According to the U.S. Department of Health and Human Services, by 2020, 157 million Americans will be afflicted with a chronic illness. The same study showed that by 2020, over 90 percent of seniors will have been diagnosed with at least one chronic illness. So what do you do if someone you know and love is diagnosed with a chronic illness? While each set of circumstances is unique, questions like these always arise:• What are my options when paying for long-term care?
• What can I do if a loved one is diagnosed with a chronic illness and loses capacity to care for himself?
Neither of these are easy questions to answer, and it’s important to examine all possible alternatives to see what is the best fit for your situation.
What are my options when paying for long-term care?
a. You can pay for the costs of long-term care out-of-pocket.
It is sometimes the case that an individual is diagnosed with a chronic illness and must pay for treatment out-of-pocket. However, expenses can be very excessive, and individuals often deplete their resources in an effort to pay for medical treatment. Consulting with an attorney to explore the various options is a wise decision for those who wish to avoid impoverishment. Although it is best to prepare for medical emergencies before they arise, those who have done no planning at all can still avail themselves to various forms of assistance if afforded good legal advice.
b. You can purchase long-term care insurance to cover the costs of long-term care.
While purchasing long-term care insurance is unlikely to provide a solution in the event of a crisis, it may be a viable preventative measure for select individuals. However, long-term care insurance is certainly not for everybody, and individuals should consult with an attorney before purchasing a policy. In short, whether a long-term care insurance policy should be purchased depends upon age, health status, overall retirement goals, income and assets.
• Generally, individuals should not purchase long-term care insurance if their only source of income is social security benefits or supplemental security income.
• Individuals may wish to consider purchasing long-term care insurance if they have a large amount of assets and do not want to utilize those assets for purchasing long-term care.
c. You can apply for the ALTCS program to receive assistance in covering the costs of long-term care.
ALTCS is Arizona’s version of the Medicaid program, and it provides financial relief to qualifying individuals in need of long-term care. ALTCS is not an entitlement program, meaning individuals must meet certain medical and financial criteria in order to receive assistance. However, a qualified attorney can perform advance or crisis planning to assist individuals in the eligibility process.
Benefits which may be available under ALTCS include:
• Acute care services (doctors, hospitalization, prescriptions, lab work, x-rays, tests and specialist treatments)
• Nursing home care provided in a licensed nursing facility, residential or intensive care facilities,
• Home and community based services, which include home health nursing, rehabilitation, adult day care, personal and respite care, medical transportation, mental health services, homemaker services, attendant care, home health aids and home delivered meals
It is important to make preparations for long-term care before the actual need arises. Those who are medically and financially able to qualify for long-term care insurance should look into that option. Alternatively, or even concurrently, individuals should plan ahead to qualify for ALTCS benefits before a crisis strikes. Even in the event of a crisis, however, individuals can still engage in planning to qualify for ALTCS. In any event, there are numerous possibilities for long-term care coverage, and a qualified attorney will be able to provide guidance and assistance.
d. You can have a special needs trust created specifically to provide for long-term care.
Depending upon the circumstances, it may be wise to create what is known as a special needs trust. Special needs trusts are irrevocable legal documents specifically designed to provide care for individuals with disabilities or chronic illnesses. The biggest advantage to creating a special needs trust is that the monies in the trust are not counted for purposes of becoming eligible for certain government programs, such as ALTCS. Perhaps the biggest disadvantage, on the other hand, is that once monies are placed in the trust, they cannot be used for anything outside of the trust’s designated purposes. It is wise to counsel with an attorney before establishing a special needs trust, as the repercussions – good and bad – can be severe.
What can I do if a loved one is diagnosed with a chronic illness and loses capacity to care for himself?
Being diagnosed with a chronic illness can be especially difficult if the ability to care for one’s self is lost. Likewise, it can be quite trying to watch a loved one lose independence. In such an event one might wish to take action by assisting the ill individual with things such as medical attention or financial oversight. However, in assisting an incapacitated individual, it is of utmost importance to act in accordance with his or her wishes. As such, with an attorney’s assistance one should first look to see if there are any guiding documents such as powers of attorney, advance directives or living trusts.
While it has become more common for people to engage in advance planning, it is certainly not unheard of for individuals to lose capacity to care for themselves, due to chronic illness or otherwise, without first preparing any guiding documents. In such situations, the court can be petitioned to appoint a guardian and/or conservator to act on behalf of the incapacitated individual.
a. The court can appoint a guardian to oversee the medical needs of a chronically ill individual.
If appointed by the court, a guardian can make placement and medical decisions for an incapacitated individual, but does not oversee the individual’s finances. A guardian is generally given responsibilities such as:
• Providing care, comfort and maintenance of the incapacitated individual.
• Acting in the incapacitated individual’s best interest.
• Ensuring that the incapacitated individual’s living arrangements are the most appropriate and the least restrictive based on needs, abilities and financial resources.
• Determining if placement in an assisted living facility or skilled nursing facility is appropriate.
• Providing appropriate and sufficient clothing.
• Consenting to medical care or other professional services on behalf of the incapacitated individual.
b. The court can appoint a conservator to oversee a chronically ill person’s finances.
If appointed by the court, a conservator can make financial decisions on behalf of an incapacitated individual, but is generally not involved in any lifestyle, placement or medical decisions. At most, a conservator’s duties include:
• Authorizing payment of debts and expenses.
• Handling legal actions on behalf of the incapacitated individual.
• Creating an inventory of the assets and indicating the fair market value of each asset.
• Prudently investing estate funds.
• Acquiring or disposing of property.
• Dealing with insurance companies for the estate.
• Preserving and protecting estate property.
• Paying income and property taxes.
• Keeping detailed financial records of all monies coming in or going out of the estate.
• Providing an annual accounting to the court, itemizing every expense and receipt.
A good starting point for having either a guardian or a conservator appointed is consulting with an experienced and qualified attorney. An attorney will be able to evaluate the relevant documents and determine whether it would be useful to initiate court proceedings for an appointment.
