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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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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