Long Term Care Planning - Even “Too Little Too Late” Can Be Enough
Are you one of the millions of adults who have let estate planning fall to the bottom your to do list for years? Does wondering about how you’ll pay for long term care nag at the back of your mind? Has life thrown some curve balls that smacked the life out of your retirement savings?
Sometimes it feels like it’s just too late or too hard to rescue your retirement dreams, but take a minute to remember all the times you’ve been knocked down yet found a way to get back on your feet. The fact is that the only way to figure out where you stand with dreams of swimming at the top 10 beaches, rebuilding a ’61 Corvette or playing in the back garden with the grandkids is to take a hard look at what you have and compare it to what you need. Having the facts laid out in front of you may reveal a path to a retirement you can love.
Living Through Long Term Care Challenges
Like nearly everyone, my dear friend Mary and her husband Russ experienced their share of wonderful encounters and heartbreaking ordeals – research in Mexico, new careers, first house, a son, divorce, years living separate lives. Then, in retirement, Russ’s close call with death brought them full circle - back together to the home they’d lived as a family. Each time life threw curve balls, they had to find ways to adapt so they could keep going.
As a professor with tenure, Russ was able to take full advantage of university health insurance and retirement benefits packages. He focused his future on the retirement benefits the university promised. He put away the maximum contribution for retirement every year and counted on the group pension plan to invest it wisely. He put much of his money in indexed annuities. When he turned 65, he enrolled in Medicare and the university’s group supplemental health plans. When he first retired, his pension felt generous - more than enough to live the life he had settled into. His retirement health insurance covered what was needed. And he even had time and money to travel. At the time, the health insurance plan was a group Medigap type plan. He never gave a thought to long term care insurance until cancer snuck up on him in his late 70s.
Mary worked a few years as a professor, too, but ended up taking care of their family at home. The few years she had at her university weren’t enough to provide a pension. After the divorce, she searched for meaningful work. Her later jobs didn’t offer generous pay or much in the way of retirement benefits, but they often provided health insurance plans. She lived frugally, managed to purchase a home, and later invested in a rental property to build retirement assets. Her CPA introduced her to a talented investment advisor to manage her savings. When Mary retired, she immediately enrolled in Medicare A and B plus a Medigap and prescription drug plan. She took a small stipend from her investments, claimed her small social security payment and did some part time work as a home care provider and an editor for students’ dissertations. Mary hadn’t heard of long term care insurance and hoped her investments would be enough.
Russ and Mary had stayed in touch over the years, so when the call went out to friends and family for help supporting Russ through the cancer crisis, Mary answered. With Russ’ Medical Power of Attorney, she coordinated his treatment and care. The cancer was beaten back and Mary found a brand-new rehabilitation facility. Russ’s group Medicare insurance covered quite a bit of the rehabilitation, but ran out part way through. Without any long term care insurance, they had to tap his savings to cover care. But it worked! The care at the rehab facility brought him back to life.
Spending that time together rekindled their romance and when Russ was ready, they moved back to the family home together. As is common for couples who get together late in life, they continued to manage their money separately but shared the bills. When Mary sold her house, she deposited the funds with her investment advisor. Russ held steady with his annuities, pension and savings.
In his late 80s, Russ’ health began to fail. Russ and Mary decided it was time to revamp their estate documents and turned to a local estate attorney with Medicaid expertise. They also asked for a review of their Medicare plans and long term care insurance.
Russ had other Medicare options but he didn’t feel he could afford additional premiums, so he decided to keep everything as it was. He also knew he could count on Mary do everything in her power to take care of him as long as possible at home.
Mary’s plan was the most complete coverage she could buy for serious health conditions for the premium she paid. However, she knew she would almost certainly be alone when she needed help and wanted some kind of long term care insurance to help protect her savings. She’d seen first hand how much professional care costs and for how short a time Medicare would pay for care. Unfortunately, she’d waited too long and didn’t qualify for policies for long term care. What she DID qualify for was a plan of prepaid home care hours. She wanted to be at home as long as possible so she chose the longest plan they offered.
As he entered his 90s, Russ’ health declined further and he was bouncing in and out of the hospital and rehab more and more frequently. His group Medicare, which had become an Advantage-style PPO plan, kept kicking him home before he was in a position to manage there even after a couple of rounds of appeals. He refused home care other than the wound specialist and nurse sent by Medicare once a week and a little bit of help from a friend. Mary, now in her mid 80s and suffering from health issues of her own, was the one who wound up carrying the burden of his care. After Russ had another bout in the hospital with sepsis, Mary was exhausted and frightened by the precariousness of their situation at home. She finally persuaded Russ to stay in a full care nursing home. Care costs were $330 a day plus his share of medication costs. The cost bit deeply into the savings he was hoping to leave to Mary, but it was well worth it. Both he and Mary were calmer, safer and more rested.
When it became obvious that Russ was entering his final months on earth, Mary looked into hospice care to add to the care offered at the nursing home. Mary had to fight Medicare for it because new regulations made it harder to qualify for – dying slowly from “failure to thrive” didn’t count anymore. (Long term care insurance could have helped here, too, by paying part of the hospice costs.)
But once hospice started, everyone began smiling more. Mary and Russ both felt the tenderness of the care, and the focus of attention. When Russ left this earth at last, the hospice caregivers were right there making things easier for everyone. They even knew to leave room for Mary and Russ to have the privacy that they needed.
After Russ’ passing, grief lay on Mary’s shoulders like a heavy blanket. Even managing the basic steps to initiate his estate was too much to bear. Mary reached out to me for help as a long-time friend and the alternate Personal Representative (PR) of the estate. Russ hadn’t opted to have the house or his other possessions “poured-over” to a revocable Trust, so everything had to go through probate assisted by the estate attorneys. However, having their estate planning documents in order meant that it was a simple matter of assigning her primary role to the alternate PR, me, to remove the burden on her.
Having ignored her own care for several years -- canceling her own doctor’s appointments, pushing through chronic pain, and laboring day and night taking care of Russ -- now it was Mary’s turn to take care of herself. The first step was to complete a very overdue surgery for a chronic condition. Recovery from that surgery required very restricted movements for 2 weeks and less but still restricted movements for another 4 weeks - a demand that was not possible living alone at home.
The surgery was a success and fortunately the surgeon listened to our plea for time at a rehabilitation facility. Medicare covered 4 weeks of care under the Medigap plan, without the struggles they went through with Russ' PPO plan.
After four weeks, Mary was recovering from her surgery but still suffering from chronic pain, which limited her ability to get up from her bed or chair and to walk more than a short distance. She opted to stay at the facility, pay from her savings, and continue with the physical therapy to continue to gain strength, as well as the personal care that made her days workable.
When the doctor determined that there was nothing Mary could do to fix the conditions causing pain and that all she could do was learn to manage it, Mary decided she was more than ready to go home. She was frustrated with the very restrictive procedures of the rehab facility and missed her bed and her gardens. Thankfully, she had purchased that prepaid home care plan. It was time to put those home care hours to good use! She set up care givers for morning and evening to help with getting in and out of bed, cooking and cleaning up after meals, doing laundry, showering and even driving to appointments (and fun events) when pain limited her movement and exhausted her. She wasn’t thrilled to have people in her house doing tasks that she felt she could do if she had to, but after her time at rehab, she realized that life was more manageable with help. Although the prepaid hours plan had many limits on use of hours and didn’t cover a facility of any kind, living at home was going to be possible because of it.
Next Steps:
Mary and Russell didn’t start out with all the pieces in place that could have helped them through the difficulties life threw at them, but what they did do made all the difference. The fact is, the longer you put off estate planning, retirement savings and insurance, the fewer choices you may have - but even modest efforts can help when you really need it.Today is the right day to move planning for retirement to the top of the list. Make an appointment to get started with a free review. Don’t forget to subscribe to our newsletter to be the first to access our latest information-packed articles.
