MONEY Aging

A Sad Lesson From My Mother’s Decline

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A diagnosis of dementia spotlights the importance of protecting against devastating outcomes.

Lessons of financial awareness and self-sufficiency began early for me. I was just 13 and my sister was 11 when our father left us. My mother was 35 at the time and had no work experience and only a high school diploma. She had dedicated her married life to our family and supporting my father’s career.

She never had access to our household finances, ever. In the blink of an eye she was faced with having to learn how to provide for the three of us. She found a retail position, making little more than minimum wage. My sister and I did what we could to help, both working full-time in addition to going to school.

When my mother was 53, I was 31 and married with two young children. My sister and I started to notice Mom’s increasingly odd behavior. She got lost while driving familiar places, acted like a child, and forgot to bathe and wash her clothes, among other worrisome behavior. We thought perhaps she was dealing with depression and we sought professional help. She was prescribed antidepressants and went to counseling. Over the next year she continued to decline, and lost her job as a customer service representative.

Shortly thereafter, she was a target of a financial scam. She initiated three outgoing wire transfers totaling nearly $30,000, her life’s savings. To her, in her increasing confusion, it was great news! She had won the Mexican lottery! We only learned of it from a bank teller who was suspicious of the wire instructions. (If a loved one is exhibiting early signs of dementia, it’s very helpful to get to know the local bank branch staff and title accounts so they can alert family if they notice odd or uncharacteristic behavior by a longtime customer).

She soon could not pay her mortgage and we were forced to sell her home. She moved in with us. I was able to find an adult daycare to care for her while my husband and I were at work. So on we went day by day. I’d drop my kids off at school and mom off at daycare, at my expense.

Several years later, when she needed around-the-clock care, we looked for a facility that approved Medicaid, since she had no resources to pay for long-term care. This was a painful, difficult lesson – and one that I share with my clients: The time to purchase long-term care is when you don’t need it. My mother would hate knowing that my sister and I are paying out of pocket for preventative care and day-to-day expenses.

Dementia may have a long life cycle. Today my mother is 68. She has not recognized my sister or me for over six years. We have seen firsthand how 13 years in long-term care facilities can devastate a family both financially and emotionally.

There was a time when we had resources to purchase protection again these risks, and we didn’t. Dementia or other disabilities can happen at any age, and the lessons have been painful on many levels. A proud woman, my mother never expected to be financially dependent on anyone. It is a painful lesson for all of us. But if there is a silver lining, it’s this: As a financial adviser, I have been able to help others avoid making a similar mistake.

As the Baby Boomer generation ages, some estimate that as many as one in three individuals will suffer some form of cognitive dysfunction, from mild impairment to full-blown dementia. Our family wasn’t ready for this. Is yours?

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Margaret Paddock, who oversees U.S. Bank’s wealth managers and financial advisers in the Minneapolis/St. Paul market, is quick to advise her clients to make preparations for catastrophic care and provisions for situations that are hard to envision, but which can come to pass.

MONEY long term care insurance

The Best Moves to Make So a Nursing Home Doesn’t Bankrupt You

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q: I am 62 and my wife is 58. We are considering buying long-term care insurance. However, we are also wondering if we have enough assets to self-insure. We have more than $2 million and no debt. We plan to retire to North Carolina, where long-term care costs are considerably less than in New Jersey. Would you be able to help us make this decision? – Bob Hyde, Flemington, N.J.

A: The decision is understandably difficult. A nursing home, assisted living facility, or home health care can cost tens of thousands of dollars a year, and no matter where you live, a lengthy illness could quickly deplete your savings. But long-term care insurance policies are expensive and restrictive, and insurers are hiking premiums as people live longer and require more care than insurers anticipated.

The high cost is one reason fewer than 8% of Americans have long-term care insurance. Many people mistakenly believe that Medicare will cover long-term care needs. The reality is that most people use their own resources to pay, and when those assets are exhausted, they turn to Medicaid.

There’s no easy answer to the best way to plan for long-term care needs, even as people grow increasingly worried about having enough money to cover the cost of a protracted illness.

A recent study has some good news and some bad news on this front. While previous research seemed to overstate the duration of care for people who need it, the risk of requiring care at all may be higher than previously thought.

According to the study, by senior economist Anthony Webb of the Center for Retirement Research, U.S. nursing home stays are relatively short: 11 months for the typical single man and 17 months for a single woman. But the risk that an older person may one day need some kind of nursing home care is considerable: 44% for men and 58% for women.

In your case, you have substantial savings for retirement and no debt, so that should make it possible to self-insure without jeopardizing your retirement lifestyle, says Tom Hebrank, a long-term care insurance specialist and financial planner in Atlanta.

But it doesn’t have to be an all-or-nothing decision, Hebrank says. You could, for example, buy more limited coverage and plan to pay the rest from savings. That would bring the cost of insurance way down.

A couple your age would pay about $7,700 a year for a policy that would cover three years’ worth of nursing care and provide a 5% compound annual increase in benefits to keep up with inflation. If you reduce the amount of inflation protection to 4%, your annual premium drops to $6,000; at 3% it falls to $3,500.

Another way to reduce the cost of a policy is to cut the daily benefit from, say, $150 to $100. Or you could limit the number of years benefits are paid. A policy that covers three years will be about one-third cheaper than one that provides unlimited benefits, according to the American Association of Long Term Care Insurance. How much you can afford depends on your retirement income. The National Association of Insurance Commissioners (NAIC) suggests that you spend no more than 7% of your income on premiums.

You can get free quotes from the American Association of Long Term Care Insurance to price out different options.

When deciding whether or not to buy long-term care insurance, you should also consider how liquid your assets are and whether you want to preserve money for your spouse or heirs. If the bulk of your wealth is tied up in your home, it won’t be easy to tap if you need quick access to the money for medical bills. Long-term care insurance is another way to preserve your assets and protect a surviving spouse who may also need care down the road, Hebrank says.

For some people, having long-term care insurance buys peace of mind, so it seems worth the price. “They don’t want to be a burden to their spouse or kids,” he says, “so even if it’s expensive, they feel better knowing they have coverage.”

Get more answers to your questions about long-term care insurance:
What should I look for in a long-term care policy?
How much will a long-term care policy cost?
What’s the best age to buy long-term care insurance?

Read next: 5 Ways to Tell If You’re Really Ready to Retire

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MONEY Medicare

The Huge Health Care Expense Medicare Won’t Pay

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For peace of mind, you need more than Medicare.

Medicare helps more than 55 million Americans with their health care expenses, with most people age 65 or older qualifying for coverage. With benefits for everything from hospital stays to doctors’ visits, Medicare is an essential part of retirement financial planning for older Americans in dealing with one of the largest expenses they bear. Yet there’s a huge gap in Medicare coverage that doesn’t provide financial assistance for services that an estimated 70% of senior citizens will need at some point during their lives. In order to prepare yourself for those expenses, you’ll need to make separate provisions outside Medicare to ensure that you’ll have the financial resources necessary to cover the costs of care.

Nursing homes, long-term care, and the Medicare gap

Medicare covers many things, but the coverage it provides for nursing homes and other types of long-term care are extremely limited. Medicare Part A, which covers most inpatient care such as hospital visits, does make a provision for covering the costs of a skilled nursing facility. If you qualify, Medicare will pay 100% of the cost of skilled nursing facility for 20 days, and it will cover all but a $157.50 per day copayment in 2015 for the next 80 days of approved care at such a facility.

However, in order to qualify for those services, you need to have had a qualifying hospital stay of at least three days, and the care you receive at the facility must be connected to the treatment you were getting in your initial hospital visit. Once your 100 days is up, you’re responsible for all costs — and you’ll need a break of at least 60 days in a row in order to end your current benefit period and renew your benefits for future coverage.

More importantly, many people in nursing homes aren’t receiving skilled nursing services and therefore don’t qualify for Medicare benefits at all. If the only kind of care you need is custodial care such as helping you get in and out of bed, bathing, or getting dressed, then Medicare won’t cover those costs.

When it comes to home health services, Medicare also has limits. You’re entitled to up to 100 home health visits under Medicare Part A following a hospital stay, and Part B also provides certain home health benefits. But to qualify, your doctor has to certify that you’re homebound, and you must need skilled nursing care or certain other treatment such as physical therapy, speech-language pathology, or occupational therapy services. Again, Medicare won’t cover purely personal care, making seniors responsible for much of their own costs for getting in-home help.

How to bridge the gap

Unfortunately, the costs that Medicare doesn’t cover play a part in most retirees’ lives at some point during their retirement. According to a study from the Department of Health and Human Services, almost seven out of every 10 Americans turning age 65 will need long-term care at some point in their lives.

Most traditional insurance, including medical and disability insurance, follow Medicare’s rules in limiting coverage to those whom are medically necessary and involved skilled, short-term care. Even supplemental Medicare policies typically only cover the $157.50 copayment for covered services and provide nothing for long-term care.

In order to get insurance coverage for long-term care needs, you’ll need a specific long-term care insurance policy. These specialized policies cover a wide array of services, ranging from assisted living facilities and nursing homes to home-healthcare and personal care needs. Premiums depend on the age at which you buy insurance, the maximum daily coverage you choose, and the lifetime maximum benefits the policy will provide. In general, the older you are when you obtain long-term care insurance, the higher your annual premiums will be. Moreover, many long-term care policies include what are known as elimination periods, which define initial time periods of three months or longer during which you’ll be solely responsible financially for covering costs of care.

In addition, some states provide programs that assist with certain care needs for senior citizens. Nutrition programs deliver meals directly to many retirees’ homes, and transportation and personal-care assistance are aimed at making lives a little easier. Those services by themselves won’t address many of the major needs people have, but they can nevertheless help bridge some of the coverage gap in Medicare.

Medicare is a vital part of your long-term financial security in retirement, and it covers many different services. But to protect yourself against the needs for nursing and other long-term care, you’ll need to turn to alternatives to Medicare to give yourself the peace of mind that you’ll be able to cover those extensive costs.

MONEY retirement planning

Smart Moves for Controlling Health Care Costs in Retirement

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pixhook—Getty Images

Planning for later-life medical costs is essential. These steps can keep you healthy longer and ease your worries.

It’s clear that planning for later-life health care costs is essential for a secure retirement—but figuring out what to do about them is a lot less clear. Out-of-pocket health expenses are not only a big-ticket item but are not predictable or controllable. No wonder few of us build financial strategies for future health needs, preferring the ever-popular ostrich plan: Place head in sand and hope for the best.

“Less than one out of six pre-retirees has ever attempted to estimate how much money they might need for health care and long-term care in retirement,” according to a report by Merrill Lynch and Age Wave, a consulting firm. Knowledge about Medicare is abysmal, the survey found, even among those already enrolled in the program.

And a recent health benefits survey by the Employee Benefits Research Institute, a non-profit retirement industry think tank, found that while nearly half of workers were confident about their ability to get the treatments they need today, only 30% were confident about that ability during the next 10 years, and just 19% are confident once they are eligible for Medicare.

Having a plan is a good way to build confidence. So start by taking a look at the mirror and asking yourself: How long do you think you’ll live and how healthy will you be in your later years?

“A 65-year-old male in excellent health can expect to live to age 87, while the same male in poor health has a life expectancy at age 65 of approximately 81 years,” said a recent study from the Insured Retirement Institute, a trade group that pushes annuity investments. A 65-year-old female in excellent health has a life expectancy of 89, or 84 in poor health. An average couple age 65 has a 40% chance that one or both will live to age 95.

While living to an old age may be better than what’s behind Door Number Two, it may prove costly. Old-age health expenses tend to be loaded into the last few years of life, often to deal with chronic illnesses, especially Alzheimer’s.

Average out-of-pocket health care expenses for that 65-year-old male will be an estimated $246,000 for the rest of his life if he is in poor health and dies at 81, the IRI study said. The lifetime bill rises to $345,000 for the healthy man who survives to an average age of 87.

Adopting healthy lifestyle habits may significantly reduce older-age health expenses. Just as important, it’s the best investment you can make in a higher quality of life during your later years.

The Merrill Lynch-Age Wave study recommends these proactive planning steps:

  1. Map out future out-of-pocket health expenses, including estimating future Medicare premiums and co-pays.
  2. Learn how Medicare and long-term insurance work.
  3. Develop contingency plans, for you and other family members, should illness cause lost income from an extended work disability.
  4. Broaden your planning to include those family members most likely to comprise your caregiving and financial support network.

The IRI report, not surprisingly, sings the virtues of using annuities to provide guaranteed lifetime streams of income to deal with long-running health care expenses. Many financial advisers prefer other investments. But you should at least look at annuity options as part of your long-term financial planning anyway.

If you’re especially worried about running out of money in your 80s— and, God willing, your 90s—then you should explore deferred annuities. Often called longevity insurance, a deferred annuity can be designed to not begin payouts until old age. If you buy one of these products in your 50s or 60s, the insurance company will provide very attractive payment terms. And it should, of course, because it will have the use of your annuity purchase money for 20 or even 30 years, with a good chance you’ll die before they have to pay you a cent.

The other insurance product worth a close look is long-term care insurance. Increasingly, this product is being linked with annuities to provide purchasers with choices—receive annuity payments or use the money for a qualifying long-term care needs. Generally, such hybrid products provide less bang for the buck than a pure annuity or long-term care policy. Also, keep in mind that your goal here should be to protect you and your family from ruinous health care bills. This is primarily an insurance product, not an investment.

Finally, the best annuity around is Social Security. It offers lifetime payments, annual inflation protection and government payment guarantees. That’s why I pound the drum of deferring Social Security until age 70, if it makes sense for your financial, family and longevity profile.

Philip Moeller is an expert on retirement, aging, and health. He is an award-winning business journalist and a research fellow at the Sloan Center on Aging & Work at Boston College. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

MONEY Financial Planning

The Tough Talk Worth Having With Your Parents This Weekend

Conversation with grandparent
Silvia Jansen—Getty Images

Midyear is a great time for adult children to have a discussion with their parents about finances.

Do you find yourself in the Sandwich Generation, squeezed by dependent children on one side and caring for your parents, financially and otherwise, on the other? Now, at the middle of the calendar year, is a good time to have some difficult conversations with your parents.

One reason why a midyear conversation is ideal comes from author Stephen Covey. In his book The 7 Habits of Highly Effective People, Covey likens people’s banking activity to their personal relationships. Making deposits of goodwill will offset withdrawals — tough conversations, for example — and keep the relationship net positive. Many families have yet to recover from overdrawn relationships!

As a midyear mark, the beginning of July falls on the heels of Mother’s Day and Father’s Day — occasions for significant (and often expected) deposits into parents’ lives. The beginning of summer keeps the positive momentum by ushering in a mindset of fun and relaxation.

Among financial planners, the middle of the year is also a traditional time to review clients’ finances. Planners discuss with clients their net worth, asset allocation, and estimated taxes, among other financial areas, to ensure progress toward the client’s goals.

These factors make July an ideal time for people in the Sandwich Generation to talk about finances with their parents. This sensitive conversation requires effort and sound strategies. You can make the conversation relevant, for example, by linking it to a triggering event experienced by the parent, such as a pronounced illness or unexpected job loss close to retirement.

In a midyear review, financial planners can give their clients some guidance with how to conduct this conversation. Some of the questions that financial planners ask of clients in the financial planning process are relevant for clients to ask of their parents: How do you envision your life ten years from now? What fears do you have in reaching the quality of life you envision?

Working with a financial planner also exposes people to tools and techniques for understanding their parents’ financial situation. To build the foundation for gauging your parents’ financial needs, you can request from them, or create with them, the same materials that planners assemble with their clients: A net worth statement, for example, a spending plan, long-term care insurance coverage, and estate planning documents.

The client’s family values and the financial impact of any parental financial dependency are key areas of focus for planners and Sandwich Generation clients. For example, the aging parent of a client may envision being cared for at home instead of a nursing home. Honoring the parent’s desire becomes a family value of shared responsibility of time and money, particularly if there are gaps in long-term care insurance coverage. A client has to figure out how much of the gap he or she can handle, along with whether any other family members will help meet this goal.

Having the mid-year talk also plants the seeds for follow-up conversations during Thanksgiving, Christmas, or other year-end holidays. Starting the conversation early takes the edge off the discussion and channels the energy toward building and protecting family legacies during a time of celebration and reflection.

The Sandwich Generation literally cannot afford to delay these conversations. This group suffered proportionally worse than other generations during the most recent economic crisis. The financial pressures from high student debt, coupled with a decade of low returns and negative home equity, continue to squeeze the financial wind out of these households. Caring for parents and children adds further financial strains to household budgets with little or no capacity for additional expenses.

Sandwich Generation, let the talks begin!

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Lazetta Rainey Braxton is a certified financial planner and CEO of Financial Fountains. She assists individuals, families, and institutions with achieving financial well-being and contributing to the common good through financial planning and investment management services. She serves as president of the Association of African American Financial Advisors. Braxton holds an MBA in finance and entrepreneurship from the Wake Forest University Babcock Graduate School of Management and a BS in finance and international business from the University of Virginia.

MONEY Insurance

Overweight? The Skinny on Insurance

Junk Food
Dwight Eschliman—Getty Images Unhealthy food and lack of exercise can have an impact on insurance planning.

Buying life, disability, and long-term care insurance poses special challenges for people who are overweight or obese, explains a financial planner who's also a physician.

While people think of illness as something that can strike at anytime, that’s not really true for the majority of illnesses that can affect a financial plan. That’s because so many of those conditions affecting people’s finances relate to being overweight or obese. You can literally see the problems that may arrive.

Financial advisers need to be aware of health issues that their clients face; weight and lifestyle are very good places to start. People usually start working with a financial planner once they reach their 20s or 30s — coinciding with the same period people settle into a lifestyle that will determine their future health.

Financial planners: Does your client exercise regularly and avoid unhealthy foods? Or is he or she more likely to watch sports than actively participate? Understanding a client’s lifestyle can improve planning in many areas and may actually spark a healthy lifestyle change for your client.

A key element of a financial plan is insurance. Do you have any young, overweight, and otherwise healthy clients with no plans to change their trajectory? Ask about their family history. If a close family member has diabetes or heart disease, there is a very high chance that your young client will develop the same problem. These illnesses don’t happen overnight – they develop over a number of years. Getting proper insurance coverage early is key in this situation.

The good news: The epidemic of obesity in the U.S. has made it easier for obese people to qualify for good rates on disability, life insurance, and long term care insurance. Since 68% of our population is overweight or obese, who would the insurance company sell policies to if they were too strict on people with weight problems?

The problem is that once a person has actually developed a health problem related to obesity, insurance companies will show no mercy. Getting coverage will be extra difficult.

So what should an overweight person be doing about insurance?

  • Life insurance: Although I usually recommend term life for most clients, you may want to take out a permanent life policy. A person may be uninsurable 10 or 20 years down the road when the term is up. Obtain a rider to waive the premium for disability – this will guarantee that the policy stays in force even if the insured can no longer pay premiums because of disability.
  • Disability insurance: Maximize coverage and consider graded premiums — annual premiums that start out low and rise with age. Since someone who is obese is more likely to claim disability before someone who isn’t, putting off paying high premiums may be a way of avoiding them altogether.
  • Long-term care insurance: Investigate coverage at a younger age. Most people start thinking about long-term care insurance in their fifties. For people with known risk factors, it makes more sense to begin looking in their forties.

Planning is challenging with a young person on the path to poor health. It is important for them to be insured because their risk of illness may affect their ability to save down the road, and they may incur significant health expenses. These conversations are tough for a planner and client to have, but valuable for the client. By addressing lifestyle and health issues in planning, and paying attention to health along the way, planners can help maximize the client’s enjoyment of life now and prepare them for what the future holds.

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Carolyn McClanahan is a physician, financial planner, and founder of Life Planning Partners, Inc. In addition to running her financial planning practice, she educates financial planners, health care professionals, and the public on the intersections of health and personal finance.

MONEY Health Care

Help Your Parents Get the Right Home Care

Photo: Jason Hindley The right home care can make it possible for many seniors to age in place.

Your parents probably want to age in place. The right home care is the key to making it happen.

The vast majority of Americans want to live at home for as long as possible: Nearly 90% of people over the age of 65 said so in a 2010 AARP survey.

And with assisted living costing more than $40,000 a year on average, staying put can also save money. But the physical and medical problems that go hand in hand with aging can make home life difficult.

That’s why seniors — and their adult children — are increasingly hiring help to extend their time at home. Demand for these services is so strong that the Labor Department expects the number of aides to rise by 70% through 2020, making it the fastest-growing job in America.

The cost of help, though, can add up fast, averaging $21,000 a year for a typical part-time schedule, says MetLife. And more often than not, the government or insurance won’t foot the bill. Take these steps to find the right care:

Identify the need

After a hospital stay or health crisis, it’s often obvious that a parent should have help. In those cases a doctor may prescribe short-term skilled nursing care or physical therapy visits, which should be covered by Medicare.

Other times, the need is tougher to spot: dirty dishes in the usually tidy kitchen, stubble on Dad’s typically clean-shaven face.

“When you see longtime habits changing, that could be a sign,” says Kathleen Gilmartin, chief executive officer of home health franchiser Interim Healthcare.

Your own heavy caregiving load could also be the trigger: “Home health aides give family caregivers a break from the stress and let them manage their own life,” says Denise Brown, founder of online support site Caregiving.com.

The type of care varies, from health aides and nursing assistants who can help with bathing, dressing, and medication reminders to workers who’ll do light housework and fix meals. In both cases you’ll pay about $20 an hour through a home health agency, says MetLife (for live-in care, the average tab is $250 a day). By hiring directly you can pay about a third less, says Steve Horen, CEO of the home agency Koved Care.

A geriatric-care manager ($150 to $200 an hour) can do an assessment of your parents’ needs. Locate one at caremanager.org.

Hire carefully

A geriatric-care manager or home health agency will screen candidates and conduct background checks. You can find an agency at homecareaoa.org. Advertise directly, and you’ll need to do the due diligence, including checking references and credentials. Health aides and nursing assistants are generally certified by the state.

No matter where you get the names, interview at least three potential hires. Look for a pro who has experience taking care of someone with your parents’ particular needs. “If your father is grumpy and doesn’t like to eat in the morning, ask the caregiver how she would handle that,” says Jody Gastfriend, vice president of senior-care services at Care.com.

When you hire through an agency, the company acts as the employer, withholding taxes and paying unemployment and workers’ comp insurance. While many people who hire direct pay cash, by law you must contribute to Social Security and Medicare on the caregiver’s behalf. A service like Breedlove.com or HomeWorkSolutions.net will handle taxes and insurance for $700 to $800 a year.

Once you’ve found someone you like, make him or her feel valued and comfortable. These jobs don’t pay great, so try to be flexible about scheduling. And, adds Gastfriend, “express thanks for the often challenging work they do.”

Investigate aid

Some 70% of home health bills are paid out of pocket, according to the market research firm Home Care Pulse. Still, don’t overlook any aid options.

Most long-term care insurance policies cover visits when a person cannot perform two to three “activities of daily living,” such as meal prep or bathing. Medicare pays only for doctor-ordered, skilled nursing care. If your parents have very little in assets, Medicaid usually covers part-time help. Check benefitscheckup.org for eligibility and find local services at eldercare.gov.

MONEY Health Care

Who Is Your Biggest Health Care Advocate?

Photo: Joshua Scott To find the right kind of health-care provider, you have to think outside of the medicine bag.

Got a tricky or specialized health care situation? To find the right kind of provider, you have to think outside the bag and seek out a new kind of pro.

Your primary-care doctor can be a gatekeeper for all sorts of specialized care, but there are some things he can’t do. Maybe you’re dealing with a non-medical issue such as billing, for example, or making a care plan for a loved one.

“In our fragmented health care system, doctors don’t speak to each other,” says Byron Cordes, president of the National Association of Professional Geriatric Care Managers.

Here are four times to try a different kind of provider:

For billing or treatment problems

Who: Health care advocate

Why use one: Up to 80% of medical bills contain costly errors; an advocate can help you sort out the mess. Struggling to make a decision about care for an ongoing issue? An advocate can also help you get a second opinion and figure out the best treatment plan.

Where to find one: You can find local advocates via companies like Best Doctors or HealthCare Advocates, which contract with large companies that offer this service as a perk.

Besides several years’ experience, you want to have an advocate who works as part of a team, to fill in any gaps in his knowledge, says Joanna Smith, founder of the National Association of Healthcare Advocacy Consultants. The advocate should also be willing to sign a service agreement detailing the nature of the work he’ll perform and what he’ll be paid.

Typical cost: Depends on the work involved; $125 to $500 is typical.

Insurance coverage? No

For end-of-life care and serious conditions

Who: Palliative-care workers

Why use them: People commonly use these specially trained hospital-based teams (often a doctor, nurse, social worker, and chaplain) to help manage loved ones’ end-of-life care. But palliative-care workers can also assist patients and their families outside the hospital in coping with severe, chronic illnesses.

They might help a cancer patient weigh the pluses and minuses of undergoing another round of chemo, for example, or work with an HIV patient to reduce nausea and pain.

Studies show that patients who receive early palliative care sometimes live longer and have a better quality of life than those who don’t, and their health care costs are often lower.

Where to find one: Most large hospitals and some nursing homes offer palliative-care services; Go to www.getpalliativecare.org/providers to find one in your area.

Typical cost: Depends on insurance.

Insurance coverage? Yes

For elder-care issues

Who: Geriatric-care manager

Why use one: These pros, usually nurses or social workers, do anything from researching assisted-living facilities to getting meds delivered to providing referrals to elder-law attorneys.

“We find the chinks in seniors’ armor and make recommendations to fix them,” says Cordes. Getting the right medical care and other support upfront means Mom is less likely to undergo a scary, expensive hospital stay.

Where to find one: Find local help via the National Association of Professional Geriatric Care Managers. You want someone who is knowledgeable in the area you need — a nurse is best for medication management, for example — and has a minimum of two years’ experience.

Typical cost: $100 to $150 an hour.

Insurance coverage? Some long-term-care policies will cover the cost.

When fighting mild ailments

Who: Your company doctor

Why use one: Boss not happy about your taking half a day off work to get a prescription for pinkeye?

Nearly half of large firms offer on-site health clinics staffed by MDs and registered nurses. While they usually handle mild issues like fever or flu, they also increasingly are providing primary-care and wellness services, from physicals to diabetes management.

Some clinics even welcome employees’ children and spouses, as well as retirees, says Bruce Hochstadt, a health and benefits consultant at Mercer.

Where to find one: In your building. Some small firms may have clinics at central locations. Check with your HR department to see what’s available.

Typical cost: Free or reduced co-pay.

Insurance coverage? Sometimes.

MONEY

Premium Hikes Loom for Long-Term Care Insurance

One of the nation’s largest providers of long-term care insurance is planning to raise premiums an average of 40% next year — a move that revives the longstanding question of whether the pitfalls of buying a long-term care policy outweigh the payoffs.

John Hancock — which, boasting more than a million LTC insurance clients, says it’s the largest provider of employer-sponsored group LTC insurance in the country, and one of the largest carriers of individual LTC coverage — wants current customers to start paying higher rates starting next spring.

The planned rate increases, along with a sales freeze on new group policies, were first reported last month by the trade publication National Underwriter Life & Health, which calls John Hancock “one of the pillars” of the LTC insurance industry.

As of last year, more than seven million Americans were covered by LTC insurance under individual or group policies, according to the financial-services trade organization LIMRA.

The John Hancock news isn’t the only recent report of sharply rising costs for LTC coverage, which helps people pay for nursing-home care or home health care should they become incapacitated. Late last month, Congressman Frank Pallone, Jr. (D-N.J.) said he was launching a probe of LTC premium hikes, starting with four companies — John Hancock wasn’t among them — that he said had raised rates for New Jersey customers 25% to 35%.

Nor is it the first time that purchasers of LTC insurance have been rudely surprised by giant rate increases. Three years ago, in a story about the challenges of buying coverage, MONEY wrote about a customer who bought a long-term care policy — again, not from John Hancock — only to see his premium rise nearly 30% the following year. “It all smacks to me of a bait and switch,” the customer said.

At the root of rate increases past and future is a pattern of seller’s remorse in the LTC business. Collectively, LTC insurers have had a long history of selling coverage to thousands of people at particular prices, only to discover later that they underestimated the money they’d ultimately have to pay out in claims. One of the highest-profile consequences of that came two years ago, when LTC insurer Conseco, citing an LTC business it said was a financial drain on all of its insurance operations, got permission to spin off part of its business into an independent trust. The spun-off unit, it was reported this July, told California customers this year it would be raising their rates as much as 35%.

You would think by now that the insurance industry would have gotten its act together about LTC pricing. No such luck. John Hancock, a unit of Manulife Financial MANULIFE FINL MFC -0.61% , says the rate increase comes in the wake of a 2010 study in which it found it was paying out more to customers than it had planned. “Our recent claims study found that the incidence and severity of claims are significantly higher than expected, and the duration of claims is longer than expected,” a John Hancock spokewoman wrote in an email. “Mortality improvements observed throughout the LTC and Life insurance industry have also led to more people reaching the age where claims are more likely.”

Here’s the crazy part: The last time John Hancock says it conducted a claims study such as this one was in 2007. In other words, the company had problems projecting what its costs might look like just three years later.

That raises a thorny question for potential customers: If an insurer has that much trouble figuring out its business three years down the road, how much sense does it make to commit yourself to being a customer of the company for 20 or 30 years? There’s a lot at stake here: The money you might need to stay in a nursing home without going broke, along with all the premium money you’d be paying in the interim.

And that money is indeed substantial. For all the underpricing that the industry appears to have done, LTC coverage isn’t cheap. John Hancock says its average annual individual-plan premium amounts to $2,300. The proposed increases would bring that number to more than $3,200—an increase easily big enough to dent the budget of a worker or retiree with an LTC policy. Customers affected by the rate hike will most likely end up accepting a reduction in benefits in order to keep their premiums down, one insurance industry source told the trade magazine InvestmentNews.

So the promise of LTC insurance makes sense: The idea that you’ll be protected in your old age should you need expensive day-to-day care. But will the actual product deliver the peace of mind it’s supposed to? With rate increases like this one, it’s hard to say.

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MONEY Health Care

The Coming Long-Term Care Crisis (and Why Personal Finance Can’t Solve Every Problem)

I’ve been a personal-finance journalist for over a decade, and what I’m about to say almost amounts to heresy in my line of work: Some of your most pressing financial questions just don’t have any satisfying answers. There may not be much you can do.

Most financial advice sounds like something out of a how-to manual. Building a table with a dovetail joint? Go get a fine-tooth saw and sharp chisels. Want to shelter your retirement savings from future taxes? Put it in a Roth IRA. But there’s a whole set of money problems that can’t always be solved by finding (or buying) the right tool.

The best example of this: Paying for long-term care, whether it’s for your aging parents or for yourself. In his new book Caring for Our Parents, the journalist and Urban Institute researcher Howard Gleckman makes a compelling argument that the cost of long-term care will be the next shoe to drop in America’s ongoing health-care crisis.

This story is personal for Gleckman (who also edits an excellent blog on tax policy). In the course of just a few months, first his father-in-law and then his father fell ill. His family had shell out thousands of dollars to pay for just a few weeks of nursing-home care, and then battled with a Medicare managed-care insurance company that refused to pay $85 a day for his dad’s at-home aide. Even little things were a struggle: For a time, the only way his father (who lived in a different state) could get to a doctor was to call an ambulance. “I was a journalist and my wife was a lawyer, [but] we were hit with this huge crisis and we didn’t even know where to start,” Gleckman told me recently.

That huge complexity is likely in your future, too. About 70% of seniors will eventually need some kind of long-term care, according to one study Gleckman cites, and most of that isn’t covered by Medicare. (Long-term care isn’t medicine and doctors—it’s the people with strong backs who lift you out of bed and make sure you are eating.) A day in a nursing home runs an average of $180, and the rate keeps going up faster than inflation. After you burn through your lifetime of savings or home equity, the main safety net to pay for this is Medicaid, the government insurance program for the poor. With 77 million baby boomers hurtling towards retirement, that system is likely to come under major financial pressure.

This is where the “right tool” problem comes in. There is a product on the market that’s supposed to solve this: long-term care insurance. But it’s an answer with a lot of asterisks. A couple of years ago, MONEY’s Amanda Gengler and I took a close look atLTC insurance and who it might be right for. Read it here.That story kept me up at night with worry about offering the right advice—the stakes of the decision to buy insurance can be very high, and the product is dauntingly complex.

Among the questions you’ll have to tangle with: Are you buying enough coverage (or the right kind) to pay for unpredictable future costs? Will you be able to afford to keep paying the policy 10, 20, or even 40 years from now, especially if premiums rise? And these days, you’d have to add: Can you trust the financial strength of the insurance company?

Speaking very broadly, long-term care insurance can make sense if you’ll have enough money to comfortably pay premiums for life, expect to have an estate worth preserving, and are willing to do a lot of careful research to make sure you get the right policy. In short, while today’s private LTC insurance can work for some people, it’s not going to be an affordable solution for most us. And so it also won’t protect the younger taxpayers who are going to be on the hook for more and more of these costs in the coming decades.

Gleckman thinks we’ll need to set up some kind of public or hybrid public-private insurance system, so that more Americans will be preparing in advance to pay for the cost of their own care. This insurance might pay just part of the costs, leaving plenty of room for private insurers to sell supplemental coverage. Ideally, Gleckman says, the insurance would be mandatory, so that, by spreading the cost among millions, the premiums could be kept low.

America is already facing a hefty bill for boomers’ retirement and regular medical costs—can we really add long-term care to the government’s menu of responsibilities? The truth is that cost is going to hit us whether we plan for it our not. And this is one problem we’ll need to face as a society, not just as individuals.

—Pat Regnier

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