Retirement Living News

July 2008

HEADLINES  (Click on headline to read story)

• Report Offers Advice on Hiring an Independent Caregiver
• Migrating Boomers May Create Bonanza for Home Builders
• Study Finds Long-Term Care Providers Face Funding 
  Problems in Future
• CMS Plans to Improve Rating System for Nursing Homes
• ElderLawAnswers Offers Tips on Reducing Long-Term Care Insurance Costs

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NEWS STORIES

Report Offers Advice on Hiring an Independent Caregiver 

The MetLife Mature Market Institute has updated its free guide titled Hiring an Independent Caregiver. The publication is part of its "Since You Care" series of guides. It offers a great deal of information on how families can find and employ a home health care aide or companion without going through an agency. The 12-page booklet includes sample employment ads for placement in local newspapers, a suggested contract, interviewing tips, a resource guide and more.

Independent caregivers may be a great help to the millions of Americans who spend time caring for a loved one who can no longer perform activities of daily living. Their presence may allow an older person to remain in his or her home rather having to move to a facility to receive care. They are usually less expensive than those provided by an agency. 

"Finding the right caregiver can be a tremendous help to families, but the selection process may be daunting," said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. "Hiring a person independently means being an employer and carries with it the responsibility of choosing the right individual for the job, placing trust in that person, and setting the terms of employment. 

"There are many variables, including a list of responsibilities, work hours, salary, transportation and even policies for the household, such as smoking or language guidelines," said Timmermann. To download a copy of the report, click here.                                                                                          Top

Migrating Boomers May Create Bonanza for Home Builders

As the U.S. economy struggles to stay afloat, one noted economist who has studied the mature market for more than a decade, says builders who focus on serving the needs of the nation's 76 million baby boomers are in the right place at the right time. Gene Warren, president of Thomas, Warren & Associates in Phoenix, Ariz., predicts that mobile retirees will create a demand for 11 million homes during the next 22 years.

"All of the studies and migration data we have reviewed point to a dramatic increase in the rate of migration among baby boomers," Warren said. "While less than 10 percent of the previous generation (the boomers' parents) relocated after retirement, we're looking at a number that could exceed 20 percent when it comes to boomer migration. This generation has traveled more and is much more experiential in their lifestyle pursuits and as a result, they will be on the move."

Warren's calculations for 2007 indicate that there were approximately 2.25 million homes occupied by relocated retirees. If 20 percent of the nation's 91 million people between the ages of 43 and 64 relocate as they retire during the next 22 years, more than 18 million mature Americans, equal to 11 million households, will be on the move and looking for life-style-oriented housing.
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Study Finds Long-Term Care Providers Face Funding Problems in Future

The National Investment Center (NIC) for the Seniors Housing & Care Industry has announced the release of the first comprehensive review and analysis of research on long-term care financing for America's elderly. Titled The NIC Compendium Project: A Guide to Long-Term Care Projection and Simulation Models it represents a body of knowledge that will help policymakers and others determine the best combination of public- and private-sector funding that will be needed to pay for the nation's growing care needs, especially when baby boomers reach their 70s and 80s. 

The study was conducted for NIC by RTI International and involved compiling and analyzing all major studies and projection modeling to date on the issue. 

"In a short 20 years from now, our nation's economy will face an enormous challenge," said Robert G. Kramer, president of NIC. "That is, how are we going to pay for the massive numbers of baby boomers who will move through the long-term care system?" 

The lead author and head of the research team for the project was Joshua M. Wiener, Ph.D., Senior Fellow and Program Director for Aging, Disability and Long-Term Care at RTI International. Wiener pointed out several significant findings from the research that formed the Compendium: 

• "The need for long-term care is a "normal" life experience. Among those turning 65 now, nearly 70 percent will need some form of long-term care before they die, and 20 percent will need it for more than five years. This includes informal care, paid home care, nursing home care and assisted living facility care. 
• "The number of people with disabilities is likely to increase substantially, even if disability rates fall. 
• "The demand for long-term care services is likely to at least double by 2040. During the same period, the number of older people using nursing care will increase from 1.2 million to 2 million. 
• The price of long-term care services will have a big impact on the level of expenditures. 
•  Despite problems with the pension system, the financial status of older people will improve over time. 
• Under the current system, most older people will not have private long-term care insurance in the future 

The issue of how to fund future long-term care has huge implications for the senior housing and care industry. Its leaders need to work closely with government and research communities to craft on-going, relevant research, especially in those areas that have been lacking in previous studies," said Anthony J. Mullen, Senior Fellow for NIC. 

Founded in 1991, the National Investment Center for the Seniors Housing & Care Industry is a nonprofit education and research organization providing information about business strategy and capital formation for the senior living industry.
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CMS Plans to Improve Rating System for Nursing Homes

For seniors and their families, it is often difficult to get enough information - staffing level, number of patients with bed sores, violations, and other data that shed light on the quality of care -- before they choose a nursing home. In an effort to improve its presentation of data, the Centers for Medicare and Medicaid Services (CMS) will begin a five-star system for rating facilities. 

The Nursing Home Compare section of its Web site expects to have this information on its site by the end of the year. Each nursing home listed will have from one to five stars based on government inspection results, staffing data and quality measures. It may also include information on whether a nursing home provides care to patients with dementia or those on ventilators. 

This year Medicare listed some of the most troubled nursing homes in its public database, which already has some information on staffing and quality measures. Many consumers have complained that it isn't easy to understand, and states such as Wisconsin and California have established their own databases to evaluate nursing homes. 
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ElderLawAnswers Offers Tips on Reducing 
Long-Term Care Insurance Costs

While long-term care insurance can be a good way to pay for a nursing home stay or a home health care worker, it doesn't come cheap, according to ElderLawAnswers. Annual premiums vary significantly, depending on your age, health, and the type of policy, but policies can run as high as $5,000 per year. You do not need to pay that much, says the legal information organization. Following are six tips to reduce your costs. 

1. Shorter benefit period. The most significant cost-saving step you can take is to not purchase a lifetime policy. Unless you have a family history of a chronic illness, you aren't likely to need coverage for more than five years. In fact a new study from the American Association of Long-Term Care Insurance shows that a three-year benefit policy is sufficient for most people. According to the study of in-force long-term care policies, only 8 percent of people needed coverage for more than three years. By purchasing coverage for three, four, or five years instead of a lifetime, you can save thousands of dollars in premiums. If you do have a history of a chronic disease in your family, you may want to purchase coverage for 10 years, which would still be less than purchasing a lifetime policy.
2. Buy younger. Long-term care insurance premiums rise as you age, so the younger you buy, the cheaper your premiums. Be careful, however, because insurance premiums can, and often do, increase considerably from your initial purchase price. Even if you have a policy that is "guaranteed renewable," your premiums can still increase. 
3. Shared care policy. If both you and your spouse are purchasing long-term care insurance, a shared care policy might be able to give you more coverage for less money. With a shared care policy, you buy a pool of benefits that you can split between you and your spouse. For example, if you buy a five-year policy, you will have a total of 10 years between you and your spouse. If your spouse uses two years of the policy, you will have eight years. A shared care policy may cost more than separate policies with the same benefit period, but it will allow you to buy a shorter policy, knowing that you have a pool of benefits to work with. 
4. Longer elimination period. Most policies have a waiting period before coverage begins, typically 30-90 days. The longer you make this waiting period, the cheaper your premiums. Keep in mind, however, that you will have to pay for your care out of pocket until the waiting period is over and the insurance begins its coverage. 
5. Reduce the daily benefit. Instead of purchasing the maximum daily benefit you might need in a nursing home, you can consider paying for a portion of the daily benefit yourself. You can then insure for the maximum daily benefit minus the amount you plan to pay. A lower daily benefit will mean lower premiums. 
6. Inflation protection. Inflation protection increases the value of your benefit to keep up with inflation and is almost always recommended. But you can save on premiums by which method of protection you choose: compound-interest increases or simple-interest increases. If you are purchasing a long-term care policy and are younger than age 62 or 63, you will need to purchase compound inflation protection. This can, however, more than double your premium. If you purchase a policy after age 62 or 63, some experts believe that simple inflation increases should be enough, and you will save on premium costs. 

You should also remember that your premiums may be tax-deductible. Premiums for "qualified" long-term care policies will be treated as a medical expense and will be deductible to the extent that they, along with other unreimbursed medical expenses (including "Medigap" insurance premiums), exceed 7.5 percent of the insured's adjusted gross income. 

For more information on long-term care insurance from ElderLawAnswers, click here. ElderLaw Answers provides legal information, not legal advice. It is not a law firm. Their information explains general legal concepts and principles which may or may not be applicable to a persons situation. 
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