Money Ain't Funny: The strain of long-term care for seniors

A bowl-shaped, tin sieve observed my entire childhood from its perch in my grandmother's kitchen.

The long decommissioned utensil was rescued from plainness some 40 years ago, tole-painted with strawberries, and repurposed as a decoration.

Across the decades it moved only a few feet: from the counter to the window, to the top of the fridge, and then finally punched and looped with leather string and hung on a nail above the kitchen doorway.

A house warming gift 75 years ago, it never left her kitchen until I recently acquired it from a family auction where my grandmother's belongings were sold to the highest bidder.

When I saw it, I wanted it immediately. With a mere silver-dollar-sized mesh in the bottom, it did not seem practical as a colander or sifter, but the old bowl had caught many memories in its sieve.

It saw vegetables canned, meals prepared, holidays observed, milestones celebrated, and all the love and laughter that filled my grandparents' home for decades.

When I glance at it atop my cabinets now, it takes me back to memories of sugar-cured ham, fresh North Carolina tomatoes, apple fritters, and a legacy of laughter at Granny's steel wit.

Winning the bid at the auction, I mentioned that the relic had been there as long as I could remember.

My mother commented, "It was here before me. I strained many a pail of milk through that old thing."

Ah, a milk strainer. Wait. They had to strain the milk? Were there that many flies? Perhaps a lot of unwanted flotsam falls into the pail in the struggle to milk a cow.

This revelation dampened my nostalgia just a bit. I scratched raw milk permanently off my shopping list for the local farm co-op. Yes, organic pasteurized milk will do just fine going forward.

The odd part about owning this sentimental prize is that Granny is still alive. Advanced Alzheimer's disease has reduced her physically and mentally to a mere glimmer of her former self, and the medical equipment and skill required for her daily care make staying at home no longer feasible.

It would be helpful to tap into her home equity to help with the cost of care, but selling the house is not legally possible. The house was transferred to her children more than a decade ago, but she retained life estate.

Her residency rights prevent the sale of the home during her lifetime, even if she is unable to live there. The house can only be rented in her absence, and the few hundred dollars per month the old brick farmhouse fetches is not enough to pay for even one week of care each month.

The upside of the transfer is that it prevents the house from swirling down the drain of a Medicaid spend-down. Medicaid, a social healthcare program for needy Americans, has a five-year look-back period. This means that assets transferred less than five years prior to application for Medicaid result in a Medicaid penalty.

For example, if you transfer a house with a fair market value of $144,000 in an area where the average cost of care is $72,000 per year, you would not be eligible to receive assistance for 24 months.

Generally speaking, all assets are expected to be spent on your care before applying for assistance.

Long-term care planning is a complex issue. Trusts and transfers may offer some protection to property and cash assets, but what about the issue of getting the necessary care?

While insurance may be a viable solution, many people wrestle with the idea of paying a stout premium for a policy that they may not use. If you are lucky enough to just drop dead, then you have lost thousands, perhaps tens of thousands, of premium dollars that will bring you no return.

On the other hand, a claim on any insurance policy is typically an unpleasant experience. A home destroyed by fire, a wrecked car, or a major surgery are not the moments we hope for. But why do we write the premium checks for those other policies with less chagrin?

According to the National Fire Protection Agency, you have a 25% chance of a reported fire in your home over a lifetime, but Medicare says that 70% of people who reach the age of 65 will need care at some point.

That is nearly triple the odds that we will need long-term care, so the unequal feelings about the premium costs are seemingly illogical. Perhaps we are just conditioned by lenders who have required home and auto insurance.

If a large lender is unwilling to take the one-in-four risk of even a small loss on your home, how are individuals supposed to absorb the more than two-in-three risk of the devastating cost of care?

For those who already need care, the answer is tough. You write the checks for as long as your money lasts, then the burden shifts to Medicaid.

But the resistance to long-term care premium remains. How do we get those flies out of the buttermilk?

Fortunately, insurance companies have responded with new policy designs that allow unused benefits to revert to one's estate, thus protecting your health, preserving your assets, and shooing away the fear of wasted premium.

When I see my Granny's milk strainer, I realize that we cannot control the fact that tragedy may enter our lives, but with proper planning, we might strain out some of the unwanted bits of impact that such tragedies bring.

The antique utensil no longer catches particulates from the milk pail, but it is full of memories caught from a childhood on the farm, a grandmother who made everyone laugh, and a kitchen filled with the most delicious food available on the planet.

She no longer remembers, but I do.

Source: http://www.nydailynews.com/life-style/money-ain-funny-strain-long-term-care-seniors-article-1.2522164

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