Long-Term Care At Home Without Breaking The Bank

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The vast majority of older adults choose to receive long-term care at home and not in nursing homes. But many people forget to make plans for this very important expense.

Nor do they see long-term care insurance as a viable option — because it is expensive and often seen as protection against the cost of only nursing home care.

That should change, some experts contend. If the long-term care insurance industry focused more on helping people cover home-based services, they argue, policies would be more affordable, and potentially appealing.

Long-term care, for most people, is a home care problem. It makes sense to insure people for the likelihood of where care is going to be needed first — which is at home.

Genworth, one of the nation’s leading long-term care insurers, acknowledged that this position is supported by industry claims data.

“Primarily, we are seeing people utilizing home care and a smaller percentage using nursing home care,” said Beth Ludden, Genworth’s senior vice president for long-term care insurance products.

“People think, ‘While I might start out needing care at home, eventually I’ll need to be in a facility,’” Ludden continued. “But that’s not something we see in our data. For the most part, people are able to stay at home for the whole time.”

Currently, more than 6 million older Americans are thought to have a “high need” for long-term care, according to a report from the U.S. Department of Health and Human Services. That’s defined as requiring daily assistance with two activities (eating, bathing, toileting, dressing, continence or transferring from a bed to a chair) that lasts at least 90 days or a need for substantial assistance due to severe cognitive impairment.

About 52 percent of adults reaching age 65 today will need these services — 26 percent for two years or less; 12 percent for two to four years; and 14 percent for more than five years, the HHS report projected.

Yet fewer than 10 percent of older adults have purchased long-term care insurance, which has somewhat declined in popularity as premiums skyrocketed and insurers exited the market over the past decade. Whether the industry can fix its major problem — affordability — remains to be seen.

From a consumer’s perspective, if the goal is covering several years of home-based care, not nursing home care, a person can purchase a less expensive policy without all the bells and whistles that drive up costs.

A 55-year-old couple buying a policy of this kind — say, $4,000 a month in benefits for each person, for a maximum of three years, with a 1 percent compounded annual inflation protection provision — from a major insurance company would pay $2,380.05 a year in premiums. It’s common for policyholders to pay premiums for 10 or 20 years before claiming benefits. Terms are similar in most states.

How much help in the home might this policy provide?

According to 2016 data compiled by Genworth, the average annual cost for care provided by a home health aide was $46,332, compared with $82,128 for a semiprivate room in a nursing home. That translates into $3,861 a month, for 44 hours of home care a week — the equivalent of slightly more than six hours of care, seven days a week.

That might not be enough for seniors with serious, disabling illnesses, but it can provide much-needed relief to unpaid family caregivers who could otherwise be on call nonstop.

What happens if someone ends up needing nursing home care?

People might consider what is known as a “qualified long-term care partnership policy” — a plan available in every state except Alaska, Hawaii, Illinois, Massachusetts, Mississippi, New Mexico, Vermont and Washington, D.C. 

These little-known insurance products are designed to help consumers preserve their assets if they become seriously ill, need nursing home care and seek to become eligible for Medicaid, which pays for nearly half of nursing home costs in the U.S.

To qualify for Medicaid, most states require that an individual have no more than $2,000 in assets; couples are allowed to have up to about $120,000, so that a well spouse does not become impoverished. With a partnership policy, every dollar received in long-term care benefits is exempted from Medicaid’s asset test and protected from seizure by the state.

In other words, if you get $200,000 in benefits from a partnership policy and your state has an asset limit of $2,000 for Medicaid, you can keep $200,000 in assets plus the $2,000 allowed and still meet your state’s asset test.

Partnership policies do not guarantee Medicaid eligibility and a person would still have to meet whatever income standards their state sets for Medicaid. (Many, but not all states, allow people to “spend down” to qualify, using their income to pay for institutional care.)

Alan, 61, of Las Vegas, purchased a partnership policy three years ago because it allows him to retain control of his financial assets, even if he needs caregiver services. Another plus: The policy permits him [if he decides to stay at home] to take a certain amount of the monthly amount and give it to someone he chooses to provide care for him, even if that person is a family member.

There is no reliable national data about how many people with partnership policies end up going on Medicaid to cover nursing home care. Nor is there good data about the number of these policies that have been sold or the benefits paid out to date.

David Guttchen, who directs the Connecticut Partnership for Long-Term Care, the first such program in the country, is skeptical about policies with benefits that will cover only a portion of expected costs. (Four states, including Connecticut, were the first to launch partnership programs and have special rules.)

“A person absolutely needs to know what the average home care and nursing home costs are for their state, to get a sense of what the exposure might be,” he said. “If you don’t buy meaningful benefits, you’re wasting your premium.”

If a person is able to cover a good amount of home care but the policy does not cover nursing home care, some protection is gained, for a while, but a person could still pay an enormous amount out-of-pocket going forward, if Medicaid is not an option.

It’s a gamble because people cannot be sure what kind of care they will need in the future, or for how long, or what the future of Medicaid will offer. Before buying any policy, consult with an elder law attorney and an independent insurance adviser.

New Nursing Home Rules: Residents Control Their Care

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elderly-with-caregiver-thumbs-upAbout 1.4 million residents of nursing homes across the country now can be more involved in their care under the most wide-ranging revision of federal government rules for such facilities in 25 years.

The changes reflect a shift toward more “person-centered care,” including requirements for speedy care plans, more flexibility and variety in meals and snacks, greater review of a person’s drug regimen, better security, improved grievance procedures and scrutiny of involuntary discharges.

“With proper implementation and enforcement, this could really transform a resident’s experience of a nursing home,” said Robyn Grant, director of public policy and advocacy for the Consumer Voice, a national group that advocates for residents’ rights.

The federal Medicare and Medicaid programs pay for most of the nation’s nursing home care — roughly $75 billion in 2014 — and in return, facilities must comply with government rules. The new regulations, proposed late last year by Health and Human Services Secretary Sylvia Mathews Burwell, take effect in three phases. The first began in November 2016.

They allow residents and their families “to be much more engaged in the design of their care plan and the design of their discharge plans,” said David Gifford, a senior vice president at the American Health Care Association, which represents nearly 12,000 long-term-care facilities.

Grant goes even further, saying the new approach puts “the consumer in the driver’s seat.” Until now, she noted, a person’s care has too often been decided only by the nursing home staff. “And if the resident is lucky, he or she is informed about what that care will entail, what will specifically be done and who will do it.”

HHS reviewed nearly 10,000 comments on its draft proposal before finalizing changes. One controversial measure in the department’s final rule would prohibit nursing homes from requiring residents to agree in advance to have any disputes settled through a privately run arbitration process instead of the court system. The industry association objected, claiming that Medicare officials have authority only to regulate matters related to residents’ health and safety and that an individual’s rights to use arbitration cannot be restricted. The ban is on hold until the association’s lawsuit, to force the government to drop the provision, is decided.

Here are highlights of the requirements now in effect:

Making the nursing home feel more like home: The regulations say that residents are entitled to “alternative meals and snacks … at non-traditional times or outside of scheduled meal times.” Residents can also choose their roommates, which may lead to siblings or same-gender couples being together. And a resident also has “a right to receive visitors of his or her choosing at the time of his or her choosing,” as long as it does not impose on another resident’s rights.

Bolstering grievance procedures: Nursing homes must now appoint an official who will handle complaints and follow a strengthened grievance process. Decisions must be in writing.

Challenging discharges: Residents can no longer be discharged while appealing the discharge. They cannot be discharged for non-payment if they have applied for Medicaid or other insurance, are waiting for a payment decision or appeal a claim denial.

If a nursing home refuses to accept a resident who wants to return from a hospital stay, the resident can appeal the decision. Also, residents who enter the hospital have a right to return to their same room, if it is available.

A state’s long-term-care ombudsman must now get copies of any involuntary discharges so the situation can be reviewed as soon as possible.

Expanding protection from abuse: The definition of abuse now includes financial exploitation. Nursing homes are prohibited from hiring any licensed professional who has received a disciplinary action because of abuse, neglect, mistreatment or financial exploitation of residents.

Ensuring a qualified staff: Consumer groups had urged federal officials to set minimum staffing levels for registered nurses and nursing staff, but the industry had opposed any mandates and none was included in the final rule. Instead, facilities must have enough skilled and competent staff to meet residents’ needs. There are also specific training requirements in caring for residents with dementia and for preventing elder abuse.

“Competency and staffing levels are not mutually exclusive,” said Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy. Person-centered care and other improvements “mean nothing if you do not have the staff who knows the residents … and can figure out why Mrs. Smith is screaming.”

Yet, requiring a certain number of nurses could backfire, said Gifford. “It could actually result in some places that are above those ratios by lowering their staffing levels, other places that would increase staffing when it is not necessary, and could be putting their resources into better care to meet the needs of the residents.”

 

New Regulations: Modernizing Nursing Home Care

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After nearly 30 years, the Obama administration wants to modernize the rules nursing homes must follow to qualify for Medicare and Medicaid payments. There are hundreds of pages of proposed changes that cover everything from meal times to the use of anti-psychotic drugs to staffing.

Some are required by the Affordable Care Act and other recent federal laws, as well as the president’s executive order directing agencies to simplify regulations and minimize the costs of compliance.

“Today’s measures set high standards for quality and safety in nursing homes and long-term care facilities,” said Health and Human Services Secretary Sylvia M. Burwell. “When a family makes the decision for a loved one to be placed in a nursing home or long-term care facility, they need to know that their loved one’s health and safety are priorities.”

Officials announced the update at the recent White House Conference on Aging.  The once-a-decade [10 years ago] conclave set the agenda for meeting the diverse needs of older Americans, including long-term care options. July 30, 2015, also marked the 50th anniversary of the Medicare and Medicaid programs, which cover almost 125 million older, disabled or low-income Americans. Medicare and Medicaid beneficiaries make up the majority of residents in the country’s more than 15,000 long-term care facilities.

“The existing regulations do not even conceive of electronic communications the way they exist today,” said Dr. Shari Ling, Medicare’s deputy chief medical officer. “Also there have been significant advances in the science and delivery of health care that just weren’t imagined at the time the rules were originally written. For example, the risks of anti-psychotic medications and overuse of antibiotics are now clearly known, when previously they were thought to be harmless.

The proposed regulations include a section on electronic health records and measures to better ensure that patients or their families are involved in care planning and in the discharge process. The rules would also strengthen infection control, minimize the use of antibiotic and anti-psychotic drugs and reduce hospital re-admissions.

Revised rules would also promote more individualized care and help make nursing homes feel more like home.  For example, facilities would be required to provide “suitable and nourishing alternative meals and snacks for residents who want to eat at non-traditional times or outside of scheduled meal times.”

Residents should also be able to choose their roommates.  “Nursing facilities not only provide medical care, but may also serve as a resident’s home,” the proposed rules say. “Our proposed provision would provide for a rooming arrangement that could include a same-sex couple, siblings, other relatives, long term friends or any other combination” [as long as nursing home administrators] “can reasonably accommodate the arrangement.”

Consumer advocates are likely to be disappointed that officials are not including recommendations to set a federal nurse-to-resident ratio.

However, the proposed changes would require that nurses be trained in dementia care and preventing elder abuse to better meet residents’ needs.

“We believe that the focus should be on the skill sets and specific competencies of assigned staff,” officials wrote in the proposed rules, “to provide the nursing care a resident needs rather than a static number of staff or hours of nursing care that does not consider resident characteristics.”

Nursing homes will be required to report staffing levels, which Medicare officials said they will review for adequacy.

“It’s a competency approach that goes beyond a game of numbers,” said Ling. “If residents appear agitated, figure out why, get at the cause of the problem,” she said, instead of resorting to drugs to sedate residents.

Advocates for nursing home residents argue that because of inadequate staffing, residents with dementia are often inappropriately given anti-psychotic drugs, even though that can be dangerous for them. The new rules would help control the use of these drugs by requiring the facility’s pharmacist to monitor drugs that are prescribed for excessive periods of time or other irregularities and require the resident’s physician to address the problem or explain in the resident’s medical record why the medication is necessary.

“We don’t have enough nursing staff,” Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy, said before the rules were released.  Federal law requires only one registered nurse on the day shift for a 20-bed facility or for a 500-bed facility, licensed practical nurses around the clock and sufficient staff to meet residents’ needs, she said.

“We don’t look at the specific staffing positions per se,” said Greg Crist, a spokesman for the American Health Care Association, which represents 11,000 skilled nursing facilities. “We look at the needs of the individuals when determining staff levels, and that is best addressed in the resident’s care plan.”

Although there are also no provisions addressing enforcement in the proposed rule, Ling said  it “will permit detection of violations to enable enforcement by lessening the noise.”

“The biggest problem is that the rules we have now are not enforced,” said Edelman.  “We have a very weak and timid enforcement system that does everything it can to cajole facilities into compliance instead of imposing penalties for noncompliance.”

A report by the Center for Medicare Advocacy found last year that often some serious violations were not penalized.

“Once the new rules are finalized, they will be added to the items nursing home inspectors check,” Ling said.