How Else Can Nursing Homes Be Impacted by COVID-19?

Lack of funding is a big issue for nursing homes.“You layer COVID on top of that and… it’s a crisis on top of a crisis,” David Grabowski, a professor of health care policy at Harvard Medical School, told Yahoo Finance. “And that you started with a lot of nursing homes that didn’t have adequate staffing models, weren’t exactly strong at infection control, lacked resources in many, many regards, and then this hits, it’s definitely the industry.”

Yahoo Finance’s recent article entitled “U.S. nursing homes face ‘a crisis on top of a crisis’ with coronavirus and funding woes” explains that the nursing home industry has been facing a financial shortfall since at least 2013, particularly for non-Medicare margins, according to the American Health Care Association (AHCA). Non-Medicare margins are the revenues and costs associated with Medicaid and private payers for all lines of business. They dropped 3% in 2018, an increase from the year prior.

“Over 60% of people in the country that live in nursing facilities are dependent upon Medicaid,” AHCA President and CEO Mark Parkinson told Yahoo Finance. “And unfortunately, in most states, the Medicaid rates have been set at less than the actual cost to take care of the residents. So, it makes it very difficult to provide the kind of care that providers want when they’re underfunded so dramatically.”

In addition, Parkinson commented, “most of the people don’t understand that Medicaid is really a middle-class benefit, because if people live long enough to outlive their resources, it’s the only way that they can afford to be taken care of in a facility.”

Medicaid is a federal benefits program that gives health coverage to seniors, pregnant women, children, people with disabilities and eligible low-income adults. However, the federal government permits states to level the payment amounts long as they meet federal requirements.

“The failure to adequately fund Medicaid is primarily a problem with the states,” Parkinson said. “Each state gets to make its own decision on what its reimbursement will be for Medicaid. Although the national average is around $200 a day, the rate varies dramatically by states, and some states are as low as less than $150 a day. In the low funding states, like Illinois and Texas, the politicians just haven’t decided it’s an important enough priority to adequately fund it.”

According to the New York Times, COVID-19 has infected more than 282,000 people at about 12,000 facilities as of June 26. It has killed more than 54,000. There are roughly 15,600 nursing homes in the U.S., with more than 1.3 million residents and over 1.6 million staff.

“It’s important to note that COVID hasn’t discriminated, so it’s not just those worst-quality nursing homes that have seen cases,” Grabowski said. “It’s been equally apparent across the high quality and low-quality facilities, high Medicaid and low Medicaid facilities. We’ve found that it’s really about where you’re located that has driven these cases.”

Adding to the financial situation is the fact that testing for coronavirus in the thousands of nursing homes across the country can be very expensive. The AHCA and National Center for Assisted Living (NCAL) found that testing every U.S. nursing home resident and staff member just once, would cost $440 million. As the pandemic continues, more supplies are also needed. A recent NCAL survey found that many assisted living communities are running low on PPE (N95 masks, surgical face masks, face shields, gowns, and gloves).

Parkinson says, it’s a “failure to recognize the importance of the elderly. It’s a conscious political decision to underfund elder care,” he said. “It’s not defensible on any level, but it’s occurring in the vast majority of states.”

He went on to say that with more funding, nursing homes can be better prepared for the next health crisis.

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Reference: Yahoo Finance (June 30, 2020) “U.S. nursing homes face ‘a crisis on top of a crisis’ with coronavirus and funding woes”

Will the Sunshine State Crack Down on Crimes against the Elderly?

Florida Governor Ron DeSantis signed a bill recently approving the creation of elder abuse fatality review teams.

These teams are authorized by Senate Bill 400, which permits, but doesn’t require the creation of elder death review teams in each of Florida’s 20 judicial circuits. The teams would review cases in their judicial circuit where abuse or neglect has been found to be linked to or the cause of an individual’s death.

The Naples Daily News’ recent article entitled “Deaths of Florida’s elderly who were abused or neglected to get increased scrutiny under new law” reports that for many years, the state has authorized teams to examine child deaths and domestic-violence deaths where abuse is involved. However, the state hasn’t had a comparable review when an elderly adult dies, even under suspicious circumstances.

State Senator Audrey Gibson, D-Jacksonville, has sponsored the bill for the last four years and remarked that it’s “incumbent upon us as a state” to review cases of elder abuse and to look for gaps in service and possible policy changes to better protect the elderly.

“It can help to reduce elder abuse, if somebody knows that it’s going to be up for review if something happens to that senior,” said Gibson, the Senate minority leader. “The other thing is to prevent what happened in the cases they’re reviewing, to keep that from happening to another senior.”

Elder advocates believe that the new elder death review teams could help decrease the number of cases of nursing home neglect and mistreatment, like those identified in a recent USA TODAY Network – Florida. The investigation looked at 54 nursing home deaths from 2013 through 2017 where state inspectors cited neglect and mistreatment as factors.

The investigation found that Florida’s Agency for Health Care Administration seldom investigated the deaths.

The new law states that these elder abuse fatality review teams can be established by state attorneys and would be part of the Department of Elder Affairs. They would be composed of volunteers and open to people from a variety of disciplines, such as law enforcement officers, elder law attorneys, prosecutors, judges, nurses and other elder care advocates.

The teams are restricted to looking at files that have been closed by the State Attorney’s Office, whether or not it resulted in criminal prosecution. Remarkably, state attorneys didn’t prosecute any of the 54 nursing home deaths reviewed in the network’s investigation.

Reference: Naples Daily News (June 11, 2020) “Deaths of Florida’s elderly who were abused or neglected to get increased scrutiny under new law”

How Do I Talk about End-Of-Life Decisions?

With the coronavirus pandemic motivating people to think about what they prioritize in their lives, experts say you should also take the time to determine your own end-of-life plans.

Queens News Service’s recent article entitled “How to have the hardest conversation: Making end-of-life decisions” reports that in this coronavirus pandemic, some people are getting scared and are realizing that they don’t have a will. They also haven’t considered what would happen, if they became extremely ill.

They now can realize that this is something that could have an impact upon them.

According to the U.S. Centers for Disease Control and Prevention (CDC), 70% of Americans say they’d prefer to die at home, while 70% of people die in a hospital, nursing home, or a long-term care facility. This emphasizes the importance of discussing end-of-life plans with family members.

According to a survey of Californians taken by the state Health Care Foundation, although 60% of people say that not burdening their loved ones with extremely tough decisions is important, 56% have failed to talk to them about their final wishes.

“Difficult as they may be, these conversations are essential,” says American Bar Foundation (ABF) Research Professor Susan P. Shapiro, who authored In Speaking for the Dying: Life-and-Death Decisions in Intensive Care.

“Now is a good time to provide loved ones with the information, reassurance and trust they need to make decisions,” Shapiro says.

Odds are the only person who knows your body as well as you do, is your doctor.

When thinking about your end-of-life plans, talk with your doctor and see what kind of insight she or he can provide. They’ve certainly had experience with other older patients.

If you want to make certain your wishes are carried out as you intend, detail all of your plans in writing. That way it will be very clear what your loved ones should do, if a decision needs to be made. This will eliminate some stress in a very stressful situation.

Even after the COVID-19 pandemic is over, everyone will still need a will.

Talk with an experienced elder law or estate planning attorney to make certain that you have all of the necessary legal documents for end-of-life decisions.

Reference: Queens News Service (May 22, 2020) “How to have the hardest conversation: Making end-of-life decisions”

Suggested Key Terms: Elder Law Attorney, Elder Care

Why are Medicare Scams Increasing in the COVID-19 Pandemic?

Medicare scams are increasing in the COVID-19 pandemic. Motley Fool’s recent article entitled “Seniors, Be Wary of These Medicare Scams During COVID-19” discusses some red flags you should look out for to avoid being a victim.

  1. Callers requesting your Medicare number. Medicare typically won’t call beneficiaries and randomly ask them to verify their benefits. If someone calls you and requests your Medicare ID number, don’t give them your information.
  2. Callers requesting your Social Security number. If a bad guy gets your Social Security number, he can do a number of things with that information, any of which will create headaches for you. This includes opening a credit card in your name and charging a lot of expenses on it. If you get a caller who says he’s a Medicare representative who needs your Social Security number to process a health claim, don’t give it to him.
  3. Email or phone calls asking you to send money. Medicare doesn’t sell prescriptions over the phone or ask seniors to pre-pay for services. If someone calls asking you to send money or give out credit card information, it’s a bogus caller.
  4. A promise for early access to a COVID-19 treatment or vaccine. Right now, there is no COVID-19 vaccine. There is also no mail-order treatment that you can stock up on to protect yourself in case you’re struck with the virus. Therefore, don’t believe a caller who says he’s from Medicare and is offering you a chance to get in on a groundbreaking medication. Don’t pay him or share your Medicare ID number during that conversation. When an effective vaccine is available, Medicare will pay for it and let you know how to get it.
  5. Someone at your door claiming to be from Medicare. Medicare doesn’t have sales reps. Therefore, if someone says they’re from Medicare, lock the door and demand that that person leave immediately. Call the police, if you need help.

When a lot of seniors are worried, isolated, and in financial straits, they don’t need to fall victim to a scam. Be prepared and be aware of what common fraud attempts look like. That way, you’ll be in a good position to protect yourself.

If you receive a suspicious email or phone call, report it at 1-800-MEDICARE. This might prevent another senior from falling victim to what could be an extremely dangerous trap.

Reference: Motley Fool (May 25, 2020) “Seniors, Be Wary of These Medicare Scams During COVID-19”

What Worries Retirees the Most?

Retirees don’t want to run out of money. However, homeowners over 62 who have considerable equity in their homes may want to look at a strategy that can minimize their money anxiety. A reverse mortgage will let them tap into home equity, by providing funds to keep them financially stable. Could the reverse mortgage payments take a bite out of their Social Security or Medicare benefits?

Motley Fool’s recent article asks, “Can a Reverse Mortgage Impact Your Social Security or Medicare Benefits?” The article explains that reverse mortgages, also called home equity conversion mortgages (HECM), were created in 1980 to help seniors stay solvent, while remaining in their homes.

You know that in a regular mortgage, you pay the bank monthly installments. However, with a reverse mortgage, the bank pays you. You take out money against the equity in your home, and the loan doesn’t come due until you sell the home, move out of it, or die. The amount you can get is based on a formula that takes into account your age, the equity in your home, its market value and the interest rate you’ll be paying. You can get your reverse mortgage funds as a lump sum, a monthly payment, or a line of credit.

There are some drawbacks to a reverse mortgage. This type of loan can have big fees, including origination fees, closing costs (similar to a regular mortgage) and mortgage insurance premiums.  These fees can usually be rolled into the loan. It will, however, increase the amount the bank is entitled to receive once the loan ends.

A reverse mortgage isn’t for you, if you want to leave your home to your family. Perhaps they can pay off the balance of your HECM once you die or move out, but that could be costly. If you want to sell it (perhaps to simplify the splitting up of that inheritance), the share your heirs will receive from the proceeds may not be as much as you’d anticipated. If you’re having a hard time keeping up with the day-to-day costs of running the house, a reverse mortgage may not be the best option. However, if you’re just looking to add to your retirement income for peace of mind, it’s a decent financial planning tool to consider.

The good news is that it has no impact on your Social Security benefits, because the program is not means-tested. Therefore, the amount of income you have won’t affect your monthly benefit when you file. As a result, you don’t need to take Social Security into account when you’re thinking about this type of loan.

Likewise, Medicare is a non-means-tested program. However, a reverse mortgage can have an impact on Medicaid and Supplemental Security Income (SSI) benefits, because those are based on your current financial assets. If you’re receiving either of those, talk to an elder law attorney or estate planning attorney to discuss how a reverse mortgage might have an effect on your specific circumstances.

Reference: Motley Fool (November 1, 2019) “Can a Reverse Mortgage Impact Your Social Security or Medicare Benefits?”

How Does Traveling While on Medicare Work?

CNBC’s recent article, “Planning to travel while on Medicare? Make sure you have coverage at your destination” explains that basic Medicare—which includes Part A (hospital coverage) and Part B (outpatient care)—typically doesn’t cover any medical costs outside of the U.S. and its territories. There are a few Medicare Advantage Plans that cover emergency services overseas, as well as some Medigap plans that also offer protection.

If you’re on Medicare, your coverage away from home depends partly on your destination and if you’re on basic Medicare or receive your benefits through an Advantage Plan. This also can depend on whether the health care you get is routine or due to an emergency.

Travel medical insurance can be the solution to gaps in coverage, but it’s good to first determine whether you need it. Remember that original Medicare consists of Part A and Part B. Retirees who opt to stay with just this coverage—instead of going with an Advantage Plan—typically pair their coverage with a stand-alone prescription-drug plan (Part D). If you fit in this situation, your coverage while traveling in the U.S. and its territories is fairly simple. You can go to any physician or hospital that accepts Medicare, regardless of the type of visit.

However, when you journey beyond U.S. borders, things get more complex.

Generally, Medicare doesn’t provide any coverage when you’re not in the U.S, with a couple of exceptions. These include if you’re on a ship within the territorial waters adjoining the country within six hours of a U.S. port or you’re traveling from state to state but the closest hospital to treat you is in a foreign country. As an example, think a trip to Alaska via Canada from the 48 contiguous states.

Roughly a third of retirees on original Medicare also buy supplemental coverage through a Medigap policy (but you can’t pair Medigap with an Advantage Plan). Those policies, which are standardized in every state, vary in price and offer coverage for the cost-sharing parts of Medicare, like copays and co-insurance. There are some Medigap policies—Plans C, D, F, G, M and N—that offer coverage for travel. You pay a $250 annual deductible and then 20% of costs up to a lifetime maximum of $50,000. However, that may not go very far, depending on the type of medical services you need.

There’s also no overseas coverage through a Part D prescription drug plan, and Medigap policies don’t cover any costs related to Part D, whether you’re in the U.S. or not. For seniors who get their Medicare benefits—Parts A, B and typically D—through an Advantage Plan, it’s a good idea to review your coverage, even if you’re not leaving the U.S. any time soon. These plans must cover your emergency care anywhere in the U.S., but you may have to pay for routine care outside of their service area or you’ll pay more.

Some Advantage Plans may also have coverage for emergencies overseas, so review your policy. Whether you have an Advantage Plan or original Medicare, travel medical insurance might be a good move if you think your existing coverage isn’t enough. The options are priced based on your age, the length of the coverage and the amount. In addition to providing coverage for necessary health services, a policy usually includes coverage for non-medical required evacuation, lost luggage and dental care required due to an injury.

There’s coverage for a single trip of a couple weeks or several months, or you can buy a multi-trip policy, which could cover a longer time period.

It’s also important to know if your policy covers pre-existing conditions, since some don’t. You should also be aware that some Advantage Plans might disenroll you, if you stay outside of their service area for a certain time, usually six months. In that situation, you’d be switched to original Medicare. If you are disenrolled, you’d have to wait for a special enrollment period to get another Advantage Plan.

Reference: CNBC (July 14, 2019) “Planning to travel while on Medicare? Make sure you have coverage at your destination”

How to Manage the Cost of Long Term Care

A single woman has seen her annual premiums for long-term care rise by more than 60% over the last six years. Her cost in 2018 was $2,721, up from $1,626 in 2013. She’s keeping her policy, reports CNBC in the article “Long-term care insurance costs are way up. How advisors can help clients cope”

For her, the price she is paying is worth the cost. However, these types of increases can take older individuals off guard, especially if they are living on a fixed income.

Last year, Genworth Financial received 120 approvals by state regulators to increase premiums on their long-term care insurance business. The weighted average rate increase was 45%. General Electric said earlier this year that it expects to raise premiums on its LTC policies by $1.7 billion in the next ten years. Insurers hold between $160 to $180 billion in LTC reserves, covering 6 to 7 million people, according to estimates from Fitch Ratings.

Elder care has also become increasingly expensive. The annual national median cost of a private room in a nursing home was $100,375 in 2018, according to Genworth Financial. The annual national median cost of a home health care aide was $50,336 in 2018.

Insurers entering the business in the 1990s and early 2000s didn’t anticipate that so many policyholders would continue to pay their premiums and eventually file claims. Fewer than 1% of policyholders have let their policies lapse, and this caught many companies off guard.

Low interest rates have also hurt overall profitability for the insurance companies.

About 40% of the bonds held in insurance companies’ general accounts had a maturity of more than 20 years at purchase, said the American Council of Life Insurers.

There are a few ways to tweak benefits to keep premiums more affordable, while continuing to have this essential coverage.

Daily Benefit. Policies sold in 2015 had an average daily benefit of $259. Paring down the daily benefit could keep premiums down.

Benefit Period. Insurance contracts sold in the 1990s and early 2000 could pay out for the remainder of a client’s life. Reducing that period to five or ten years could make premiums lower.

Inflation Protection. Inflation riders help stay ahead of the rising cost of care. For older policyholders, this might reduce the inflation protection.

Waiting Period. Most policies have a waiting period before benefits will be received. Adjusting this period of time might reduce benefits.

Policyholders are advised to speak with the insurance company directly, instead of relying on the premium increase notices. This may reveal more options that can be used to reduce the premiums, without sacrificing too much in the way of coverage. If you do not have long-term care insurance, there may still be options. Speak with a qualified elder law attorney to see if there are options available to you.

Reference: CNBC (September 8, 2019) “Long-term care insurance costs are way up. How advisors can help clients cope”

How Much Will Long-Term Care Cost?

The recent article from MarketWatch, “This is how much long-term care could cost you, and don’t expect Medicare to help,” reports that most people over 65 will eventually need help with daily living tasks, like bathing, eating, or dressing. Men will need assistance for an average of 2.2 years, and women will need it for 3.7 years, according to the U.S. Department of Health and Human Services’ Administration on Aging.

Many will rely on unpaid care from spouses or children, but over a third will spend time in a nursing home, where the median annual cost of a private room is now more than $100,000, according to insurer Genworth’s 2018 Cost of Care Survey. Four out of ten will choose paid care at home; the median annual cost of a home health aide is more than $50,000. Finally, more than 50% of people over 65 will incur long-term care costs, and 15% will incur more than $250,000 in costs, according to a study by Vanguard Research and Mercer Health and Benefits.

Note that Medicare and private health insurance typically don’t cover these “custodial” expenses. This means that such costs can quickly deplete the $126,000 median retirement savings for people age 65 to 74. People who exhaust their savings could wind up on Medicaid, the government health program for the indigent that pays for about half of all nursing home and custodial care.

People who live alone, are in poor health, or who have a family history of chronic conditions are more likely to require long-term care. Women face special risks, since they typically outlive their husbands and, as a result, may not have anyone to provide them with unpaid care. If husbands require paid care that erases all of the couple’s savings, women could have years or even decades of living on nothing but Social Security.

The earlier you start planning, the more choice and control you’ll have. Let’s look at some of the options:

Long-term care insurance. The average annual premium for a 55-year-old couple was $3,050 in 2019, according to the American Association for Long-Term Care Insurance. Premiums are higher for older people, and those with chronic conditions might not be eligible. Policies typically cover part of long-term care costs for a defined period, like three years.

Hybrid long-term care insurance. With life insurance or annuities with long-term care benefits, money that isn’t used for long-term care can be left to your heirs. These products typically require you to commit large sums or are paid in installments over 5 to 10 years, although some now have “lifetime pay” options.

Home equity. People who move permanently into a nursing home may be able to sell their houses to help fund the care. Reverse mortgages may be an option, if one member of a couple remains in the home. This type of loan lets them use their home equity. However, it must be repaid if the owners die, sold, or they must move out.

Contingency reserve. People with a great deal of investments could plan on using some of those assets for long-term care. Their investments can produce income, until there’s a need for long-term care, and then can be sold to pay for a nursing home or home health aide.

Medicaid spend-down. Those who don’t have much saved or who face a catastrophic long-term care cost that cleans out their entire savings, could wind up applying for Medicaid. Ask an elder law attorney about ways to protect, at least some assets for your spouse.

Reference: MarketWatch (July 19, 2019) “This is how much long-term care could cost you, and don’t expect Medicare to help”

How Can I Avoid a Retirement Home and Live at Home?

Staying at home requires planning. The sooner you begin, the more prepared you’ll be, even if you’re around at 102.

The Washington Post’s article, “Aging in place helps you to avoid a retirement community or nursing home,” explains that there’s plenty of work to do.

You might start by remodeling or retrofitting your home to suit senior-specific issues, such as decreased mobility or impaired eyesight (think replacing a bathtub with a walk-in shower or improved lighting). Some seniors add a first-floor bedroom and bathroom and an outdoor ramp onto their homes. Other changes can include wider doorways (the better to potentially accommodate a wheelchair or walker), a bathroom with grab bars and an easy-access shower.

This is known as universal design, which means building or remodeling a home to accommodate all ages and abilities. It can usually be implemented or planned by builders or contractors who are Certified Aging in Place Specialists (CAPS), an educational designation offered by the National Association of Home Builders.

Even if you can’t afford a major remodel, there are some simple changes you can do, like installing shower grab bars or improving interior and exterior lighting to avoid falls and other accidents. You can also secure throw rugs to the floor with special two-sided tape to prevent slips.

You can speak with an elder law attorney about health agencies, resources for financial assistance, elder abuse prevention, as well as estate planning, Medicare, Medicaid and other state programs.

Keep busy by taking yoga at the local rec center, business or computer classes at the public library, or even getting a roommate to help combat loneliness and keep feeling connected and emotionally healthy.

For dining, in addition to the community-based food delivery from Meals on Wheels, you can get restaurant food or groceries delivered to your home by services, such as Uber Eats, Caviar and Peapod.

There are also a number of meal prep companies—Blue Apron, Hello Fresh, and others—that make it easier to put a healthy meal on the table, without the need to journey to the grocery store.

Reference: Washington Post (July 1, 2019) “Aging in place helps you to avoid a retirement community or nursing home”

What’s Going on in Congress with Alzheimer’s Legislation?

McKnight’s Senior Living reports in the article “Bill would aid those with younger-onset Alzheimer’s disease” that Senate Bill 901, also known as the “Younger-Onset Alzheimer’s Disease Act,” was introduced in the Senate by Senator Susan Collins (R-ME), chairman of the committee, Senator Bob Casey, ranking member, and Senators Doug Jones (D-AL) and Shelley Moore Capito (R-WV). Representatives Kathleen Rice (D-NY), Pete King (R-NY), David Trone (D-MD), Elise Stefanik (R-NY), Maxine Waters (D-CA), and Chris Smith (R-NJ) introduced the bill as H.R. 1903 in the House of Representatives.

Nutritional programs, supportive services, transportation, legal services, elder-abuse prevention and caregiver support have been available through the OAA since 1965. However, under the current law, only individuals over 60 are eligible.

“These programs would make a huge difference in the lives of individuals living with younger-onset Alzheimer’s disease, who don’t have support services available to them,” said hearing witness Mary Dysart Hartt of Hampden, ME, a caregiver to her husband, Mike, who has younger-onset Alzheimer’s.

About 200,000 individuals aged less than 65 have younger-onset Alzheimer’s disease, according to hearing witness Clay Jacobs, executive director of the Greater Pennsylvania Chapter of the Alzheimer’s Association, North Abington Township, PA.

“The need to reach everyone affected will grow significantly in the coming years,” he said.

Senator Collins was a founder and co-chair of the Congressional Task Force on Alzheimer’s Disease. She noted that she and Casey are leading this year’s OAA reauthorization efforts.

Senator Collins said she was also introducing the “Lifespan Respite Care Act” with Senator Tammy Baldwin (D-WI) Tuesday “to help communities and states provide respite care for families.” This legislation would earmark $20 million for fiscal year 2020, with funding increasing by $10 million annually to reach $60 million for fiscal year 2024. The program lets full-time caregivers take a temporary break from their responsibilities of caring for aging or disabled family members.

“Whenever I ask family caregivers, which included my own mother, about their greatest needs, the number one request that I hear is for more respite care,” Senator Collins said.

Reference: McKnight’s Senior Living (April 3, 2019) “Bill would aid those with younger-onset Alzheimer’s disease”