Later On

A blog written for those whose interests more or less match mine.

One Woman’s Slide From Middle Class to Medicaid

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It can happen, and in the NY Times Ron Lieber gives an example:

A dozen or so years into retirement, Rita Sherman had plenty going for her financially.

Recently widowed, she had a net worth of roughly $600,000 as of 1998. Her health was excellent, and she dutifully purchased a long-term care insurance policy that would cover three years of nursing home costs should she ever need help. Watching over it all was her daughter, a medical social worker, and her son-in-law, a financial planner.

By the time she died at the age of 94 last year, however, all of the money was gone after a diagnosis of dementia and five and a half years in a nursing home. Like so many people who never see it coming, she’d gone from being financially comfortable to qualifying for Medicaid.

This is the same Medicaid that our representatives in Washington are aiming to cut right now. While there is no telling how the debate over health care legislation will end, it ought to matter plenty to everyone who hopes to grow old and is not certain that their savings could last for decades. While many people don’t realize it until well into old age, it is Medicaid, not Medicare, that pays for most nursing home and community or home-based care for older adults who run out of money.

Continue reading the main story

Marcia Perna, Ms. Sherman’s daughter, and her husband, Michael, were acutely aware of this fact from decades of work at their day jobs, but it was not something that they imagined they would personally encounter.

Rita Sherman did worry about money, according to her daughter. Ms. Sherman’s father had fallen ill when Rita was a child, and the family’s fortunes had taken a negative turn. Ms. Sherman worked much of her adult life as a bookkeeper and also as a recreational aide for older people who were sick. Her husband, Stanley, had worked as an industrial psychologist and educator before becoming too ill from emphysema to work.

Ms. Perna still remembers the stern warning her father gave her about his own care. “‘You make sure I don’t go to a nursing home!’ he told me,” she said. “‘If you think you’re going to transport me, I’m going to jump out of the car.’”

She didn’t dare try. Her mother had quit her job to take care of him before he died, and once Ms. Sherman was on her own, she soon sold the family home — the same postwar ranch house in Natick, Mass., they’d had all along — and moved to an apartment.

Her mother, according to Ms. Perna, was the kind of health-obsessed person who even decades ago would exercise regularly and go sparingly on the cheese. Still, Ms. Sherman had watched her own mother end up in a nursing home and wanted to plan for that possibility in a way that might preserve some of her money for Ms. Perna, her only child. So after her husband’s death, another relative helped Ms. Sherman buy that long-term care insurance policy.

According to Ms. Perna, her mother’s mother succumbed to her illness mere months after moving into a nursing home, and everyone assumed that Ms. Sherman would go just as quickly, too, if it ever came to that. But just in case, the family put some of her assets in a trust, so that in the unlikely event that she lived in a nursing home longer than the three years that her insurance policy would cover, any bills would not entirely wipe out her savings.

Things did not work out that way, though. Ms. Sherman started having trouble with daily tasks, was found to have dementia and moved into an assisted-living facility and then a nursing home with specialized staff members for memory care patients. Along the way, the insurance company declared her not sufficiently ill to warrant paying out on the policy. Then the trust, which is common and legal, did not hold up to state scrutiny because of a problematic passage.

These twists and turns reveal two terrifying facts about aging and how we pay for it. While it’s hard to imagine a couple better suited to help an aging parent navigate her final years than a social worker-financial planner duo, the Pernas still ended up hiring five additional professionals to help them with complex, specialized tasks: a long-term care insurance salesman, a nurse consultant to help get the insurance company’s decision reversed, an elder care lawyer to set up the trust, another consultant to help with the Medicaid application, and a malpractice lawyer to sue the attorney who created the defective trust. (The family eventually received a settlement. And to the many readers who have asked about the ethics and economics of Medicaid planning and trusts, please watch this space in the coming weeks.)

So add aging to the maddeningly long list of enormously complex financial tasks that each of us faces. And pity those in their 70s or 80s who must navigate this morass without expert adult children or other advocates.

Second, for people like Rita Sherman who lead healthy lives for three-quarters of a century, it is often their brains that give out first, not their bodies. And when that happens, the decline can be both lengthy and expensive, given how much supervision dementia patients need.

Just over three years into Ms. Sherman’s nursing home stay, her money was gone and the long-term care insurance had been used up. She eventually did qualify for Medicaid, which paid for much of her final two years of care.

Continue reading.

Of course, nations that have more advanced healthcare systems than the US, such as France with its single-payer system, do not experience to complexity and costs of the jury-rigged ad hoc “system” in the US. People who need medical attention get it, and no paperwork is involved. That, however, is not the US way.

Written by LeisureGuy

8 July 2017 at 1:48 pm

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