Spring 2001 , Vol 5 , Issue 1
Paying for Long Term Care

This issue of the Senior Care Management newsletter is dedicated to the subject of Paying for Long Term Care. In our work with families during the past ten years we have had the opportunity to talk with many people about their concerns regarding elderly family members. We have also had the chance to speak with older adults themselves about their worries and concerns when care is needed. Everyone finds the high cost of long-term care disturbing, as well as the fact that private funds have to be utilized in most cases. This is the crisis of long term care and one that is increasingly important as our aging population grows. We believe that informed and prepared consumers make the best clients and we hope that this newsletter will provide you with the necessary information to start planning for your own long term care needs.

LONG TERM CARE
What is it?

Long term care is different from other medical care in both duration and types of services. Usually someone with a physical illness, a disability or a memory or thought problem (like Alzheimer's Disease) will need long term care. Long term care covers a variety of services that help people with chronic conditions overcome the limitations that keep them from being independent. This care may include custodial care, which describes help with the activities of daily living such as dressing, bathing, and eating, or home care tasks such as cooking, laundry and dish washing.

There are numerous services and facilities providing long term care. Some examples are:

• Nursing homes: this is the setting providing the most medically intensive care and is licensed and regulated by the State as well and funding sources such as Medicare. Nursing homes vary in size; some are non-profit and most are private. Residency costs between $175 and $250 per day (or $60,000 plus per year) in New Jersey. Other costs, such as medication, laundry services and some personal care supplies are usually additional.
• Assisted Living: these facilities represent a recently-developed level of care in New Jersey. This option provides housekeeping and social activities in a homelike setting, larger private rooms, attractive living areas, supervised meals, medication monitoring, on-site physician visits and some bathing and personal care assistance. Some are dedicated to caring for the memory impaired; some of these have special locked dementia units. Almost all are for-profit and they cost on average between $3,000 and $4,500 per month--some having levels of care (for additional fees) for additional personal care as determined by the facility.

Home care: this includes homemaker and home health services, supervised by an R.N. (as required in New Jersey). Helpers come to the home to provide assistance in bathing, help with dressing, meal preparation, assistance getting to appointments, grocery shopping, medication reminders and socialization. Average hourly rates for services range between $15 and $20.00 per hour. These prices represent licensed agency rates (see SCM Newsletter, Fall 2000).

Adult Day Care: this setting provides socialization and activities in a group setting for frail or memory impaired adults. There are a variety of programs for those with cognitive or physical impairments. Usually running from morning to late afternoon these programs offer social activities geared towards the specific impairments of those attending. They may also provide meals, medication monitoring, transportation to and from and support groups for families. The cost usually runs between $45 and $65 per day.

Continuing Care Retirement Community: facilities that provide a continuum of care usually nursing home and independent living, new facilities offer the additional assisted living level. These facilities require a buy-in or deposit and then a monthly maintenance fee. The advantage is that those who eventually need nursing care pay a fixed amount less than the average cost of nursing home care and can stay in the same complex as they age. Typical deposits range from $50,000 to $200,000 +, and maintenance fees of $1,000 to $3,000 each month.

LONG TERM CARE
Who pays for it?

Medicare

Medicare is the national health insurance system for the elderly. Many beneficiaries believe that it pays for all nursing home and home care but this is not the case. You cannot depend on Medicare alone to pay for Long Term Care, and Medicare Supplement Insurances like AARP only help pay for services that Medicare approves.

Traditional Medicare pays for medically necessary care under Part A (hospital insurance) and Part B (medical insurance). You must meet certain conditions for Medicare to cover skilled nursing facility care, home health and hospice care. Medicare does not cover custodial care and it is always time-limited. (Source: Health Care Financing Administration "Medicare & You 2001.") For more information on Medicare, contact 1-800-MEDICARE or look up <www.Medicare.gov> on the internet for help with Medicare questions.

Long Term Care Insurance

This insurance will pay for some or all of your long-term care. This insurance is relatively new and was originally called "nursing home insurance", but the new generation of policies cover home care, day care and assisted living facilities. Policies can be expensive if purchased after age 70 and many insurance experts suggest starting shopping for a policy in your 50"s. Many buyers can now deduct at least some of their premiums and not pay taxes on policy reimbursements. Premiums can be in the range of $3,000 to $5,000 annually for those over 70 and closer to $1,400 to $2,300 for those in their late 40's and 50's.

Be aware that premiums vary according to benefits-length of coverage, amount of per day benefits and amount of time before benefits begin after services start. The earlier you purchase long-term care insurance, the greater chance that you'll be able to qualify for coverage and the lower premium. Coverage can also be concentrated on the spouse more likely to need long-term care if a couple is being insured.

For assistance in evaluating policies or filing claims, help is available through the State Health Insurance Program (SHIP) of Mercer County at 609-924-7108; for other county offices contact your local Office on Aging.

Medicaid

Medicaid is the health insurance for the poor funded by the State and Federal government, including those who have become poor by paying for nursing home care. It is the payor of last resort and the largest financier of nursing homes nationwide. More nursing homes are certified for Medicaid than Medicare, and in New Jersey nursing homes who accept Medicaid clients must maintain 45% of their population on Medicaid at all times.

Nursing homes receive higher rates for private clients than they can charge for Medicaid clients and so may prefer private clients, but in New Jersey it is illegal to require that Medicaid-eligible clients finance their own care as a condition for using Medicaid. Many homes do have a waiting list for Medicaid clients, but not for those paying privately, if the nursing home has their required percentage of Medicaid clients.

In addition to financial eligibility, an individual must also be deemed medically appropriate by a Medicaid nurse for nursing home level care to use this funding. To qualify, an application must be filed showing several years of banking records. All assets are considered (except a home if a spouse or a qualified family member is resident) and all income must be turned over to the nursing home. There is a "spousal allowance" whereby income can be kept at home to support a spouse and half the accumulated assets up to a set limit. Medicaid also has waiver programs that pay for some assisted living, but assisted living facilities are not mandated to participate in this program, so beds are not available in every facility or county. Other waiver programs cover alternate family care homes, and there are some community care programs that pay for home and day care and other services--these are available in each county.

Call the New Jersey Ease Program if you have questions about the Medicaid program (1-800-792-8820), or call your county Office on Aging.

Respite Long Term Care

There are programs that provide respite care for care givers of older persons needing long term care. Each county has a State-funded respite program for financially eligible individuals. This program does have limitations on the number of people that can be assisted and in the amount of services a family can obtain each year, but it can provide much needed short-term help. Some of the services covered are homemaker/home health, adult day care and in-patient care (on a temporary basis in an appropriate facility). Call the New Jersey Department of Health & Senior Services at (609)588-2902 for information. The New Jersey Alzheimer's Association also has a Respite Program that pays for up to $500 for a six-month period beginning on the day of acceptance into their program. Clients must live in one of the 14 counties covered by the Greater N.J. Alzheimer's Association Chapter, be diagnosed with the disease or a related dementia and submit an application stating their need. Other specifics can be obtained by calling the Greater N.J. Chapter at (973) 586-4300.

New Programs

Two new long term care needs programs in New Jersey are the Caregiver Assistance Program (CAP) and the Jersey Assistance for Community Caregivers (JACC). These programs provide a wide range of in-home services and have income and asset limitations higher than traditional Medicaid programs. There is a "cost share" responsibility and a limit to the amount that can be spent on a client in a month for each program. Call the Mercer County Office on Aging Ease Program at (877)222-3737 for information.