Many people are under the mistaken impression that Medicare or Medicaid will cover the costs of long term care. Medicare only covers care for short periods of time, such as rehabilitation following an illness or injury. It does not cover help with activities of daily living (ADLs), which include bathing, toileting, dressing, eating, transferring out of bed and incontinence care. Medicaid only pays for people meeting federal poverty guidelines, or for nursing home residents who have exhausted their savings and become eligible.

So what’s the solution? Long term care insurance is an option to consider as part of your retirement planning. Long term care insurance was first introduced in the 1980s. It was originally meant to cover only nursing home care, but now covers:

• Home care
• Assisted living
• Adult daycare
• Respite care
• Hospice care
• Nursing homes
• Alzheimer’s facilities

There are a variety of policies and premium levels available through long term care insurance providers. Here are some important things to consider as you work with your insurance professional to determine the long term care solution that’s right for you.

1. Buy it early, while you are still healthy. They younger you are, the more likely you are to qualify for coverage. Once you have been diagnosed with certain medical conditions you will not qualify for coverage. Premiums are cheaper when you’re younger and many insurance companies won’t offer plans once you are into your 80s.
2. In addition to age and health, the three factors that have the greatest impact on determining your premium are: the daily benefit (generally $100, $150 or $200), the length of coverage (most people buy three years of coverage) and the inflation protection you choose.
3. Opt for an “alternate care benefit” which recognizes that new trends in care are emerging and allows for coverage in the future for long term care that is not specifically spelled out.
4. Ask about a “shared care” option that gives you and your spouse access to each other’s benefits if you use up your own.
5. Look for tax breaks. Some states offer an income tax credit for annual premiums.

Long term care insurance can protect your assets, and ensure that you receive the care you need without having to rely on your loved ones. For more information and a cost calculator, refer to the Long Term Care Insurance National Advisor Center.

1.  Tax relief programs. NCOA has a free online BenefitsCheckUp® service that can help you find programs that may lower your annual property tax bills or get a tax credit from other local programs. Savings average from $500 – $2,000 annually if you qualify. Go to www.benefitscheckup.org.
2. Free tax assistance. The IRS offers free tax help for people aged 60 and over through their Tax Counseling for the Elderly Program. The program offers self-assistance service as well as certified volunteers to guide you through the tax filing process. For more information check out the Tax Counseling for the Elderly page on the IRS site.
3. Tax scam protection. Older adults are common targets for scammers at tax time. This year a new scam was reported that tricks lower income seniors into filing for fraudulent refunds or stimulus payments. In San Diego, scammed homeowners received personal letters offering a paid reassessment to reduce taxes. The NCOA website has information about scams and how to protect yourself here.
4. Protecting and using your home equity. NCOA’s new website Home Equity Advisor helps homeowners determine whether they can tap into their home equity to help pay expenses. You can take a “quick check” on Home Equity Advisor for personalized tips and resources.
5. Tax law changes. The Women’s Institute for a Secure Retirement offers a 2011 Tax Update with changes in the tax law that might affect your situation. Check out the Tax Update.
6.  Tax refund advice. If you receive a tax refund, it’s a great opportunity to add to your savings for those unexpected expenses that crop up during the year. You may also want to consider U.S. Savings Bonds. New tax forms now include purchase options for U.S. Savings Bonds.

If you feel that any of these resources could help you save money on your 2011 tax return, talk to your tax preparer and see whether you need to file an extension so you can take advantage of them. The tax deadline (April 17 this year) is approaching, but it may be worth filing an extension if these resources will help you.

Greg Hartwell, Managing Director & CEO of Homecare California, provides a free report - 7 Key Things to Know Before Hiring In-Home Care in California, which discusses the benefits, options, legal/tax issues and costs of hiring in-home care. Here are some highlights from that report.

Home care is defined as non-medical assistance provided by experienced caregivers. It is focused on activities ranging from basic needs such as meal preparation, medication reminders and companionship, to more sophisticated needs such as bathing, grooming, and incontinence care.

Medicare and private health insurance do not pay for non-medical home care. However, since home care can be limited to only the hours needed, it may initially cost less than an assisted living facility. Once the care moves to 24 hours a day the costs become more comparable.

Greg Hartwell, Managing Director Homecare California

Hartwell discusses three primary options for home care – full service agency, private caregiver and domestic referral agency (DRA). Since California does not require licensure for home care agencies or private caregivers, it’s important to understand the options and the pros and cons of each. Hartwell’s report includes a handy checklist and interview questions to help in the selection process. Homecare California is actively involved in supporting legislation proposed by the California Association of Health Services at Home (CAHSAH) which would require licensure to protect California seniors. Currently approximately 25 states have licensure requirements.

The decision to hire a home care provider involves many factors – type of care needed, type of provider, cost, tax implications and compliance with federal and state employment laws. Perhaps even more important is having confidence in the individual or agency you are entrusting with the care of your loved one. Hartwell recommends that you check out the following in your vetting process:

• Proof of insurance, etc. – ask about liability insurance, workers compensation, finger printing process, drug testing, etc.
• Testimonials – what do existing clients say about the agency or private caregiver?
• Third Party endorsements – check for third party endorsements through the Better Business Bureau, CAHSAH and others.
• References – be sure to get several references from the agency or private caregiver.

Providing your senior with the ability to age in their home can extend their independence and quality of life. Doing your homework before making a home care selection will provide you with peace of mind.

Get your free copy of the Homecare California report at http://www.homecare-california.com/

Common deductions include:

• Medical insurance premiums (unless pre-tax)
• Prescription medicines
• Doctor bills
• Hospital fees
• Travel to and from medical appointments

Only those expenses paid during the tax year are deductible for that year. Also, expenses are limited based on your adjusted gross income (AGI). For 2011, medical expenses must be in excess of 7.5% of AGI. You can only claim those amounts for which you have not been reimbursed by private insurance or Medicare. Additional special expenses, such as wheelchairs and repairs, ambulance services and oxygen may also be claimed. Check with your tax advisor for the current list of items that fall into this category. Improvements to your home made for medical reasons may also be deductible, but may be limited based on whether they increase the value of the home. Certain structural improvements to accommodate disability, such as the following, are fully deductible regardless of home value impact:

• Ramps
• Widened doorways and hallways
• Railings and grab bars
• Lifts (but not elevators) and
• Warning systems

Other items that may be deductible

• Special equipment or hand controls in a car
• Medical expenses incurred in a nursing home
• Medically related nursing, therapeutic and or/aide services

Here are a few publications offered by the Internal Revenue Service that may help you understand the deductions available to you. These can be ordered by phone 800-TAXFORM, or online at www.irs.gov.

• Publication 502 – Medical and Dental Expenses
• Publication 554 – Tax Guide for Seniors
• Publication 907 – Tax Highlights for Persons with Disabilities
• Publication 929 – Tax Rules for Children and Dependents

Every situation is unique, so be sure to check with your tax advisor.

1. Start the assessment early. Impaired driving skills generally happen gradually and affect different people at different ages. Many people drive safely well into their 70s. Others, due to failing eye sight or other health issues, may have driving difficulties much earlier. Observe your older driver over time. Listen for any concerns they express about driving (such as how awful traffic has gotten or how rude other drivers are), and use that as an opportunity to open the conversation.
2. Watch for warning signs. Do they have difficulty turning their head to see when backing up? Are they easily distracted or riding the brake? Have you noticed new dents or scrapes on the car or mailbox or garage? Are they disoriented, or have they gotten lost driving to places where they have driven many times before? The Hartford has a complete list of warning signs at www.safedrivingforalifetime.com. Use this as your guide.
3. Seek a professional opinion. If it’s a health issue, your loved one’s doctor may be able to provide information and guidance that will help convince your loved one that it’s time to stop driving. Or they may refer you to a driving specialist for a comprehensive driving evaluation.
4. Research alternative means of transportation. Many areas have government subsidized senior transportation options available for trips to the doctor, grocery store, etc. Providing information about these alternatives can go a long way in easing the transition and helping seniors retain their independence. Use The Hartford’s “Getting There” Worksheet to assess alternatives: http://hartfordauto.thehartford.com/UI/Downloads/Getting_There.pdf
5. Have the conversation. The conversation should happen long before there’s a serious issue. A potential opener would be a general discussion around health and safety and their connection to driving. Or talking about the increased hazards and traffic on the roads today. Ask questions to find out any concerns your senior has about driving. The important thing is to be sensitive to their need for independence while letting them know that you care about their safety.

For more tips on having this conversation, check out AARP’s online seminar: Talking with Older Drivers, www.aarp.org/weneedtotalk.

Children who live far away may notice changes in their parents’ mobility and mental capacity more so than those who see them on a regular basis. This is an opportunity to compare notes and assess:

• Home safety
• Parents’ driving capability
• Bill payments/late notices
• Medication use/supply

AARP offers tips to help families who are “home for the holidays” determine whether their elderly loved ones can safely live in their own homes, drive and manage their finances.

Once the assessment is made, the next step is having a family discussion to resolve any issues identified, and create a plan for the future.  This can be an area of contention, even for the closest of families. How much longer can the parent drive? Where will they live when the time comes? Collaboratively developing a plan before eldercare becomes imminent can prevent these conflicts.

The National Care Planning Council’s book, The 4 Steps of Long Term Care Planning provides guidelines and checklists for family planning meetings. Here are some basic steps:

1. Get all interested persons together in one place at one time.
2. If the parent is still in good health (which is the ideal time to develop the plan) he/she should conduct the meeting.
3. After a thorough discussion of the issues and solutions, there should be a consensus of all present to support the plan.
4. A written care plan should be developed with each family member signing it to confirm their commitment.

The U.S. Department of Health and Human Services states:

“No one wants to think about a time when they might need long-term care. So planning ahead for this possibility often gets put off. Most people first learn about long-term care when they or a loved one needs care. Then their options are often limited by lack of information, the immediate need for services, and insufficient resources to pay for preferred services. Planning ahead allows you to have more control over your future.”

In 1789 U. S. Congress passed as law that pensions were to be provided to disabled veterans and their dependents, and in 1811 the first domiciliary and medical facility for veterans was completed. Since that time the Department of Veterans Affairs has opened a multitude of care facilities nationwide.

For a full list of the benefits provided for veterans by the Department of Veterans Affairs, go to: http://www.vba.va.gov/VBA/.

One of the little-known and underused veteran benefits is “aid and attendance,” which is a pension that provides disability income.  It’s called “aid and attendance” because many veterans or their single surviving spouses can become eligible if they have a regular need for the aid and attendance of a caregiver, or if they are housebound. Evidence of this need for care must be certified by the VA.

Pension can pay qualified veteran recipients as much as $1,949 a month in disability income.  To receive Pension, a veteran must have served on active duty, at least 90 days, with at least one of those days during a period of war. There must be a discharge under conditions other than dishonorable. Single surviving spouses of such veterans are also eligible. If younger than 65, the veteran must be totally disabled. If age 65 or older, there is no requirement for disability. There is no age or disability requirement for a single surviving spouse.

There are income requirements, but a special provision allows household income to be reduced by 12 months worth of future, recurring medical expenses.

Thomas Day, Director, National Care Planning Council, has written two books to help veterans obtain this long term care benefit. The first, “How to Apply for the Aid & Attendance Pension Benefit” explains what the benefit is and how to get it. All forms necessary for filing a claim are included in the book. Tom recommends if you have excessive assets and income or are not sure how to apply medical deductions, use the services of a qualified veterans benefits consultant.

The second book, “Aid & Attendance Handbook for Professionals & Consultants,” is for the professional consultant. The secret for receiving a successful award for aid and attendance or housebound ratings is not in filling out the form, but in knowing what documents and evidence must be submitted with the application.

1. Remaining independent in their home without intervention from others
2. Maintaining good health and receiving adequate health care
3. Having enough money for everyday needs and not outliving assets and income

Addressing these concerns requires some pre-planning. Yet few people do it.

In fact, it’s been said that most people spend more time planning for a two-week vacation than they do planning for their “sunset years.” Lack of planning for that time of life can be devastating to an elderly person’s lifestyle, finances and security. It can drastically alter or completely eliminate the three main lifestyle wishes listed above. It can also have an adverse effect on the older person’s family, requiring sacrifices in their time, money and family lifestyle.

Clearly, planning ahead is essential.

Let’s look at some facts.

An older woman relying on her children to provide meals, transportation and help with financial decisions may find it difficult to complain if one of her children takes advantage of her. If, for example, the child takes her money, hits her, or neglects her care, the parent may be threatened with loss of that support from the child if she complains. The child may also use threats of violence to keep the parent in line.

It is estimated that 5% to 10% of elderly Americans are victims of abuse. According to the National Committee for the Prevention of Elder Abuse: “Spiraling rates of elder mistreatment are reported by both practitioners and researchers. In a recent national study of Adult Protective Services (APS) – typically the agency of first report concerning elder abuse – there were 253,421 reports of abuse of adults age 60+, or 832.6 reports for every 100,000 people over the age of 60 (Teaster, Dugar, Otto, Mendiondo, Abner & Cecil, 2006).”

A National Elder Abuse Incidence Study (National Center on Elder Abuse, 1998) found that “more than 500,000 persons aged 60+ were victims of domestic abuse, and an estimated 84% of incidents were not reported to authorities, denying the victims the protection and support they need.”

Although much attention has been focused on abuse in nursing homes, most of the elder abuse in this country is at the hands of family members or other caregivers in the home.

In 2004, Utah Adult Protective Services workers investigated approximately 2,400 allegations of abuse, neglect or exploitation of vulnerable adults. In Utah, a vulnerable adult is defined as, “an elder adult (65 years or older) or an adult, 18 years or older, who has a mental or physical impairment that substantially affects their ability to protect or provide for themselves.” The majority of the victims were females between the ages of 60-89, and 60% of the perpetrators were immediate family members or other relatives.

There are a number of reasons why incidents of abuse, neglect, or exploitation are not reported to Adult Protective Services or other authorities. One of the most common reasons is the victim’s fear that if the family member or other caretaker is incarcerated, or stops providing support, the victim will be left alone and expected to take care of him/herself, or be forced to live in a nursing home.

Many states have implemented mandatory reporting laws to assist in the prevention of abuse, neglect or exploitation of vulnerable adults. Utah is one of the many states to have a mandatory reporting law. This law states that any person who has reason to believe that a vulnerable adult has been the subject of abuse, neglect or exploitation should immediately notify Adult Protective Services or the nearest law enforcement agency. Anyone who makes a report in good faith is immune from civil liability in connection with the report; however, any person who willfully fails to report is guilty of a class B misdemeanor.

The following is a list of indicators of abuse, neglect or exploitation. It is important to note that the following lists are merely indicators and may not always be violations.

Signs of abuse:

• Unexplained bruises, welts, fractures, abrasions or lacerations
• Multiple bruises in various stages of healing
• Multiple/repeat injuries
• Low self-esteem or loss of self-determination
• Withdrawn or passive
• Fearful
• Depressed, hopeless
• Soiled linen or clothing
• Social isolation

Signs of neglect/self-neglect:

• Dehydration
• Malnourishment
• Inappropriate or soiled clothing
• Odorous
• Over/under medicated
• Deserted, abandoned or unattended
• Lack of medical necessities or assistive devices
• Unclean environment
• Social isolation

Signs of exploitation:

• Missing/”disappearing” property
• Inadequate living environment
• Frequent/recent property title changes or will changes
• Excessive home repair bills
• Forced to sign over control of finances
• No/limited money for food, clothes and other necessities

Prevention can only occur if there is awareness, the statutes are adhered to, and any suspicions of abuse, neglect or exploitation of vulnerable adults are immediately reported to Adult Protective Services and/or law enforcement.

All states have agencies that receive complaints of abuse. In some states, failure to report abuse of the elderly is a crime. To contact an abuse complaint department, call your local area agency on aging. To find an agency on aging in your area go to: http://www.longtermcarelink.net/eldercare/ref_state_aging_services.htm

Many of these caretakers find themselves in a situation where their parents did little or no planning for their physical or financial long term care. This puts the burden squarely on the shoulders of the adult children. Discussions around where the parents will live – at home, with an adult child, in assisted living – how their living expenses will be paid for, how medical decisions and final arrangements will be made can often lead to stress and contention among family members.

If you find yourself in this situation, learn from your parents’ example and don’t let the same thing happen to you and your family. Here are some things you can do right now to start planning for your future to prevent your children from going through the same experience.

It is best for parents and all family members to be involved in planning for future financial needs. The financial resources being used today could change drastically with the occurrence of a stroke, illness or onset of dementia. To plan financially for long term care, you need to know what the costs are now and what they may be in the future.

MetLife does an annual survey of long term care costs. Their 2010 survey shows that the average daily rate for a private nursing home is $229, which is up from $219 in 2009. Assisted living monthly base rate cost rose to $3,293 in 2010 from $3131 in 2009. Home health aides average $21 an hour.

Although it’s difficult to plan exactly how much or how long you will need care, you can determine what will be needed in certain living situations. Staying in your home for care will require Professional Home Care assistance, travel accommodations to doctor appointments, help with shopping, meals, medical supplies and medication and possibly a 24-hour attendant. Even if a family member is doing most of the care, eventually professional care will be required or a move to a nursing home facility will be necessary.

When evaluating your present income and assets consider how they would work for future needs.

• What are my care options?
• What type of long-term care can I afford?
• Do I have long term care insurance?
• Are there assets I can sell?
• If I stay at home how will I pay for care?
• Do I have to sell the house to pay for other living arrangements?
• Do I have life Insurance or the means to pay for a funeral and burial?
• Will my spouse be cared for financially?
• Should I do Medicaid planning?

Long term care insurance is one option for paying for care. Long term care insurance helps pay for the care you need when you can no longer care for yourself. It can protect your family’s financial future and your own investments. There are qualifications that need to be met with health and age. This type of insurance is more expensive the older the person and almost impossible to get if age related illness has already occurred.

Senior Financial Planners, Elder Law Attorneys and Veteran Benefits Consultants can assist you in evaluating your needs and future planning.

Senior Financial Planners are expert in working with seniors and their families to set up long term care plans. They usually work with an Elder law Attorney and Care Manager (Professional) to give you all options and resources for care. Elder Law Attorneys help with Medicaid Planning and Asset protection as well as legal documents needed for final requests.

If you want to stay in your home, a Reverse Mortgage may provide the funds to pay for home care.

Another option for veterans who served during a time of war is the Aid & Attendance Benefit. This benefit provides extra income up to $1,949 to help pay for home care, assisted living and medical costs. It will also pay for widows or widowers of the Veteran. To learn more about qualifications for these benefits contact a Veteran Benefit Consultant in your area.

Knowing your needs and financial resources is essential before making any long term care decisions.