Retirement News : Seniors : Baby Boomers and Long-Term Care for Their Parents

Baby Boomers and Long-Term Care for Their Parents

Date Added: 13-06-2005

Much has been written about the maturing of the baby boom generation. One of the phenomenon facing the baby boomers is the long-term care of their parents. The baby boomers may be the first population segment where homecare is not a viable alternative for their parents. With two wage earner families, the decline of the nuclear family, and the trend toward suburban life, the option to bring parents home for their final years is diminishing. In addition, the cost of healthcare providers for in home service is growing more rapidly than the cost of residential facilities. The cost to provide 24 hour home care can exceed 1.5 times the cost of a residential care facility.

Businesses today, particularly small businesses, are concerned about the rising cost of healthcare insurance. A hidden cost, but equally devastating, is the cost of lost hours due to the care provided to parents and other senior members of the employee’s family. The small business owner and their key employees need to know how to navigate through the quagmire of elder care.

WHAT IS THE THREE-YEAR RULE?

The answer is much more involved than this article could ever hope to provide. Therefore, I am leaving the answer to the elder care and Medicaid planners. However, I do offer some random thoughts.

First and foremost, seek professional assistance. Do not rely on hearsay from friends and family. You need to understand the entire concept of the look back provisions of the Medicaid law as it relates to your family, as different provisions affect each family in a distinct and profound manner.

Sooner is always better than later; however, one is never too late. There are many options when discussing spending down and the three-year look back provisions, but consider the gifting provisions as an important option. The gift tax law allows an annual exclusion (exempt from gift tax) which can be utilized each and every year. Understand how the annual exclusion works and how you can use both spouses’ exclusion regardless of the ownership. Furthermore, gifting can include a second generation, thereby increasing the amount of the gift.

Always consider prepaid funerals. I recognize there is nothing more gruesome than planning one’s own funeral. However, from a purely business prospective, a prepaid funeral is an absolute win–win situation. You are afforded a certain amount of inflation protection, decisions are made when emotions are not a major factor, and payments are generally outside the estate.

However, the most important point is to seek professional assistance and understand the economic provisions of the Medicaid law, the look back period, and the theory of asset spend down. This whole concept is asset preservation. The plan is to preserve your parent’s assets for the benefit of a future generation, as allowed within the Medicaid laws. Each and every individual can make their own decision regarding the morality and applicability of Medicaid, but each family should have a thorough knowledge of the rules and regulations of this important concept.

DO NOT SEND ME TO THE HOME

The moral dilemma of being the decision maker for an elderly parent presents a monumental dilemma. What is best for your parents, what makes the most sense from a cash flow position, and what do your parents want. I believe we can state for the record that no one has ever said "Oh, boy, I cannot wait to get to an adult care facility." Unfortunately, there may be no other viable alternatives. Rather than feel guilty about the decision, or worse, to not make a decision, one should proceed in a deliberate and thoughtful manner.

Spend time talking with friends and family that have been through this process. This is a horrible time to be independent and make isolated decisions. Learn from other people’s experience, and allow yourself to investigate all sides.

Talk to people in the healthcare business. Talk to hospital staff, adult care facility staff, social workers, medical professionals, and anyone else who works with the elderly. Go visit adult care facilities. There are many levels of facilities ranging from independent apartment settings to the traditional nursing home. Look at several facilities and talk with the caregivers that have family at each of the facilities. Some of the best information can be obtained from family members who have been through the process and are now living with their decision.

However, some of the best information available is simply to observe the medical condition of the residents. I believe there is a strong temptation to place your parent with fellow seniors who are as healthy or healthier than your parents. I suggest just the opposite – place your parents with individuals that are as healthy or less healthy than your parents. If you place your parents in a facility where they are, at best, in the lower half of the healthy scale, then they may not be a resident in that facility for very long. At some point their healthcare needs may exceed what the facility offers and they will have to move to a more intense (and usually more expensive) facility. On the other hand, if your parents move into a facility where they are one of the more healthy members in the community, then they may become long term residents in the community. The less you disrupt your parents’ lives, the more successful the move will be.

For More Information: http://www.oswegocountybusiness.com/issue78/78SpecialArticle.html