Caregivers need legal status, such as power of attorney, to legally make decisions for someone else, but simply knowing what kind of accounts a loved one has and how to access them is a good first step to getting organized.

Accounts and access options take many forms.

Physical documents and storage

Know where the following items are kept or make copies:

• Driver’s license

• Social Security card

• Insurance cards

• Birth certificate

• Marriage/divorce certificates

• Organ donor card

• Will/estate documents

• Power of attorney

• Home, auto, life, disability and long-term care insurance policies

• Burial plot and headstone documents

• Loan documents

• Mortgage or lease information

• Trusts

• Safety deposit box and key

• Cash, stocks and bonds

Financial accounts

Although many of the above items will indicate the institution used to draft them, many financial accounts are accessed and managed virtually today. These include items such as:

• Checking accounts

• Savings accounts

• Credit cards

• Certificates of deposit

• Money market

• Roth and traditional IRA

• 401k, 403(b), 457 or others

• Pension

Other accounts

The following are often easily documented through repeat bills, which also makes them good candidates for an automated bill pay service.

• Water

• Electric

• Gas

• Trash

• Services (lawn, snow, maintenance)

• Cellular service provider

• Apple or Android phone access

• Cable TV, telephone, internet, streaming services

• Donations

Social media

A final area to consider is social media. Facebook and YouTube are popular among older adults who use them to stay connected with friends and family. Although Facebook does have a process for turning a person’s page into a memorial page after their death, being able to access an account can make closing the account or setting up a memorial page much easier.

Other sites to review include:

• Email accounts

• Digital subscriptions (newspapers, magazines, etc.)

• Twitter

• Instagram

• Blogs (WordPress, Tumblr, Blogspot, etc.)

• Websites/web hosts (Bluehost, GoDaddy, Wix, WordPress, etc.)

Not everyone will have all of these accounts, but using the items listed here as a starting point or guide can start a conversation and help ensure nothing falls through the cracks.

Making financial decisions is easy when a person is healthy and has the resources needed to live the life they want. But for older adults, who may be limited by mobility, finances or cognitive issues, these decisions can be more difficult. Planning ahead can make it easier to understand the costs of long-term care — and where the finances for that care might come from.

The following steps outline financial needs every older adult should consider.

Paying for long-term care

According to studies from the U.S. Department of Health and Human Services, “most Americans underestimate the risk of developing a disability and needing long-term services and supports.”

Nearly half of Americans age 65 today will need some form of long-term care as they age, yet most people do not understand how much these services cost. Furthermore, many misconceptions about who pays for long-term care provide people with a false sense of security when they think about a potential need for care.

Although it may feel too early to think about long-term care for some, understanding the potential costs can make it easier for caregivers and loved ones to have conversations about other financial needs.

The financial inventory

A financial inventory is a document designed to help individuals organize financial information. This can include:

• Bank assets

• Retirement assets

• Credit cards and other debts

By listing all assets, debts, locations, brokers and contact information in one document, an individual summarizes their financial life in a single snapshot. This can be helpful when planning for retirement. It’s also an important document for the person’s loved ones, should they need to step in and assist with financial matters.

Ensuring bills are paid

Once a financial inventory has been created, it’s easy to see how much money is available and how much is going out.

One way to track and manage all this information is through a bill pay service. These automated systems provide a snapshot of this activity and the ability to make payments with the touch of a button. But unless proper documentation is in place, caregivers cannot legally act on behalf of a love one. This is where the power of attorney comes in.

Power of Attorney

The power of attorney document gives someone the power to act on behalf of another person as an agent, carrying out any activity permitted in the document.

It’s important to designate a power of attorney before it’s needed, to ensure it is who your loved one would want. Otherwise, the state may appoint one for at the time of need.

Beyond the POA: trust or will?

Another step is to create a complete financial plan, which includes preparing the estate in a way that all assets are dispersed according to personal desires. The best way to do this is by setting up a trust or a will. Both allow designation of assets, but there are several key differences between the documents.

Designating beneficiaries

Although both a trust and a will name recipients for assets, designating beneficiaries within certain accounts is a crucial part of estate planning.

Guidelines exists for naming beneficiaries, but each person and account is different, and account owners should spend time considering where they’d like their assets to go and in what manner. A discussion about choices with beneficiaries will help inform them about how and why their loved one wanted things handled upon death. The more people know about a loved one’s preferences, generally the more at ease they are with the decisions.

For older adults, who may be limited by mobility, finances or cognitive issues, making some decisions can be difficult. That’s why it’s important to organize financial affairs early during the aging process — and update them as needed.

The following steps offer some guidance for how to proceed.

The financial inventory

A financial inventory is a document designed to help people organize financial information. This can include:

• Bank assets

• Retirement assets

• Credit cards and other debts

• Personal property

• Brokerage accounts

• Loans

By listing all assets, debts, locations, brokers and contact information in one document, a person summarizes their financial life in a snapshot. This can be helpful when planning for retirement or long-term care. It’s also an important document for an individual’s loved ones, should they need to step in and assist with financial matters.

Power of Attorney

The power of attorney document gives someone the power to act on behalf of another person as an agent, carrying out any activity permitted in the document.

A POA may be in place without being used, but if the need for one arises, the state will designate a power of attorney if nothing is in place.

Accessing necessary accounts

If a POA has been put in place, the agent will be able to access a loved one’s financial accounts. If a POA is not yet in place, adding a trusted family member or friend to an account can provide peace of mind that the original owner of the account has a backup for paying bills and understanding financial decisions.

A potential concern is that if one person on the account dies, the money remaining in the account then belongs to the other person listed. Another risk is the possibility of exploitation or theft.

Other options

Additional options may provide more security than adding another person to an account. These include:

• A revocable living trust

o To set up a trust, a person transfers assets to a revocable living trust and designates a trustee. This designee is then able to make financial decisions about these assets and is responsible for keeping them safe. This could include everything from money in a safe deposit box to paying bills and taxes and managing investments. As long as the individual is of sound mind, they can change the trust.

• Court-appointed guardian

o When a court finds that someone can no longer mange money or property on their own, a guardian or conservator will be appointed for them. This person must act in the best interest of the protected individual, as well as report to the court regularly. They are required to create reports that document how money is being spent.

Ensuring bills get paid

Once a financial inventory has been created, it’s easy to see how much money is available, and how much is going out. For people who have set bills and enough income to cover them each month, automatic bill pay ensures bills are paid on time.

Another option is adding the individual to a caregiver’s account as a “limited account user.” This allows that person to deposit checks to their caregivers account, but not make withdrawals. In this way, the caregiver can manage bills as needed.

No one likes to think about getting older, facing disability and requiring help with personal care.

But many of those scenarios happen, and caregivers may wonder if long-term care insurance is needed.

What is long-term care insurance?

This type of insurance covers long-term care not covered by health insurance, Medicaid or Medicare. Most people who use a long-term care insurance policy are not necessarily sick. Instead, they need help with basic daily care, such as bathing, dressing and using the restroom.

What does it cover?

Not all plans are the same, but in general, long-term care insurance covers the following:

• Home modifications

• In-home care

• Adult day care services

• Care coordination

• Nursing home care

• Assisted living care

The applicant will choose the amount of coverage desired, and policies set limits on the amount paid out per day and the amount paid during the policy holder’s lifetime.

Who is eligible?

Although there are no age requirements for purchasing a policy, applicants need to be in good health. Individuals who already require long-term care or have been diagnosed with debilitating diseases such as Parkinson’s, multiple sclerosis, Alzheimer’s or other dementias, or some types of cancer may be denied. For those who are young and healthy, waiting too long may result in higher premiums or denial of eligibility.

To purchase a policy, an applicant fills out a health questionnaire and may need to provide medical records or consent to a phone or in-person interview. Once the applicant is approved, he or she begins paying premiums.

Most plans begin to pay for services when the policy holder can no longer complete at least two out of six activities of daily living on their own, or he or she begins to experience dementia or other cognitive issues.

Where to find it

There are more than 100 companies selling long-term care insurance, but not all of them serve all states. The best place to begin is with is your state’s consumer protection office, which manages insurance companies. You can find a complete list here by entering your state. Other place to look include:

• Employers

• Personal insurance agent

• Personal financial planner

What does it cost?

There are generally two types of plans available, and costs vary.

Traditional long-term care insurance

This option guarantees the policy holder a set amount of money per day to cover at least part of cost of care, no matter where the insured lives. This means transitioning to a nursing home or assisted living community will be less likely to drain the bank.

According to the American Association for Long-Term Care Insurance, on average, in 2020 a single 55-year-old man could expect to pay $1,700 a year for a plan that would offer a baseline of $164,000 in coverage. With 3 percent compounded interest on the plan, it could grow to $333,000 by age 80 and $386,500 at age 85. On average, the same policy for a single woman age 55 costs $2,675 annually. For a similar couple to share a plan, the annual cost was $3,050 for both partners.

Hybrid policy

This type of plan combines life insurance with long-term care coverage. It also offers a death benefit — the money the insured’s beneficiaries would receive when the policy holder dies — which can be used by the policy holder to pay for long-term care. If care is never needed, the insured’s beneficiaries get the full payout. Rates may be fixed for life and can’t be canceled, and they are more expensive because policy holders are paying to guarantee a return of unused monies.

Jesse Sloame, executive director of the American Association for Long-Term Care Insurance, said there are so many variables with hybrid plans that it’s impractical to to pinpoint an average on these plans.

When to buy

It’s recommended that individuals buy long-term care insurance in their 50s, when policies are less expensive and they’re in good health.

What to know

Elimination period: The number of days a policy holder pays for care before the policy pays out. Ninety days is a common elimination period, but some are longer.

Partner discounts: Many plans offer a discount if both partners apply for a policy at the same time. This can not only help reduce costs but also offer an uninsurable spouse the opportunity to have coverage.

Rated plans: Applicants in poor health may qualify for a rated plan, which is more expensive. Ask the insurance agent to compare plans and find a better plan, if possible.

Gender makes a difference: Policies for women typically cost more, as women live longer.

Price guarantees: Prices are not guaranteed to stay the same once a plan is in place.

Questions to ask

1. Does my state have a partnership plan?

2. Is this a tax-qualified plan?

3. Does this plan offer shared care options?

4. Is there a death benefit with this policy?

5. Are premiums paid upfront, monthly or annually?

On top of keeping their own lives organized, caregivers must find ways to maintain — or establish — order within their loved one’s life. A personal inventory is a great way to keep from being overwhelmed – and it’s a useful document to have at the end of life.

What is a personal inventory?

A personal inventory is a basic accounting of important items in a care recipient’s life.

Other inventories to consider include checklists for financial assets, a list of documents, accounts and how to access them as well as a list of other information.

You can do this in whatever way works best for you – whether that’s paper and pencil or a digital document.

Why is a personal inventory important?

The benefits of a personal inventory include helping the caregiver understand basic things like email accounts and passwords, where the dog goes for shots and where important documents are kept.

What to do once it’s in place

• Make a copy for other caregivers, or share access if it’s a digital document.

• Place the original in a safe deposit box or with other caregiving documents.

• Update the lists as items are added or removed.

• Consider taking photos of the most valuable items for insurance purposes.

What happens without an inventory?

Organization and ease of access are the greatest benefits of having an inventory. Without one, caregivers might scramble to find military discharge paperwork, vehicle titles or the combination for a safe.They might also miss important payments or deadlines.

If the care recipient eventually needs more care than can be provided at home, caregivers will need to complete an inventory of clothes and items that move with their loved one. Having one completed will save time.

When it comes to managing a loved one’s finances, it’s helpful to take a financial inventory. It will simplify the process and promote understanding for how to help and what needs done.

What is a financial inventory?

A financial inventory is a basic accounting of income and expenses. It may include a list of financial assets, a list of financial documents, accounts and how to access them.

Why is a financial inventory important?

The benefits of a financial inventory include helping the caregiver understand basic things like what bills need to be paid, what finances are available and where important documents are kept. Beyond these, another advantage of taking stock of a loved one’s financial situation can help with planning for the future.

What to do once it’s in place

• Make a copy for other caregivers.

• Place the original in a safe deposit box or with other caregiving documents. Make sure it is accessible by those who need it.

• Update as items are added or removed.

What happens without an inventory?

Organization and ease of access are the greatest benefits of having an inventory. Without one, caregivers might not be aware of financial resources or might miss important payments or deadlines.

If the care recipient eventually needs more care than can be provided at home, caregivers will need to complete picture of how much money is available to pay for care.

More than a third of people caring for a loved one who is older than 50 feel high levels of financial strain, according to a survey from the National Alliance for Caregiving and the AARP Public Policy Institute.

Caregivers can expect to spend nearly 20 percent of their income on caregiving expenses, according to AARP, but developing a care budget may reduce this strain.

What is a care budget?

• A care budget is a document that tracks income and spending for the care recipient. Once a financial inventory has been conducted, it will be easy for caregivers to gather this information.

• This document can open lines of communication about how a lack of planning can have financial ripples, too.

How to create a care budget

• Use the financial inventory to track spending and income.

• Talk to care providers for an estimate of care needs over the next weeks or years.

• Discuss the care recipient’s wishes, needs and abilities – what is realistic, given their finances?

• Explore housing options and their costs.

• Create a plan that is realistic for the care recipient’s wishes, finances and care and housing needs.

There are many resources that can help make budgeting easier.

We recommend these steps:

• We recommend you gather the costs for ALL types of care, so you have a full picture not only of your options now, but the costs of future needs.

What to do once it’s in place

• Like any budget, the care plan budget might fall short at times. If emergency needs arise or a source of income falls through, caregivers and their loved ones might struggle.

• Once a budget is in place, the caregiver and their loved one should talk about how they’re staying on track. If a bill payment has been missed, resulting in a late fee and a budget shortfall the next month, reviewing ways to prevent this could be helpful. One way to do this is to consider automated bill pay services.

What happens without a budget?

To stick to your family’s budget, accounting for all dollars in and out is a crucial step in making sure money is available for necessary payments. Without a budget in place, the care recipient could lose access to things like utilities, or not have enough money left for co-pays or insurance premiums. This, in turn, could lead to the caregiver stepping in and paying for things out of pocket.

Caring for a loved one might be an infrequent thing, like helping wash windows in the spring or picking up groceries on occasion. But as a loved one begins to need more help, caregivers may find themselves spread thin by managing their own responsibilities and those they’ve taken on for a loved one.

Putting together a care plan is a way for caregivers to track what they’re doing, find support and build in some time for self-care.

What is a care plan?

• A care plan is a list of needs, desires and goals developed by the care recipient and caregiver.

• Corresponding to each item should be a listing of who will help with that goal and how.

• The plan doesn’t need to include every situation that could arise, but it should cover immediate needs and any anticipated needs.

How to create a care plan

Start by having a conversation

• This includes talking with the care recipient about their needs and desires, but it should also include talking with other family members and potential caregivers, such as neighbors, support service providers or community resources such as meal delivery services.

• Caregivers who are working should also consider having a conversation with their employer about their caregiver responsibilities outside of work. This can help them find resources at work or discuss potential shift changes as needed.

What happens without a care plan?

• The greatest benefit of having a care plan is organization. Without one, needs could fall through the cracks, or caregivers may not notice changes to be addressed.

• Some care recipients may have several caregivers. A plan helps keep people organized and accountable.

• Others might have just one caregiver, and with multiple responsibilities, it could be difficult for that caregiver to keep track of everything.

• Without a plan, your loved one may be left guessing or trying to remember who helps with what.

What to do once it’s in place

• Post a copy where your loved one can view it. This can provide peace of mind, so your loved one knows what to expect.

• Provide all caregivers with a copy. Keeping it in a log book and asking all caregivers to add notes after providing care is a good method.

• Update as needed.

• Take to medical appointments.

What to Know

• A care plan is a fluid document. It can change with a change in diagnosis, increased care needs, change in finances, caregiver circumstances and other life changes.

• A care plan should be revisited whenever circumstances change or at a minimum on a yearly basis.

• A care facility or agency may create its own care plan, ensuring the family’s plan for care aligns with the outside caregiver’s plan for care. It is important to be part of this process to ensure that all parties hold the same expectations of care responsibilities.

Dealing with death is difficult even when the deceased has lived a long, fulfilling life.

One way to ease the pain for loved ones is to create a final arrangement document and tell family members about final wishes. This type of pre-planning for a funeral can ease the decision-making process during a time of grief, and it also helps ensure that a person’s wishes are carried out in the way he or she wants.

What is involved in pre-planning a funeral?

A funeral is a remembrance or celebration of a person’s life and his or her interests. Pre-planning a funeral may include exploring the following areas:

What service options are available?

• Funeral

• Graveside service

• Memorial service

• Wake / reception

• Viewing

• Visitation

• Committal service

• Celebration of life

• Colorful funeral

Choosing a service location

• Funeral home

• Religious places of worship

• Cultural considerations

• Chapels at cemeteries

• Gravesite

What to do with the body

• Cremation

• Burial

• Donation

Who will be involved?

• Officiant of the service

• Pallbearers

• Delivery of eulogies

• Readings

• Musician / vocalist

• Guests

Personal touches

• Flowers

• Music

• Personal touches

• Address for condolences

• Address for memorials or donations in lieu of flowers

• Military Final Salute

Other Considerations

• Obituary

• Gravestone / headstone

• Burial clothing

How to plan in advance

• Talking with loved ones about personal wishes is the first step in helping others understand why pre-planning is happening and what is already in place. This conversation allows caregivers to understand what’s desired and in place, as well as what they will need to put in place on their own.

• In some states, such as New York, people who prefund their funerals are protected by state laws. These laws protect individuals and may provide relief to loved ones, who know that final expenses are taken care of.

• Working with a funeral director can provide price lists, services and available facilities. It also can help create an itemized statement listing the items, services and facilities that have been chosen. It should also include a pre-need agreement stating terms, rights, costs and items to be provided.

• If working with a funeral home is not part of person’s wishes, in addition to creating a will or a trust, providing family members with a list of desires is important.

What happens without advance planning?

• Pre-planning can take some of the logistical and financial stresses off of the family after a loved one’s death.

• If no conversations have happened, loved ones will make decisions about cremation or embalming, memorial service or church service on their own, which may not be what their loved one wanted.

No matter how diligent a person is, there may be elements of funeral planning that slip through the cracks. Using a checklist can ensure some possible scenarios are discussed and that basic elements of funeral planning are covered.

Have you wondered if you can get paid for your caregiving duties? It’s possible, and there are several programs available you may want to consider. The following drop-down menus outline some of those programs and their requirements.

What programs pay caregivers?

HCBS Waiver: Cash and Counseling Program

• Home and Community-Based Services offer cash assistance to the loved one – otherwise known as the beneficiary – and that person then spends it on a caregiver of their choosing. Some states allow the caregiver to be a family membered. Either way, the caregiver acts as a “home care agency” – which means the person could be hired and paid for the personal assistance they provided as caregivers.

• The assistance – called a waiver – is often called consumer direction, participant direction, self-directed care or another name, depending on the state where it is administered. Cash and counseling programs are usually, but not always, Medicaid programs.

• Each program has its own eligibility requirements.

Caregiver child exception

• This program offers indirect compensation for family caregivers. The exemption allows the adult child who provides care for an elderly parent in that parent’s home to inherit the home, instead of the state taking it under the Estate Recovery rules.

• There are requirements, including the adult child must live in the home with their parent and provide care for at least two years, and the level of care they provide must prevent their parent from being placed in a nursing home. They also must have the medical documentation to validate that. How much the adult child receives in compensation depends on the value and equity of the home.

• Consulting with a Medicaid planning professional may be helpful when considering this option.

Adult foster care

• In some states, Medicaid allows adult children to become adult foster care providers for their aging parent(s).

• The aging parent moves into their adult child’s home. The caregiver / child is responsible for providing personal care, assistance with the activities of daily living, meals, transportation to medical appointments and other support. In return, the adult child is compensated by Medicaid for their care services but not for room and board. However, through a secondary program, many states offer supplemental financial assistance for room and board expenses.

• Medicaid continues to pay for the elderly parent’s medical care, prescriptions, etc.

Veteran directed care

• This program is open to any veteran enrolled in the Veterans Affairs health care system whose care requirements rise to the level of nursing home care. It gives veterans the option to hire whomever they choose, including family members, to provide them with services, rather than receive nursing home care directly from the VA.

• The program has a variety of names – including Veterans Directed Care/VD-HCBS Cash and Counseling for Veterans, Veterans Community Living Program, CLP-VDHCBS, Veterans Independence Plus Program and Veteran Directed Home Services (VDHS).

• Veterans can’t participate in both this program and the Medicaid Cash and Counseling program at the same time. However, war-time veterans can participate in this program and still be eligible for the Veterans Aid and Attendance pension benefit.

• Your local Veterans Service Organizations office can help find services.

Life insurance

• If your loved one has a life insurance policy with a death benefit valued at more than $50,000, he or she may be able to use that policy to pay a family member to provide care.

• The policy owner sells it to a third-party for an agreed-upon value of elder-care services. The policy buyer takes over the monthly premiums and pays the care providers’ monthly fees for the original policyholder, and then collects the death benefits when applicable.

• These are called Life Care Assurance, a Long-Term Care Benefit Plan, a Medicaid Life Settlement or Life Care Funding.

• It’s important to note that life insurance affects Medicaid, and an eligibility expert can help you determine if this is the right choice for you or your family.

Long-term care policy

• Long-term care policies often cover some home care and home health care costs. They don’t always include paying a family member to provide care. Your first step is to contact the insurance company and ask if the policy has a caregiver payment benefit. If it does, request a written confirmation of benefits before you proceed.

Paid caregiver leave

• As the number of family caregivers grows, companies are realizing the need to assist their employees with paid leave.

• Check with your company’s human resources department to determine availability and eligibility.

Paid by loved one or family

• Often family members are oblivious to the financial impact caregiving for a loved one can have on a caregiver’s finances. They also may not realize how time-consuming caregiving can be.

• It may be worth a conversation to ask your loved one or family members if they will compensate you for your time. You may want to consider making this a more formal arrangement, so both parties know what to expect. An elder-care lawyer in your area may be able to help you.

State nursing home diversion program

• Sometimes there are private programs that provide financial assistance to elderly individuals who live at home. The objective is to prevent unnecessary placement of these people into Medicaid-funded nursing homes.

• The programs vary widely and often have complicated criteria for eligibility.

Disease-specific coverage

• Some organizations offer resources for caregivers.

Other care options

Unpaid caregivers often provide care in the home, but other options exist, including:

• Community support services, such as adult day or transportation services

• Home health and home care providers serve on an as-needed basis

• Nursing homes

• Assisted living facilities

• Continuing care retirement communities

Michelle’s journey

In the fall of 2013, Michelle D. watched her oldest son launch a career from afar. She had just sent a second child off to college and was enjoying her youngest’s final year of high school. It seemed as if the bulk of her caregiver days were over.

And then, Betty, her mom, fell.

Michelle became a caregiver in a new way, and like nearly 45 million other unpaid family caregivers in the United States, this meant checking in on her mom and helping her as she recovered. It meant stopping by Betty’s home after work to do laundry and take stock of the fridge, the bills on the table and her mother’s overall health.

A new role

Unpaid caregivers like Michelle frequently feel overwhelmed. Often, they are thrust into this position during a crisis, with no say in how to handle finances, medical care or even the level of care a loved one can receive.

But Michelle was prepared. When her mother began to decline, she made sure to set up a power of attorney, so when the time came, she could make financial decisions for her mother. She asked Betty to complete HIPAA paperwork, so when complex medical situations arose, Betty’s doctors could talk to Michelle about them. And she asked her mom to go over her living will again to clarify what kinds of medical actions Betty wanted.

Finding balance

Today, Betty lives in an assisted living community designed for people with dementia. It’s been difficult for Michelle to see her mom move from her home to a care setting, but she has peace of mind knowing her mom is getting the care she needs, and her affairs are in order.

Michelle doesn’t think of herself as “lucky,” just prepared. Unlike many other caregivers, she had time to plan.

According to a 2020 report from the AARP, about half of caregivers say someone else is working with them to coordinate care.

The following steps may be helpful in determining roles when that’s the case.

Developing a care plan

Sit down with the care recipient and any potential caregivers. Discuss what the care recipient needs and who is best able to address each area. Creating a care plan may be part of this step, but honest self-reflection should also take place at this point.

Areas to consider:

• Who has medical knowledge? Can they organize and be in charge of medical documents, appointments, paperwork?

• Who is good with financial matters? Are they able to focus on bills, reimbursements and tracking income?

• Does someone enjoy working with their hands and doing-task oriented work? Who enjoys shopping and preparing meals?

By discussing who is most equipped for or interested in the tasks needed to assist the care recipient, caregivers can be involved in ways that speak to their strengths.

Talk about time and money

Some care teams may find that the person best suited to handling medical information doesn’t have the flexibility to take the care recipient to doctor appointments. Is it possible that they are able to organize medications lists, medical bills and insurance statements so that this information is current but then rely on someone else to get a loved one to the appointment?

What if the person who can best track expenses and income lives out of state? How will they receive copies of the bills and track all income? Some of the best solutions may require creativity from the care team.

Being realistic about not only what each caregiver is good at but how much time, mental energy and financial assistance they can provide is important.

Don’t forget long-distance caregivers

While it’s easy to think of caregivers as those who are involved on a physical, day-to-day basis, don’t discount the value of a family friend, former co-worker or relative who lives at a distance.

• Could this person check in with a daily or weekly phone call?

• Could they organize transportation for doctors’ appointments and regularly scheduled appointments such as getting groceries?

• Maybe they are able to set up and monitor an online bill pay service, thus taking on a responsibility that doesn’t need a physical presence.

• Maybe they can work with the loved one to create a grocery list and then order the groceries online and have them delivered.

Finding unique ways to incorporate the help of someone from afar can give everyone on the team more room to focus on their role and their own personal responsibilities.

Caring with siblings – tips

The Family Caregiver Alliance suggests rethinking how old roles can be reimagined and offers these and other tips:

1. Accept siblings and parents for who they are, not who they could be.

2. Remember that each sibling and each parent has their own relationship to each other.

3. Determine what is personally needed from each sibling — and what the care recipient needs.

4. Check criticism. Is it that they’re doing things “wrong,” or is it that more support is needed?

5. Don’t use guilt and anger.

6. Seek professional mediation if needed.

7. Discuss parents’ estate plans with them, not with siblings.

8. If a sibling is taking advantage of a parent financially, contact an attorney.

Setting up support services

For many families, an aging parent may be the primary caretaker of another aging parent or relative. Even with additional assistance from friends and family, the daily work of caring for another person can wear on their health as well. It’s important to watch for signs of caregiver burnout.

As part of this effort to coordinate care, caregivers should look for local services that can come into the care recipient’s home and help with a variety of tasks. Supplemental service programs today can even offer much-needed breaks to a primary caregiver.

Caregivers who handle financial responsibilities for an older loved one will want to understand and discuss Social Security. Here is some basic information about the program.

Note that regulations change, and we invite you to go to the Social Security Administration website to stay up to date.

Social Security qualifications

Social Security is a government program designed to provide financial benefits to older Americans as well as people who have become disabled in their working years. However, in order to receive these benefits, working individuals must earn a certain number of credits to qualify.

Credits are determined by income and years worked, and the number needed to qualify is based on birth date. You can find updated guidelines on the Social Security Administration website.

To determine credits needed in your situation, use one of the Social Security Administration’s online benefits calculator tools.

Designed as additional income

Social Security was established in the 1930s to replace some of a worker’s pre-retirement income. Following the Great Depression, more than half of America’s seniors could not support themselves. To ensure these and future older Americans did not have to live in poverty, President Franklin D. Roosevelt signed the Social Security Act of 1935.

Today, many people believe that Social Security will take care of all their financial needs in retirement. This is simply not true, and it’s important to plan for the future.

Delaying affects benefits

The longer someone delays collecting Social Security, the more it will pay off. The earliest a person may qualify is age 62, but the benefit amount will be reduced for retiring at that age. Retiring at the “full retirement age” means a person will receive their full benefit. Currently, someone born in 1960 is eligible for the full benefit at age 67. This chart helps determine full retirement age.

Medicare is the federal health insurance program available to people ages 65 and older. People younger than 65 with certain disabilities or permanent kidney failure also are eligible for this program.

Depending on coverage needs, the programs available include Original Medicare, made up of Part A and Part B, or a Medicare Advantage plan, which is known as Part C.

For additional coverage on items such as prescription drugs and co-pays, Medicare Part D and Medigap are available.

See what services are covered on Medicare.gov/coverage

Medicare Part A

Medicare Part A is the hospital insurance component of Medicare. It typically includes coverage for short-term inpatient care at hospitals and skilled nursing facilities, as well as some home care and hospice services. There may be a deductible or co-pay for some care, services and equipment.

Covered Events

• Inpatient care in a hospital

• Skilled nursing facility care

• Inpatient care in a nursing home (not long-term care)

• Hospice care

• Home health care

Medicare Part B

Medicare Part B is a little different. It covers two types of services:

• Medically necessary services: Services or supplies that are needed to diagnose or treat a condition using accepted standards of care (e.g, clinic visits).

• Preventive services: Health care to prevent illness, like the flu, or detect it early, when treatment is most likely to work best.

If the Part B deductible applies ($185 in 2019), the person must pay all costs (up to the Medicare-approved amount) until the deductible is met. At that point, Medicare begins to pay its share and the patient typically pays 20 percent of the Medicare-approved amount, if the provider accepts assignment.

People pay nothing for most covered preventive services if they get the services from a doctor or other qualified health care provider who accepts assignment. However, for some preventive services, patients may have to pay a deductible, coinsurance or both. These costs may also apply if they receive a preventive service in the same visit as a non-preventive service. There is no yearly limit for what is paid out-of-pocket.

Examples of Part B coverage

• Clinical research

• Ambulance services

• Mental health

• Second opinion before surgery

• Some outpatient prescription drugs

Conditions of Assignment

For most preventative services, costs are covered as long as the service comes from a health care provider who accepts the conditions of “assignment:”

• Agrees to be paid directly by Medicare

• Accepts the payment amount approved by Medicare

• Will only charge the Medicare deductible and coinsurance

Medicare Part C

Medicare Part C is coverage offered by Medicare-approved private companies. These plans can be used instead of Original Medicare, but companies set their own premiums, deductibles, co-pays and coverage rules. However, unlike Original Medicare, there is a limit on out-of-pocket costs. These plans offer the same coverage as Parts A and B, but may also include dental and vision care, as well as prescription-drug coverage.

Medicare Part D

Medicare Part D is supplemental prescription drug insurance offered by private plan providers. It carries a monthly premium, as well as deductibles and co-pays. If someone is enrolled only in Medicare Part C, they cannot enroll in Part D.

Medigap

Medigap coverage is available only to to people enrolled in Original Medicare. It is used to help cover costs of things like co-pays and deductibles, which are not covered by Original Medicare. These plans are also offered by private insurance companies and come with their own monthly premiums.

Many people envision retirement as a time of golf courses, grandkids and other leisurely pursuits. If they’ve saved up a nest egg, they assume they’ll be able to live out this vision.

But the reality is 70 percent of people turning 65 today will need some sort of long-term care in their golden years, according to the U.S. Department of Health and Human Services.

Other hard realities include:

• The median annual costs of home health care: $52,620

• The median annual cost of assisted living: $48,612

• The median annual cost of a semi-private nursing home room: $90,156

Data from the Genworth 2019 Cost of Care Survey

Considering the following misconceptions about who pays for long-term care can help people of all income levels plan ahead.

Misconception 1: Retirement savings will cover long-term care

Reviewing the costs above, it’s clear that just three years of assisted living could drain retirement savings of $150,000. Add medical and other costs to this, and $150,000 would be depleted even faster.

Misconception 2: Health insurance will cover long-term care

Some plans provide short-term skilled nursing benefits or limited home care services in cases of rehabilitation from illness or injury. But because most long-term care is custodial, meaning the recipient is receiving non-medical assistance with daily activities and their condition is a chronic, long-term condition, health insurance often will not cover it.

Misconception 3: Medicare will cover long-term care

In-home skilled care administered by a nurse, occupational therapist, speech therapist or social worker, and ordered by a doctor, may qualify for up to 21 days of coverage through Medicare. If the same care is received in a skilled nursing facility or nursing home, Medicare might pay for the first 20 days, but from days 21 to 100, Medicare will cover only a portion of the costs. The care recipient pays a portion as well.

This means the most Medicare will cover is 100 days of skilled care. Because most people who need long-term care need it for the rest of their lives, Medicare is not a practical payment option.

Misconception 4: Medicaid will cover every recipient’s long-term care

For those who meet eligibility requirements, Medicaid will cover long-term care. Basic requirements include being 65, income limits, having a permanent disability or being blind.

All applicants for long-term care coverage will be assessed by a state medical specialist to determine if the applicant needs a skilled nursing facility or nursing home, or if they are eligible for receiving in-home care.

However, if a person meets Medicaid’s medical criteria but maintains income and assets, they often are required to pay out of pocket until their assets reach a certain threshold.

Other things to consider

• Medicaid is a state-run program, and each state has its own criteria for eligibility.

• There are financial eligibility requirements for those on Medicaid. These are state-specific and are based on the federal benefit rate. The hard income limit for Medicaid in 2020 is $2,349, according to the American Council on Aging.

• To meet financial eligibility requirements, older adults may consider passing assets to their children or spouse. The Centers for Medicare and Medicaid Services will conduct a five-year look-back to ensure the applicant did not give away assets below market value. Most states review financial transactions going back 60 months from the date of the person’s qualifying application to Medicaid. If the applicant is found to have given assets away within the previous 60 months, they will face a penalty period, which means a delay in receiving Medicaid benefits.

Misconception 5: Long-term care insurance will cover all long-term care expenses

Although long-term care insurance is a safety net, costs incurred during an elimination period (time until the policy begins) may not be covered. A care provider might charge more than the policy benefit allows for a service. Charges for amenities that go beyond services like room and board may not be covered. Reviewing policy language and coverage is an important part of finding the right long-term care insurance plan.

Understanding these basic payment options and what they will or won’t cover is an important start in planning for long-term care and how to pay for it.

Many people think their retirement plans will cover the cost of care in a nursing home if they need it some day. Others think the government will pay for it and forego any planning.

These are just two misconceptions about long-term care costs, and they send countless families into shock when faced with a need for long-term care and no plan for financing it.

The best way to avoid such surprises is to understand the cost of long-term care and plan for it.

First, understand the costs of various options, from the Genworth 2019 Cost of Care Survey.

• The median annual costs of home health care: $52,620

• The median annual cost of assisted living: $48,612

• The median annual cost of a semi-private nursing home room: $90,156

How to plan for long-term care costs

The best way to plan for care is to conduct a financial inventory to see how far personal finances will stretch. Once this has been done, caregivers and their loved ones can use the Genworth care comparison tool to get an estimate for care in their area. Paired with a financial inventory, they can make decisions about what options might be a good fit for the potential resident and their wallet.

What is long-term care?

Long-term care is care that provides long-term assistance with the activities of daily life, such as bathing, dressing and eating. It also can be tailored to meet other personal needs, including medication reminders, running errands, shopping and preparing and cleaning up after meals. These services can be provided at home, in a community setting or in a specialized facility.

Who needs this type of care?

Single older adults are more likely to need long-term care services than those who live with someone. People with a compromised health condition, such as diabetes, and individuals with disabilities also may be more likely to need this care.

How much care will they need?

According to data published by ACSIA Partners, a provider of long-term care products and insurance:

• More than 70 percent of people ages 65 and older will need some type of long-term care as they age

• Women typically live longer than men and often need care longer (3.7 years) than men (2.2 years)

• Twenty percent of those ages 65 and younger will need care for more than five years

• People who receive long-term care at home will typically receive care for longer than those living in a care facility

Who provides this care?

Unpaid caregivers often provide this care in the home, but other options exist, including:

• Community support services, such as adult day or transportation services

• Home health and home care providers serve on an as-needed basis

• Nursing homes

• Assisted living facilities

• Continuing care retirement communities

Who pays for long-term care?

Medicare, Medicaid and health insurance have limits on long-term care costs, but other options exist.

Medicare

• Does not pay for assistance with activities of daily living, such as bathing, dressing, toileting, or needs such as pet walking, grocery shopping or cleaning.

• Does pay for short-term skilled care or rehabilitative services in a nursing home, for an average of 22 days and no more than 100.

• Does pay for care at home if skilled home health or other skilled in-home services are provided. These are generally provided only for a short period of time.

Medicaid

• Will pay for the largest number of long-term care services but only if the individual meets income and minimum state eligibility requirements. These requirements are limited to the amount and type of assistance needed with activities of daily living.

Long-term care insurance

• This type of insurance covers long-term care not covered by health insurance, Medicaid or Medicare.

VA benefits

• There are many services available to veterans through the VA, and those who served active military duty may be eligible to receive health care benefits and long-term care benefits.

Private pay

• The person’s resources and finances cover all types of care.

• Many people cannot afford it.

• A financial planner can help weigh the risks and benefits of this option.

Health insurance

• The coverage offered by health insurance is often limited and is similar to services covered by Medicare.

• If health insurance covers long-term care needs, it is usually just for short-term, medically necessary care.

What is Medicaid?

Medicaid is a federal program that provides health coverage to qualified participants.

That includes eligible low-income adults, children, pregnant women, elderly adults and people who have disabilities. Some states have chosen to expand that coverage to other groups.

Medicaid is funded jointly by states and the federal government.

The following Q&A will help with basic information about the program, as well as links to resources that will be regularly updated. Your Prosper Caregiving Coordination guide also can help you find specific information and answers.

Tip: Some states have different names for Medicaid. For example, Tennessee calls its program TennCare, in South Carolina the program goes by Healthy Connections and in Connecticut the program is known as HuskyHealth. Learn if your state’s program goes by another name.

What benefits does Medicaid offer?

Medicaid benefits vary by state.

All states provide coverage to low-income adults and people with disabilities – these are called mandatory benefits. Some states have elected to extend coverage to other groups, commonly referred to as optional benefits. To find out if your state has expanded coverage, this website by healthcare.gov can help.

To help people understand mandatory versus optional Medicaid benefits, this link from Medicaid.gov may be useful: Mandatory versus Optional Medicaid Benefits.

It may help to understand what Medicaid does not cover and the exceptions to those exclusions. The Centers for Medicaid and Medicare Services put together a booklet: Items and services not covered under Medicaid.

Who is eligible for Medicaid?

Medicaid eligibility varies by state, and you must be a resident of the state where you wish to receive benefits.

Eligibility is determined by one or more of the following:

• Age

• Income level

• Number of people in the household

• A person’s medical qualifications

This tool from healthcare.gov can help you determine if you qualify based solely on income:

Medicaid income eligibility tool.

How do I apply for Medicaid?

There are three ways to apply for Medicaid:

• Online Application

• Call the Health Insurance Marketplace at 1-800-318-2596

• Call your state Medicaid department. Find the phone number for your state Medicaid department.

What does Medicaid cover?

Medicaid coverage varies by state.

Examples of services that might be covered by Medicaid include:

• Doctor visits

• Healthcare equipment

• Prescriptions

• Lab and x-ray services

• Inpatient and outpatient hospital or care center services

Medicaid may also cover long-term nursing home stays, assisted living services and in-home personal care if you are eligible under your state’s Medicaid program.

Click here to find out if you are eligible for Medicaid under your state’s requirements.

Helpful tips about Medicaid

• Some states have different names for Medicaid. For example, Tennessee calls its program TennCare, in South Carolina the program goes by Healthy Connections and in Connecticut the program is known as HuskyHealth. This database will help you find out what your state calls it.

• Seniors must go through a period of what’s called “spend-down” of their assets to meet income requirements for Medicaid. The amount varies by state, marital status and assets. You can find detailed information on what that means for you and your family on this through the American Council on Aging.

• SHIP – State Health Insurance Assistance Program – is a free program that assists Medicare and Medicaid beneficiaries, their families and caregivers in determining what benefits a loved one may be eligible to receive. Find your local SHIP Office. Tip: When you call, select the option to schedule a call rather than wait on hold. It will save time and frustration.

• A Medicaid planner can help create a Medicaid/Asset Protection Plan, also called Medicaid Trust or Medicaid Asset Protection Trust. The plan is designed to protect assets from spend-down.

o The American Council on Aging matches individuals with a Medicaid planning professional through its online tool. The initial consultation is free, but there may be a fee applied for follow-up services.

o Find a Medicaid planning professional

• Before starting the Medicaid application consider consulting an elder law attorney and your financial adviser. If you do not work with an attorney, contact us to get a list of elder law attorneys in your area.