Long Term Care Costs Going Up Due to COVID-19?

Long term care costs are already expensive, but will likely increase due to costs from COVID-19. No one can predict how much, so it is better to plan now.

About 70% of seniors 65 and older will eventually require some type of long term care in their lifetimes. That care already isn’t cheap, but how will prices be affected by COVID-19?

Motley Fool’s recent article asks “Will COVID-19 Drive Up the Cost of Long-Term Care?” According to the article, unfortunately those figures may begin to look like a bargain in the coming years as facilities change their policies and long term care costs go up after COVID-19.

The impact of the coronavirus has been experienced throughout the country, but we all see that nursing homes are an especially hard hit. As of April 23, there were over 50,000 reported COVID-19 cases in long-term care facilities, according to the Kaiser Family Foundation, and to date there are well over 100,000. In six of the 23 states that are publicly reporting death rates (Delaware, Massachusetts, Oregon, Pennsylvania, Colorado, and Utah), deaths in long-term care facilities are at least half of all COVID-19-related fatalities.

Again as of April, COVID-19 has been detected in at least 4,000 long-term care facilities across the country and has caused more than 10,000 deaths among residents and staff members. As a result, nursing homes and other long term care facilities will most likely reconsider how they train and rotate staff and implement sanitary standards to avoid this from occurring again.

All of this is will likely come at a cost, and the question will be if that expense is passed on to seniors, who can hardly afford these facilities in the first place.  If so, long term care prices, already difficult for many to manage, will increase.

We can’t really predict if you’ll require long term care in the future and to what extent. We also don’t know how much long term care costs will go up in the coming years after COVID-19. However, you may be well served to purchase long term care insurance while young enough and healthy to qualify.  See here for more information.  https://galligan-law.com/when-should-i-consider-long-term-care-insurance/

The best time to apply is during your mid-50s, so that you aren’t paying those premiums for too many years. However, you’re also applying at a time when you’re relatively young and more apt to get a nice discount on your premiums based on your age and health. However, if you’re already past your mid-50s, you still should look at applying in your 60s, too, especially if your health is good.

Not all long term care policies are created equal. Different policies offer varying levels of coverage. Take the time to assess your financial resources, research the cost of long-term care in your area and determine the amount of coverage you think you’ll need.

If you don’t have a plan for the rising costs, then you’ll have to consider either private paying the higher rates, or seeking government benefits to cover the costs.  Time will tell what effect COVID-19 has on Medicaid.

Even if COVID-19 doesn’t directly mean big increases, the cost of long term care has already been increasing every year. The more financial protection you have, the less stress you and your family will have when you are older.

Reference: Motley Fool (May 5, 2020) “Will COVID-19 Drive Up the Cost of Long-Term Care?”

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When Do You Need a Special Power of Attorney?

A special power of attorney can help you take care of business when you're unavailable.
A special power of attorney can help you take care of business when you’re unavailable.

Yahoo Finance’s recent article entitled “What is Special Power of Attorney?” explains that with a general power of attorney, you can designate a person to make decisions when you are unable, due to illness or incapacity. A general power of attorney allows your agent (the person you select) to do almost anything related to your financial affairs that you could do, including, for example, file your tax returns, sell your house, access bank records, or sign financial contracts in your name. There are usually few, if any, limitations.

A special power of attorney only applies to specific circumstances. This is also called limited power of attorney. An agent named in a special or limited power of attorney can only act in situations included in your power of attorney document. Maybe you’re traveling or out of town when an important transaction need to take place. A special power of attorney is often used to sell property when the buyer or seller is unable to attend the closing in person. In a special power of attorney you can set limitations and conditions under which your agent is authorized to act.

You can have multiple special powers of attorney, depending on your situation. You may want to give one agent the power to run your business while you’re away and give another agent the power to sell your car.

Remember that a special power of attorney, like a general power of attorney, only applies during your lifetime. If the special power of attorney does not include a date when it terminates, it must end when you pass away. Your assets would then be managed pursuant to the terms of your will or trust, if you have either. If a person dies without a will, then in most cases the assets are distributed according to the probate laws of the state where the person lived.

Typically, creating special power of attorney involves the following:

  • Naming a person to act as your agent
  • Detailing the specific terms under which a power of attorney will take effect
  • Determining which authority your agent will have
  • Designating a successor agent, if necessary, and
  • Choosing an end date for the power of attorney to terminate

A special power of attorney is just one of the documents you may need for your estate plan. You should also ask your estate planning attorney about a last will and testament and a living trust to help you manage assets, according to your wishes after you pass away. Other critical documents include advance health care directives which state the kind of care you should receive when you can’t make medical decisions for yourself.

For more information on other estate planning documents you may need see https://galligan-law.com/living-wills-and-medical-powers-of-attorney-why-they-are-important/.

Reference: Yahoo Finance (Feb. 28, 2020) “What is Special Power of Attorney?”

 

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Helping Seniors Battle the Unspoken COVID-19 Toll: Loneliness

Isolation leads to loneliness in seniors.

Social distancing is a new term we have all become familiar with over the past several weeks. An essential step in reducing transmission of the coronavirus, it’s important to note that distancing also can cause social isolation and loneliness. Although this can affect anyone, regardless of age, the elderly are particularly vulnerable at this time.

What exactly is loneliness? We have all experienced loneliness at some time, but a more refined understanding can help us help our loved ones.  While social isolation is simply not being around other people, loneliness is a subjective feeling – a sense of suffering from being disconnected from other people. In other words, social isolation may lead to feelings of loneliness. Studies have linked these persistent feelings to higher risks of conditions like heart disease, high blood pressure, anxiety, depression and even death.

How to Help

Experts offer guidance on how we can help our elderly loved ones combat feelings of loneliness and avoid their negative mental and physical health consequences.

Some tips:

  • Help with the technology for video chats and social media.
  • Set up regular phone calls or video chats on a daily or weekly routine.
  • Explore online learning opportunities, especially those designed especially for seniors.
  • Help your elderly loved ones to change their expectations for the time being, and understand that this situation is temporary.

Resources: ABC News, The unspoken COVID-19 toll on the elderly: Loneliness, April 14, 2020.

 

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