Caregiving and finances

As we begin the caregiving journey, we are mainly concerned about our aging parents’ well-being and safety. This can be a difficult time psychologically for adult children as they watch their parents, once vital and in charge, become frail and in need of help. In the rush to deal with day-to-day problems and scramble to figure out what to do if Mom or Dad is having difficulty at home or has a serious health crisis, the financial ramifications are often an afterthought.

However, sooner or later, finances will become a key part of the mix, whether we end up paying for incidentals, managing or coordinating parents’ finances, or paying outright for their care. It is not unusual for family caregivers to take on all three financial roles. A recent study finds that 92% of caregivers are “financial caregivers” along with more traditional caregiving responsibilities. Often people aren’t aware of what they are spending or how much time they devote to helping out with paperwork until they are deep into their caregiving responsibilities.

Paying out-of-pocket expenses
Whether aging parents or other loved ones are well off financially or not, family caregivers usually don’t think twice about picking up groceries, items from the drug store or medical supplies. And if they live in a different location from their parent, they are quick to get in their car or fly to a destination if a crisis occurs or simply to make sure things are okay.

Expenses for gas, airfare and all the incidentals can really add up. Caregivers spend an average of $6,954 yearly for out of pocket expenses, and for long-distance caregivers, the cost is nearly doubled. On average, those who care for someone who lives far away spends $11,923 per year. These expenses are generally unbudgeted and can take an unbudgeted bite into a family’s savings.

Coordinating and managing finances
It’s not unusual for someone who needs care or has a serious visual impairment to be overwhelmed by the paperwork generated from Medicare, insurance, utilities, and savings and checking accounts. Even if a parent has a financial professional, the day to day work involved of making sure bills are paid, taxes filed, accounts monitored, and insurance premiums and claims under control is part of this responsibility. Keeping track of legal documents such as powers of attorney, living wills and other safeguards also needs to be managed by someone. And that someone is usually a family caregiver.

Taking on this role has some pitfalls as parents are often reluctant to turn over anything related to money to their children. But it is an important role, because it enables the caregiver to make sure that the bills don’t stack up and that there are no suspicious expenditures. The annual loss to victims of financial elder fraud and abuse is estimated to be $3 billion a year; some estimate it could be as high as $36 Billion as four out of five incidents go unreported.

Whether fraud is an issue or not, financial caregivers find themselves spending many hours coordinating finances and making sure that their parent’s money is safe and secure.

Paying for care
As financial caregiving escalates and care needs increase, caregivers may need to confront a harsh reality. They may find that their parents don’t have enough money saved to afford paid care, whether at home, in an assisted living facility or nursing home, and do not have long-term care insurance protection. It’s also possible that assets have dwindled after one of their parents had to spend down savings to pay for the other spouses’ care.

The cost of care increases each year. The average rate for paid home care is now at $22 per hour and assisted living at $3.750 (base rate) per month. Studies indicate that about half of adult children feel an obligation to pay for their parents’ care should they need it. But families are often struggling with their own finances, worried about college tuition payments, mortgages, possible job loss and their need to save for their own retirement.

Transferring parents’ assets to a daughter or son, once considered a viable option, is risky and not always foolproof. Most states have look back periods, and thirty of them now have Filial Responsibility laws on the books requiring adult children to repay for the cost of care incurred by the government. While rarely enforced, a few lawsuits are currently pending. With state budgetary shortfalls in the news, it’s likely that these laws will have more teeth in the future.

Lost lifetime wealth
An alternative to paying for care directly is to ask a parent to move in, or as another option, to assume the caregiver role. For those who do the math, it may seem logical at first to leave the workforce altogether or step back to part time and become the primary caregiver. Paying for round-the-clock care is costly. Even if parents have money, the stress and emotions of providing care may drive a caregiver to stop working. Women, in particular, who take on intense caregiving roles, are more inclined to see this as an option and decide to cut ties with employment.

However, more sophisticated calculations show that a workforce departure or step-back can result in a significant blow to long-term retirement finances. For men, the loss of wages and benefits over a lifetime amounts to $284,000. It’s even worse for women at $324,000. People who do drop out often don’t think of the subtle ramifications in addition to the missed years of earnings and income growth. They forget about the 401 (k) match, the value of employee benefits, the career trajectory, and the roadblocks they might find when they try to get back into the workforce at the same salary level. Actually, continued employment might be the best thing to do, not only to maintain financial health but also for physical and mental health as well. Caregivers often say that work helps them take a break from the intensity and emotions of caregiving.

So what is a potential strategy?
Both the family and the financial professional can take the initiative and make a difference by confronting the issue of financing care early, before it is too late. A conversation with family members and with an advisor about care planning—who will provide care, where will care be delivered and how will it be paid for—is a very important step. It’s often forgotten or put off. Another topic of discussion with an advisor is what long term care protection options are available, not only to find out whether parents might be eligible but also as a planning tool for the adult children themselves. Financing the quality care that we all want and helping our families cope when they assume caregiving roles should be top of mind and incorporated into any discussion of long-term care.

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Caregivers At Risk.

It is not easy to talk about our parents or even ourselves getting older and some day needing help with very basic things. Here is information designed to educate the public about these issues.

Finding the words to begin a long term care conversation. (Genworth)

Beyond Dollars Infographic exposing the true costs of a long term care event. (pdf)

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LongTermCare.gov – Basic information about what is covered by Medicare and Medicaid.

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There are different ways to fund long term care: self-insure, long term care insurance*, life insurance or annuity with a long term care rider*, life insurance with a chronic illness rider*, Medicaid.
* Insurance is medical underwritten. Insuring locks in age and health.
27% of applicants ages 60-69 are declined because of health.

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Americans underestimate senior care costs

A crisis may be growing around the need for senior care, and a lack of realistic perceptions and planning for it.

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“The trials and tribulations of child care are widely discussed and known,” said Jody Gastfriend, vice president of Senior Care at Care.com. “However, those issues are only part of the care challenges families face. Nearly half of U.S. adults in their 40s and 50s are already in the Sandwich Generation caring for a child and an aging parent. And with the number of people over the age of 65 set to nearly double by 2050, the emotional and financial weight of senior care is only going to intensify for families.”

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Testing long-term memory may provide earlier Alzheimer’s warning

 

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The current tests for Alzheimer’s disease assess short-term memory. A new study by scientists at the University of Edinburgh indicates that testing memory over a long timescale may help doctors detect the disease earlier.

Early detection of Alzheimer’s is important to give doctors the best chance of treating it. The researchers recommend a long-term memory test combined with a brain scan to identify early abnormalities that might otherwise go undetected.

Doctors giving the test would ask pagenworth nursing cost 2016tients to remember events from several years ago, rather than from earlier that day.

In the study, published in the Journal Nature Communications, scientists taught two groups of mice, one with Alzheimer’s and one healthy, to find a hidden platform in a pool of water, using signs on the wall to navigate. When tested shortly after the initial training, both grou
ps of mice were able to remember where the platform was. However, one week later, the mice with Alzheimer’s had much more difficulty remembering how to get there. Brain activity tested normal in both groups of mice when no task was given.

Alzheimer’s disease is caused by beta amyloid proteins building up in the brain to form plagues and tangles. These formations cause loss of connection between nerve cells and eventually result in the death of nerve cells and loss of brain tissue.

Alzheimer’s and other dementias present one of the biggest challenges in health care today.

For statistics on Alzheimer’s disease, go to Guide To Long Term Care – Alzheimer’s


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New blood test for Alzheimer’s disease

Researchers have developed a blood test to detect early stages of Alzheimer’s disease.

Scientists at Rowan University in New Jersey have developed a blood test that can detect mild cognitive impairment (MCI). MCI usually appears ten or more years before the severe symptoms of Alzheimer’s disease.

Not everyone with mild cognitive impairment goes on to get Alzheimer’s. MCI can be caused by multiple sclerosis, Parkinson’s Disease, vascular problems, depression, traumatic brain injury, and other conditions.

HomeNursingHomeAccording to researchers at Rowan, their blood test can distinguish between different forms of cognitive impairment, and, using a small number of blood-borne autoantibody biomarkers, can predict with nearly 100 percent accuracy the cases that will progress to advanced Alzheimer’s disease.

The study tested the blood of 236 subjects, 50 of whom had MCI. If the original findings are confirmed by a larger study, doctors could use the test to make treatment recommendations. The care of those who have early Alzheimer’s would be different from those who have MCI for different reasons.

Early detection of Alzheimer’s is important so that treatment can begin when it is most beneficial, before a lot of brain changes have occurred.

The research will be published in a future issue of Alzheimer’s & Dementia: Diagnosis, Assessment & Disease Monitoring.

For more information on Alzheimer’s disease, see Guide To Long Term Care.

It is estimated that unpaid family members take up 2/3 of the cost of long term care. Long term care insurance can help pay for both home care and nursing home care. Two LTC insurance companies include a (limited) cash benefit that can be used to pay family members, many of these policies have Partnership asset protection. Also available are life policies with long term care riders and some companies have a cash benefit.

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Home care and nursing home care – some facts

In the United States, over 65 million people provide home care to someone who is ill or disabled.

Elderly people who live at home and have trouble with 3 or more activities of daily living require an average of 9 hours of assistance per day (from paid or unpaid caregivers), and once they reach age 85  they require about 11 hours of assistance per day.

There are about 52 million caregivers assisting adults over age 18, with about 44 million caring for adults over 50; around 15 million family caregivers help people with Alzheimer’s and dementia.

ltcstudyTwo out of three (66%) people who receive home care rely solely on family members, usually wives or daughters. Another 26% receive a combination of family care and paid help; and 9% receive paid help only. Of family members caring for the elderly, 30% are themselves over 65, and 15% are age 45–54.

Nursing home patients are 75-80% women. Many of them care for their husbands at home, then have no one to care for them.

Lost income and benefits over a caregiver’s lifetime are estimated at $283,716 for men or $324,044 for women.

The great majority (80%) of elderly people who need assistance live in private homes rather than institutions. However, community-based care accounts for only about 18% of long term care expenditures for the elderly. Care in a skilled nursing facility (SNF) costs four times as much as paid care at home. In addition to being less expensive, home care is what most Americans prefer.

For those who need nursing home care, the average price per year of skilled care in a semi-private room is $82,000 in 2016. It varies by region: Texas is $55,000 a year; California $91,000; Connecticut $148,000; Alaska $292,000. Skilled care in a private room is about 10% more. Assisted living costs are about half of nursing home costs.

By contrast, private paid care in a patient’s home costs about a third as much as care in a nursing home, depending on how much care the patient needs. However, if the home patient needs round-the-clock skilled care it can cost $10,000 – $15,000 a month, which is comparable to nursing home costs or even more expensive.

About half of people who go into a nursing home will stay no longer than 6 months; the other half average 3-4 years.

It is estimated that unpaid family members take up 2/3 of the cost of long term care. Long term care insurance can help pay for both home care and nursing home care. Two LTC insurance companies include a (limited) cash benefit that can be used to pay family members, many of these policies have Partnership asset protection. Also available are life policies with long term care riders and some companies have a cash benefit.

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American death rate rises for the first time in a decade; attributed to drug overdose, suicide and Alzheimer’s

For the first time since 2005, the United States mortality rate has increased. There were 729.5 deaths per 100,000 people in 2015, and  723.2 in 2014, according to the National Center for Health Statistics.

Experts say the increase could be connected to an increase in suicides, Alzheimer’s disease, and drug overdoses among white working class Americans.

The national mortality rate has been on a steady decline for years so an increase is unusual. For example, American Deaths per 100,000 people were 885.9 in 2002; 813.7 2004; 815 in 2005; 723.2 in 2014; and 729.5 in 2015. Heart disease and cancer are by far the largest killers of Americans.

The last increase in mortality was in 2005, during a bad flu season.

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Physicians blamed more U.S. deaths on Alzheimer’s disease in 2015 than in 2014. During a period when the age-adjusted death rate for heart disease, cancer, pneumonia and influenza held steady, the age-adjusted death rate for Alzheimer’s disease increased from 25.4 deaths per 100,000 in 2014 to 29.2 deaths per 100,000 in 2015. Some observers say the rise in Alzheimer’s deaths may simply reflect more accurate recording on death certificates.

Drug overdoses rose in 2015. In the second quarter of 2014, the rate was 14.2 per 100,000 and for the same quarter in 2015, it was 15.2. Numbers for the second half of 2015 have not yet been released.

Suicides rose from 12.7 per 100,000 in the third quarter of 2014 to 13.1 in the same quarter of 2015.

Over a 40 year period, Alzheimer’s disease is projected to cost $20 trillion in constant dollars to Medicare and Medicaid alone, rising to over $1 trillion per year by 2050.

For more information and statistics on Alzheimer’s, see Guide To Long Term Care.


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