Part 2: Care ReceiversIssues February 26, 2017 Second Presbyterian - - PowerPoint PPT Presentation

Caregivers and Care Receivers: Understanding the Impact on Families Part 2: Care Receivers’Issues

February 26, 2017 Second Presbyterian Church

Presenters

 Charles Harlan - Certified Structured

Settlement Consultant

 Cindy Levering - Associate of the Society

• f Actuaries

We’re all in this together!

 Have you had personal experience caring

for a family member?

 What challenges did you face?  What resources did you access?  What resources were missing?

Part 2 Agenda

 Understanding the data  Defining “caregiving”  The problem  Funding strategies  Identifying resources

Presentations and resources posted on SPC website –

http://secondpresby.org/caregivers-care-receivers/

Today’s Agenda

 Summarize data and define caregiving  Outline strategies to finance long-term

assisted care risk

 Conserve assets and “planned for” later

life income

 Transfer of assets at death  Identify resources  Questions

Key Data on Caregiving

• By 2030 there will be 72.1 million older

Americans age 65+

• 22.6% of the current U.S. population
• Of that group, over 50 million will

experience a long-term assisted care event

• 30% of Americans currently providing

long-term assisted care for a family member

Key Data on Caregiving

• Largest segment of caregivers between 45

and 64 years of age.

• 47% of working caregivers reduce or deplete

savings to cover caregiver expenses.

• 80% of primary and 50% of secondary

caregivers have reduced their retirement savings to cover care assistance expenses.

Key Data on Caregiving

• 43.5 million adults have provided unpaid

care to an adult or a child in past 12 months.

• Estimated number of adult caregivers is 39.8

million (12.5% of U.S. population).

• Estimated number of child caregivers (under

age 18) is 6.5 million.

Key Data on Caregiving

• Caregivers by gender: 60% female; 40%

male

• 82% of current caregivers are taking care of
• ne person.
• The average age of a caregiver is 49.

Key Data on Caregiving

• 85% of caregivers are caring for a relative

and 49% for a parent or in-law.

• One in 10 caregivers are caring for a spouse.
• “High-hour” caregivers are almost four

times as likely to be caring for a spouse or partner.

Key Data on Caregiving

• Three in five care recipients have long-term physical

conditions.

• More than a third have short term physical conditions.
• 25% have memory problems and 37% have multiple

conditions.

• 18 million caregivers are routinely marginalized and

ignored within the health care system

Define Caregiving

Caregiving starts with assistance for Instrumental Activities of Daily Living (Lawton IADL Scale):

Ability to Use the Telephone Shopping Food Preparation Housekeeping Laundry Mode of Transportation Responsibility for Own Medications Ability to Handle Finances

http://micmrc.org/system/files/IADL.pdf

Define Caregiving

Caregiving progresses to assistance with Activities of Daily Living (Katz ADLs):

Transferring (43%) Dressing (32%) Toileting (27%) Bathing (26%) Feeding (23%) Incontinence (16%)

https://consultgeri.org/try-this/general-assessment/issue-2.pdf

Define Caregiving

• Family caregivers are increasingly

performing tasks nurses typically perform, such as injections and tube feedings.

• Over 50% of caregivers self-reported that

they had no choice in taking on their caregiving responsibilities.

https://www.caregiver.org/caregiver-statistics-demographics

The Problem

• 70% will need long-term care
• 40% of those in need of long-term

assisted care are below age 65

• Long-term assisted care can easily drain

retirement savings as well as other assets

Medicare

• Does NOT cover long-term care
• Does cover –

Care in a long-term care hospital Skilled nursing care in a skilled nursing or long-term care facility Eligible home health services Hospice and respite care

• Must be hospitalized 3 consecutive days
• Covers first 20 days at 100% and next 80

days at 80%

Medicaid and Long-Term Care

• Eligibility criteria
• Income requirements
• Asset / resource requirements
• Spending down assets
• Transfers of assets
• Look-back and penalty periods
• Spousal rules for income and assets

Early Planning is Important

• Funding for long-term assisted care is

more expensive each year

• Availability of preferred funding options

decreases with age:

Under Age 50 12% Age 50 – 59 17% Age 60 – 69 25% Age 70 – 79 44% Source: AALTCI 2014 Study

Possible Funding Strategies

• “Stand-Alone” Long-Term Care Insurance
• “Linked” Life/Long Term Care Insurance
• Single Premium Annuities
• Non-Insurance Solutions
• Reverse Mortgages

“Stand-Alone” Long-Term Care Insurance

• Wide range of payout options
• 90 waiting period before payouts
• Options to keep pace with cost-of-living
• Spousal “share-care” option
• “Portable” when employee leaves or retires
• May be used anywhere in USA
• Different levels of acceptance based on

health history and number of applicants

State LTC Partnership Programs

• Asset spend-down exemption
• Estate recovery
• Dollar-for-dollar offset method
• Total asset offset approach
• Suitability

“Linked” Life / Long-Term Care Insurance

• Permanent life insurance benefit.
• Pays “accelerated” benefit based on:
• 1. critical illness
• 2. long-term assisted care need, or
• 3. terminal illness diagnosis
• “Portable” when employee leaves or retires
• Different levels of acceptance based on

health history and number of applicants

Single Premium Annuities

• Deferred annuity used to pay for long-term

care free of federal taxes.

• Choose 200 - 300% for long-term care benefit

(2 to 3 times initial face value)

• Generally, easier underwriting
• If long-term care benefits are not used, annuity

can be redeemed for greater of accumulated value or the single premium paid initially, less any benefits paid or any penalties if paid during the first 8 to 10 years after policy is written.

Single Premium Annuities

• Longevity annuities

Annuity usually begins at 80 or 85 Payout grows with deferral No death benefit or early withdrawals Insurance against “catastrophic risk” Investing 10% to 15% of retirement savings =>50% to 60% of savings to immediate annuity*

* Per Jason S. Scott - Financial Engines, Palo Alto, Calif

Retirement Plan Options

• Qualified Longevity Annuity Contract

(QLAC)

New in 2014 Funded by qualified plan or traditional IRA Annuity begins between ages 701/2 and 85 Can be single or joint life annuity Exempt from RMD rules Annual limit of 25% of “funding source” Lifetime limit of $125,000

Retirement Plan Options

QLAC Example*

Invest $125,000 at age 70 Receive $14,825 annually at age 80 Total payout of $222,375 at age 95 Present value of $135,428 at 3% interest at age 70

* Based on single-life income annuity, purchased by either a 70-year-old

male or female, or as a joint contract, with a cash refund feature. The best quote available as of 8/23/2016, was used from among the QLACs distributed by Fidelity Insurance Agency, Inc.

Non-Insurance Solutions

• Designed for individuals age 65 & up for

assistance in the home (both by licensed home care agencies as well as informal caregivers)

• Choice of 4 different banks of hours of service

with “rejuvenation”

• Annual renewal discounts when benefits have

not been utilized

• No medical questions to answer (but cannot be

receiving assisted home care)

Reverse Mortgage

• Loan for seniors using home equity as collateral.
• Loan does not have to be repaid until the last

surviving homeowner permanently moves out of the property or passes away.

• Estate has approximately 6 months to repay the

balance of the reverse mortgage or sell the home to pay off the balance.

• Remaining equity is inherited by the estate.
• Estate not personally liable if home sells for less

than balance of the reverse mortgage

• Property taxes and insurance must still be paid

Maximize Social Security

• Can claim as early as 62 with a permanent

reduction of 25-30%

• Delay receipt to 70 if possible
• Benefits increase 8% per year for delay past

full retirement age (66 or 67)

• Couples should carefully consider filing

strategies

• Also consider impact if still employed and have

not reached full retirement age

Life Expectancy

Actuaries Longevity Illustrator - http://www.longevityillustrator.org/ Input (one or two lives) Date of birth Age for illustration to start (if not retired) Gender General health – Excellent, Average or Poor Smoker – Yes or No

Probability of Living for a Specified Number of Years - Couple age 65

http://www.longevityillustrator.org

Resources

Ways Family Caregivers Can Ease The Financial Burden

http://money.usnews.com/money/personal-finance/family- finance/articles/2016-12-09/how-family-caregivers-can-ease-the-financial- burden

Registered Nurse In-Home Assessment (Independent)

http://caregivingexchange.com/agis/caregiver-exchange/rn-in-home- assessments

Caregivers Mall

http://www.firststreetonline.com

Caregivers Kit

http://www.agis.com/caregiverkit/default.aspx

Monthly Online Caregivers Articles and Resources

Resources

Maryland Department of Aging (and its resources)

http://aging.maryland.gov/Pages/default3.aspx

American Psychological Association (and its resources)

http://www.apa.org/pi/about/publications/caregivers/faq/index.aspx

Overview of Maryland’s CARE Act (effective 10/1/16)

http://www.mhaonline.org/docs/default-source/publications/update- links/care-act---what-hospitals-need-to-know.pdf

Resources

Ombudsman Program

http://aging.maryland.gov/Pages/Ombudsman.aspx

Society of Actuaries’ Decision Brief –

https://www.soa.org/Files/Research/research-pen-long-term-care.pdf

AARP Care Connection

https://careconnection.aarp.org/en/home.html

AARP Care Card & other resources

http://states.aarp.org/help-family-caregivers-2/?CMP=RDRCT-STATES- MD-CAREGIVING-100316

Resources

The Village Network

http://www.villageathome.com/staff.php

BCDA Checklist

http://resources.baltimorecountymd.gov/Documents/Aging/lastchapter.pdf

WISER Women

http://www.wiserwomen.org/index.php?id=96&page=Caregiving https://www.wiserwomen.org/images/imagefiles/Caregivers- %20Care%20for%20yourself%20while%20caring%20for%20others.pdf https://www.wiserwomen.org/images/imagefiles/wiserwoman-newsletter- fall-2016-final.pdf?utm_source=February+2017+E- newsletter&utm_campaign=Feb+2017+Newsletter&utm_medium=email

Resources

Consumer Financial Protection Bureau (CFPB)

http://www.consumerfinance.gov/managing-someone-elses-money/

Miscellaneous Articles

http://www.marketwatch.com/story/at-what-age-are-you-too-old-to-manage-your- money-2017-01-25 http://www.forbes.com/sites/nextavenue/2016/12/18/why-older-adults-are-so- susceptible-to-financial-fraud/#a48c71d57fa1 https://www.fidelity.com/viewpoints/retirement/mrds-to-retirement-income-for-life https://www.agingcare.com/articles/spending-down-to-medicaid-133289.htm https://mobile.nytimes.com/2017/02/18/your-money/retiring-longevity-planning- social-security.html?referer=https://t.co/edTCDIccRp

CARE Card

Legal Documents

Medical directive (aka living will or advance health care directive) Durable power of attorney for healthcare and HIPAA release Durable power of attorney for finances Revocable living trust Will

A Final Thought

“Consider talking to your family today about writing an advance directive, while the idea is still fresh. Encourage your business colleagues, golf partners, friends and adult children to do the same. Your death will be an emotional time for your loved ones, but if you have prepared, your family will not be struggling with

• verwhelming choices. Your work now is so

important for later.”

Cynthia Kerr Salmond, DNP, CRNP

Questions?