No one likes to think about the possibility of their own disability or the disability of a loved one. However, as we’ll see below, the statistics are clear that we should all plan for at least a temporary disability.

Disability planning is one area where elder law attorneys can give each and every person and family they work with great comfort in knowing that, if the day comes for themselves or a loved one, they will be prepared.

Most Individuals Will Face At Least a Temporary Disability
Study after study confirms that nearly everyone will face at least a temporary disability sometime during their lifetime. More specifically, one in three Americans will face at least a 90-day disability before reaching age 65 and, depending upon their ages, up to 44% of Americans will face a disability of up to 4.7 years. On the whole, Americans are up to 3.5 times more likely to become disabled than die in any given year.

Many Persons Will Face a Long Term Disability
Unfortunately, for many Americans the disability will not be short-lived. According to the 2000 National Home and Hospice Care Survey, conducted by the Centers for Disease Control’s National Center for Health Statistics, over 1.3 million Americans received long term home health care services during 2000 (the most recent year this information is available). Three-fourths of these patients received skilled care, the highest level of in-home care, and 51% needed help with at least one “activity of daily living” (such as eating, bathing, getting dressed, or the kind of care needed for a severe cognitive impairment like Alzheimer’s disease). The average length of service was 312 days, and 70% of in-home patients were 65 years of age or older. Patient age is particularly important as more Americans live past age 65.

The Department of Health and Human Services also estimates that 9 million Americans over age 65 will need long term care in 2011. That number is expected to increase to 12 million by 2020. The Department also estimates that 70% of all persons age 65 or older will need some type of long term care services during their lifetime.

The Alzheimer’s Factor
Alzheimer’s is growing at an alarming rate. Alzheimer’s increased by 46.1% as a cause of death between 2000 and 2006, while causes of death from prostate cancer, breast cancer, heart disease and HIV all declined during that time period.

In 2010 The Alzheimer’s Association published a report titled, “Alzheimer’s Disease Facts and Figures” that explored different types of dementia, causes and risk factors, and the cost involved in providing health care, among other areas. In this report were some eye-opening statistics:

An estimated 5.3 million Americans of all ages have Alzheimer’s disease. This figure includes 5.1 million people aged 65 and older and 200,000 individuals under age 65 who have younger-onset Alzheimer’s.

One in eight people aged 65 and older (13%) have Alzheimer’s disease.

Every 70 seconds, someone in America develops Alzheimer’s. By mid-century, someone will develop the disease every 33 seconds.

The number of people aged 65 and older with Alzheimer’s disease is estimated to reach 7.7 million in 2030 – more than a 50% increase from the 5.1 million aged 65 and older currently affected.

By 2050, the number of individuals aged 65 and older with Alzheimer’s is projected to number between 11 million and 16 million – unless medical breakthroughs identify ways to prevent or more effectively treat the disease.

Caregivers are at risk of developing health problems.  There were approximately 10.9 unpaid caregivers (family members and friends) providing care to persons with Alzheimer’s or dementia in 2009. According to the Alzheimer’s Association, those persons are at high risk of developing health problems, or worsening existing health issues. For example, family and other unpaid caregivers of people with Alzheimer’s or another dementia are more likely than non-caregivers to have high levels of stress hormones, reduced immune function, slow wound healing, new hypertension and new coronary heart disease.

Spouses who are caregivers for the other spouse with Alzheimer’s or other dementia are at greater risk for emergency room visits due to their health deteriorating as the result of providing care. A study mentioned in the 2010 Alzheimer’s Association report found that caregivers of spouses who were hospitalized for dementia were more likely than caregivers of spouses who were hospitalized for other diseases to die in the following year.

Receiving care.  According to the National Nursing Home Survey 2004 Overview, the national average length of stay for nursing home residents is 835 days, with over 56% of nursing home residents staying at least one year. Significantly, only 19% are discharged in less than three months. Those residents who were married or living with a partner at the time of admission had a significantly shorter average stay than those who were widowed, divorced or never married. Likewise, those who lived with a family member prior to admission also had a shorter average stay than those who lived alone prior to admission.

While a relatively small number (1.56 million) and percentage (4.5%) of the 65+ population lived in nursing homes in 2000, the percentage increased dramatically with age, ranging from 1.1% for persons 65-74 years to 4.7% for persons 75-84 years and 18.2% for persons 85+. According to the U.S. Census Bureau, in 2009, 68% of nursing home residents were women, and only 16% of all residents were under the age of 65. The median age of residents was 83 years.

According to the MetLife 2010 Mature Market Institute, current estimates indicate that nearly 1 million people live in approximately 39,500 assisted living residences in the U.S. The average age of an assisted living resident is 86.9 years old, and the median length of stay in assisted living is 29.3 months.

Long-Term Care Costs Can Be Staggering
Not only will many individuals and families face prolonged long term care, in-home care and nursing home costs continue to rise. According to the 2010 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs national averages for long term care costs are as follows:

Monthly base rate (room and board, two meals per day, house keeping and personal care assistance) for assisted living care is $3,293 or $39,516 annually, a 5.2% increase from 2009.

Daily rate for a private room in a nursing home is $229, or $83,585 annually, a 4.6% increase over the 2009 rate.

Daily rate for a semi-private room in a nursing home is $205, or $74,825 annually, a 3.5% increase over the 2009 rate.

Hourly rate for home health aides is $21, unchanged from 2009.

These costs vary significantly by region, and thus it is critical to know the costs where the individual will receive care. For example, the average cost for a private room in a nursing home is much higher in the Northeast ($381 per day, or $139,065 annually, in New York City) than in the Midwest (only $174 per day, or $63,510 annually, in Chicago) or the West ($238 per day, or $86,870 annually, in Los Angeles).

Long-Term Care Insurance May Cover These Costs
If a parent, their spouse, or family member needs long term care, the cost could easily deplete and/or extinguish the family’s hard-earned assets. Alternatively, seniors (or their families) can pay for long term care completely or in part through long term care insurance.

Most long term care insurance plans let the individual choose the amount of the coverage she wants, as well as how and where she can use her benefits. A comprehensive plan includes benefits for all levels of care, custodial to skilled. Clients can receive care in a variety of settings, including the person’s home, assisted living facilities, adult day care centers or hospice facilities.

Planning in the Event Long Term Care Insurance is Unavailable or Insufficient
Unfortunately, many older Americans will either be medically ineligible for long term care insurance or unable to afford the premiums. In that event, more aggressive planning should be considered as early as possible to make sure life savings are not depleted as a result of having to pay out-of-pocket for care. With the help of an elder law attorney, a plan can be created that will protect much of the assets of an individual or couple that would otherwise be at risk of being depleted.

All Planning Should Thoroughly Address Disability
When a person becomes disabled, he or she is often unable to make personal and/or financial decisions. If the disabled person cannot make these decisions, someone must have the legal authority to do so. Otherwise, the family must apply to the court for appointment of a guardian over the person or property, or both. Those who are old enough to remember the public guardianship proceedings for Groucho Marx recognize the need to avoid a guardianship proceeding if at all possible.

At a minimum, seniors need broad powers of attorney that will allow agents to handle all of their property upon disability, as well as the appointment of a decision-maker for health care decisions (the name of the legal document varies by state, but all accomplish the same thing). Alternatively, a fully funded revocable trust can ensure that the senior’s person and property will be cared for as desired, pursuant to the highest duty under the law – that of a trustee.

Conclusion

The above discussion outlines the minimum planning clients should consider in preparation for a possible disability. It is imperative that clients work with a team of professional advisors (legal, medical and financial) to ensure that, in light of their unique goals and objectives, their planning addresses all aspects of a potential disability.

On June 1, 2012, the Centers for Medicare & Medicaid Services issued Transmittal No. R2480CP , which took effect September 4, 2012.  The Transmittal updated instructions on the issuance of ABNs.  This transmittal clarifies the difference between a mandatory and voluntary ABN, brings the ABN process into compliance with the Affordable Care Act (ACA), creates a Quick Glance Guide and offers new hypothetical situations to illustrate the use of ABNs.

Highlights of the Transmittal are briefly covered below with language directly from the Transmittal in quotes:

Background

An Advance Beneficiary Notice of Noncoverage (ABN) provides notice to a Medicare beneficiary that an ordinarily covered Medicare item or service will not be covered.

Required Notice

If notice is not given in the form of an ABN, or as otherwise required, to the beneficiary, the provider/supplier may not shift liability to the beneficiary.

Skilled Nursing Facilities, Preventive Services and Hospice Care

The transmittal clarifies use of ABNs with Skilled Nursing Facilities (SNFs) and when form CMS-R-131 should be used.  It also addresses that Home Health Agencies use a separate form call a Home Health Advance Beneficiary Notice of Noncoverage (HHABN).  The transmittal discusses when hospice providers are required to issue an ABN.

The transmittal clarifies the mandatory use of ABNs for preventive services established by the ACA’s annual wellness visit and the preventive physical examination (the Welcome to Medicare physical) established by the Medicare Modernization Act.

Mandatory Use of ABNs

An ABN is mandatory in the following situations:  1) not reasonable and necessary; 2) violation of the prohibition on unsolicited telephone contacts; 3) medical equipment and supplies supplier number requirements not met; 4) medical equipment and/or supplies denied in advance; 5) custodial care; 6) hospice patient who is not terminally ill.

Expanded Mandatory Uses of ABNs

In addition to the previously detailed Mandatory ABNs, this transmittal added the following to the Mandatory ABN list:  1)   The item or service is furnished by a non contract supplier AND the item is included in the Durable Medical Equipment, Prosthetic, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) for a Competitive Bidding Area (CBA) (unless the beneficiary has already signed an ABN); or 2) The preventive service frequency limitations have been exceeded.

Voluntary Use of the ABN

Where a Voluntary ABN is appropriate, it does not have to comply with the formal requirements of a mandatory ABN.  “The voluntary ABN serves as a courtesy to the beneficiary in forewarning him/her of impending financial obligation. When an ABN is used as a voluntary notice, the beneficiary should not be asked to choose an option box or sign the notice.”

Notifiers

“Regardless of who gives the notice, the billing entity will always be held responsible for effective delivery. When multiple entities are involved in rendering care, it is not necessary to give separate ABNs.”

Recipients of the ABN

The ABN must be issued prior to the item or service being provided.

Representatives of Beneficiaries

If the beneficiary has a known legal representative, notice must be given to the representative.  If no legal representative exists, but it is believed one is necessary, CMS may appoint one.

Reduction of benefits

“The ABN is not issued every time an item or service is reduced. But, if a reduction occurs and the beneficiary wants to receive care that is no longer considered medically reasonable and necessary, the ABN must be issued prior to delivery of this noncovered care.”

Termination of Benefits

“The ABN is only issued at termination if the beneficiary wants to continue receiving care that is no longer medically reasonable and necessary. “

Repetitive or Continuous Noncovered Care

Generally, an ABN is valid for one year.  The Transmittal provides new language with specific clarification regarding ongoing treatment and the issuance of the initial ABN and a renewal ABN.

Proper notice requires an up-to-date ABN

CMS makes it clear in this transmittal that the ABN used must be up-to-date or it is considered inadequate notice.

Beneficiaries responsible for usual fee if proper notice given

Where a beneficiary has been properly notified with an ABN, she may be held responsible at the rate of the providers/suppliers usual and customary fee for the items or services furnished.

Electronic Retention

Providers are permitted to retain electronic copies of signed ABNs.  In addition, providers may electronically provide beneficiaries with ABNs, but these are only valid if the beneficiary can clearly see the screen.  The provider/supplier must provide the beneficiary with a hard copy of the ABN after signed acknowledgement.

DMEPOS, Ambulance Services and CORFs

Mandatory use of ABNs with DMEPOS, ambulance services and CORFs are specifically addressed in the Transmittal.

Instructions for ABNs

ABNs are provided on the CMS website.  It is the provider/supplier’s responsibility to check the dates of the ABN and periodically check the CMS website for updates.  The notice requirements can be found at:  www.cms.gov/BNI/Downloads/ABNFormInstructions.zip.

To view the Transmittal in full, see the attached document.

For a summary of the transmittal provided by the Center of Medicare Advocacy, follow the link:  http://www.medicareadvocacy.org/2012/08/16/cms-clarifies-when-the-advance-beneficiary-notice-of-non-coverage-abn-must-be-issued/

Older Americans Month was first established in 1963.   It was called “Senior Citizens Month” until 1980 when President Jimmy Carter proclaimed it to be “Older Americans Month.”

The Growth of the Senior Population

In 1963, only 17 million Americans had reached age 65.  In 2004, approximately 36.3 million U.S. citizens were age 65 or older, and accounted for approximately 12% of the U.S. population according to the U.S. Census Bureau.  Today, the number of persons age 65 or older is over the 40 million mark.

By 2050, the U.S. Census Bureau predicts there will be 86.7 million citizens age 65 and older living in the U.S. and will comprise 21% of the total population.  People in the 65 and older age group will grow by 147% between 2000 and 2050, compared to 49% growth in the population as whole.

Increased Need for Elder Law Attorneys

As the population of those 65 and older increases, so does the need for the services elder law attorneys provide.  While the term “elder law” is very broad, the services of an elder law attorney may include assistance in obtaining Medicaid benefits or other governmental benefits based on a medical and financial need, advice on planning documents like revocable living trusts, wills, powers of attorney and health care directives, assistance in obtaining veterans benefits, and assistance with guardianships if a loved one becomes incapacitated.

To find an elder law attorney in your area, please visit our member directory at http://www.eldercounsel.com/AttorneySearch.aspx.

If you are an elder law attorney, we welcome you to take a look at ElderCounsel  and the benefits we offer our members.

We wish everyone a Happy Older Americans Month!

ElderCounsel, LLC

While a sluggish economy has caused many of the country’s service providers and retailers to cut consumer costs, seniors and their families are paying more this year than ever for long term health care.  The 2009 Market Survey of Long-Term Care Costs prepared by the MetLife Mature Market Institute showed increases ranging from 3.3% for assisted living facilities to 5.6% for a home care worker.

The national average for an Alzheimer’s unit (private room) is $85,045, while the national average for a private room in a nursing home is $205/day, or $74,825 annually.  The median age of a nursing home resident is currently 83.2 years, with women making up 65% of all nursing home residents.  The average age of an assisted living resident is 86.9 years, and the average stay is 28.3 months.

These are important statistics to share with prospective clients and their families.  How to pay for long term care is and will continue to be a challenge for seniors and their families who will look to elder law attorneys to guide them.  Are you up to the challenge?