SPEAKER_01 0:00

Welcome everybody to another episode of the Sandwich Bread Podcast. I'm your host, Tom Kaminsky. These are conversations about life and money for the sandwich generation. And this is a very special episode. We have our first repeat guest. Welcome back, Maureen.

SPEAKER_00 0:14

So great to be here. Thank you.

SPEAKER_01 0:15

You bet. She's just back. I couldn't believe it.

SPEAKER_00 0:18

We had too much to talk about after the first one.

SPEAKER_01 0:20

We did. We covered a ton of ground. For new listeners, Maureen was on episodes five and six. Awesome conversation. We talked about what elder law is, and then we talked a little bit about practical application. And there was enough awesome stuff there that we made two episodes out of it. So we had to have her back because we had to dive in a little deeper on one specific topic that means a ton to financial planners or should if you're doing your job right. That's the topic of long-term care. Welcome back, Maureen. Before we get into that, I do want you to kind of reintroduce yourself and um I want you to also reshare the story of what brought you specifically into the elder law profession. I think that's cool.

SPEAKER_00 0:59

Absolutely. So yes, I've been practicing in only the elder law space in my entire legal career. And so now I've been doing that for about 12 years. And I got interested in it because, and this is fun since I'm in my office instead of in Tom's very fancy studio. You get to see this little picture right here. And this is a picture of my grandparents. They're my dad's parents. And when I was in law school, they started kind of going through their long-term care journey. So my grandfather got sick and he declined over about a six-month period. And um, after he passed away, my family realized how much he was doing for grandma. So we kind of had this year and a half long saga, if you will, of their decline and eventual deaths about eight months apart. So going through that during law school and then recognizing that an attorney can help a family through that really difficult period of time was something that impacted me personally. And I also knew that it fit my personality. And so I really found a passion for it. And then I just focused the rest of my legal studies on elder law and eventually all of my legal career in this field.

SPEAKER_01 2:10

Very cool. Um, and I can attest from my perspective, work with a lot of sandwich clients, those millennial age clients, but I quite often work with their parents as well. And as I've built out my process for helping assist the parent or aging parent, you come to appreciate how valuable the elder law attorney is in the process and just making sure you have the right documents in place and you have the right plan in place to care for the aging parent. So I I really appreciate and value the work that you folks do.

SPEAKER_00 2:40

Right. And there's so much more and figuring out just the whole puzzle of who's going to go where, how are we going to pay for that, and then how do we pay for the other parent is kind of easy to start with the factual nature of the finances to get into maybe the harder or stickier topics, which is eventually what do you want out of your long-term care? I get to bring in my social skills and um just some of those softer skills that they don't really teach you in law school.

SPEAKER_01 3:06

Yeah, that's great. For the audience, if you are of the millennial age, the value of this call will be first kind of wrapping your head around long-term care, and then we'll give you some ideas about how to have this dialogue with your parents. And if you're of a retirement age and listening, hopefully there's some educational components to understanding what costs may come your way with your care needs. And then maybe this will be a little nudge or a prompting to have the dialogue with your kids proactively around what your long-term care wishes are and how well you've saved or planned for that. So, first and foremost, Maureen, how do you define long-term care?

SPEAKER_00 3:39

Yeah, I think there are medical definitions and then there's legal slash insurance definition. So I'm going to be talking more on the legal slash insurance side of things. So that long-term care is defined as care that's going to be needed for 12 months or longer. But really, in my mind, it's essentially when do we need consistent care and that's never going to end. So where it becomes really, really relevant is when we start looking at what coverage covers this time frame of care that is that we're looking at right in front of us. So short-term care or short-term rehabilitation, as it's sometimes called, is most often covered by Medicare. And you have to have a couple of elements in order to actually get that coverage to kick in. And for Medicare to kick in, somebody has to be an inpatient in a hospital for three midnights or essentially three overnight stays as an inpatient. So they can't just be in there for observation. When you're in the hospital for that length of time, Medicare essentially recognizes that that's taken a toll on your body. There was something going on where now you're going to need at least a short-term amount of time where you're doing some intensive therapies or different types of care rehabilitation in order to go back to your baseline from before that hospitalization. And that's the short-term part. So that's short-term care and is ordinarily covered by Medicare. But if somebody does that short-term period and they still need ongoing assistance with at least a couple of things, that's technically long-term care. Most of the time, long-term care starts out in the home and is being done by family members and friends that are pitching in and they don't even realize what they're stepping into is long-term care. It's really once the care needs get to a level where it's more than what just the family can provide by themselves, it's more frequent, it's a longer duration. That's when everybody starts looking at getting, bringing in help. And that's essentially when the costs start piling on.

SPEAKER_01 5:41

Okay. Very helpful. And then when long-term care is in play, what are the types of buckets to the different options that are at your disposal?

SPEAKER_00 5:50

Yeah. So I've made us a handy-dandy chart here. And I go over this chart in most of my consultation meetings with clients. So, because I think it's so important to have a baseline understanding of what this long-term care continuum actually looks like. So the law breaks down long-term care into three different areas. And this is how the law would regulate what is required for long-term care providers to say that they provide this kind of care. So independent living means that somebody lives in their own home, their own apartment. It could even be in their own apartment in a senior living community, but they are living independently. And when you're in independent living, if you need long-term care, you're bringing in a caregiver on an hourly basis. So you're hiring somebody and paying them by the hour. So your costs associated with that. So if we're looking at our independent living column, our our next um piece of the chart there is what does it cost? So you you obviously have your baseline living costs. Then you add on, you layer on additional hourly care that you pay by the hour. And a caregiver that you hire from an agency is typically paid right now about $30 to $50 an hour. And that range is going to depend on two factors, the type of caregiver that you have and the skill set that they have, and also the number of hours. If you can hire somebody for an eight-hour shift, then you're going to get the lower end of that spectrum, even if you have a skilled caregiver like a CNA. Most care agencies want to be able to pay a worker for an entire shift. And so they're, they may have minimums. So it's okay to shop around because different caregiving agencies would give you different options.

SPEAKER_01 7:34

Okay. And for the the folks that are just listening, Maureen does have this helpful graphic. We will provide a link to it or a copy of it in the show notes. And then we also have a YouTube channel, channel Sandwich Bread Pod. So if you can hop on YouTube and actually look at it, but we'll do our best to paint the picture for you with our words. A quick question on this one, Maureen. The $30 to $50 an hour, um, that's consistent with what I've seen, just FYI from the financial planning side. Are you seeing inflationary trends? Have you seen that number outpace inflation? Do you see it matching inflation?

SPEAKER_00 8:06

That's a really good question. It was usually between $20 and $35 an hour before COVID. And then during COVID era is when we saw a big jump. And then I've seen more and more agencies recognize that there's a big demand for short shifts that are occurring on maybe three, four, or five days a week. And they've found that if that they can corner that area of the market. And so that's also where I've seen that upper limit jump a bunch, is because we have now several agencies that are allowing for a two-hour shift, but you pay a premium for those.

SPEAKER_01 8:38

And we're both based in Kansas City for the listeners. And I do think actually that Kansas City is not a terribly bad average for the country. There's certainly much higher cost areas and certainly lower cost areas, but I would guess we probably fall somewhat in the the average range.

SPEAKER_00 8:52

I would definitely agree. And very good.

SPEAKER_01 8:55

What's next category after independent living, which we just talked about?

SPEAKER_00 8:58

Yeah. So if somebody needs a higher level of care, they would bump up to assisted living. So what assisted living looks like is typically going to be a large scale or a small scale facility. So in my mind, a large scale scale facility is 50 or more residents. Now I don't think that's really defined anywhere. Maybe it is, but that's just in my mind. Um, and then there are an increasing number of small-scale assisted living facilities. Many of them are called a home plus. And what's happening is typically an investor will buy up a ranch style home and then they'll retrofit that home to have five to six private bedrooms and then a one shower room and then common spaces. So a common kitchen, a common living room, um, and usually a common restroom. What that allows for is anywhere between four to eight residents to live permanently in a house inside of a regular neighborhood. So especially for people with diminished capacity and memory issues, it's a nice transition because it feels like a home.

SPEAKER_01 10:01

Yeah.

SPEAKER_00 10:01

And there's usually just a split shift caregiver. So you'll have, you know, 12 hours on, 12 hours off for caregivers, and then you only have a couple of caregivers. So the residents are only making a few relationships instead of in a large-scale facility, not only are you going to have turnover, but you're just going to have more faces to learn. So it's easier, especially for people with memory issues. Those are technically regulated as assisted living facilities as are your traditional large-scale assisted living. So, what an assisted living facility is going to provide is some amount of care and all of your basic living costs. So now, assisted living is not highly regulated by the law. So, what that means is that you can find an extremely broad range of options inside of this assisted living category. So you can find an assisted living that will provide the resident with their own private room and private bathroom and one meal a day and, you know, maybe assistance just with their laundry, but they're really not providing assistance with much else. And perhaps, especially if it's a memory issue that's happening, it's a secure environment and they've got very specific security going on for those folks with memory issues. That would be on the very low end of the spectrum as far as care needs. You can also find assisted living facilities that provide almost up to end-of-life care, where they're they are helping that person to transfer in and out of a wheelchair into a chair, into bed, wheeling them to their meals and making sure that they arrive to their meals. And some assisted livings will provide three square meals a day instead of one at other facilities. So it's really important to note that if you're starting to look at assisted living facilities, to pay really close attention to the entire spectrum of care that that assisted living provides, because you might be looking to live there for a very long time and making sure that it can provide a higher level of care. That big thing is really check out what their base room and board cost is and what it provides, and also look at will that change over time? And then in pretty much every assisted living facility, they should be able to break it out for you what is your level of care cost above that room and board rate? Because that will go up over time. And so you want to understand how many levels of care they have, what each of the levels means as far as what does it take to bump you up into the different level, the next level of care, and then what is that cost difference? So again, that can be a pretty broad range. And the other thing that's really important to note is that anytime you see the term memory care, that, as you can see, for those of you who are looking at this chart, memory care does not appear on any of my categories because memory care is a marketing term, it's not a legally defined term or area of care. So, what that means is that memory care is going to look very different at each place. But most often when something is called a memory care facility, it is registered as an assisted living facility. So you just have to ask questions to figure out what memory care means here. And so if you're comparing and you go visit a few different memory cares, asking those same types of questions to get at what is the specific memory care you're providing, you'll probably get very different answers.

SPEAKER_01 13:31

Got it.

SPEAKER_00 13:32

So let's talk a little bit about the cost of assisted living. Because assisted living provides such a broad range of care, you also find a really broad range of prices. And so that really low level of care that I talked about, you can find in a slightly more, you know, middle rural area, $5,000, $6,000 a month if you don't need a whole lot of extra care. Now, once you start to get into really high levels of care and layering on memory care, I mean, you can get up to $11,000, $12,000, $13,000 a month easily at just the assisted living level. So really a broad range of care there with assisted living.

SPEAKER_01 14:08

That's helpful. All right. Now let's talk uh third, third category, skilled nursing.

SPEAKER_00 14:12

Yeah. So the highest level of care that you can receive is skilled nursing. And essentially what that means is that someone is a full-time resident for the long term. They're not planning on rehabilitating to go back home. We understand that they're going to need that level of care most likely for the rest of their life. Skilled nursing can provide a very, very high level of care, including when somebody needs two people to assist them. The technical term is called transferring. That can mean from getting out of bed into a chair, basically transferring from one place to the next. Skilled nursing will also always assist with restroom activities, with showering, and they can typically do IV medications and nursing level interventions that people need. So when someone needs 24-7 care and a very high level of care, skilled nursing is going to be the most appropriate level of care for them. And because the level of care that they're providing is very intensive, I'm seeing now the average being more like $12,000. And I've seen them go all the way up to about $15,000 per month. Um, that starts to really eat away at savings very, very quickly.

SPEAKER_01 15:25

Now it almost seems like there's an overlap here. Does assisted living in it cover to a large extent some components of skilled nursing if it's call it the really, really high end of skilled care or assisted living for the care? Is there like an overlap there potentially?

SPEAKER_00 15:40

There's there's definitely overlap. There's people in assisted living facilities that are providing a high level of care, and those people would also qualify to be in a skilled nursing facility. Absolutely, there's some overlap.

SPEAKER_01 15:51

Okay. All right. So a quick summary on the cost side. Pendant living, caregiver typically commands about 30 to 50 an hour, and that's sort of a Kansas City average cost, but it can be extrapolated out reasonably well nationally. Assisted living, we've got roughly six to thirteen thousand per month range, and skilled nursing, roughly nine to fifteen thousand a month range is what we're hearing. Now, just kind of framing if you are of retirement age and want to age at home, which I think I would guess Maureen, the six percent of the people you meet with are saying I want to age at home. You think about that independent living cost, call it around 50 bucks an hour, 24-hour care, you know, toward the end of your life. If you if you need 24-hour care, you're looking at about a thousand dollars a day for care. Um, and so that could easily run into the hundreds of thousands a year for the independent living cost when these additional stepping stones you could potentially take might cut that by a third or half, you know, at least.

SPEAKER_00 16:50

That's right. And there's really only two ways to pay for long-term care, and that's privately, or by using public benefits. And that's really where my expertise comes in is knowing how to get those public benefits to kick in. So that becomes a really, really important part of this conversation because as you're sort of planning a potential trajectory through these levels of care, or even just expressing or talking with your parent about their wishes, maybe they never want to be in skilled nursing. So you say, okay, well, let's do our best to take that off the table, which means we'd have to find an assisted living that has a very high level of care potential. And it still might be very expensive. And oh, by the way, maybe it the assisted living facility that's chosen doesn't have any public benefits that will kick in. So all of these, these pieces about the financing of it have to come into the conversation. You might be able to have an ideal trajectory which could get derailed based on the financing of that long-term care choice. So being able to use your private dollars obviously gives you the most choice possible. You would have every option available to you if you're going to use your own funds. And many people don't think of it this way, but long-term care insurance is private money because once you go on claim, they're paying your expense directly or they're just paying you, and then you have more money to pay for long-term care. As long as you fit the criteria to get your long-term care insurance to start paying out, then it provides you with the money that you choose where to go. So it technically counts as private pay. And I often have clients tell me, Well, when should I get it to kick in? That's such a hard question to answer because it always depends on, well, what is your plan? And do you ever see yourself being in skilled nursing? And would you be okay jumping on Medicaid to help pay for that? And so I help clients to come up with a five to 10 year plan where long-term care insurance is part of that picture.

SPEAKER_01 18:55

Great. They are a very nice supplement to your financial plan if it's a fit.

SPEAKER_00 19:00

Yeah. And a lot of my clients realize oh, well, Medicaid could actually help me in the future. But what relying on public benefits does is it decreases your choice.

SPEAKER_01 19:11

I've seen enough plans across enough states to really stress that only take the advice of a local attorney that knows what they're doing for your specific state and situation.

SPEAKER_00 19:21

Yeah, it's really important because each state's Medicaid rules are vastly different. And sometimes for those people who are living in assisted living, but their health could qualify them to be in skilled nursing, if their money runs out at assisted living, they're forced to bump up into skilled nursing just to get Medicaid to pay for it.

SPEAKER_01 19:41

Okay.

SPEAKER_00 19:42

If they need a Medicaid eligible facility. So it's got its very own special rules.

SPEAKER_01 19:46

But don't take that as gospel across the country. You know, explore your local rules and regulations and and engage with an expert to make the a really well-informed decision about this. Because the rules vary and it can mean hundreds of thousands of dollars with each decision you make. So or more.

SPEAKER_00 20:02

Yeah. And so when you get Medicaid to cover your long-term care, here's what actually happens the resident pays their income towards their facility first. So if somebody has twelve hundred dollars of Social Security and $800 in a pension, they're bringing in $2,000 a month. They essentially owe almost $2,000 to the facility. And then the Medicaid benefit pays the rest of the tab, whatever that is. So you can see how that is an incredible savings, right? You're always getting your income and that's all that's all that you owe. So remember how when I was talking about the cost of assisted living, I talked about the base room and board rate, and then your level of care rate that is layered on top of that. And that's how you get your total monthly payment to the assisted living facility. So typically the resident will still be responsible for paying their base room and board rate, but what Medicaid covers is that cost of care on top of that.

SPEAKER_01 21:00

Okay.

SPEAKER_00 21:00

Now, what's really important to figure out as you're researching this assisted living facility is will that room and board rate stay the same when someone is off of Medicaid or on Medicaid? Because if your base room and board is $5,000 and you bring in $2,000 of income, where is that extra $3,000 a month coming from? Um, and I'll just put a quick plug in here for a national organization that I belong to called NALA, which stands for the National Academy of Elder Law Attorneys. And they have an awesome find an attorney button right on the homepage. If you have a client in a different state and you're trying to help them find someone local to that state, NALA.org and use that find an attorney button. So read, read the read, read those contracts super. And now you know the right questions to ask when you're going into looking at the that care facility.

SPEAKER_01 21:46

Super helpful, Maureen. I really appreciate it. But we went through the three main buckets of long-term care as as through the lens of an elder law attorney, I should say. And those buckets are independent living, assisted living, and skilled nursing. And as you can see from this dialogue, lots of nuance between these categories and huge difference potentially in cost between these categories. So if you are first of all, reflect on what you want for your own aging process, do a lot of due diligence into the actual costs of executing what you like and understand if your finances can can meet that need and meet that desire. And then from there, talk to your family, talk to your kids about what your desires are so that it's not scrambling in confusion if some type of more urgent event occurs and you're forced into making decisions quickly. Your kids are aware and ideally put it in writing in the form of an estate plan, right, Maureen? And then if you are a millennial aged or kid of an aging parent listening to this episode, similarly understand that the the costs and the implications and what you're signing up for if you are navigating this for your parents. And if they are of great health, still have that dialogue with them proactively, not reactively, because these is going to be as big a cost as really any in your life, potentially. Maureen, thanks so much for coming on again. We really, really appreciate having you back. Who knows? Maybe you're you're enough of a glutton of punishment for another episode after this.

SPEAKER_00 23:10

Sounds great.

SPEAKER_01 23:10

Thank you for for tuning in to another episode of the Sandwich Bread Podcast. We loved uh having this dialogue. Thanks again.