Who takes care of the unbefriended elderly?

A critical part of the estate planning process involves the client’s selection of an appropriate person to look out for the client when it’s time for end-of-life decision-making, so that this person can be named in the Health Care Proxy and given access to medical records via a HIPAA Release.. This endeavor seems simple enough, except when there is no one in the client’s life who the client feels may be able or willing to step forward. Perhaps the client’s children have moved far away and are unavailable in an emergency. Perhaps the client is estranged from family and does not want to involve them or friends in the most intimate of decisions. Or perhaps the client simply has outlived her family and friends and there is no one available to look out for her.

Clients like these are known in the elder care world as the “unbefriended elderly.” Roughly 10 years ago, the American Bar Association estimated that 4% of seniors fell into this category. I think that number is now significantly higher, as the size of the typical family has continued to shrink and longevity continues to increase. A terrific article on the New York Times web site discusses the problems which occur for these folks in identifying advocates for end-of-life care.

Under Massachusetts law, employees of hospitals, nursing homes, rest homes, and other “facilities” licensed by the Departments of Public Health, Mental Health and Developmental Disabilities may not act as health care agents unless those employees are actually related to the elder. Thus, doctors, nurses and other employees who may actually have the most intimate knowledge of the elder’s wishes and medical needs are generally barred from acting as a health care agent under a health care proxy. If such persons cannot serve, where does that leave the elder?

Some elder law attorneys will act as health care agents and advocates. I (and most of the elder law attorneys I know) am uncomfortable taking on such a role for my clients for several reasons. First, my training is in law, not social work or medicine, and I do not feel that I have the skills to take on such a task, particularly for persons who I do not know well. Second, my malpractice insurance coverage likely does not extend to making decisions which are clearly medical and not legal in nature. Third, I really cannot promise that I will be available at the drop of a hat to fly to the hospital at the expense of other clients who have the right to expect that I will be diligent in performing work for them. In short, I don’t think it’s fair to my clients or myself that I take on such a role for people to whom I’m not closely related or who are not very close friends. It’s certainly not a role I would wish to assume unless I have known the client for a very long time.

When these situations arise in my practice, I strongly recommend the involvement of a willing geriatric care manager (GCM). These professionals are generally nurses or social workers by training. They have experience navigating medical systems, and physicians are going to be more comfortable speaking with a GCM about medical issues than to a lawyer. A GCM will also cost much less than an attorney to perform such tasks with a level of skill that a lawyer simply will not have. Not all GCMs are comfortable taking on such a responsibility, however.

But what about the situation where the unbefriended elder lacks the funds to hire a GCM? This is a situation which frequently occurs in nursing homes, where the elder’s funds have long been exhausted. As the article notes, there are some non-profits which will step up and have their GCMs or social workers serve, but identifying such organizations is not easy. If there is no health care proxy, then a guardianship may be required if the elder is no longer competent. Since Massachusetts does not have a public guardianship commission, the unbefriended elder will be assigned the next attorney or volunteer on the judge’s list of (usually) uncompensated guardians. This situation is, in my opinion, entirely unsatisfactory.

So… what to do? If you are an unbefriended elder, talk to a geriatric care manager about whether she would be willing to act as your health care agent, and don’t hesitate to ask whether she would continue to act in this role if you run out of funds. Have an elder law attorney draft a health care proxy which makes it clear that the health care agent has the power to authorize or not authorize types of treatment. Make sure you speak with your GCM regularly so that she can get to know you, your values, and your medical needs. But whatever you choose to do, pick your health care agent while you have the ability to find someone who will take care of you.

Being female continues to get more expensive

As an elder law attorney, I regularly suggest to my clients that they investigate purchasing long-term care insurance as a hedge against the cost of costs associated with aging, especially if they have any interest in planning for the cost of long-term care and asset protection. I still think it’s generally a good idea. However, one thing that purchasers should be mindful of is that there is no guarantee that the price of the premium will remain the same over time or that they will even be able to get coverage at an affordable rate.

In the last two years, several major insurers, including MetLife, Prudential, and Allianz, have stopped selling policies; while others, like Genworth, are significantly restructuring their underwriting rules and premiums.  One major change in the rules is to start charging women more for coverage. From an insurer’s point of view, this change is understandable. Women live longer, so they have more time to become disabled — a fact which the industry seemed to have overlooked when they started selling these in the 1980s. Seven out of ten residents of nursing homes, 76% of assisted living residents, and 66% of recipients of home care services are female. As a result, insurers are now charging new female policyholders more than they are charging male policyholders. Single women searching for new policies will be hit particularly hard, with insurance commissioners approving rate hikes of as much as 40%.

However, the head of one trade group argues that the real culprit is the low interest-rate environment. Insurers need to make enough money through fairly conservative investments to pay out claims. The combination of very low interest rates and unexpected demand for payment of claims is forcing rate hikes.

Whatever the reason may be, shop carefully for a policy. Work with an experienced long-term care insurance agent who sells for a number of different policies, so you can compare your options.

Don’t fall victim to this scam against aging veterans and their families!

There was an excellent article in the May 2012 edition of Kiplinger’s Retirement Report (subscription required) on a little –known scam which is run by some less-than-scrupulous insurance agents on frail elderly veterans and their surviving spouses. The deal they present is this:  buy an annuity from me and I’ll help you qualify for the Veterans Administration’s Aid and Attendance (A&A) benefit.

The A&A benefit is available for veterans who served during wartime and their surviving spouses. You qualify by meeting an income and assets test (generally about $80,000 or less, plus the value of your home and a car). You must also provide proof that the cost of your care to help you with activities of daily living (bathing, dressing, walking, eating and the like) exceeds your monthly income. This benefit is very useful for residents of assisted living facilities, where the cost of care can easily be double the resident’s income.

The A&A regulations have nothing to do with Medicaid regulations. Part of the elder law attorney’s job is to advise clients that what may work for one program will not necessarily work for the other and to provide options and counsel. This is not what these “helpful” salespeople do. Instead, they will convince elderly veterans and their families that they must unload assets, and the “best” way to do that is by purchasing an annuity. What the veteran is not told is that these are more often than not deferred variable annuities. The money in these accounts will not be accessible to the veteran for a number of years without payment of a premium, and may not begin paying out income for many years (I’ve seen deferred variable annuities sold to 75-year-olds that would not begin to make payments until the consumer turned 90!) What’s more, these annuities are generally treated as being either available assets or disqualifying transfers (depending on what state you’re in) by the state Medicaid agency, thus making the veteran or his spouse unable to get Medicaid benefits unless the annuity is cashed in. In the meantime, the salesman has gotten a nice, juicy commission.

Even if the annuity is an immediate payout annuity, the amount of the payment might be so high as to cause the veteran to have too much income to qualify for A&A – but because the payout is immediate, the investment cannot be undone.

What’s particularly shameful is that some assisted living facilities seem to see nothing wrong in allowing these salesmen to put on seminars and encouraging their residents to use their services. While I understand the facility’s desire to be sure that their residents have sufficient funds to pay their bills, they have a legal and ethical duty to make sure that their residents aren’t getting fleeced as a result of programs which they promote.

Massachusetts is fortunate in that every town is served by a Veterans Service Agent (VSA) paid for by the taxpayers, whose job includes doing this sort of paperwork. These applications are also handled at no charge by VSAs who are affiliated with such organizations as the Veterans of Foreign Wars. Before you ever think of applying, see an elder law attorney for counseling on your options and advice about whether your income, assets and infirmities may make you eligible for the A&A benefit and important information about how the trust and transfer-of-assets rules differ from those of Medicaid. Then contact a VSO for help with the application. Your elder law attorney may also handle the application at no charge as a courtesy to you.

Mom may not be the only one on the hook for her nursing home bill.

Imagine this scenario:

You’re struggling to pay your mortgage.

You’re trying to help your kids get through college.

And now your mother’s nursing home is suing YOU for payment.

This can’t happen, right? Wrong.

Thirty states, including Massachusetts, have seldom-enforced “filial responsibility” laws, requiring children to pay for the need of their indigent parents. The wonder is that these suits don’t happen more often. It’s a particularly frightening thought that persons in their 60s who are still trying to save for their own retirement needs  while trying to help their underemployed children may be sued to pay for the care of a parent who has outlived her money.

One thing that children can do to both protect themselves and their parents is to get Mom and Dad to sit down with an elder law attorney and carefully review how their assets are set up, and to make a plan for when to apply for Medicaid coverage for the nursing home. If Mom and Dad are still insurable, buying them a long-term care insurance policy may be insurance for your own assets. But it all starts with a frank discussion within the family about how health care will be paid for and who will pay for it.

Median annual cost of a nursing home in US is now $77,745

According to a study issued by Genworth Financial, nursing homes in the US have increased their costs by an average of 3.4%. This study was based on a survey of over 15,000 providers taken in the first three months of this year.

You won’t find a nursing home in the Boston area charging that low a rate. Most facilities I deal with charge privately-paying residents around $120,000 to $140,000 per year for a shared room. With these kind of costs, it just makes sense to make plans for the cost of long-term care, even if you think you’ll never need it.