Illinois’ SMART Act Changes – Fewer Programs Available, Especially for Seniors

As readers of this blog are aware, Governor Quinn signed the SMART bill into law on June 14th.  This means big changes to the programs available from the State of Illinois, especially for Seniors.

The biggest impact for most Seniors will be the elimination of the Illinois Cares Rx and Circuit Breaker Property Tax Relief programs.  Thousands of people will no longer receive drug plan coverage with no premium.  If you were previously covered by Illinois Cares Rx, you will now need to pay a monthly premium for your drug plan.  Those who have not been contacted by their drug program provider, should contact them to find out the amount of their premium.  Premiums are due beginning July 1.  If you refill a prescription after July 1, you will want to show your pharmacy your new prescription card, or you may be charged full price.  If you don’t have a new card, contact your plan provider.

New Illinois Law Bad For Seniors

Last week, Illinois Governor Quinn signed into law reform bill SB2840. The bill completely eliminates funding to the Illinois Cares Rx program.  This program helped thousands of Illinois seniors access necessary prescription drugs that they otherwise would be unable to afford.

Illinois Cares Rx was cut to help Illinois cut their budget in order to recover from its financial crisis, but the cuts are likely to cause more financial burden on an already weakened hospital system and eventually higher costs to the state.  With the soaring cost of prescription drugs, seniors without aid will be forced to make decisions like paying for utilities or paying for prescription drugs.  For those that choose to reduce their dosages or quit taking their pills altogether, it is easy to see how expensive emergency room visits will be on the rise.  

Illinois Attempts to Make Drastic Cuts to Medicaid

Illinois lawmakers are currently in the process of putting together budget bill for the State of Illinois.  As part of this, the Illinois Department of Human Services is negotiating with lawmakers to make an end-run around the Administrative process by instituting draconian cuts to the Medicaid program through the budget process.  While cuts and revenue enhancements are needed everywhere in the Illinois budget, some of the proposed changes by DHS are truly draconian and will adversely effect Seniors around the State.

Will the Government Pay for My Long Term Care?

A study by the U.S. Department of Health and Human Services says that “people who reach age 65 will likely have a 40 percent chance of entering a nursing home.  About 10 percent of the people who enter a nursing home will stay there five years or more.  This year, about nine million men and women over the age of 65 will need eldercare.  By 2020, 12 million older Americans will need eldercare.   Most will be cared for at home; with family and friends as the sole caregivers for 70 percent of the elderly”. Medicare.gov

How To Protect The Family Home From Medicaid Recovery

When confronted with the out-of-pocket costs of long-term, and the possibility of utilizing Medicaid to help pay those costs, the most common question I hear is, “Am I going to lose my house?”

Does My Family Need A Caregiver Contract?

For many, the only option to receive regular in-home care is to rely on a family member to provide the needed services. Whether the reason is financial or personal preference, it is essential to have a contract between all parties involved if there are any type of wages paid to the caregiver.

The basic caregiver contract should be signed and dated by the parties involved and describe the services that are to be provided as well as the wage that will be paid to the caregiver. A well written contract will help eliminate confusion about what is expected from the caregiver and the care recipient. The contract is especially important and needs to be carefully prepared if the person being cared for ever needs to qualify for Medicaid coverage.

Important aspects to consider in order for a contract to be Medicaid eligible are:

• Fairmarket Reimbursement Rates – Some states have a maximum wage that can be paid to a caregiver
• Proper Documentation – After the wage is agreed upon, carefully document all payroll checks and payroll taxes
• No Pre-Payments – Wages can only be paid after services are rendered. No money can be paid for future services
• Prescribed Services – Some states require that caregiver services be prescribed by a physician
• Maximum Payments – The total amount allowed for services rendered can also vary state to state
• Think Ahead – The agreement cannot be a last minute deal among family members

Attorney John L Roberts, in his article titled “Caregiver Contracts that Protect Elders and Their Family Members” states:

“A written Caregiver Contract is a good idea for every family that wants to protect family harmony, and make sure everyone in the family understands how care is being provided to an elder.

The family member who provides care can save an elder from needing nursing home services, and may also protect assets if nursing home care is needed in the future. Elders who want to cover all of these bases must have a written Caregiver Contract. Whenever adult children and other family members are providing valuable care, only a written agreement will protect assets from nursing home care costs and qualify the elder for Medicaid.”

In many cases, it may be necessary to consult an elder law attorney to help navigate preparing a contract that follows all of your state’s regulations while also considering Medicaid rules for eligibility. A well prepared contract can help protect your family member’s assests especially if they wind up requiring nursing home care in the future.

If you have any questions about creating a caregiver contract for a family member, please contact the Law Office of Dawn M. Weekly, PC. The law firm located in Sandwich, Illinois and focuses on elder law and Life Care Planning for clients. Their office may be reached by calling 815-570-2334.

Every day of every week, Weekly Law is here for you.

Putting Home Care in Perspective

The Evolution of Home Care

In the first century of our country’s history there was no such thing as nursing homes or assisted living.  Society was mostly rural and people lived in their own homes.  Families cared for their loved ones at home until death took them.  In the latter part of the 1800s, because of an increasingly urban society, many families were often unable to care for loved ones due to lack of space, or because all family members including children were employed six days a week for 12 hours a day.  During this period many unfortunate people needing care were housed in County poor houses or in facilities for the mentally ill.  Conditions were deplorable.  In the early 1900s, home visiting nurses started reversing this trend of institutionalizing and allowed many care recipients to remain in their homes.  Nursing homes or so-called rest homes were also being built with public donations or government funds.  With the advent of Social Security in 1936, a nursing home per diem stipend was included in the Social Security retirement income and this government subsidy spurred the construction of nursing homes all across the country.

By the end of the 1950s it was apparent that Social Security beneficiaries were living longer and that the nursing home subsidy could eventually bankrupt Social Security.  But in order to protect the thousands and thousands of existing nursing homes Congress had to find a way to provide a subsidy but remove it as an entitlement under Social Security.  In 1965 Medicare and Medicaid were created through an amendment to the Social Security Act.  Under Medicare, nursing homes were only reimbursed on behalf of Social Security beneficiaries for short-term rehabilitation.  Under Medicaid, nursing homes were reimbursed for impoverished disabled Americans and impoverished aged Americans over the age of 65.  It has never been the intent of Congress to pay for nursing home care for all Americans.  The nursing home entitlement for all aged Americans was now gone.

Over the last 40 years, there has been a gradual change away from the use of nursing homes for long-term care, toward the use of home care and community living arrangements that also provide in-house care.

With Proper Planning People Could Remain in Their Homes for the Rest of Their Lives 
We are seeing a trend toward working conditions like those in urban America in the early 1900s where both husband and wife are working and putting in longer hours.  We are also seeing a return of the trend in the early part of the 20th century where outside visitor caregivers are becoming available to replace working caregivers and allow the elderly to receive long-term care in their homes.  In addition, there is a significant trend in the past few years for Medicaid and Medicare to pay for long-term care in the home instead of in nursing homes.

Given enough money for paid providers or government funding for the same, a person would never have to leave his home to receive long-term care.  All services could be received in the home.  Adequate long-term care planning or having substantial income can allow this to happen.

We only need to look at wealthy celebrities to recognize this fact.  Christopher Reeve, the movie star, was totally disabled but he had enough money to buy care services and remain in his home.  President Ronald Reagan suffered from Alzheimer’s for many years but received care at his California ranch.  He was also wealthy enough to pay for care when needed.  Or what about Annette Funicello or Richard Pryor?  Income from their movie careers allowed them to receive care with their multiple sclerosis at home.  We will be willing to bet that Mohammed Ali, who is severely disabled with Parkinson’s disease, will probably never see the inside of a care facility, unless he chooses to go there to die.  With the proper planning and the money it provides, most of us could remain in our homes to receive long-term care and we would never have to go to an institution or a hospital.

The Popularity of Home Care 
Most of those receiving long-term care and most caregivers prefer a home environment.  Out of an estimated 8 million older Americans receiving care, about 5.4 million or 67% are in their own home or the home of a family member or friend.  Most older people prefer their home over the unfamiliar proposition of living in a care facility.  Family or friends attempt to accommodate the wishes of loved ones even though caregiving needs might warrant a different environment.  Those needing care feel comfortable and secure in familiar surroundings and a home is usually the best setting for that support.

Often the decision to stay in the home is dictated by funds available.  It is much cheaper for a wife to care for her husband at home than to pay out $2,000 to $4,000 a month for care in a facility.  Likewise, it’s much less costly and more loving for a daughter to have her widowed mother move in to the daughter’s home than to liquidate mom’s assets and put her in a nursing home.  Besides, taking care of our parents or spouses is an obligation most of us feel very strongly about.

For many long-term care recipients the home is an ideal environment.  These people may be confined to the home but continue to lead active lives engaging in church service, entertaining grandchildren, writing histories, corresponding, pursuing hobbies or doing handwork activities.  Their care needs might not be that demanding and might include occasional help with house cleaning and shopping as well as help with getting out of bed, dressing and bathing.  Most of the time these people don’t need the supervision of a 24/7 caregiver.  There are, however, some care situations that make it difficult to provide long-term care in the home.

Please note from the first graph below that a great amount of home care revolves around providing help with activities of daily living.  Note from the second graph below that the average care recipient has need for help with multiple activities of daily living.  Finally, it should be noted from the second graph that well over half of home care recipients are cognitively impaired.  This typically means they need supervision to make sure they are not a danger to themselves or to others.  In many cases, this supervision may be required on a 24-hour basis. (Graphs were derived from the 1999 national caregivers survey, courtesy http://www.longtermcarelink.net.)

It is precisely the ongoing and escalating need for help with activities of daily living or the need for extended supervision that often makes it impossible for a caregiver to provide help in the home.  Either the physical demands for help with activities of daily living or the time demand for supervision can overwhelm an informal caregiver.  This untenable situation usually leads to finding another care setting for the loved one.  On the other hand if there are funds to hire paid providers to come into the home, there would be no need for finding another care setting.

Problems That May Prevent Home Care from Being an Option 
Caregivers face many challenges providing care at home.  A wife caring for her husband may risk injury trying to move him or help him bathe or use the toilet.  Another situation may be the challenge of keeping constant surveillance on a spouse with advanced dementia.  Or a son may live 500 miles from his disabled parents and find himself constantly traveling to and from his home, trying to manage a job and his own family as well taking care of the parents.  Some caregivers simply don’t have the time to watch over loved ones and those needing care are sometimes neglected.

The problems with maintaining home care are mainly due to the inadequacies or lack of resources with informal caregivers, but they may also be caused by incompetent formal caregivers.  These problems center on five issues:

1. Inadequate care provided to a loved one
2. Lack of training for caregivers
3. Lack of social stimulation for care recipients
4. Informal caregivers unable to handle the challenge
5. Depression and physical ailments from caregiver burnout

In order to make sure home care is a feasible option and can be sustained for a period of time, caregivers must recognize these problems, deal with them and correct them.  The responsibility for recognizing these problems and solving them is another function of the long-term care planning process and the team of specialists and advisers involved.

Adequate Funding Solves Most Problems Associated with Providing Home Care 
None of the problems discussed in this article would be an obstacle if there were enough money to pay for professional services in the home.  These services would be used to overcome the problems discussed in the previous section.  If someone desires to remain in the home the rest of his or her life, adequate preplanning could provide the solution.

This planning ideally occurs prior to retirement, but planning can still be done up to the time that a care need begins.  The most obvious way to provide sufficient funds for home care is to buy a long-term care insurance policy when someone is younger, healthy and able to afford the lower premiums.  If insurance is not an option, then money must be put aside early in life to pay for care in the future.  The only other option is to be rich.

Unfortunately, very few people address the issue of needing long-term care when they are older.  This leads to a lack of planning and in turn leads to fewer options for elder care when the time comes.  Lack of planning means most people do not have the luxury of remaining in their homes and must rely on Medicaid support in a nursing home to finish out the rest of their lives.

To find out if you’ve sufficiently planned for long term care, or to start the planning process, give our office a call and schedule a consultation.  815-570-2334.

Every day of every week, Weekly Law is here for you.

Planning for your Elder Years

If we were to ask an older person what his or her most important concerns for aging are, we would probably get a variety of different answers.  According to surveys frequently conducted among the elderly, the most likely answers we would receive would include the following three principal concerns or life wishes:

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.

To address these concerns or wishes and maintain the quality of life wanted in the elder years, it simply takes a little preplanning.  Few people do this preplanning.

It is human nature not to worry about an event until it happens.  We may prepare financially for unexpected financial disasters by covering our homes, automobiles, and health with insurance policies.  However, no other life event can be as devastating to an elderly person’s lifestyle, finances and security as needing long term care.  It drastically alters or completely eliminates the three principal lifestyle wishes listed above.  The majority of the American public does not plan for this crisis of needing eldercare.  The lack of planning also has an adverse effect on the older person’s family, with sacrifices made in time, money, and family lifestyles.

Because of changing demographics and potential changes in government funding, the current generation needs to plan for long term care before the elder years are upon them.  Let’s look at some facts:

*the population of the “very old,” — older than age 85 — is the fastest growing group in America.  This population is at highest risk for needing care.

*Medical science is preventing early sudden deaths, which means living longer with impaired health and greater risk of needing long term care.

*The Alzheimer’s Association estimates the risk of Alzheimer’s or dementia beyond age 85 to be about 46% of that population.

*It is estimated that 6 out of 10 people will need long term care some time during their lifetime.

*Children are moving far away from parents or parents move away during retirement making long distance care-giving difficult or impossible.

*Government programs — already stretched thin for long term care services — will experience even greater stress on available funds in the future.

One of the important things for planning is how to maintain your lifestyle as you age.  You may be healthy enough to stay in your own home with help provided for the following activities of daily living:

• maintaining a home
• providing meals
• supervision
• companionship
• transportation
• shopping services

This type of care at home is non-medical and is generally provided free of charge by family, friends, or volunteers, or the care must be paid for out-of-pocket by the family.  Government programs, in most cases, will not pay for this kind of care.  It is estimated that 80% of all long term care is non-medical, with 90% of that care provided in the home.  It is most likely that your long term care will begin with home care.

It is wise to plan now how you will pay for care when it is needed.  In evaluating your future income, you may find it necessary to add some resources such as long term care insurance to pay for assisted living or nursing home costs.  Long term care insurance must be purchased while you are younger and healthy.  Failing health, stroke or other aging issues will not allow you to qualify for this insurance.

A reverse mortgage may also help you pay for home care if staying in your home is an option.

Consider where you may want to live in your elder years.  Many assisted living facilities offer complete care alternatives with a nursing home wing if needed.  Senior retirement communities also offer many amenities with some including home care options.

Now is also the time to do estate planning.  An elder law attorney will give you direction on how best to protect your assets for future needs and for Medicaid planning.  Now is the time to have your elder law attorney create your trusts, will, medical directives, and any other documents you want noted for future use.  Gather insurance policies and bank records where they can be found by family members in case you are not able to get them yourself.

We don’t like to think of our elder years in terms of health problems, but a sudden stroke, heart failure or onset of dementia could make it impossible to carry out our own wishes if preparation is not made ahead of time.

The process of long term care planning involves the following four principles:

1. Knowledge and preparation are the keys to success;
2. Having funds to pay for care expands the choices for care settings and providers;
3. Using professional help relieves stress, reduces conflict, and saves time and money;
4. Success is assured through a written plan accepted by all parties involved.

Consultation with an elder law attorney will help you institute these principles within a sound long term care plan.

Every Day of Every Week, Weekly Law is there for you.

For more information, please give us a call at 815-570-2334.

Misconceptions About Who Pays for Long Term Care

A large majority of the American public still believes that the government will provide long term care when needed through Medicare.  It is this misconception that most likely prevents people from doing any planning at a younger age for the future need for care.  Contrary to popular belief, once a person requires long term care, as opposed to rehabilitative care from which they will heal and eventually return home, Medicare will not pay for long term care beyond 100 days of in-facility care, only the first 20 of which are covered 100%.

According to the National Care Planning Council (www.longtermcarelink.net) many people believe they can give away assets prior to the need for long term care and qualify for Medicaid.  The Council suggests that this belief prevents people from considering other ways to fund the cost of future care.  In fact, the earlier one starts planning, the more options are available to help protect hard-earned assets from total depletion, and a person’s total impoverishment before government benefits covers their cost of care.

The major governmental program that pays for a person’s long term care costs, once they are impoverished, is Medicaid.  However, Medicaid’s historical bias of paying only for nursing home care, has prevented most people from properly planning for their future long term care needs.  The good news is that Medicaid now covers Assisted Living care, and with the Health Care Reform Act, is shifting its emphasis to paying for more in-home care.  Now it is more important than ever to proactively plan for possible long term care costs by consulting an elder law attorney about the rule and regulations of Medicaid and the best strategies to help you legally retain as many assets as you can.  In addition to helping you protect your assets, proper planning also allows you to have a choice in care setting and in the types of services you receive.

Next week, I’ll talk about how preplanning can help you address these issues.