“This just in…..” recent developments

Several interesting news items worthy of sharing with you have crossed my “desk” recently. So, tune in:

Longevity and the cost of long-term care

Five columns ago we dialogued about how much longer we live than our parents and grandparents did. Remember, we explored how that, plus family lifestyle changes and the inflating cost of the services that we demand, sharply increases that longevity’s cost.

Genworth Financial’s annual “Cost of Care Survey” for 2015 updates us on local prices nationwide of various major elder-living aspects. Among them is the “heavyweight,” long-term care, for coping when we’ve lost the ability to manage vital activities of daily living (ADL’s):

In the Grand Strand, you’ll pay around $20 per hour for a housekeeping personal assistant, $21 for a home healthcare aide. “Not too bad!” we exclaim. But there are over 700 hours in a month, and over 8,760 in a year, and that translates to well above $14,000 per month and more than $170,000 over a year — just one year! Isn’t that a powerful motivator for us and for the family to boost our caregiving skills, so that we can cover many or most of those hours without hemorrhaging twenty-plus dollars for each hour?

Of course, adult day care centers provide some pocketbook relief, because we can enjoy their “TLC” and social life all day long for the cost of only three hours of home care. But, of course, some can’t handle the commute or the day care center’s limitations, and, besides, we still have to cover the rest of the day and night.

Guess what! About $3,500 per month covers the rent and basic care in a Grand Strand assisted living facility, not counting needed add-ons. So, the oversimplified math (ignoring all of everyone’s quality-of-life dynamics) reveals that living there costs less than it does at home if we need more than about 175 hours’ home aide care in a month. Plus, the facility provides at least some meals, social life, and usually some maid service. Hmmmm!

Then, of course, when we’ve lost enough ADL’s to need full-service nursing home care, in the Grand Strand we’re in for about $6,000 per month basic fee (semi-private room), plus needed add-ons, hence the $70,000-plus that we recently reported to you.

Ouch! But, be glad we’re not in the Northeast, south Florida, and the West Coast, where that $70,000 nursing home cost reaches well over $100,000. Also, of course, Medicare will help for a while post-hospital. Medicaid might help, too, and more and more of us are becoming eligible for it.

The fortunate among us who have long term care insurance can expect our premiums to rise substantially this year, averaging 9 percent, according to “Elder Law News”, a prominent law firm’s monthly newsletter. Anticipating even higher costs, insurers are trimming the benefit durations and increasing the waiting periods in new-issue policies, too. Of course, if your in-force policy is guaranteed renewable, you’re insulated from those benefits cutbacks. Today, buyers under age 60 get the best deals – Even if that’s not you, tell the kids!

ICD-10: Today’s hassle, tomorrow’s blessing

We’ve been hand-wringing about the health care delivery system’s problems, too. For the last couple of months the confusion and angst that you’ve sensed in Doc’s office and other facilities is caused by the “International Classification of Diseases, 10th Edition”, the computerized information system’s new language.

Beginning on October 1, everyone in the system has to use its new “dictionary”, increasing its 14,000 codes to more than 68,000. One practicing physician exclaims: “It’s as if we’re suddenly beamed up to the Klingdon Empire, and we’re paralyzed and can’t function until we learn Vulcan.”

So, why is this burden thrust upon us? Lauren Neergaard explains why the new precision is so beneficial in the September 7 “Health and Science”: It captures far more detail from a patient’s chart, clueing other involved providers about exactly what they should concentrate on, and it saves time by reducing the need for further and redundant examining. It’ll reduce the perceived need for more or duplicative testing, too. Providers’ information systems will be more uniform, enabling fuller, more accurate, and quicker communication and utilization. “When a case of early kidney disease in a diabetic comes in, it tells us right away all the details unique to that patient’s diabetes.”

“We know from the urgent care center’s coding what species of animal inflicted the bite, and can address the right sort of infection exposures right away.”

Insurers can reduce claims errors caused by the old generalized, broad, imprecise claim coding. Public health researchers have vastly improved data for spotting the beginnings of epidemics and for researching therapies. American providers can communicate instantly with counterparts in other countries, where the system already functions well.

So, let’s be patient (pun unintended) and compassionate, and give beleaguered Doc and company a break. It’ll be great in the long run for all of us.

Longevity Annuities: A New Tax Shelter

Remember our pros and cons piece about annuities? On July 1, the U.S. Treasury issued final rules liberalizing the withdrawal start-date options for 401(k) and traditional IRA accounts.

The rules are technical, of course, but the gist is that accountholders now can defer the start-date for part of their distribution value, and therefore the income tax, by converting the lesser of 25 percent of their accounts or $125,000.00, into a longevity annuity, exempt from the age 70 ½ required minimum distribution guillotine. Once the annuitant starts the deferred payouts, they’re guaranteed for life. Residual benefits at death return to the original account for distribution to the beneficiaries, but subject to the original tax rules.

Even if you’re beyond eligibility for this break, tell the kids. It’ll be major.

There’s lots more interesting background and forecast implications in Ashlea Ebeling’s article in the July 1 “Forbes” magazine. You can Google it to access it on-line.

Do the kids have to pay for your care?

Believe it or not, if you live in one of about 30 states, “filial responsibility laws” hold your children responsible to pay your long term care cost — and you, theirs. I bet you didn’t know that, did you?

But, don’t panic – You didn’t know about it because it rarely happens! So many residency, financial ineligibility, family-dynamics, military and public service, time-line, and numerous other exemptions prevail, that hardly anyone gets nailed. In fact, like criminal prosecutions for adultery, the laws are rarely enforced. South Carolina even isn’t one of those 30, but North Carolina is.

So, why am I bothering you with this? Partly because it’s amusing and interesting. But, an elder-care law firm’s monthly newsletter reports that there’s a burgeoning movement among long-term-care institutions, largely in vulnerable Pennsylvania, pushing for enforcement as a potential means to collect for patients’ care.

Sixty percent of nursing home patients are on Medicare and otherwise indigent, leaving the institutions deep in the red.

For more, you can pursue all of these topics more deeply if you like, by Googling them.

This story was originally published November 5, 2015 at 10:53 AM with the headline "“This just in…..” recent developments."