Generational shift to Long-Term Care Partnership Plans

The purpose of this article is to introduce another way to handle caregiving responsibilities and the money which will pass from grandparents and parents to their children and grandchildren, church and charities. Otherwise, without prior thought and planning those dollars slip through the cracks…WASTED….along with the time, when you could have done something different and did not know what to do until it was too late! Time waits for nobody. It is time for you to know about partnership plans for long term care and their potential impact on generational wealth.          

Caregivers come in all forms! There are tens of millions of people in the United States today who provide caregiving services for a parent, a spouse, or a child with special needs. Usually, these people are unpaid, serving out of love. What would you be willing to do for the people you love?

Pat answers this question in the same way many people do… “ANYTHING” and “EVERYTHING”! 

You may know people like Pat… the ones who would give you the shirt of their back. While honorable and motivated by love, we all share in the dilemma of limited resources. There’s only so much time and there’s only so much money. Sooner or later, something happens to each of us. Exactly what and exactly when, we won’t know until we know. Then, it gets VERY real, real quick! Some things are obvious and inevitable, such as the aging process and our ultimate mortality. In the meantime, we may think about who will be impacted & start to prepare.

Pat may not identify as a caregiver, but every day people, like Pat, stop at the store, drive someone to their doctor’s appointment, bring in the mail and help out with some basic chores… like emptying the trash and taking the can out to the curb. According to the National Institute for Healthcare Management, there are nearly fifty million informal caregivers, like Pat, in the United States today. Which means: You may know someone, right now, such as a neighbor, co-worker or friend who is struggling with stress, anxiety or depression that often come with informal caregiving. 

Pat may be like you, in many ways. Pat is an adult, Pat is a child and a parent, a spouse, an employee, a partner, a friend, a neighbor, a volunteer… just to name a few of Pat's roles. Just like you… Pat is one person, dealing with conflicts and compromises. Putting some things on hold in order to prioritize others.

Work has been going well for Pat. A co-worker took time off under The Family Leave Act, which meant more responsibility on the job. At that time, it was a good thing because the work was challenging and fulfilling and Pat felt a sense of purpose and identity at work. A couple of month’s later, it was time for a performance review and a promotion. Pat has worked hard, saved early and often so that an early retirement might be viable.

An upcoming birthday is a milestone birthday. The reality is Pat is not excited about it. Instead, the reality is not in-line with expectations. By now, things should be easier, right? There’s too much going on for that much needed vacation. It is understood that this is the season to grin and bear it and to grind through! Reality has kicked in and it has kicked Pat in the butt! There are days when even one more thing is too much. Feeling unfulfilled, lacking the passion that was once there, Pat sees signs of aging.  One day feels much like the next.

Last Thanksgiving, when the family was together, Pat's dad gave out checks to each family member. On one hand, there was a feeling of excitement and gratitude. But on the other hand, a sense of worry because something just didn’t sit right about it. The behavior was out of character. Pat started paying closer attention to more subtle things, like the mail on the kitchen counter and the dishes in the sink. No one thing was cause for worry, but still… Maybe it is nothing,  it’s probably nothing. For the next few weeks, Pat prayed and paced. 

The back and forth was torture. Uncertainty caused too much discomfort and intervention might be unnecessary. One sleepless night, Pat decided to speak up and go along to ask questions at the next doctor’s appointment. Better to say something now, than possibly living with regret later. Pat's concerns were justified, as the doctor reported good news and bad news. There was no sign of a stroke, but test indicate some form of dementia. Additional tests will be needed.

Pat’s mind was racing with one possibility after another. Pat’s mom is healthy and can help out, but she won’t be able to do everything on his own. Pat works full time and can’t be there on weekdays. Home health workers in their area cost roughly $1,000/month. Eventually, he may need to go into a memory care unit, which will cost around $10,000/month.  An average American couple may spend $300,000 on healthcare related expenses during their retirement years.  They don’t have that kind of money! 

Medicare isn’t helpful because dad is not being rehabilitated and Medicaid isn’t available because they have too much savings.  Pat realizes that money will quickly be depleted, leaving mom in bad financial condition. They learned about Partnership Plans from a neighbor who works in the Insurance Commissioner’s office. Partnership plans are a collaboration between private long-term care insurance companies and a state’s Medicaid program. Most states have a Long-Term Care Partnership Program, intended to alleviate the burden of states to pay for this type of care via Medicaid. People who have a long-term care partnership qualified plan maintain control & protect life savings.

Most states offer long-term care partnership policies, contact your state’s Department of Insurance to learn more about them in your state of residence. According to the American Association for Long – Term Care Insurance (AALTCI), in 2021, a 55 year -old woman might pay $261/month for $164,000 in coverage.  Of course, insurance is subject to underwriting approval. Talk with a licensed, independent agent who can explain policy provisions and help to guide you through the application process. Don’t wait too long because the best time to buy a policy is when you’re healthy and can qualify for it! 

Pat went to check out a few facilities in town. They were full of women. “Where are the men?” Pat asked, politely. “Most of these women are single – divorced or widowed” she was told by one resident. Another added, " These women took care of their men and when they died, the women are left with very little money and nobody to help them". With a long-term care insurance partnership qualified plan, Pat will be able to coordinate care without being required to be 24/7 “hands on”.  Visits may be used to say what needs to be said, to clear the air, make peace and laugh. Taking control can feel empowering. The family can do what is best for mom, during her living years. 

John Wooden has a famous quote “when opportunity comes, it is too late to prepare” which may be paraphrased to point out that once something happens, your options become limited. Ask these questions:

Is your will exactly the way you want it? Do you have a Power of Attorney? A Healthcare Directive (living will)? Are your beneficiary designations correct and current?

Apply for long term care insurance while you are healthy and can qualify for it. 

Take just a moment and think of one person who you expect will outlive you. How will this person live without you. What impact do you want to make on their life? How do you want to be remembered? Don’t wait to make memories. Eventually, the clock strikes ZERO. 

Pre-planning your memorial services may take a great deal of stress off of family. Communicate your wishes by writing them down and keeping the information with other important documents. Survivors will know they are honoring your wishes.

A GOOD PERSON LEAVES AN INHERITANCE FOR THEIR CHILDREN’S CHILDREN” (Proverbs 13:22)

Please think about that and what it means to you and your family. Start getting organized now. You will be helping to save a lot of stress and aggravation in the future.

Peace and love be with you! Craig...