine--an immune system mediator protein--in a cascade of endocrine hormones and cytokines that are released when the brain signals a person is threatened with harm, injury, undue mental or physical stress or death. The hormones prepare the body to react quickly by increasing heart rate, making muscles more reactive, stimulating thought, altering sugar metabolism and producing many more changes that result in the "rush" people experience when they think they may be harmed.

The cytokine release is mediated by IL-6, which takes the role of directing the immune system to gear up to prevent infection, promote wound healing and repair organs and muscles from any injury that may result from the imminent danger. The release of cytokines such as IL-1, IL-6, IL-8, TNF and other proteins such as CRP (C reactive protein) also promote development of inflammation, which is essential for blood cells to home in on injury or infection. In addition, these chemicals promote development of various types of immune system blood cells in bone marrow. This response to harm -- either real or perceived -- is an important and beneficial life-saving activity of a normally functioning body.

The problem is if this response is initiated over and over again, frequently, and over a long period; it can have a dangerous effect on the body. This constant initiation of the stress response is common among caregivers -- especially those caring for loved ones with dementia. Providing supervision or physical assistance many hours a week and over a period of years turns out to be extremely stressful. This type of stress is often unrelenting, occurring day after day and week after week. And the long-term effects of this stress are more pronounced in middle-aged and older people who are precisely the group most likely offering long term care to loved ones.

In most younger people, when the threat lessens or disappears, the body reacts fairly quickly to shut down the stress response and return things to normal. But numerous studies have shown, as people age, the chemical cascade from stress lingers. Over a period of time, this constant chemical stimulus impairs the immune system and results in early aging, development of debilitating disease and early death. In this altered state, the body maintains high, potentially harmful levels of IL-6. The body does not return to normal without intervention.

Prolonged high levels of IL-6 and the accompanying hormones and cytokines have been linked to: cardiovascular disease, type II diabetes, frequent viral infections, intestinal, stomach and colon disorders, osteoporosis, periodontal disease, various cancers and auto immune disorders such as lupus, rheumatoid arthritis and multiple sclerosis. Alzheimer's, dementia, nerve damage and mental problems are also linked to high IL-6. Wounds heal slower, vaccinations are less likely to take and recovery from infectious disease is impaired. People who have depression also have high levels of IL-6. Depression in caregivers is about 8 times higher than the non-cargiving population.

This debilitating response to chronic stress is not unique to humans. Animals are affected as well. A 2004 PBS Scientific American Frontiers Special entitled "Worried Sick", explored the effect of chronic stress on animals. Observations in the field and experiments on animals exposed to chronic stress, uncovered the same phenomenon of debilitating disease and early death found in humans. Blood tests on the affected animals confirmed high levels of IL-6. The work of Dr. Janice Kiecolt-Glaser’s team was also followed in the Special.

The information above should provide a compelling reason to eliminate or reduce the stress of caregiving. Following are some strategies to deal with caregiver stress.

STRATEGIES TO REDUCE CAREGIVER STRESS

Ask for help.

Most caregivers are reluctantly thrust into their role without preparation because the need for care usually comes with little warning. Caregivers end up operating in a "crisis" mode--arranging medical care and living arrangements, scheduling care time, providing meals and household chores and so forth. Because they are so stressed and burdened, they rarely take time to find out what resources are available to help them. Ironically, caregivers often sever ties with family, friends and support groups about this time just when help from these people is most needed.

As a caregiver you must ask for help. The stress of going it alone is dangerous to your health. If it's difficult to ask for yourself, use an advocate--a sibling, friend or professional care manager --to arrange a meeting and get formal, written commitments from those people who are willing to help you. The extra help will give you breathing room to find all those resources that are there to help you.

Seek care management advice.

A number of organizations and private companies will give you advice and guidance -- many for free. If your care recipient has a very low income, you might get free help from your local Area Agency on Aging. A lot depends on available funds. Go to http://www.longtermcarelink.net/eldercare/ref_state_aging_services.htm for statewide lists of agencies.

A good source of free professional advice is the rapidly growing business of non-medical home care companies. Most will offer free consultations and these companies will also provide paid aides to help you with your loved-one…such things as bathing, dressing, shopping, household chores, transportation, companionship and much more. These people may also help you coordinate adult daycare or other community services. Go to http://www.longtermcarelink.net/a7homecare.htm for a nationwide list.

You may wish to pay for a formal assessment and care plan from a professional geriatric care manager. Go to http://www.longtermcarelink.net/a2bfindmanager.htm for a nationwide list of these valuable care specialists. Even though it may cost you a little money to hire a care manager, this could be the best money you will ever spend. Care managers are valuable in helping find supporting resources, providing respite, saving money from care providers, finding money to pay for care, making arrangements with family or government providers and providing advice on issues that you may be struggling with.

Take time off--find temporary substitutes.

Taking a break from caregiving is just as important as taking a break at work or taking that long-awaited vacation. A care manager may be of help in selecting the best temporary help to give you a break. Or you may make arrangements with family or friends to give you a break from caregiving.

Make plans for funding future care arrangements for you or for a healthy parent.

The analysis of data from three national surveys (Mature Market Institute, National Alliance for Caregiving and LifePlans, Inc) points out that employees caring for disabled elders who have long term care insurance (LTCI) are nearly two times more likely to be able to continue working than those caring for non-insured relatives. In addition, working caregivers of those with long term care insurance said that they were less likely to experience some type of stress, such as having to give constant attention to the care recipient or having to provide care while not feeling well themselves. Also, the group with insurance devoted more "quality time"--more companionship and less hands-on assistance--than the group without.

See if your healthy parent can still buy insurance. If he or she can't afford it, see if other family members might contribute to premiums. There are also useful strategies using a reverse mortgage to buy long-term care insurance and life insurance for your loved ones. You should also consider insurance for yourself so when you need care someday, it won't be so stressful on your caregivers. To learn all about long term care insurance and reverse mortgages go to http://www.longtermcarelink.net/.

Use assistive technology.

There are a number of technologies to make sure your loved-ones are safe while you're away. Such things as emergency alert bracelets and pendants, GPS tracking for wandering, remote video surveillance, telehomecare, sensory augmentation and all sorts of assistive devices to help disabled people cope on their own. Go to www.longtermcarelink.net for more information.

Remove non-caregiving stress from your job or at home.

It's obvious if you can remove other stressors in your life, you can cope better with the stress of caregiving, which you may not want to or can't remove. The internet is your best resource here. Go to www.google.com, the most relevant non-commercial search engine on the net. Type in "work stress" and you can browse 3 million plus URL's. For home stress type in "home stress" and browse 4 million plus URL's. Everything you ever wanted to know is buried somewhere in those millions of pages.

Attend workshops or seminars to uncover additional strategies.

The Utah Eldercare Planning Council offers worksite or community presentations on various eldercare issues. Community workshops like these are available across the country. These learning experiences are an opportunity to find help with your own caregiving situation. To learn more about the Utah Eldercare Planning Council please go to http://www.careutah.com/.

PART II OF THIS ARTICLE (See http://www.reversemortgageloans-rates.blogspot.com/)

Next month, in part II of this article, we will offer lifestyle strategies that can lead to a reduction of IL-6 by reducing stress. We will also discuss holistic strategies that redirect the mind to "clear" perceptions of harm that produce the stress response.

FINDING RESOURCES FOR CAREGIVERS

The free resources of www.longtermcarelink.net are designed to provide you with government provider lists, free care assessments, information and care provider lists for reducing your eldercare burden and the attending stress. The site is a non-commercial source of help. It is the largest and most comprehensive free source of long term care information on the Internet. There are no ads or solicitations or pop-ups. A related site for the veterans aid and attendance benefit is found at www.veteransaidbenefit.org. This is a benefit that could be available to up to one third of all US residents over the age of 65 under certain conditions. It could provide an additional monthly income of up to $1,843 a month for qualifying veterans households.


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The Best Health Care System In America

It comes as a surprise to some people who had experience with VA health care during the 1970s and 1980s that this same system is now considered the best medical care in the United States. To illustrate this we quote below articles and comments from the several sources.

BusinessWeek, July 17, 2006 "The Best Medical Care in the Nation How Veterans Affairs transformed itself -- and what it means for the rest of us"

"To much of the public, though, the VA's image is hobbled by its inglorious past. For decades the VA was the health-care system of last resort. … The huge system had deteriorated so badly by the early '90s that Congress considered disbanding it."


"Instead, the VA was reinvented in every way possible. In the mid-1990s, Dr. Kenneth W. Kizer, then the VA's Health Under Secretary, installed the most extensive electronic medical-records system in the U.S. Kizer also decentralized decision-making, closed underused hospitals, reallocated resources, and most critically, instituted a culture of accountability and quality measurements. "Our whole motivation was to make the system work for the patient," says Kizer, now director of the National Quality Forum, a nonprofit dedicated to improving health care. "We did a top-to-bottom makeover with that goal always in mind.". . . .

Robert Bazell, Chief science and health correspondent, NBC News Updated: 6:33 p.m. MT March 15, 2006

"We report a story tonight that is going to turn a lot of heads. The Veterans Administration Health Care System, once famously known for horrendous medical care, now offers what many consider the best health care in the nation. I am sure we will hear from many of you who have had difficult times with care at the VA. That is understandable, because the improvement in the VA has occurred relatively recently and inevitably many people will be dissatisfied with their treatment at the hands of any medical provider."
"But here is the evidence. In a study two years ago a group of researchers from the RAND Corporation and several medical Centers found that 67 percent of patients in the VA system received “appropriate care” as defined by expert panels on medical practice. Two thirds sounds short of the mark, but in the current issue of the New England Journal of Medicine the same researchers report on a survey of the country that finds only 55 percent of Americans in general are getting appropriate health care. And that number does not vary much with the patients’ level of education or income."

"In addition, a telephone survey last January from the University of Michigan found that VA patients rated their satisfaction with care at 83 out of a possible 100 points for inpatient care and 80 out of 100 for outpatient care. By comparison, the same survey found rates of 73 and 75 in the general population. Another indicator comes from the American Legion, which has been surveying its members and finding similar high levels of patient satisfaction."



"Indeed, the biggest complaint about the VA system these days is from people who want in. The VA provides unlimited care for service-related injuries and illnesses. but for other problems veterans must fall below a defined income level. As a result, patients at the VA tend to be poorer and sicker than the rest of the population, which makes the improvements all the more remarkable."
"What happened? The change began with Dr. Kenneth Kizer, who became undersecretary of health for Veterans Affairs in the Clinton administration and has continued in that role during the Bush administration. The VA changed its emphasis from hospital to outpatient care where possible. It also set up genuine prevention programs. As a result, people with conditions like diabetes get the simple measures that can save enormous misery and thousands of dollars in treatment costs. Every patient is assigned a personal physician and the mandate from headquarters is to treat veterans with the respect and dignity they deserve."
"The other big change was a massive shift to electronic medical records. At any VA facility in the country, a doctor or other health professional can access the records of any patient in the system, including lab tests, X-rays and chart notes that can be read easily. The electronic system challenges health providers who seem to be making mistakes, and it allows for a massive collection of data so the VA can know which treatments work and which don’t."

"A big advantage for the VA is electronic medical records. The VA has the largest, and one of the most modern systems in the world. When a VA patient visits any facility in the country, the records are there. Indeed, after Hurricane Katrina, many VA patients received uninterrupted care even as they were forced to move."
"’All of the information I need about any of my patients, including their X-rays and their tests, are always available, always accurate, always there in a legible form,’ says Gauge."

"The electronic records also allow the VA to track its performance — to quickly learn what works and what doesn't — providing what many say could be a model for health care nationwide."

A quote from Families USA

"A report released Tuesday (December 2006) by the consumer group Families USA says Medicare's prices for seniors' most frequently used drugs are about 58% higher than those provided by the Department of Veterans Affairs."

Why the VA Health Care System Works so Well

Actually it's not that VA is such a marvelous system since any large-scale organization employing over 200,000 people is bound to have its inefficiencies. VA simply comes closer to the mark of providing excellent care than the rest of the health-care providers in the country. One big reason is the veteran system does not rely on insurance reimbursements so money saved through efficient operation remains in the system and does not transfer to insurance companies. This type of operational structure encourages innovation and change.

However, being a single-payer health plan alone would not necessarily result in a better system. The outstanding reawakening of VA health care is largely a result of the vision and leadership of Doctor Kizer and his successor. Here are some of the operational advantages that make VA health care so successful.

As a government entity, the agency cannot be sued by patients who have been mistreated. This obviously saves the time and money involved in lawsuits. However, in order to be responsive to medical errors, doctor Kizer instituted the "Sorry Now" program that holds staff accountable for their actions and provides damage awards to patients.

Veterans who are part of the system have the opportunity to remain with the system throughout their lives. This allows VA to practice preventative medicine by scheduling regular checkups, performing regular lab tests and intervening before a medical condition becomes too advanced. The provider/contractor insurance reimbursement model used in the United States typically does not allow for this type of preventative medicine.

An electronic records system provides the opportunity to practice outcome based medicine which has become the Holy Grail of all health-care systems. The computerized records allow tracking outcomes for various medical conditions and finding those that work best. This weeds out expensive procedures that are no more effective than other less expensive ones. Prescriptions for medications are also tracked on the computer and potential drug interactions are avoided. According to studies, VA has the lowest drug interaction incidents and deaths in the country
The electronic records also prevent duplication of expensive medical tests. Some surveys indicate that, 60% of the time, private sector providers order duplicates or triplicates of the same test. This is because paper records make it difficult or almost impossible to track tests between different care providers. Even in the same hospital, estimates are that one out of five tests are unnecessarily reordered.

Finally, electronic records help the veterans health system to maintain a more cost effective and smaller drug formulary. Fewer categories of drugs allow VA to negotiate with drug companies for larger quantities at a lower price. If an existing, less expensive drug is proven through electronic records computer data to be just as effective as newer more expensive medicines, then obviously the older medicine will be favored.

Proponents of the new Medicare drug plans criticize VA for limiting drug choice to only about 1,300 medications where some Medicare plans allow 4,500 different drugs or more. VA would probably argue that such a wide choice is unnecessary and that many newer more expensive drugs are simply analogues of less expensive versions that have been around for a long time.

Cost of overhead and administration is another issue that makes VA a better system. Our country's private insurance model results in insurers eating up a great deal of their premium income in unproductive overhead costs. It is estimated that private insurers spend anywhere from 20% to 30% of their premium income on advertising, agent commissions, insurance administrative oversight costs, expensive claims and records tracking systems, taxes, profit, and dividends for shareholders. VA has none of these additional cost burdens except for administrative costs associated with maintaining the system.

There is also evidence that the morale of employees in VA hospitals and outpatient clinics is especially high because of the pride those employees take in providing quality care. Motivated employees can be a major factor in providing care more effectively and more efficiently thus saving money. For more information on veterans benefits go to the National Care Planning Council at http://www.longtermcarelink.net/.



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Dealing with the Sudden Crisis of Eldercare

Eldercare providers and advisers who deal with the public know from experience that the need for long term care can often arise without warning. In many cases, desperate caregivers are frantically trying to find services, advice or care funding sources to help their loved ones with unexpected long term care needs. This sudden need for help often occurs when the loved one needing care has recently demonstrated unsafe behavior, or there has been an injury or sudden illness or there is a pending release from nursing home rehab or the current caregiver can no longer cope. Help must be found right now.
Unfortunately, many of these caregivers -- who are typically operating in crisis mode -- don't know where to turn for help. It's not that there aren't advisory services out there to help them, it's just that the caregivers often don't know where to find these services.

Government caregiver resource services such as area agencies on aging and related ADRC pilot programs typically reach out to caregivers through referrals from hospitals, discharge workers, doctors, home health agencies and nursing homes. Caregivers seeking help outside of this referral network generally aren't aware of government advisory services. In the private sector, help with caregiving issues is generally provided when a caregiver calls a specific agency, nonprofit organization or an advisor. There is no nationwide, private sector one-stop shopping source of help for all the types of care provider services that are available in the community.

The national care planning Council has discovered an answer to help desperate caregivers find the one-stop shop support they need. A 2004 study by the National Alliance for Caregiving and AARP estimates nearly six in ten (59%) caregivers are currently employed. Many of these working caregivers will use their Internet access at work to find the caregiving support they need.

The National Care Planning Council is in the process of developing websites in every state that contain the Internet resources employed caregivers are looking for. Currently, results from websites operating in 10 states indicate that harried caregivers will indeed search out these state care planning council websites for help. For example, one state website sponsored by the National Care Planning Council -- the Utah Eldercare Planning Council website, www.careUtah.com-- last year produced over 1,000 inquiries for help primarily from younger family caregivers. Additional requests for help were also received by Utah Eldercare Planning Council members through traditional outreach networking channels such as eldercare advisers, eldercare service providers, government agency referrals, associations, brochures and community presentations.

The National Care Planning Council is currently seeking qualified individuals to be Directors and oversee geographic service areas of state care planning councils. The Director's job is to coordinate local requests for help from the community and provide needed eldercare services. If you are a professional care provider or eldercare advisor please contact us about this opportunity to help the community and at the same time expand your services by becoming a Director of a Service Area. Or you may simply want to become a member of your local state care planning council.

Contact the National Care Planning Council at 800-989-8137 or by email at inquiry@longtermcarelink.net. To read more detailed information about what about state care planning councils, please go to www.longtermcarelink.net/council.pdf






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Elder Mediation Resolves Family Conflicts

“My daughter is insisting I move in with her,” complains Martha. “She just wants to control my life and take away my freedom,” she continues.

Jenny, Martha’s daughter worries that her mother keeps falling, and fears one day she will break her hip or hit her head.

“I’ll take my sister to court before I will let her get control of mom and my inheritance,” exclaims Jim about Jenny’s desire to move her mother in with her.

It is amazing how quickly formerly cordial relationships between family members will sour when the family has to deal with care of elderly parents or inheritance at their death. Sometimes the consequence of dealing with the final years of elderly parents can break families apart and create long-lasting animosity.

The National Care Planning Council has seen an increase in requests from caregiving children for help in solving disputes with siblings. In one case, the caregiver was being sued by her sister for abusing their parent and stealing the Social Security checks. In another, the caregiving child would not allow siblings to see their mother, claiming they would take advantage of her.

A lot of times it is a “she said,” “he said” situation with neither party really understanding what the elder person needs or wants.

Some families find it hard to communicate with each other when their parent is in need of care. Perhaps when they grew up together they were not accustomed to come together as parents and children to work out problems. And now those children are older and taking care of parents and they don't have this family council strategy to rely on. It may seem unnatural to them. But that is often exactly what is needed, especially in situations where perhaps one child is caring for the parents and the others are left out of the loop.

Children all have a common bond to their parents and as a result a common obligation or responsibility to each other. When disagreements arise, suspicions begin to grow. Suspicions or distrust often lead to anger and the anger often leads to severing the channels of communication between family members. This can occur between parent and child or between siblings or between all of them.

It is often at this point that a neutral third party can come in and repair the damage that has been done and help correct the problems that have come about because of the disagreement.

A practitioner experienced in elder mediation is a perfect choice for solving disagreements due to issues with the elderly.

WHAT IS ELDER MEDIATION?

Mediation is a non-adversarial approach to solving disputes. Mediation is a process of bringing two or more disputing parties together and having them mutually negotiate a solution to their disagreement. The mediator is not a judge and does not render a decision but is there to make sure that communication flows freely between the disputing parties. Elder Mediators are trained in the art of negotiating resolutions between elderly parents and family members.

Mediation can achieve results that the family by itself may not be capable of realizing or have the expertise of achieving. Here are some reasons that make Elder Mediation so valuable.

• A trained expert on communication gives the family a perspective it could not gain by meeting together on its own;

• All family members involved meet and prevent problems from arising by anticipating situations that may cause disputes;

• Allows for the mediator to invite experts such as care managers or other care providers into the meeting to educate the family and give them a new perspective;

• Allows parents to focus on their abilities rather than their limitations;

• Allows children to come up with and consider options not thought of previously;

• Encourages uninvolved family members to become involved;

• Allows parents to express wishes and desires that had previously gone unuttered;

• Allows for a neutral third party to challenge family members and make them take responsibility for their actions;

• Promotes consensus of all involved which in turn creates a much higher rate of compliance with the plan than with any other process; (the success rate for compliance with elder mediation is estimated to be about 80% to 85%)

• Requires a written plan with specific responsibilities which makes compliance feasible.

There are many organizations and companies throughout the country providing expertise in “Elder Mediation” to help seniors and their families. You will also find that mediators often have many coincident professional accreditations such as, Professional or Geriatric Care Manager, Elder Attorney, Clinical Social Worker or Certified Mediator.

In choosing a mediator, consider your needs. Is there a need for a medical assessment to determine the type of care? Are legal concerns with inheritance or family business or power of attorney, the main need? Perhaps, just bringing the family together to communicate on what needs to be done and who will do it is the agenda for now.
In one case, after months of dispute with her parents over their health and safety issues, Connie enlisted the service of a professional care manager mediator.

“Bringing a neutral person with a professional and compassionate attitude into our disputes was the best thing for all involved,” Connie recalled. “My parents shared their concerns and listened with acceptance to mine. All of a sudden we could communicate and work out a plan that they could live with and I could relax knowing they were safe.”

Seniors Use Mediators to help the family plan for long term care.

In the National Care Planning Council's book, “The 4 Steps of Long Term Care Planning,” the process of creating your own “Care Plan” before you need it is introduced. Quoting from the book:
“If the current or future caregiver wants the other persons attending the meeting to give support with respite care, transportation to doctors, etc., everyone needs to be aware of this and in total agreement to do it. All must also be willing to work with the member of the family, friend or professional who is designated as the Personal Care Coordinator.

If you feel the communication will be strained, consider having a professional mediator present. The mediator will be able to keep things calm and running smoothly and help work out each person's concerns.”

“The 4 Steps of Long Term Care Planning” book can be found at http://www.longtermcarelink.net/a16four_steps_book.htm

Where to Find an Elder Mediator

• In your local phone book, on the internet or with your community senior services.

• References from friends and neighbors

• Contact the local area agency on aging

• Contact your state bar association

• Contact a local university or college and asked to speak to the department that provides mediation training and ask for a referral.

• On the internet look up mediation in your area

• Yellow pages in local phone books

The National Care Planning Council lists Professional Mediators throughout the United States on its website at http://www.longtermcarelink.net/a7mediation.htm

List your Elder Mediation service
National Care Planning Council
http://www.longtermcarelink.net/
800-989-8137



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Reverse Mortgage and the Time Value of Money

Here is another true story about a senior I just talked to.  She is in her late 60's and she would like to repair her home so when she dies and her son sells it he gets more for it. (She later mentioned that the buyer will more than likely tear it down because the value was in the land). She wants him to have more money so he can buy a place where he lives and is currently renting because he can't afford to buy.  We agreed that she would live at least 20 more years and once she was gone he could sell the house and buy his house.  Now lets say rent was ohh --$800/mo (cheap rent where he lives) and assuming rent never increases - he will have put $192,000 toward renting.  If mom gives him $100,000 not to put a nice down payment on his new home - his rent would probably pay a mortgage.  So if the house he bought was $300,000 and his house increase 32% (we figured that was how his moms house appreciated) his $300,000 house would be worth at least $396,000.  So he would have $396,000 asset and maybe a $170,000 debt in 20 years. But the real benefit is that mom would have been able to visit her son in the house she helped buy.  Is she doing her son a favor by giving him a little more when she dies?  Its hard to be logical when you are dealing with something as emotional as your house.  I understand, but its sad really.

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Frustrated!

I just got off the phone with a senior that I had educated on the reverse mortgage program.  Her income was $1,300 a month and she was struggling with her $159.00 payment and $12,000 dollars in credit cards.  Her total payments on these bills were $359.00/month.  That didn't leave much for her to live on after paying those.  Well she said she was going to discuss it with her son and get back to me...like usual I didn't hear anything so I called her to see what they had decided.  She stammered around and said..I went to the bank and got a home equity loan from the bank.  So the net result is now she has a $297.00 payment.  She lowered her payment by only $62.00 and she is still struggling.  I am not frustrated because I didn't get to do her reverse mortgage, I am frustrated that this banker (well intentioned) didn't help this senior out much at all. I am guessing they didn't offer the reverse mortgage or the loan officer didn't know about them because there is no other reason to put her client in harms way.  She took unsecured debt (which if you can't pay they can't take your home) and made it all secured debt where if you can't pay they can take your house. Please loan officers, call me and lets discuss the reverse mortgage and spend a little time knowing your clients situation before you put them in a loan that hurts them.  Getting your commission is nice, but helping people and getting a commission lets me sleep better at night.

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Early New Years Resolution - Plan for Long Term Care

“According to some sources, 60% of us will need long term care sometime during our lives. It is important for all of us to prepare for that day when we will need to help loved ones with elder care or we will need elder care for ourselves.”

“It is simply a fact of life to prepare financially for unexpected disasters by covering our homes, automobiles and health with insurance policies and to provide funding for our retirement. But no other life event can be as devastating to our lifestyle, finances and security as needing long term care. It drastically alters or completely eliminates the three principal retirement dreams of elderly Americans, which are:

1. Remaining independent in the home without intervention from others
2. Maintaining good health and receiving adequate health care
3. Having enough money for everyday needs and not outliving assets and income

Yet, it is our experience that the majority of the American public does not plan for the devastating crisis of needing elder care. This lack of planning also has an adverse effect on the older person's family, with sacrifices made in time, money, family lifestyles and even affecting the family's or caregiver's medical and emotional health.” National Care Planning Council “ The 4 Steps of Long Term Care Planning”

Because of changing demographics and potential changes in government funding, the current generation -- more-than-ever -- needs to plan for long term care.

If you have spent time helping a parent or loved one cope with a disability resulting from aging, you know the frustration of balancing what you feel they need to do and what they want to do. Communication is strained at times, because after all, you are the child and they the parent, yet physically and mentally the rolls have changed.

When you make directives, assignments and arrangements in advance of needing elder care, then everyone involved can follow the prearranged care plan.

As an example, Jefferson Simpson wrote in his care plan that if dementia or Alzheimer's inhibited his mental abilities to communicate or recognize his surroundings, he wished to be in a respectable facility and only asked that he be visited and brought chocolates. To his children this request seemed silly at the time, but when his mental capacities did diminish, the instructions were there. No one had to wonder if they should try to take care of Father Jefferson at home and how they would do it. Without quilt or question they placed him in a respectable facility that took care of his needs. All they had to do was make loving visits, and of course they brought chocolates.

In order for Jefferson's simple request to happen, he had made financial, legal and personal long term care plans years before.

What do you want your children or friends to do on your behalf?

When it comes time for them to help, what if you can't say what you want because of a physical or mental disability? This is where a written long term care plan comes into effect.

Do you have a financial plan or long term care insurance? Retirement savings can disappear quickly when used for care services.

Where is your paperwork; insurance policies, living will, medical directives, Armed Services discharge or disability papers? Is there someone designated to know the location?

What are the legal documents that are needed for power of attorney, estate planning and disbursement of assets? When do they have to be completed?

What types of care services and facilities are available and what are the costs?

What will government programs pay for and how do you qualify?

There is a lot you can do now to put together a plan for your own long term care. You may have limited resources in the future or health problems that will inhibit your ability to take care of things you could do now. For example.

James and Cindy want to be able to stay in their home as they age. In order to do this, when they were in their 40's they took out a long term care insurance policy that will pay for home care if it is needed. The policy will also pay for nursing home costs as a care option. With taking the policy at a younger age and in good health the monthly payments are low. Extra funds can now be put away for retirement without worries of having to deplete savings for care costs.

Or consider Sarah's following experience:

After taking care of her own parents for many years, Sarah realized the importance of making, in advance, a plan and preparations for herself. She saw all of her parents' assets dissipated in order for her father to qualify for Medicaid nursing home coverage. She didn't want the same thing to happen to her. She took the time to create her own plan on paper-- expressing her wishes for her own care. A trip to her attorney provided all the legal documents and estate planning she wanted to be in place to insure care for her and an inheritance for her children.

There is much to learn about long term care and there are a lot of new services and programs available to draw from.

The National Care Planning Council has gathered together an overall review of government and private long term care services both on the Council website, www.longtermcarelink.net and in their book The 4 Steps of Long Term Care Planning.

The 4 Steps of Long Term Care Planning provides comprehensive information about long term care planning. The design also allows you to record personal information, family agreements and directions on 20 planning sheets at the back of the book. Using this book as a single-source repository for information and directions makes it much easier for you or your care coordinator to carry out your wishes when the need for care occurs.

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Nursing Homes for Veterans

Nursing home coverage for veterans is available from two sources within the Department of Veterans Affairs -- the veterans health care system and the state veterans homes system.

Nursing Home Coverage through the VA Health Care System

Nursing home coverage along with other long term care services such as home care and assisted living as well as geriatric care management are available through the Veterans Health Administration for qualifying veterans.

In order to get into the veterans health care program, the veteran must have service-connected disabilities, or be below a qualifying income level or be receiving Veterans Pension income. Once in the system, veterans are not guaranteed long term care services, including nursing home care, unless they meet specific requirements. Here is a list of these requirements for nursing home coverage.

Who is Eligible for Nursing Home Care

•Any veteran who has a service-connected disability rating of 70 percent or more;
•A veteran who is rated 60 percent service-connected and is unemployable or has an official rating of "permanent and total disabled;"
•A veteran with combined disability ratings of 70 percent or more;
•A veteran whose service-connected disability is clinically determined to require nursing home care;
•Nonservice-connected veterans and those officially referred to as "zero percent, noncompensable, service-connected" veterans who require nursing home care for any nonservice-connected disability and who meet income and asset criteria; or
•If space and resources are available, other veterans on a case-by-case basis with priority given to service-connected veterans and those who need care for post-acute rehabilitation, respite, hospice, geriatric evaluation and management, or spinal cord injury.

VA's nursing home health system programs include VA-operated nursing home care units and contract community nursing homes. Many VA hospitals operate nursing home care units located in or near the hospital. Other hospitals, without adequate nursing home beds, contract with approximately 2,500 community private nursing homes nationwide to provide services.

State Veterans Homes

State veterans homes fill an important need for veterans with low income and veterans who desire to spend their last years with "comrades" from former active-duty. The predominant service offered is nursing home care. VA nursing homes must be licensed for their particular state and conform with skilled or intermediate nursing services offered in private sector nursing homes in that state. State homes may also offer assisted living or domiciliary care which is a form of supported independent living.

Every state has at least one veterans home and some states like Oklahoma have a number of them. There is great demand for the services of these homes, but lack of federal and state funding has created a backlog of well over 130 homes that are waiting to be built.

Unlike private sector nursing homes where the family can walk in the front door and possibly that same day make arrangements for a bed for their loved one, state veterans homes have an application process that could take a number of weeks or months. Many state homes have waiting lists especially for their Alzheimer's long term care units.

No facilities are entirely free to any veteran with an income. The veteran must pay his or her share of the cost. In some states the veterans contribution rates are set at a certain level and if there's not enough income the family may have to make up the difference. Federal legislation, effective 2007, also allows the federal government to substantially subsidize the cost of veterans with service-connected disabilities in state veterans homes.

State Veterans Homes Per Diem Program

The Veterans Administration pays the state veterans homes an annually adjusted rate per day for each veteran in the home. This is called the per diem. The 2008 nursing per diem amount is $74.42 and for domiciliary care it is $34.40. Adult Day Health Care – up to one-half of the cost of care -- cannot exceed $66.82 per day. The goal of state veterans homes is to get Congress to increase the per diem rate for nursing care to 75% of the state private nursing rates. In most states the per diem falls well short of this goal.

The per diem program and construction subsidies mean that State veterans homes can charge less money for their services than private facilities. Some states have a set rate, as an example $1,400 a month, and they may also be relying on qualified veterans receiving the Pension benefit with aid and attendance plus the per diem to cover their actual costs. Other states may charge a percentage of the veteran's income but be relying on other subsidies to cover the rest of the cost. Some state homes can receive Medicaid support as well.

Most of the states with income-determined rates are selective about the veterans they accept. These states may rely on a variety of private and public sources to help fund the cost of care.

Eligibility and Application Requirements for State Veterans Homes

From state to state, facilities vary in their rules for eligible veterans. And even in the same state it is common, where there is more than one state home, for some homes to have very stringent eligibility rules and others to be more lenient. These differing rules are probably based on the demand for care and the available beds in that particular geographic area.

Some homes require the veteran to be totally disabled and unable to earn an income. Some evaluate on the basis of medical need or age. Some evaluate entirely on income -- meaning applicants above a certain level will not be accepted. Some accept only former active-duty veterans, while others accept all who were in the military whether active duty or reserve. Still others accept only veterans who served during a period of war. Some homes accept the spouses or surviving spouses of veterans and some will accept the parents of veterans but restrict that to the parents of veterans who died while in service (Goldstar parents).

Federal regulations allow that 25% of the bed occupants at any one time may be veteran-related family members, i.e., spouses, surviving spouses, and/or gold star parents who are not entitled to payment of VA aid. When a State Home accepts grant assistance for a construction project, 75% of the bed occupants at the facility must be veterans.

Domicile residency requirements vary from state to state. The most stringent seems to be a three-year prior residency in the state whereas other homes may only require 90 days of residency.

All states require an application process to get into a home. Typically a committee or board will approve or disapprove each application. Many states have waiting lists for available beds.

A current contact list of all state veterans homes is available at http://www.longtermcarelink.net/ref_state_veterans_va_nursing_homes.htm

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