Retirement News : Seniors : Covering elder-care costs

Covering elder-care costs

Date Added: 20-05-2005

For Ellen Smith of Edison, N.J., it all hit at once last September. Both her parents, previously in good health despite their advanced age, were suddenly struck with physical ailments that required separate assisted-living care for each.

Her father, Jac Cohen, after being diagnosed with Alzheimer's disease, is now at Somerbrook Assisted Living in Somerset, N.J. Her mother Annette Cohen, is recuperating from a kidney infection at Care One in Perth Amboy, a hospital facility that specializes in weaning patients off the respirator she requires. Both are 85.

For now, the bills are under control - thanks to Jac Cohen's military insurance benefits, which the family is using in conjunction with Medicare and out-of-pocket savings. But the future is less certain.

"The hospital said my mother may need a nursing home soon," Smith, 45, said. "With only two in the area there's a long wait for a bed, plus it's incredibly expensive."

Indeed, nursing home care runs over $200 a day on average in the metro area, or over $90,000 a year.

Smith and her family faced the same questions affecting so many forced to deal with the difficult issue of finding quality care for elderly parents. Is the best alternative in-home help or an assisted living facility? What about a smaller house? And if they do move, how important is it to them to stay near family?

With baby boomers now going through these issues as their parents make their way through their 80s, many are socking something away each month or buying Long Term Care insurance as part of an overall retirement plan.

Being unprepared financially to meet the exorbitant costs of elder care can only exacerbate the emotional issues that arise from seeing parents lose some or all of their ability to care for themselves.

"The biggest mistake people make is believing this can't happen to them," said financial planner Michael Goodman of Wealthstream Advisors. But stats from the state insurance department show that 40% of people over 65 will ultimately need some type of long-term health care. And to the surprise of some, medicare doesn't go very far.

Medicare generally pays benefits for skilled care for specific illnesses, not for an ongoing, chronic condition, said Lynn Boyd, director of Long Term Care for the American Council of Life Insurers. Details of medicare coverage can be found at the state's insurance commission Web site: www.ins.state.ny.us.

Meanwhile, the Financial Planning Association says it's vital to review elderly parents' assets to see what kind of income stream is available through savings, pensions and Social Security. Also, talking to them about their financial wishes - what they want to spend, how much they want to leave to heirs or to charities - helps put everyone a little more at ease.

Smith hired Manhattan attorney Russell Adler, who helped her prepare for future costs by selling her parents' Stamford apartment and renting out their Florida condo. Adler also helped Smith update her parents' will and assume power of attorney over their financial affairs. That allowed her to take control of bills and paychecks, which proved valuable when she stumbled upon notices from numerous charities - finding that her father was more agreeable to giving.

"I put an end to that," Smith said.

Grabbing control of a parent's finances is a tricky emotional minefield to navigate, balancing the need to protect family assets against wounding the pride of a once self-sufficient person.

When paying bills, Smith brings the checks she's filled out for her father to sign. That's helped cushion the emotional blow for a World War II vet who once ran his own business, a pet supply store in Greenwich, Conn.

"He was always an excellent financial manager, and seeing some bills were getting in late was a red flag," Smith said.

For More Information:

http://www.nydailynews.com/business/story/311133p-266216c.html