There are many reasons why long-term care may become necessary, but one of the most difficult both financially and emotionally is due to Alzheimer’s. Since the body can remain relatively healthy for a period of time while the cognitive abilities deteriorate, no one knows how long this kind of care may last.
During the care process the family of the one of the receiving care will have a unique set of challenges to deal with. Here is an article from the Wall Street Journal that discusses the impact that dealing with Alzheimer’s can have from a financial standpoint:
“When Theresa Kraus’s mother was diagnosed with Alzheimer’s disease in 2005 at age 87, Ms. Kraus figured that she could manage the health-care bills if she combined her mother’s savings and her own. But the size of those bills proved larger than anyone anticipated.
To start, the mother moved in with Ms. Kraus, who had to pay for care almost 24 hours a day, seven days a week. An extra person in the house meant higher costs for food and utilities. Additional expenses — including medicine, co-payments for doctors’ visits and adult diapers — amounted to $200 to $300 a month.
By the time her mother passed away in March, Ms. Kraus had run through her mother’s savings — as well as the money that Ms. Kraus had put aside for her daughter’s college education. Ms. Kraus, a teacher in Rochester, N.Y., is now tens of thousands of dollars in debt. She says she doesn’t regret a penny of the money spent, but adds that the impact on her finances was devastating.
“You never think you are going to outspend the money you [have] saved,” she says.
An Alzheimer’s diagnosis is the start of a long, hard road. Naturally, health-care questions must be resolved, but at the same time, families need to address a host of financial issues. They range from the logistical — tracking down deeds or making sure family members have access to bank and savings accounts — to budgeting and assessing the potential costs of care.
“These are conversations that need to be had early and often,” says Donna Schempp, program director for the California-based Family Caregiver Alliance.
Patients Participate
Tackling tough questions at the outset can give Alzheimer’s patients the chance to express their wishes, which can go a long way toward avoiding family disputes down the road.
“People in the early stage of the disease, no matter how old, can still retain a lot of abilities and be able to participate in their own planning,” says Peter Reed, senior director of programs for the Alzheimer’s Association.
Legal issues, such as determining who will have power of attorney once the person is no longer able to make decisions, should be a top priority. Says Marguerite Angelari, an elder-care law professor at Loyola University Chicago School of Law: “Decision-making capacity is going to start to decline…and, if needed, you want to be able to have someone step in immediately.”
If the person with Alzheimer’s lives on his or her own, household bills should be sent to someone else, and others should have the ability to monitor spending. “Sometimes when people are in the early stages of dementia they spend money inappropriately or build up unpaid bills because they aren’t able to keep track,” Ms. Angelari says.
Outlining a potential budget can help avoid unpleasant surprises later.
If there’s a long-term-care insurance policy, review details of the coverage. And as daunting as it seems, when considering questions about home care and nursing homes, talk to an expert on your state’s Medicaid to understand eligibility rules.
That kind of help can sometimes be found at a state agency on aging, in the office of an elder-law attorney, or with an organization such as the Alzheimer’s Association, which has staff members who also offer help on setting up a budget.
Central to financial planning will be decisions about where the care will take place, such as an assisted-living facility, nursing home or in a family home. Continuing-care retirement communities have grown in popularity, but they generally require a large initial investment. Adult day care is more common, but also comes with a cost.
Paying Family Members
Some family members will want to help provide care. For those thinking about quitting a job or working part time, be sure to weigh the costs beyond losing a salary. Such a move will cut into retirement savings and Social Security, not to mention potentially lead to the loss of medical insurance.
One increasingly popular option is to have a family member act as a paid caregiver. But that approach is more complicated than just writing a check; if you end up applying for Medicaid, such payments could be viewed as transfers of assets, which could delay eligibility. The solution is to have a so-called personal-care contract put in place, which specifies the care being provided and the pay.
“You want to formalize it as much as possible,” says Loyola’s Ms. Angelari. “And you want to work with an attorney that doesn’t just know the state law; you want one that knows what’s going to be acceptable to the Medicaid office.”
Then, as Ms. Kraus found out with her mother, expenses pop up unexpectedly. In addition to adult diapers, many people with advanced Alzheimer’s may need costly liquid nutritional supplements. If there are physical impairments as well, home modifications may be needed.”
Read more of this article here.
