I recently met with a client who wanted to do whatever she could to remain at home.  Since she owned her home outright, I suggested that she consider a reverse mortgage as a way to access the equity for cash to pay for home-based care.  I was surprised to learn that Wells Fargo is no longer issuing reverse mortgages.  Wells Fargo and Bank of America, which discontinued offering reverse mortgages a few months earlier, had previously issued more than 40% of all reverse mortgages.  As reported in the Summer edition of the National Academy for Elder Law Attorneys (NAELA) Arizona chapter newsletter, Wells Fargo said they had based their decision on ”today’s unpredictable home values,”  and the restrictions on reverse mortgage holders that make it difficult for the bank to determine whether the homeowner can meet her other obligations, such as taxes and insurance.

Reverse mortgages have several restrictions, one of which is that the mortgagee must stay in the home, and the fees are significantly higher than those for traditional mortgages.  However, for someone like my client, who is trying to pay for home-based care,  and who has most of her net worth in that home,  it has been one of very few options for financing that care. 

Through a broker, my client was able to find an institution that would issue a reverse mortgage.  Unfortunately, since a reverse mortgage will only secure up to 60% of the home’s current value, the amount of money available in the current housing market was barely worth the trouble.  

If my client ends up spending all of her cash assets to pay for her care, she will be forced to consider applying for Medicaid, which will not count her home as an asset.  It would be unfortunate, both for this family and for our cash-strapped state, if this women ends up accepting public benefits because she cannot access the equity she has accumulated over a lifetime.

For more information, contact Marsha Goodman.

Every time over the past 6 weeks that I have read that Congress and the President are close to agreement on legislation that will reduce the federal budget as a condition for raising the debt ceiling,  12 hours later, I read that it has fallen apart.  Since, like all of us, I have plenty on my plate, I resolved not to read any more articles until a deal was finalized.  After all, what’s the point of trying to understand a plan that isn’t going to be implemented anyway?

I broke that resolution this morning when I read the Executive Summary of the plan developed by “The Gang of Six.”  Their plan, which includes both cost cutting and revenue increases, is fairly general at this point, which is why the specific recommendation to “repeal the CLASS Act” jumped out at me. 

As I described in this blog back in March, the CLASS Act is designed to establish a national system of long term care insurance.  It would allow employees to use a voluntary, government-sponsored insurance program  to pay premiums through payroll deduction, and then receive a cash benefit when they can’t perform at least two of their  activities of daily living, whether due to old age or a disability caused by disease or accident that could occur at any age.  It isn’t designed to cover the full cost (so would never replace the benefits of private long term care insurance for those who qualify, and can afford it), but it would offset some of a family’s burden for long long term care.

Many details of the program have yet to be completed, and lots of smart people have expressed concern that the program won’t work, because only those who have a condition that makes them uninsurable in the private market will participate.  Since the program is designed to be cost-neutral, this may make the premiums unaffordable for the very people for whom the Act was intended.  Precisely because of these concerns, the Act requires the collection of premiums for 5 years before anything is paid out. In addition to that requirement, the Congressional Budget Office has estimated that the Act, when fully implemented, will save the government money by preventing, or at least delaying, the need for some individuals to turn to Medicaid to cover the cost of this care.

I try hard not to be cynical, but something seems odd about the inclusion of a specific directive to repeal this one law  in a 5 page summary of sweeping economic reform.  If this alarms you, too, you might want to check out the website of an organization called AdvanceClass, at http://www.advanceclass.org/, which is an advocacy group dedicated to the implementation of the CLASS Act and other initiatives to make long term care affordable.

Discovering the Life Care Planning Law Firms Association (“LCPLFA”)  almost three years ago helped me define the way in which I would be serving seniors and their families in my practice of law.  The members of the LCPLFA  are committed to  “helping clients and their families navigate the long term care and healthcare system and advocate for good care during their  – or their loved one’s – journey through the elder care continuum.”  (www.lcplfa.org).  This organization has provided me with a wealth of information and tools to enhance my ability to fulfill this mission for my clients and their families.

This past weekend, the Board of Directors of the LCPLFA met to review our mission, vision and most recent strategic plan to make sure that we are on the right track.  We all agreed that we are absolutely committed to our interdisciplinary practice model, which enables us to use the expertise of both human services and legal professionals to solve the challenging issues that confront our aging clients and their families.  Many members of our organization are including additional professionals, such as insurance experts, on their teams, to assure the most comprehensive solutions possible.   We spent much of our time together discussing how we might educate our communities and potential clients about the availability of this planning model, as opposed to seeking a specific transaction or document, or waiting until it is too late to do much advance planning.

Once our facilitator synthesizes the notes she took on dozens of flip chart pages and develops the draft of our plan for the next 3 years, I look forward to enhancing my own practice, so I can provide even more value to the seniors and their families whom I have the privilege of serving.

Congress passed the Older Americans Act in 1965, but the long term care ombudsman program that the law required wasn’t fully implemented for another 10 years.  In Arizona, that program is contained in Arizona Revised Statutes §§ 46-452.01 and 46-452.02.  This resource, which gets its authority from the Department of Economic Security, but is administered by the Area Agency on Aging (In Phoenix, www.aaaphx.org, or nationally, www.n4a.org). 

While nursing homes are governed by more federal regulations than any industry but nuclear power, assisted living facilities are governed by state regulations.  The long-term care ombudsman is in place to make sure that they adhere to those regulations, and that they always have the best interest of the resident in mind.

The long-term care Ombudsman program is a resident-centered advocacy program.  The ombudsmen advocate to promote the rights of residents, and improve the quality of their lives. They educate residents and their families, as well as facility staff and the community.  While they can’t address all of the issues that may  be raised, they can identify agencies that can help, and coordinate efforts with other agencies and service providers. Finally, they can identify problem areas in facilities and advocate for change. 

In Maricopa County, AZ,  the LTC Ombudsman has a professional staff of 9 people.  Since Maricopa County is larger than 22 states, they also utilize a large cadre of volunteers. If you are interested in serving in this way, contact the Area Agency in your community.

Is the Community Living Assistance Services and Supports (CLASS) Act a voluntary cash benefit program where people pay into a trust fund and then have that cash available to them for long-term services and supports related to a qualifying severe disability, or is it destined to become a new federal entitlement program that is not sustainable? On March 17, 2011, the House Energy and Commerce Committee Subcommittee on Health held a hearing to debate those points, and discuss changes before implementation. The CLASS Act is part of the federal health care reform law (Affordable Care Act). The big question is, what are the alternatives if, as they indicate, 26 million people will require some form of long-term care by 2060? See advocacy@naswdc.org March 2011