A year ago this week, the News-Democrat & Leader carried a column which attracted more interest and comments than just about anything else I've written during these three decades-plus on the job.
It dealt with getting prepared for long-term health care needs and costs, especially those associated with increasing age.
A year later, I'm more convinced than ever that the most important financial decision you can make is how you will pay not only for medical care but also for everyday care when you can no longer be self-sufficient.
On the Opinion Page (A-4) today appears a column that deserves the attention of anyone who sees his or her parents aging or who plans to do any aging himself.
Ruth Morgan, whose job is to protect the interests of those receiving long-term health care-- for example, those staying in nursing homes, shows deep concern in today's column. She discusses new guidelines involving the recovery of Medicaid funds following the death of someone who has received governmental assistance.
Let me explain what this is all about in terms of our family's own situation.
And let me add this-- what I wrote last year offended both a lawyer and those who work in social services. I'm not trying to blame anyone for the costs that we've incurred. And I'm not an expert on how to avoid them. I only know what we've experienced.
Both of my parents spent a few months at Auburn Nursing Center in years past. They qualified for the maximum 100 days in which Medicare paid most of the costs because 1) he had suffered a stroke and 2) she had broken a leg.
When those 100 days ended, however, they had to either 1) go on Medicaid to pay their costs, 2) pay their own bills out of their personal account or 3) come home.
They couldn't qualify for Medicaid because they had too many assets. And then when all of their money was gone, they still couldn't receive aid because they owned land that didn't qualify as a "homestead exemption" because it's across the road from their house.
We know the expression "a river runs through it," but in Medicaid terms, "a road runs through it" is a lot more damaging.
We were told that that land across the road has to be sold and all that money spent (not bequeathed) before they could qualify.
We don't want to sell that land; we want it to remain in the family. We've tried everything else to keep that from happening.
Yet now that my dad is no longer living, I'm not certain that Mother could ever qualify for Medicaid anyway because she gets about a thousand dollars per month from teacher retirement and another thousand from Social Security. That's probably too much income to qualify for Medicaid. I know it's too much for her to get government aid if she were to go to the active daycare center.
You'd think $24,000 a year would be sufficient for a single person to live on, and it would, if you are self-sufficient. When you're totally dependent on others, it's not close to enough.
Both my parents worked hard the first 60 years of their marriage. They were still able to live alone until Nov. 11, 1999 when she fell and broke her hip. Things have never been the close to the same since.
Mother can't stand or walk and is confined either to her wheelchair or her bed. Otherwise she's doing pretty well for a lady almost 91 years old, but she needs someone with her 24 hours a day.
When I signed the papers for them to be admitted to the nursing home on those two occasions, there was one document stating that the government has the right to recover Medicaid costs from the estate, meaning that upon the patient's death, their home can be sold to get the funds to repay the government for what it spent on their care.
"It's never happened that I am aware of, but they have the right to do it," I was told in both cases.
Now in her column today, Morgan says the government is enforcing that stipulation and forcing estates to repay what has been spent on their care.
That's chilling news.
The cost of long-term care is also chilling. Paying for your own nursing home stay averages $40,000 annually and could easily run much higher.
What if you stay home? It depends on how much care your need. There are some wonderful home health organizations available, but there is a cost involved and they don't move in with you. If government reimbursement is involved, they are limited in how often they can come to your home and for how long.
If you need full-time attention, the costs can be staggering. Maybe you could hire someone at near minimum wage, about $6 an hour. The annual cost would be $52,560 (365 days @24 hours @$6 per hour). Are you ready to pay $144 per day, every day, at the minimum? And good luck at finding someone dependable at that wage, especially if two people have to be cared for.
Also if you stay at home, paying for food, heat and air, water and sewer, etc. is your responsibility. Anywhere you stay, the costs of medicine and physician care have to be considered.
If you go to the doctor, how do you get there, especially if you aren't able to walk? More costs are involved if you need a wheelchair-accessible van.
So how do you prepare? How do you avoid all this?
When your annual retirement income is not enough, other assets-- many of them not easily or readily accessible cash-- have to be used as long as they last.
My parents invested their money in land, cattle and farm equipment with a few CDs, not insurance.
There are ways to deed all your property to your heirs, but it has to be done properly and well in advance.
Risks are involved. I talked with my dad about this long ago while I was still single and while he was one of the sharpest businessmen in Logan County. He said-- and certainly without any ill will, "What if we outlive you? Then we'd have to pay inheritance tax on it to get it back."
I thought about that often the last few years. That was when I was staying up with him all night trying to make him comfortable as we both dealt with the torture chamber his mind had become as a result of disease. There were times that I really believed he would outlive me, because I was working all day and staying up all night with him.
It was a great blessing that he never came to the realization that health care was eating up everything that he had worked for all his life. He would have been even more agitated.
Mother, unfortunately, still worries about it considerably.
A second possibility is to do what the government wants, pay your costs with your assets until everything is gone and then rely on Medicaid to do the rest. They can't recover it if you have nothing left. Let your descendants fend for themselves without any inheritance.
A third alternative is to plan in advance by taking out long-term health care insurance.
I said a year ago that I think that the most important investment middle aged people can make is in a long-term health care plan. Your cash and your investments may not be enough to care for you or carry you through. A good insurance plan could, though.
Anyone who is 50 or so-- maybe 40-- should seriously consider taking out such a plan. The younger you start, the less it costs annually and usually the greater the benefits. Couples who take out a plan together usually can get a discount for two.
A number of insurance agencies sell such policies. You probably can get it from the same agent who insures your home or life. Since this is such an important decision, you might want to compare several plans with different agents.
If you want to know more, Stan Markham, an agent who deals in long-term health care plans exclusively, is conducting an information session on this topic a week from today, May 13 at the Governor Breathitt Building. Details appear in an advertisement on Page B-3 today.
I've known Stan for about 40 years and respect him. He won't pressure you into buying his product but will answer your questions.
There are also many other insurance people here who are trustworthy and have good products.
Ask somebody who can give you good advice. This is a problem that only goes away with proper planning or death, and now they can can make you pay after death.
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