Now more than ever, people live longer into infirmity. According to the U.S. Census Bureau, in 1940, the dependency rate for older adults was 11 percent. In 2010, that rate was 21 percent. By 2020, the dependency rate is expected to reach 28 percent and 37 percent in 2040. Someone has to take care of this dependent population.
As most families are unable to accommodate their dependent older relations, assisted living centers are becoming a growing resource. For those who need the most care, of course, the nursing home is essential with on-staff nurses and full-time caregivers.
In most nursing homes, there are two types of residents. The first are those needing long-term care. The second are those who need skilled care. People who need long-term care are unable to maintain activities of daily living – eating, bathing, dressing, toileting, transferring and continence. This population may be paying for their care entirely out of their own pocket. Some may have assistance from the Veteran’s Administration or be in receipt of some long-term care benefits from TennCare. By law, the residents are required to receive the same level of care no matter the payment source.
People who require skilled care are generally going through physical therapy, occupational therapy or IV therapy. In these situations, Medicare or other types of insurance generally pay for the cost of rehabilitative care. This kind of care pays the most per bed, per day in a nursing home.
According to a 2015 Genworth survey of private costs for long-term care, the average across Tennessee was $192 per day or $70,080 per year. In Nashville and surrounding areas, that rate averages $200 per day or $73,000 per year. The average TennCare reimbursement rate for long-term care in Tennessee is $182.42 per day or $66,583.30 per year.
The average length of stay in a nursing home for long-term care is somewhere around 835 days. Around Nashville, that totals an average of $167,000 in nursing home cost per person. So, patients either have to have enough money put away to pay for the cost or they must have enough countable assets to qualify for TennCare benefits.
What does this mean for an attorney trying to help clients qualify for potential nursing home care? It means, you need to help your clients prepare.
And, in the case of nursing home care, the sooner the better.
Keep in mind, most transfers of assets that occur within five years of an attempt to qualify for TennCare assistance create significant problems.
Revocable living trusts are not the answer. Because they can be revoked, the entirety of the assets of a revocable living trust can be counted. Annuities may be part of the answer, but could easily be dangerous. Long-term care insurance products, especially partnership plan qualifying products, are a good idea in many circumstances.
Irrevocable trusts are a good option, but can create tax issues, trustee issues, allowable distribution issues. Plus, when drafting the trust, you need to allow for change as the clients have varying needs. What might seem to be a minor issue, can create major problems when your client applies for benefits.
Selection of the right nursing home is important as well. Good management at a facility can make the difference between a decent experience and a horrible experience. Proximity is also important. It is easier for family to visit a close facility. The more family visits, the better the care. It is an unfortunate reality that if staff believe a family member may show up at any time, the resident is more likely to be in good shape at all times.
There are a number of companies which help families find appropriate placement in all levels of elder care facilities. Walking around the facility a day or more before the meeting with the marketing person is a must. If the hallways smell in more than one or two places, care is lacking. If the afternoon entertainment for the residents is lining up in front of the nursing desk, care is lacking. Look in at the therapy area. If one therapist is attending too many people at once, it is likely no one is getting adequate care. It doesn’t matter if the hallways are festooned with fresh carpet and lovely paintings when care of the human residents is lacking. Karl Warden