# Presentation: 099265

## Critical Conversations About Financing Long-Term Care

- Marlene S. Stum, PhD
- University of Minnesota
- mstum@che.umn.edu

- Plan for later life events
- Changing health and independence
- --including long term care
- Act
- Identify and communicate
- strategies to manage the
- risk of long-term care

## “We didn’t think it would turn out this way”

- “We’ve never seen or talked to anybody about financing . . .we would have to get to a point where it’s a concern.  Sometimes I think it is better to take your chances, hoping that you die before you get there.  What we thought we’d do is go the way we are until we run out of money and then figure out what to do
- 	--Husband with Parkinson’s and caregiver 	wife

## “We didn’t think it would turn out this way”

- or wants to admit they might
- need long term care someday.
- “We planned for a shorter and healthier retirement”
- “I never expected to live this long!”

- “We didn’t think it would turn out this way”

## Financing Long Term CareDilemmas and Decisions

- Major gap in financial planning throughout the lifecycle
- Critical gap in later life financial security
- Few have done any planning
- Won’t admit we might personally be affected

## Financing Long Term CareDilemmas and Decisions

- Think we know more than we do!
- Significant gaps in perceived versus actual knowledge of 45+ year olds and baby boomers
- Don’t understand risk, costs, financing options
- Believe we have coverage when we probably do not (existing insurance/government sources)
- Gaps in knowledge makes it tough to plan for long-term care!

## Existing Educational Resources

- Misrepresent what “long term care” involves
- Are developed by sources with a self-interest in the message
- Are too complex, overwhelming, and technical
- Focus on one private or public financing alternative

## Existing Educational Resources

- Focus on solutions without helping consumers understand the problem
- Ignore complex family values and goals
- Ignore long-term care risk as part of retirement planning
- Too general or too specific given differences in state policies/practices

## Opportunities for Extension

- Provide knowledge-based messages
- Offer objectivity and credibility in messages
- Present holistic picture of issue/decisions
- Offer “plain language” tools
- Focus on individual and family decision making processes
- Address legal, financial, and social/emotional dimensions of the decision situation

## Opportunities for Extension

- Collaborate with credible partners
- Area Agencies on Aging
- Health Insurance Counseling Network/SHIP
- Human resources/benefit departments
- Providers of specific alternatives
- Build family decision-making research base
- Train other professionals and providers

## Challenges for Extension

- There are no “answers”or simple formulas
- “Just tell me what to do”
- A changing and complex moving target
- Finding teachable moments
- Marketing the topic
- Baby boomers and younger audiences
- Integrating with retirement and risk management planning

## Challenges for Extension

- Establishing appropriate boundaries
- As Extension
- Depth and detail decisions
- Focus on one alternative only?  NO
- Interpreting rules--eligibility/assessment?  NO
- Personal financial planning role?  NO
- Avoid duplication--who is doing what in your state?
- As Educators
- Conflicting personal values and attitudes
- Framing problem, alternatives, solutions
- Sending implicit messages

## Challenges for Extension

- Need for state specific additions
- Medical Assistance/Medicaid
- Long-term Care Insurance regulation
- Long-term care language/options
- State/local financing options/waiver programs/services
- Variation in long term care costs and availability

## A growing family economics research-base helps understand:

- What decisions are being made (outcomes)
- Long-term care insurance (individual/group)
- Medicaid estate planning
- Utilizing personal resources
- Avoidance/immobilization
- How decisions are being made (processes)
- What factors are influencing decisions
- Individual, Family, Macro-environmental
- Planning barriers/motivators

## Critical Conversations About Financing Long-term Care

- Recognize your risk of long term care
- Understand possible costs and potential financial implications
- Sort out expectations and goals
- Understand financing alternatives and consequences
- Why plan now, before a crisis

## Long-Term Care

- Help with daily living activities and remaining independent
- Eating, bathing, dressing, transferring, walking, toileting, taking medications, shopping
- Wide range of personal, social and medical services
- Provided in a variety of settings:  in-home, community, skilled nursing facility

## Most who need long term care

- Live in their own homes
- Receive unpaid care provided by family/friends
- Overestimate the chance of needing nursing home stay
- Underestimate need for in-home and community services
- Are unprepared for needs increasing gradually overtime
- Are unfamiliar with new and changing options

## Who’s at risk?

- The long-term care population is diverse in age and level of disability.
- A risk across the lifecycle
- 57% over age of 65
- 40% below 65 years of age
- 3% are children

## Who’s most at risk?

- Individuals 85 years and older
- Need help with more activities of daily living
- Experience increased rates of home care and nursing home use
- Individuals with chronic health problems
- Individuals who lack social support and unpaid caregivers
- Women

## Prevalence of Long Term Care Need

- Age:  65-74
- In Community: 11%
- In Institution: 1%
- Age 75-84
- In Community: 22%
- In Institution: 5%
- Age 85+
- In Community: 49%
- In Institution: 21%

## What are the risks?

- After age 65, almost 3/4ths will need some home care and almost half will spend some time in a nursing home.
- Average lifetime home care use is just over 200 visits.
- Average lifetime nursing home use per person is one year.

## Potential Costs: Underestimated

- In-home care:
- Degree of need and health status
- Type of service used
- Home health aide:  $80/hour
- Community services
- Adult day care:  $60/day
- Assisted living
- Skilled Nursing Home Care
- One month average in U.S.-- $5000 ($60,000/year)
- Northeast and West highest:
- CT-$223/day; CO--$133/day; Arkansas--$79/day

## Sort out Later Life Financial Goals and Expectations

- Multiple, complex and competing goals are behind later life financial decisions
- There are no “right” goals--beware of assumptions
- Understanding the meaning of a goal is essential (e.g. what does “control” mean?)
- Make unwritten and unspoken goals explicit
- Goals provide direction for selecting financial alternatives

## If I would need long term care, I would expect to:

- Remain financially independent
- Maintain control of my finances
- Keep my financial affairs private
- Involve family members (care/financially)
- Utilize government services
- Leave an inheritance

- “Family” will not be one voice
- Goals can be a common source of conflict
- Between spouses/partners
- Across the generations
- Help elders and family members prioritize competing goals
- Identify where there is agreement and/or disagreement

## Understand Financing Alternatives and Consequences

- Identify the range of private and public alternatives
- Personal resources
- Private insurance
- Government options
- Help understand factors that can and/or should affect which alternative to select
- Lead to specific credible resources

## Understand Financing Alternatives and Consequences

- There is no one financial answer or solution
- Consider a combination of alternatives
- Later life financial goals should influence which alternatives are most appropriate
- Options and choices typically decrease with age and increased risk
- What was may not longer be . . .change is a given.

## Who does pay for long term care?A patchwork of public and private sources

- Income and life savings of elders
- Unpaid family caregivers
- Medical Assistance/Medicaid for low-income
- Long-term care insurance
- NOT existing health insurance policies, Medicare Supplement policies
- Role of Medicare blurred with expansion into home health care coverage

## Critical Conversations About Financing Long-term Care

- Facilitator’s Guide
- Content and suggested activities
- PowerPoint presentation
- Participant handouts
- Myths/Facts Quiz
- Protect Your Later Life Financial Health fact sheet
- Critical Conversations About Later Life Financial Goals worksheets (versions for older generation and adult children)
- Financing Long-term Care Alternatives and Considerations
- Evaluation tools

## Impact Evaluation

- Improved overall financial knowledge and literacy:
- Risk
- Costs
- Alternatives
- Changed behaviors and practices:
- Gathered information
- Assessed situation
- Discussed with others
- Selected financial alternatives and strategies

## Critical Conversations About Financing Long-term Care

- Access curriculum after April 25th
- Go to www@reeusda.gov/financialsecurity
- Click on “educator” bar
- Go to Programs/Resources
- Select “Critical Conversations curriculum”
- Follow guidelines for making state-specific
- Identify and critique existing state-specific resources before using

## Coming Fall 2002

- Web-based resource providing anytime access to educational tools
- up-to-date
- unbiased
- plain-language
- practical
- interactive

## Website Critique

- Examined a random sample of first 100 sites found using top seven search engines and financing long term care key words
- Majority of sites:
- macro-policy level decision making
- government related sites (regulating, implementing)
- 102 of 700 sites addressed how to finance long term care and focused on helping individuals make financing decisions.
- 62 sponsored by a company
- 31 directly selling long term care insurance

## Welcome to Financing Long-term Care			A Resource Center for Families

- The goals of this site:
- Improve what people know about long term care as a family financial issue.
- Help families who are planning ahead make more informed decisions.
- Help families take action before a crisis.

## Welcome to Financing Long-term Care			A Resource Center for Families

- What’s different about this site?
- We are not selling financial or long term care products or services
- We offer unbiased, research-based information for educational purposes
- We understand long term care financial decisions are about more than money!

## Welcome to Financing Long-term Care			A Resource Center for Families

- The Basics

- Decision-Making Toolkit

- Educator Toolkit

- Who We Are

## Welcome to Financing Long-term Care			A Resource Center for Families

- The Basics:  An introduction to financing long term care and later life financial security

- Why Plan Now?
- Are You Prepared?
- Know Your Financing Options
- Creating Your Plan
- Carrying Out Decisions

## Welcome to Financing Long-term Care			A Resource Center for Families

- Know Your Financing Options

- Conversation Starters
- Fact Sheets
- Common Myths/Facts
- Planning Tools
- Family Experiences

## Welcome to Financing Long-term Care			A Resource Center for Families

- Decision-Making Toolkit:  A variety of resources to help make more informed decisions.

- Conversation Starters
- Fact Sheets
- Common Myths
- Planning Tools
- Family Experiences

## Welcome to Financing Long-term Care			A Resource Center for Families

- Fact Sheets

- Creating Your Plan
- Why can’t we talk?
- What are common later life financial goals?
- Factors to consider

## Welcome to Financing Long-term Care			A Resource Center for Families

- Planning Tools:  Worksheets, quizzes, and interactive planning guides to help you examine your own situation.

- Are you at risk of needing long term care?
- Who should be responsibility for paying?
- What are your later life financial goals?
- Couple decision-making

## Educator Toolkit: Proven resources to help teach others about financing long term care decision making.

- Teaching Outlines
- Case Studies
- Participant handouts
- PowerPoint Presentations
- Recommended reading
- Relevant research

- Welcome to Financing Long-term Care			A Resource Center for Families

## Welcome to Financing Long-term Care			A Resource Center for Families

- The Basics

- Decision-Making Toolkit

- Educator Toolkit

- Who We Are

- Develop State-specific Links
- On-line courses/workshops
- A clearinghouse (for research)

- Future Additions?

## Critical Conversations About Financing Long-term Care

- Recognize your risk of long term care
- Understand possible costs and potential financial implications
- Sort out expectations and goals
- Understand financing alternatives and consequences
- Why plan now, before a crisis

## Suggested Reading: Visit the annotated bibliography at www.reeusda.gov/financialsecurity/

- The following articles by Stum, M. focus on financing long-term care and family decision making
- “Financing long-term care: Examining decision outcomes and systemic influences from the perspective of family members.  _Journal of Family and Economic Issues_ (2001).
- “To buy or not to buy:  Examining long-term care insurance decision-making from the employee perspective”  (Dec. 2001).  Executive summary at http://fsos.che.umn.edu/stum/lresearch/ltc-dm/description.html
- “Later life financial security:  Examining  the meaning attributed to goals when coping with long-term care”  _Financial Counseling and Planning_ (2000)
- “The meaning and experience of spending down to Medicaid in later life”  _Advancing the Consumer Interest_ (1998)

- Plan for later life events
- Changing health and independence
- --including long term care
- Act
- Identify and communicate
- strategies to manage the
- risk of long-term care