Episode 5: How Do I Pay For Senior Care?

[00:00:01] Speaker A: When you see. All right, Unique New York. Unique New York. [00:00:21] Speaker B: We're ready. [00:00:22] Speaker C: Has oddly shaped feet. [00:00:24] Speaker A: Wait, say that one again. [00:00:26] Speaker C: The arsonist has oddly shaped feet. Who comes up with this comedy writers. I'll let you start it. [00:00:35] Speaker A: All right. Hi, welcome to episode five of if It's Not One Thing, it's Joanna. Today we are talking money, which is one of the key factors in caring for loved ones. So when making decisions, how do you figure out what to do? Are there specialists who focus specifically on caring for aging loved ones? Maybe you have a family accountant or financial planners, but what resources are available and how can people get help with this really challenging topic? Specifically, are there experts who focus on Medicare, Medicaid, long term care, insurance? Coming up, we have Richard Eisenberg. He is a journalist who has done extensive research on these topics and he's going to talk to us about this. But first, we're going to share a little bit of our experience dealing with all of this with our mom, Joanna. So first things first. How is mom able to afford her care? Well, it was pretty fortuitous that she has made some good decisions, but also has been fortunate in that she taught in public schools for 32 years. She has a pension. Our dad taught in a university. He also has a pension that he left to her. She has Social Security. She bought her home in 1973, so her mortgage is low. And for a long time her expenses were really minimal and totally manageable. There was a small bump, obviously, when she was still living at home. We had minimal care. We needed to invest in some things like cameras and grab bars, you know, items that we were using to kind of help us work with her without living with her. And then we should talk about. Sorry to say that her car insurance went up considerably because, you know, things kept crashing into her. So in trees hitting her car, the pylons in the Trader Joe's parking lot. Obviously that created an expense, but still, she. She really wasn't spending a ton of money. She wasn't spending. [00:02:43] Speaker C: Let's jump in here, ask you a question. We've had this wonderful guy who's been with our family for decades, and who is the guy in charge of managing mom's finances and making sure that she's future okay in the future. And she was thankfully starting in this good situation when he was giving the master plan of if she lives this long and this long and this long, did he specifically factor in, oh, if you're going to live this long, probably your health care costs are going to go up and Stuff like that. Do you remember? I mean, I sat in at a couple of those meetings. I don't recall if that was specifically part of it. Do you? [00:03:20] Speaker A: Well, I think that we've had a lot of discussions with him over the years about, look, this is how much mom has in her retirement accounts, for instance, or this is how much she has in her savings. This is what her equity is in the home. We have had a lot of discussions and really mostly over the last few years, when I call him frantically saying, oh, my gosh, she has this huge expense. Is she going to be okay? He is usually the one to say, listen, if financial planners, and I'm going to get this term wrong, but I believe it's called a prognosticator, where they try to kind of get a general idea of how long you will live based on statistics and your current health situation. And so, yes, he has run down with me just in general what I should be looking at going forward. Often he's very reassuring with us. Do I remember having deep conversations at the time about planning, spending this much or that month much? Not so much. I think more of that has been more recently. [00:04:18] Speaker C: Well, they've, you know, and they've earned that trust over decades of time, which is very fortunate for us. And I'm sure those prognostications take into account these things that generally happen when you get older. And I'm wondering if mom is so far out of that norm. [00:04:32] Speaker A: I bet she's not in terms of how long she's living or in terms. [00:04:36] Speaker C: Of her trajectory and as she gets older, how much her healthcare costs increase and when she needs care in the house and those expenses. I bet her trajectory isn't so unlike many others of her age and general condition. [00:04:50] Speaker A: Probably. I mean, I don't know the answers to that for sure, not being an expert, but I would imagine she doesn't seem like she's spending money that's out of the ordinary. I think the big issue for mom is that she lives in this house that was built in the 1940s. And, you know, my worry is that the roof is going to fall in or that, you know, trees are going to come down and big, big, big expenses that kind of break my heart to have to spend as she's, you know, getting into her elder years, but also grateful that she has so much equity in her home that should we need that we're not worried deeply about how we're going to pay for it, but obviously especially because I'm the person who's in charge of her finances. I'm super careful about making sure that we don't spend money where we don't need to because we know we need to plan accordingly because she's healthy. And that's been a big conversation that we've been having. Physically she's in good health. The other piece is that I've saved her a lot of money on care over the years because for many years I was doing the bulk of whatever care she needed. We didn't have to pay a caregiver hourly if we had to. That would have been a fortune. And so we were lucky in that respect that she lived independently for a really long time. It really wasn't until after her fall that we started to think about what kinds of expenses we were looking at. Knowing what her current condition was going to look like, looking at a lot of different assisted living facilities. And those costs vary dramatically. You know, we'd looked at some in Ann Arbor near where Julie lived, which listen, I'm not going to lie, I was really excited about the prospect of her potentially moving to a care facility right near Julie, our sister, as opposed to being five minutes from me. And they were beautiful. I mean, listen, I was ready to move in, but they were so cost prohibitive that that just wasn't going to be reasonable. And also, if I'm being honest, having mom near me does make my life easier in that respect. And I certainly wasn't going to bail on her care. So when we were able to figure out what was available locally and what those costs were, it was really an eye opening experience for us when she really started to spend all this money that she really hadn't been. But of course, even when choosing the facility, yes, many factors went into that decision, but cost was a huge one. [00:07:15] Speaker C: Well, and I recall that the anti replace was significantly more expensive. So it was not a difficult decision to make in that sense. And then, you know, that was interesting because, you know, at the time we were in this mode of, okay, I'd come back to help. I was staying at home. We weren't sure exactly what was going to happen. She was in the senior home. [00:07:39] Speaker A: And also, listen, I'm going to interject for a second to explain a bit of this in that when you had come back, there were just a series of events. Your lease was up in la. I knew that we didn't want to sell mom's house right away after moving her into assisted living. That was fortunate that we didn't. I was taking care of my house, I was working full time. I Have a tutoring business. I was trying to spend time with mom and the thought of, oh, right, also I need to be taking care of her house as well. I just could not do it. So you were here originally just to kind of help us get her settled into assisted living. [00:08:16] Speaker C: Yeah, it was like a stopgap mechanism. [00:08:19] Speaker A: Right. Which. Which I was happy with because I don't think I could have added one more piece to my plate in that scenario. But look at how well it worked out. I do remember that I had a friend who I was talking to when we had just moved mom into assisted living, and she said, do not sell her house right away. And at that point, selling her house was first and foremost in my mind. I was already trying to figure out when that was all going to go down. And I thought, wow, that's a strange piece of advice. Why wouldn't you want to get rid of that expense? Even though, to be fair, that expense monthly wasn't that huge. But wow, I'm so glad that we didn't sell that house because look where we are now. [00:08:58] Speaker C: Yeah. And we weren't gonna sell that house very soon anyway because there was just a lot up in the air about exactly what the future held and if this was gonna work out at the assisted senior home. And it was also, for me, I was also in flux. Like you said, lease in LA had run out and the timing was good for me to, instead of moving right into another place in LA to come back and help out with this transition. And it was. And I remember us going through that process of the house, going through the motions of selling the house, like finding our realtor and getting it appraised and talking to other people who are interested in the house, which is a very quick and long list in Huntington woods where we live, because people love to move in here and they're very conscientious about asking us what's going on with it. [00:09:49] Speaker A: Right. It is so funny. I know we may have talked about this previously, that people are constantly saying, oh, how's your mom? Which translates to, we, when will you sell that house? And then I remember the response of so many people in the community when we moved her home. One, it's kind of unthinkable. And also, really, that house is not going up for sale. She's coming back. I remember wheeling her, you know, when she was walking in with that walker the day I moved her back home. And I felt like I heard a collective growl among the whole square mile town of what? I mean, there's so Little supply in a town that has so much demand that I really think as much as people were just delighted to see mom wheeling her way back in there, I'm sure people were really disappointed that they weren't getting their hands on that. [00:10:36] Speaker C: Yeah, there was like shivers and wakes going around the town for the loss of the opportunity to buy a new house in Huntington Woods. [00:10:45] Speaker B: Yeah, an old house. [00:10:47] Speaker C: Went through those motions. And then, you know, by the time you came up with this idea of moving her back home and me helping out with care, it was really a stroke of genius because it worked out for everyone. I mean, as much as. And I thank you for telling me how much help I'm giving, but it also worked out for me, you know, I'm building this new senior care business out of all this that I've learned through caring with mom, being hands on with her care in the house, and managing our team of caregivers. It's yeoman's work. Yes, Pat on my own back, but it also helps me learn more and figure out what's going on with that. So there were other benefits besides the logistics and trying to make it work out with the current situations. And, you know, we had to consider, because obviously 247 care was cost prohibitive, but we had to consider whatever the situation was going to be, as it was with the assisted home, the cost would be 100% out of pocket from those buckets that you mentioned that she has because she doesn't qualify for Medicare because of her income. And we'll talk about that coming up. [00:11:54] Speaker A: I think that she doesn't qualify for Medicaid. [00:11:56] Speaker C: Sorry, Medicaid. Medicaid, right. [00:12:00] Speaker A: Sorry I keep interrupting you. But that factor with Medicaid is also that because she has this income of pension and Social Security, she doesn't qualify. [00:12:07] Speaker C: So the bottom line is that we'd have to figure out financially if this could work. And of course, we talked with our guy who's been with the family forever. He was supportive of it. We talked with other people in the industry, even Kelly, who you've met through this podcast, who was there at the senior home when we first brought her in. And it seemed to be the right thing to do if we could tackle it with the right plan and the right support. And we think we had that. And it turns out we did have that because it's been working out well. And, you know, it's just fortunate that we were able to figure out the situation where the out of pocket costs roughly not exactly. And it changes from month to month. But roughly the out of pocket costs are about the same. To have her home with this care plan that we've got versus have her living in that facility and the decrease in general anxiety and actual work that we have to do to supplement her care is off the charts. Much better. [00:13:10] Speaker A: I mean, for sure, it's been, we will say this a thousand times over. It has been the greatest move that we could possibly have imagined and we were fortunate we could do it. You know, listen, she lives in a house that has a master bedroom and bathroom on the first floor. There are no steps to get around on the main floor. In fact, it's sort of funny that, you know, she does those laps now, which I think is she's got a first floor set up, that she's got this long hallway and then like little entrances into the front part of the house and in the back. And I think it's so funny that she takes her little walker and she just moves in circles. And sometimes I'll be at her house and for instance, I'll be tutoring online, really focused on my student in front of me. And then all of a sudden you just see her zooming behind me on the camera. [00:13:53] Speaker C: Yeah, she gets her steps in, she's. [00:13:55] Speaker A: Getting her steps in, she's getting her wheeling steps in. But we were lucky because we couldn't have moved her home if so many different factors had been in play. But because all these pieces work out, and yes, in general, the cost of having her at home with the care that we have given, the fact that we don't need 247 care right now makes it worthwhile. And we were also fortunate that we found caregivers that were willing to work small snippets of hours. If we had had to go with an agency that had, let's say, a minimum of four hours, that would have been a problem that wouldn't have worked out for us. She sleeps through the night. So when she goes to bed at whatever time, which, you know, when it's dark out earlier, she's in bed well before 7pm and not up until caregiver arrives at 7 or 7:30 in the morning. We don't need someone at night. If you want to go out at night and she's still awake, I come over or Julie is there. So, you know, we have a really, really good scenario. This is not the case for everyone. And I can see how when you're in the midst of making these big financial decisions, it's hard to figure all of this out. Not everybody has a financial advisor or an accountant who has guided them through. And so I feel like that's almost, you know, a piece that you and I discovered when we were trying even to find out who to talk to about these issues. We kept finding people who wanted to sell us something. You know, they were wanted to sell long term care insurance, or they wanted to sell packages that help you navigate through Medicare, Medicaid, et cetera. I respect that that's a legitimate business. But how do I know I'm getting real answers that aren't based on a package that somebody's trying to sell me? [00:15:38] Speaker C: Well, that's the big issue that we encountered when we approached this episode because we assumed that communicating costs and dealing with some of the actual numbers is really important and similar to a lot of areas in senior care. It was hard to find a single source to talk to that could give us a good perspective on all these things because things are very segmented. And yes, God bless them for having businesses and services that help people dig into certain aspects of this. But like getting a 360 degree view of costs and some of the issues that you have to deal with and how to get that information together, it's challenging. And that's why we're so happy to have Richard Eisenberg help us out with all these issues. He's going to talk with us in a few minutes about all this stuff. And in the meantime, once again, enjoy Joanna's piano. Let's run that again, please. Richard, what were you saying? [00:17:01] Speaker B: Hold on now. Oh, wait a minute, wait a minute. It's now giving, giving me an echo. Oh, there. [00:17:08] Speaker C: There you go. [00:17:08] Speaker B: Can you hear me? Yes. Gotcha. Well, I was just trying to say how much I'm enjoying your podcast. I've listened to the first two episodes. I thought they were fantastic. I learned a lot. You even made dementia funny sometimes, which is hard to. But I really enjoy it and I'm looking forward to listening to the two that I still have to go and talking to you today. [00:17:30] Speaker A: Well, thank you. That is so kind of you. We appreciate it. [00:17:33] Speaker C: Thank you. [00:17:34] Speaker A: I'm going to give you a little intro and then we'll get right to it because I know we're taking up your time and we take your time. [00:17:41] Speaker B: I'm good. [00:17:42] Speaker A: So, Richard Eisenberg is a freelance writer and editor specializing in aging issues and personal finances. He's the former managing editor of Next Avenue, the PBS site for people over 50, the former executive editor of Money magazine and the author of the Money Book of Personal Finance and How to avoid a midlife financial crisis and in despair. And I'm using that quote, unretired time, because it's quoted in your bio and I use that term as well. You also co host the Friends in Money podcast, which I, I just started listening to as well. As an unretired person, I'm finding it really helpful also. So thank you. We really appreciate you joining us today. Is there anything I left out of your introduction? [00:18:29] Speaker B: No. You've been very gracious. I think you said more than enough. Thank you. [00:18:33] Speaker A: Well, we thank you. We know that you're busy in your unretired life and I'm feeling the same way in my unretired life. So I completely get that. Basically, we just want to begin with a general discussion of costs associated with, with caring for an aging loved one. So we're kind of, I know this is a little tricky because it varies obviously from state to state, place to place. But in general we're looking for an idea of what kinds of costs might be associated with assisted living facilities, group homes, kind of the new rage in care, in home care, long term care, insurance. We're kind of looking for advice on all of these pieces. [00:19:11] Speaker B: Sure thing. Well, there's a lot to talk about there and the prices vary quite a bit. So before I give you any numbers, I thought it might be helpful just to tell your audience, you know, what are the chances that they might even actually need long term care for themselves one day or maybe for their parents one day. And there are all kinds of numbers out there. But from what I've seen, about 56% of people who are 65 or older will need some kind of long term care services one day. And about 25% people, once they get to age 65, will be spending a year or more in a long term care facility. Now there's no way to know, of course, for yourself or for your parents or your loved ones. And that's sort of the big mystery. And the complexity for people is, you know, they know that if they need it or their family needs it, it's going to be very expensive, but they don't know whether anybody's ever going to need it. And so that's why a lot of people, excuse me, kind of cross their fingers and hope that everything's going to be fine, which is not really the best strategy now to answer your question. So I looked up the numbers. There's a survey that comes out every year called the Gen Worth Survey of cost, of cost of care. And they break down the prices for long term Care of any kind. So I'll tell you what they found. And these are national averages, so understand it could be different for people depending on where they live. Nursing homes these days, for a semi private room, a one year nursing home is about $111,000 a year. If you. For a private room in a nursing home, that's more like $128,000 for one year. Assisted living is a little less expensive, but not a lot less expensive. That is $71,000 a year. And I will tell you that the cost of assisted living has gone up 10% just in the past year. Now, home care, that really varies because it depends on how many hours and where the person lives and all that. But in general, a home care aid, if you were to have one coming in, you know, pretty much every day for the day, that would be somewhere around $78,000. And if you wanted what's called homemaker services, that's for somebody who does things like cooking and cleaning, but not really medical work, that's more like $75,000. So I'll stop there and just, you know, as you can see, it's not cheap. [00:21:39] Speaker C: Yes, exactly that last figure, Richard, about the home care, that's not including an overnight 24, 7 care situation. Right, that's even. [00:21:47] Speaker B: That's right. That's right. And as somebody who's lived through this myself, I know, and I know, you know, that sometimes you need somebody during the day and sometimes you need somebody at night. Sometimes it's one or the other. Sometimes you can only get people for certain days of the week or weekdays, and then you're on your own on the weekends. So home care can be tricky and complicated. And then, you know, sometimes you can use an agency who can find somebody for you, but you can't necessarily be sure that person's going to show up every day. And it could be different people and they may or may not know your mom or whoever it is that you are trying to get the care for. So that can be a little rough as well. [00:22:24] Speaker A: Yeah, I think that, you know, our experience is probably similar to most people, which is that you find yourself in a crisis situation and then all of a sudden you're scrambling to figure out, how do I even know where to start? Are there actual advocates who can guide families through these costs and how to pay for them? And if so, how would someone even go about finding that? [00:22:47] Speaker B: Yeah, well, there are a few resources, few types of people that could be helpful. So there's a type of professional called a geriatric Care manager. And what they're very good at doing is sort of helping you understand what are the choices in your area or your parents in your area if it's not where you live and what do they cost and can they get in and that sort of thing. So that's one place to go is to look for a geriatric care manager. And then you pay them, usually by the hour. There's. The government has something called the Elder Care Locator that's online, it's free, and that's a pretty good source of places that offer some kind of care. I also like the area Agencies on Aging. They're all over the country and they're a very good repository of sort of, here's what's available in this particular area. So they won't necessarily say, so this is the one for you, but they can say, well, these are 10 that you might look into. And Medicare itself has something on its website called the Care Compare tool, and that is really for people who are looking for a nursing home. They do star ratings of nursing homes, and you have to take that with a grain of salt because everybody has their own view. And some people tend to be sometimes provocative on these tools, just like Yelp is. But it's not a bad place to start just to hear from people who say, oh, I've used it, or here's what they offer and that sort of thing. So there are sources out there to help people. I know it's very hard, and as you say, it often comes very suddenly and. And you have to make a decision very quickly. The one new thing that I'll mention that just started last year is Medicare now has a program specifically for people who have dementia. It's called the Guide Model G, U, I, D, E. That's an acronym. I won't go through all the initials, but basically it's a. It's a system that started a year ago, and there are now about 400 of these guide navigators around the country. So for somebody who's on Medicare, a family member can help find the right kind of care for that person by using a Care A guide navigator. And I think that's a really great tool. That's fairly new. [00:25:00] Speaker A: Yeah, I just read through that, your article that you wrote about it for Forbes, and I thought that was really interesting. It does obviously have, you know, you can't be on hospice. There are certain requirements. And also, I guess I liked that you touched on the fact that. Will these programs continue going forward? We don't hope so. We don't know. But it's nice to see that they're at least addressing the crisis in dementia and Alzheimer's which is so massive in this country. [00:25:34] Speaker B: Absolutely. And so many of us are, you know, clueless when we suddenly have to make quick decisions, as you have for your mom. You know, should our parent go into an assisted living facility, a long term care facility, nursing home, is it best for them to stay home? And as you've shown, sometimes that decision will change over time as well. [00:25:58] Speaker A: For sure. [00:25:58] Speaker B: Yeah. [00:25:58] Speaker C: And one of the, speaking of some of the new trends, one of these trends that we have seen in our local area, and maybe you can tell us, Richard, if this is something that's happening around the country, are these group homes where it's not assisted living, it's not a 24, 7 care for your individual in their home, but something in between. It's kind of a house. Six to 10 residents, they pool their resources together and they can feel kind of like a home, but they're getting the care they need. 24, 7. Is that something that's viable going forward and that we're going to see more of? [00:26:30] Speaker B: I do think we'll see more of it. We don't see a lot of it yet. There's a very good example of that called the greenhouse, which is something that was started a few years ago. And so these have popped up around the country in a few places. And you know, as you described it, the, the best thing about them is that they're small and you get, you know, very personalized care. The bad thing about it is that they're hard to find. There aren't that many of them. And, you know, you can't be sure that everyone is going to be wonderful, but many of them are very good. So I would say if you have that option to look at, I would definitely look into it. Because for many people who are in them and families who, who have somebody who's living in them are very happy with using them. [00:27:10] Speaker C: Great. And so we wanted to get a little bit of the cost. So, like, how do we pay for all this stuff? I mean, we're in a situation with our mom where she's very fortunate to have a couple pensions from her and her late husband. They're both teachers and she's got Social Security, but it's basically, you know, for the care that we're giving for her in her home, it's kind of out of pocket from that disposable income. And how does Medicare get involved in some of these things? And what kind of government assistance in general is available to pay for some of these things? [00:27:47] Speaker B: Yeah, well, the out of pocket cost can be very expensive for people. Besides the costs that we've already talked about, AARP did a survey that said the average caregiver spending about $7,000 a year these days to do caregiving work or just to pay for the caregiving that needs to happen and sometimes much, much more. Now many people are confused about Medicare and Medicaid and they sometimes say one when they mean the other. Medicare actually does very little to help people who need long term care. Now it does come in handy in the case like your mom had where somebody goes into a rehab facility and they're or in the hospital, I would say for a few days and then they go into a rehab facility. So Medicare will help out often in those cases. But what Medicare does not do, what people think it often does, is to pay for a nursing home or an assisted living facility or even home care, which it sometimes does and sometimes doesn't. Now Medicaid is much more of a long term care program. However, to qualify for Medicaid you need to have a very low income and very low assets. And now the amounts vary around the country, but it's very common that they are looking for income of less than 2,000, $3,000 a month and assets of very little. You know, they make exceptions for somebody who's married and they need this kind of care, but the person that they're married to does not. So that person can keep more of their assets and can keep the house. But for a single person, they have to be very low income by and large. But if they do qualify, Medicaid will often come to the rescue. And many people who live in nursing homes and assisted living or get home care are doing it because Medicaid is paying for it. [00:29:42] Speaker C: And you had mentioned previously we were chatting separately about the look back, which is a Medicaid thing, not a Medicare thing. Can you explain a little bit about what that look back is? Sure. [00:29:53] Speaker B: So Medicaid doesn't want families to play games with their money in order to qualify for Medicaid. And what had been happening for some years is people would say, well, we'll just, you know, we'll gift mom's money to me, the son, the daughter or somebody else so it'll look like she doesn't have very much money or we'll, we'll transfer it some way. And so what Medicaid has is what's called this five year look back program, which Basically means they're going to look at the finances of that person for the past five years, their bank accounts, their income, anything, any other income that's coming to be sure that they haven't done anything, any funny business in the past couple of years to allow them to qualify for Medicaid. And so that's what the look back period is. It's a little complicated. I would advise people who think they may need this to either, well, first look online, but also to probably work with an elder care attorney who can explain how it works and what needs to be done. Because it is possible to qualify even if you don't have, you know, the bare minimum. But you have to be sure you're playing by the rules. [00:31:06] Speaker C: And so if you do qualify and the government is basically going to fund you being taken care of in one of these nursing homes, I mean, we don't want to disparage government nursing homes, but like, can you at least give us an idea of the different levels of like, if you're going into that nursing home that Medicaid covers versus some of these others and those costs that you were mentioning earlier, what kind of difference in care are you looking at for the patient? [00:31:33] Speaker B: Yeah, well, you know, it's hard to generalize about the category, but I can tell you that people who are in nursing homes are there because they need some kind of medical care, whereas people who are in assisted living people typically need help with what are called activities of daily living or ADL's, but they don't necessarily need medical care. So that's why it's a little less expensive. Now, there are usually memory care units for people with dementia, both in assisted living and in nursing homes. It's also possible that somebody might live in what's called independent living. My parents lived in independent living. My mother had Alzheimer's, my father did not, and they moved into an independent living place and they had a caregiver who was living with them in their apartment. So that's another option. But I would say if you're thinking about looking into a nursing home or assisted living facility, you really want to do your research. It's hard to do when you have to make a quick decision. But if you can try to do that in advance of having to make a decision, just to know what's in your area, maybe make a visit if you can. You know, the more you know before making the choice of, of, of where somebody may live, the happier you'll be. Now, it doesn't mean that it's a, a lock in choice either. You may find in your case, you did this, too. But sometimes people, their parent moves into an assisted living or a nursing home, and for whatever reason, it's not a good fit. They may then move to another place. You know, you hope that that won't happen because it's hard enough to do it once, but sometimes it does. So, you know, just understand it doesn't necessarily have to be an irrevocable decision. [00:33:14] Speaker C: Got it. And for, you know, a lot of. There's a. There's this whole cadre of troops out there who are family members who become caregivers because of necessity. And a lot of them are changing their lives or changing their jobs and they're doing the heavy lifting to live in the home and take care of their loved one. Is there any government assistance that helps these people get paid, like a salary or some benefit because they're doing this work? [00:33:45] Speaker B: There is in some places. So I can't say it's true everywhere. But many states have what are called Medicaid waivers. And these are programs that allow people, family members, to get paid as caregivers because their mom or loved one needs help. And they're going to do the help and they're going to provide the same care that their professional would do, but they're going to do it themselves. And the state will then allow them to get paid, typically a little less than what a home care worker would get paid, but something. So I wrote a piece about this as well, and I found that there are about half the states in the country have these Medicaid waiver programs. They often allow for higher incomes for the care recipient than Medicaid normally does. The Veteran Department of Veterans affairs also has a program for people who are veterans or family members of people who are veterans. So I would say, you know, if you think that you would like to be the caregiver or need to be the caregiver and would hope to be able to get paid something to do it because it's a lot of time and can be expensive. Look to see whether your state offers any kind of a waiver program and see what it takes to qualify. [00:35:00] Speaker A: Interesting. So when I was planning for my retirement, my poor financial advisor had to meet with me, I don't know, twice a year for eight years. I was really worried about how this was all going to go down. But I'm wondering, when people are preparing for their senior care needs, what should they be doing ahead of time in the same way you'd prepare for anything. [00:35:21] Speaker B: Else else I say There are two things. One is save a lot of money if you can, and not necessarily in a retirement fund. Because of a retirement fund, of course, you know, there are some penalties if you're trying to take your money out before a certain age, there may be tax implications. So you may want to be putting some money aside for health care costs and long term care costs in a brokerage account, mutual fund, something like that, that you can take the money out whenever you want to without penalty. The other thing to consider is a long term care insurance policy. Now a lot of people don't buy them because they are expensive and because they often go up in value, I should say go up in cost every year from the insurance company so they can get even more expensive, but they can be very helpful in, in paying some long term care expenses. They typically will not cover all the long term care expenses, especially for somebody in a nursing home or assisted living or getting full time home care. But they will cover something. And for a long term care policy and I think only about 3% of people over 50 have them. So it's not very common. The older you are, the more expensive it gets and the harder it is to qualify to buy a policy. So the, the best time to try to buy a long term care policy is in your 50s or early 60s because then you'll be most likely to qualify to buy one and it'll cost you less than it will later on. If you wait till you're 70, the insurance company may turn you down because you have a preexisting condition and they don't want to because they think you're going to need this care sooner than they want to start paying for it or they'll just charge you so much money that you'll say I just can't afford it. Now the cost of a long term care policy is going to depend on the size of the benefit, how much money you want them to pay out, but also whether you want what's called an inflation rider. Do you want it to go up in its benefit value every year with inflation, which is a good thing to have, but costs more money and also what age you are. But as an example, somebody who's 60 years old might pay these days somewhere between 1200 and $2000 a year. For a long term care policy with a benefit, a maximum total benefit of about $165,000. So that's, you know, more or less what that would cost. For a couple, it might be closer to $3,000. But as I say, if you're older or you want a bigger benefit or an inflation rider, it could be more like three or four or $5,000 a year and then it can go up after that. What some people these days are doing is they're buying what's called a hybrid policy. Can I explain what that is? [00:38:13] Speaker A: Yes, please. [00:38:15] Speaker B: So this is fairly new. A hybrid long term care policy is a policy that is a combination of long term care insurance and life insurance. And the reason people buy this is because a lot of people say, well I don't want to buy a long term care insurance policy because I may never need it. And then I'll just be throwing money away for all these years and I'll get nothing out of it. Well, when you buy a hybrid policy, if it turns out you don't need long term care or not as much as the policy is going to cover, there will be a death benefit for people who you know will that you name to get a death benefit so somebody will get something sometime. These policies are a little more expensive typically than typical long term care insurance policies because they have that extra life insurance part of it. At age 60, they often cost around 4,000 to $6,000 a year. But people who want them like the idea of knowing that they'll get something or at least their family members will get something out of it if they can afford to pay for that. [00:39:16] Speaker A: Interesting, because we do hear these stories about oh I know so and so who had long term care insurance and then when the time came it didn't cover A, B or C. I assume that there are some rude awakenings that people need to be aware of. Can you tell us about what some of those might be? [00:39:33] Speaker B: Yeah, that, that does happen. And I've heard stories, sad stories of people who bought the policy and then when they really needed it or the family member needed it, the insurance company said, oh well, we don't cover that. I guess the most important thing I would say is before you sign up for any long term care policy, either read it carefully or get a lawyer to read it with. You have somebody who knows something about this, maybe a geriatric care manager like we were talking about before, so that you know what they do and don't cover because you don't want to be unpleasantly surprised later on if you can avoid it. Some of the earlier policies didn't cover assisted living because assisted living didn't exist anymore. Now newer policies do. So I think I would say by and large, if you buy a long term care policy and you need it one day you will get some benefit. What I can't guarantee is you will get all the benefits you think you want to get and then you thought you were going to get. [00:40:30] Speaker C: Yeah, it seems like this is one of the biggest issues around costs for senior care because I mean that figure 3% of people choose at the right time when it's economically the best time to do so, choose to get long term care so that everybody's rolling the dice basically when they get older. And we've heard of all these stories of people just going into debt because someone lived long enough and required care for as long as they did. And yet still the market is such that overwhelmingly it's not the right decision to get long term care and to solve this thing, to make it more affordable seems to be a huge challenge, maybe the most important challenge in the industry right now and to improve the general care and financial comfort and stability of everybody in the country. Is there hope that this really is going to change and some of these innovations will take hold? [00:41:22] Speaker B: Maybe a little hoop. There's a. One of the bigger long term care insurance companies is called IS Genworth and they have a program called Care Scout and they are just now about to start rolling out a new program that they hope is going to make long term care insurance less expensive for people and also give them more options. It's not available yet, but it's coming later this year. A very good writer about these things named Phil Moeller, M O E L L E R just wrote a very good speaker substack piece column about this and I would encourage people to look that up. I've been very disappointed that the federal government has not done anything to help people with long term care costs. And they've had blue ribbon panels and I've written about them but whenever they have these panels they never seem to come up with a solution. A few years ago the federal government actually started a federal long term care insurance plan program called the CLASS act and it lasted for less than a year. There was so much pushback by the insurance industry and it just didn't happen. Now there are a few states around the country that are starting to offer programs where people will pay in as workers in those states pay into a system kind of like Social Security, Medicare for long term care. And it will provide a benefit in the future. Not a huge one, but something. And I'm hoping that we'll see more states doing that. I'm not optimistic that the federal government is going to be doing it anytime soon. I wish I could be, but I'm not. [00:42:55] Speaker C: Well, that's sober but understandable, certainly with what we see going on. All right, Richard, we're going to wrap up with just one final question, and that is do you have any advice for someone we talked earlier about? It's ingrained in our minds when we're growing up and you're becoming parents. Okay. Save for your college fund, save for your retirement. If you're a 30 something or 40 something and not thinking about these things, what's a piece of advice you could give someone of something they can do at that moment to start preparing for this separately? [00:43:34] Speaker B: I would say you should be expecting that you live a long and happy life and, but it's going to cost money. And so as much as you are saving for your retirement, which is a great thing to do, you should also have some money put aside for the possibility of long term care needs and certainly for health needs. You know, if you live long enough, you're going to have these expenses and you know, you can't expect that the government will come to the rescue. It's going to be up to you. If I do encourage people to think about buying a long term care insurance policy in their 50s or 60s, I've done that for my wife and for myself, but I know many people haven't. I don't think enough people think about long, the cost of long term care until it's right up against them. I'd like to see financial advisors say more about it. I don't know whether, Karen, I don't know whether yours ever did, but my financial advisor, who I like very much, never has brought up long term care costs or needs or insurance and I feel like that's something that more of them need to be doing. [00:44:43] Speaker A: Yeah, I mean really, we have discussed it and he also has been very clear about, you know, just be careful about what you're getting because more often than not they've heard these disaster stories of people paying all of this money and then they're not really getting what they need. But it does sound like maybe there's some changes happening in that direction, which is good news. [00:45:02] Speaker B: Yeah, I wouldn't, I mean, I, I don't want to be Pollyanna, but I do know that those things happen. But I don't think that that should discourage people from buying a policy if they feel they want to buy a policy. I mean, you want to go with a top rated company, one that has a good reputation for paying out benefits. You can find that kind of information. You know, there are no guarantees in this world. But I do think that you shouldn't assume that it won't pay out. You should assume it will pay out, even if it's not going to pay out everything. [00:45:32] Speaker A: That's good news. I'm going to call my financial advisor as soon as we hang up. [00:45:36] Speaker B: Okay, fair enough. [00:45:37] Speaker A: Our longevity with our mom is looking like. [00:45:39] Speaker C: All right. [00:45:39] Speaker A: We should be planning appropriately. [00:45:42] Speaker B: Absolutely. Well, I want to wish you two the best of luck with your mom, and I'm going to enjoy listening to the podcast and hearing her voice and playing the piano. And I know it can be a rocky road, but sometimes a beautiful one as well. So I wish you the best of luck for the two of you and for your sister Julie as well. [00:45:58] Speaker A: Thank you so much and thank you for your time today. We really appreciate you. [00:46:02] Speaker B: Of course. [00:46:02] Speaker C: Thank you, Richard. [00:46:03] Speaker B: You bet, Andrew. Take care. [00:46:05] Speaker C: Bye bye. [00:46:05] Speaker A: Bye. [00:46:05] Speaker B: Bye bye. [00:46:14] Speaker D: In the cabaret and when you're going to have it, I'm another one tomorrow. That's a musical one. You're gonna have to be. [00:46:31] Speaker C: Welcome back. Once again, that was our beloved mama singing up a storm as she always does. We're back to talk recently. [00:46:41] Speaker A: You know, I do want to just add in that these recordings are current. We didn't record her years ago, although I really wish we had. She certainly, you know, she was playing the whole piano in years past and singing beautiful lyrics. Now, obviously, she's kind of, you know, cobbling it together, but it's still very sweet and I do love that she is still sitting down at that piano and playing on her own. And again, when I think about her living in her house, I remember when I moved her home that day and brought her in a year ago, a little over a year ago, the first thing that she did was she just popped herself right down at her piano and started playing and singing. And how lucky are we that she gets to sit in her home and do this? [00:47:23] Speaker C: She loves it. And of course, these are not AI generated recordings as well. We're not at that stage yet, but who knows, one day we might get there and just to preserve these recordings, have a different take on it. But no, these are authentic Joanna recordings. She's still loving it and doing it daily. So regarding takeaways, that was a fascinating discussion and really helpful. I think one takeaway is, you know, again, I think we mentioned this in the open, but he mentions a bunch of resources that can help people with all this stuff. But again, you have to cobble together that stuff on your own. There doesn't seem to be this level of service vertical or a category in the industry where someone can go and say, okay, please help me with all of this. You've got your financial planners, you've got your estate attorneys, you've got government websites, but not a single kind of thing helping with all this. So just prepare yourself that you are going to. Even if you get the best people in your team, there's still a team that you have to work with and a bunch of different resources and you're kind of on your own to figure it all out. The second thing is this long term care thing, I just, I'm really stuck on it. That 3% figure, only 3% are basically going in and getting long term care insurance when it's the best time to buy it. And that ability to buy it is getting tougher and tougher. [00:48:50] Speaker A: Well, and also people are living longer. Right? And so you get it. Let's talk about supply and demand, right, that you've got a literally captive audience here, right? But yes, it does concern me that people don't have it. And then also it concerns me are they really able to use it. And I think that, you know, maybe there are improvements in that area, but it is, it is a concern that you spend this money and then there are loopholes that you can't get around. [00:49:22] Speaker C: Well, and I'm thinking, I'm just wondering out loud here, I don't know, but I'm just wondering if it's not marketed aggressively enough to people and maybe even though it's really expensive, it's just really important, as important as retirement to set aside this money and make sure you have it. I mean, I don't know. But like, even if it's. And later it's difficult to even maybe secure the benefits, maybe you live such that you don't ever have to, you know, ever need it. And thank God for these hybrid plans now where the benefit can pass on to someone else after you're gone. But I'm just wondering, maybe this is something that needs to be talked about more. Even if long term care is mostly a bad deal, which sucks, maybe it's something you just have to do because otherwise you could be in a very difficult spot. And of course people who are struggling financially can't even consider it. So it's not even a decision to make, which is its own problem. But there's probably a chunk of people who are saving money in some way or another for something else late in life that maybe could shift some around to cover this and maybe that could provide a much more stable Spot when inevitably, if you live long enough, your health deteriorates. But you know, there's, there's no good options here, which is, is pretty sad. And he wasn't very optimistic about it changing soon. [00:50:38] Speaker A: I agree. And I think that, you know, a lot of people will self fund a care plan, right? You know, an amount of money that they're planning on using as their bucket when they get older like mom did. But you just never know what your costs are going to be. And let's face it, costs don't go down over time, they certainly increase. So it is kind of a scary prospect. How are we going to pay for our own level of care as we age in a world where people are living longer? [00:51:10] Speaker C: I don't know. [00:51:11] Speaker A: I mean not everybody's going to have their kid move in with them. And you know, there's, there's a lot of, a lot of factors that. [00:51:19] Speaker C: Yeah. And once again we will just reiterate, we are an extreme, extremely lucky family simply because, and not because of our own dynamic with you, me and Julie, but like the money that mom and dad were able to save. So like she's in a fairly okay situation right now. Now she lived 20 more years which by the way, very possible it'd be a different story. But you know, which reminds me, let's get some sponsors for this thing because you know, when the money runs out. [00:51:51] Speaker A: I know I gotta use it to take care of Jojars. [00:51:53] Speaker C: That's right, that's right. So anyway, it's interesting how challenging it is and who knows what's going to happen in the future but hopefully some of these innovations that he starts to talk about will be happening. And doesn't it have to because of the surge in the elderly population? [00:52:15] Speaker A: Yeah, for sure, for sure. All right, well on that happy note, maybe we should end on something positive. Let's, let's think of. [00:52:22] Speaker C: Yeah, how do we end up on something positive? Hey, the great thing about running out of money completely is that you don't have to worry about anything. There's just, it's gone. You know, you're kind of stress free. [00:52:33] Speaker B: Is that. [00:52:34] Speaker C: I guess that's not really true. That doesn't work as the light hearted thing. There's the lottery. The lottery exists. [00:52:45] Speaker B: And they don't have. [00:52:45] Speaker C: Any problems paying for senior care after that. [00:52:48] Speaker A: I know, but my understanding is that people who win the lottery end up having lots of other kinds of issues. But really, you know, I think that perhaps your lottery chances are fewer than your chances of your long term care policy. Paying out correctly. So maybe not that. I think let's end with the concept that whatever it is that has happened in Joanna's life, to lead her to living with her favorite child, in her favorite home, in her favorite place, with people surrounding her who are helping in her financial journey, we're fortunate, and we hope that other people will find a way to make this work for them, or at least pay attention to what it is they need to be doing to plan for their own financial future, the future of their loved ones, so that they can live as joyously as Joanna. Not because we all know if it's. [00:53:42] Speaker C: Not one thing, it's Joanna. But you'll also notice that I did not interrupt you when you said favorite child. So I think you spoke eloquently and accurately, if I may say. [00:53:51] Speaker A: Everybody knows it. Everybody knows it. No joke. [00:53:54] Speaker C: All right, here's Joanna to play us out one more time. We'll see you guys next time. [00:53:58] Speaker D: Yeah. That was Hermesa, Roz. My dream A dream gone by when hope was wonderful for living I hope that I always would be here for Michael and his wife Bodies would always be here Somewhere over the rainbow Skies are blue and the dreams that you do Always were home for you pretty much.