Health Costs: When you have some money but not enough.

The increase in life expectancy, and with it people living for many years with one or more chronic conditions, has created unique problems for the health care system, families and community. This is a relatively new issue, since at the turn of the 20^Th century most people died from an acute illness or injury.

State and federal programs are available to help with certain aspects of care, but their availability is generally income driven. If you have savings, even as little as $2,000 in some states, you may not be eligible for these programs. Fortunately, owning a home is not part of the asset test.

The liquidation of assets to pay for treatment and care can be quickly exhausted. Once assets are gone, there can be a long wait until programs start providing the services, and that says nothing about the psychological toll of having to spend down savings and/or sell one’s home.

Other variations on this theme include:

• The person who wants to pass on savings and their home to family and doesn't want to spend money on health care.

• Caregivers that look at these assets as their compensation for caring for a family member. Consequently, they may be reluctant to spend money for various aspects of care that would benefit their charge.

• The middle age person with a chronic condition(s) who is having difficulty paying for care but is unwilling to dip into savings, IRA etc. for fear that this money is needed for when they are “truly old.”

So what to do?

By organizing help, planning, and making changes in daily living practices, it is possible to reduce need, thereby reducing costs and having to spend down assets. Yet as the saying goes, “there is no such thing as a free lunch.” Chances are you’ll need to dip into savings to help cover costs. That noted, even here there are things to consider before having to liquidate all assets or selling one’s home.

Consider the following:

• Reduce Expenses as Much as Possible: Check out Ways to Save Money on Monthlies(Bills).  You’ll be surprised how many bills you can eliminate or reduce.

Using Medical Cost Advocates, a hospital bill review service or a medical negotiation service can Don’t Pay That Medical-Use aNegotiation Service! 

significantly reduced medical bills. Read-

• Create and use Social Capital: Your social networks have value and importance. Not only does it allow you to help others in their time of need, but they’re there when you need it. Being an active participant in support groups, church, civic and other types of community groups and organizations, as well as cultivating friendships can help significantly increase your “social capital.”  Looking for ways to increase your social capital?  Check out 150Things You Can Do to Build Social Capital. 

One way to organize the people who make up your networks, so that they can help you, is a Lotsa Helping Hands website.  Lotsa Helping Hands is a private, web-based caregiving coordination service that allows family, friends, neighbors, and colleagues to create a community to assist a family caregiver with the daily tasks that become a challenge during times of medical crisis, caregiver exhaustion, or when caring for an elderly parent. Each community includes an intuitive group calendar for scheduling tasks such as meals delivery and rides, a platform for securely sharing vital medical, financial, and legal information with designated family members, and customizable sections for posting photos, well wishes, blogs, journals, and messages. This is a free service.

Using Lotsa Helping Hands to help friends and clients, I’ve found that it works best if a friend or family member administer the site versus the person(s) who is in need of the help.  

• Use Condition Specific Organization: The local chapter of a condition specific organization-e.g. American Parkinson’s Disease Foundation- can help with a variety of services you might not even be aware of. These groups will often provide a wide array of services free of charge. Such services may include care management, buyer’s clubs for things like vitamins and supplements, loan closet for durable medical goods, as well as support groups and informational materials. Organizations for the blind and hearing impaired are among the best in terms of helping with free and low cost adaptive equipment. The best way to find out what organizations serve your area is by calling 2-1-1 or using the 211 website.  2-1-1 provides free and confidential information and referral and can help with food, housing, employment, health care, counseling and more.

• Use case management/care coordination services. Case managers can provide a variety of services to help individuals and their families get the care they need. Depending on your age, condition and/or location, where you find one varies. Places to consider: Area senior services, including senior centers; condition specific organization (e.g. Diabetic Association); community action agency; social services department for the hospital or health center where you receive care; veterans hospital.

• Consider Different Living Arrangements: Where you live can make a significant difference on the type of outside care you’ll need. Having a roommate, living on one floor, choosing an apartment complex over a stand alone house, or living with adult children or other family, can all have major benefits from reducing costs to eliminating the need for certain types of services (e.g. someone to cut the lawn or shovel snow). Being in an area where you can walk everywhere not only increases exercise but it can eliminate the expense of a car.

While these are generally thought of as “senior living,” many of these housing options start at 50 years of age and some younger if the program includes people with disabilities.

- Senior Community/ Senior Co-Housing: Cooperative-style housing community of seniors who share some expenses, skills and visions. Variations of this type of living arrangement include: a group of people purchase a very large home and sub dividing it into apartments; building a number of homes in a cluster under the leadership of a corporation or builder. Generally, they do not provide formal services. If need becomes to great, the person can hire outside assistance, such as a personal care attendant, or will need to enter assisted living or nursing home care.

- Continuing Care Retirement Center (CCRC): Provides resources and services from independent living through nursing home level of care. Residents pay for an apartment/condo and then a monthly fee to cover meals, cleaning services etc. Because these facilities are designed to meet the needs of elders, many elders do much better, live longer and have less need for institutional long term care. There are all types of different CCRCs, so it is best to site visit and review all aspects before buying an apartment or townhouse.

- Naturally Occurring Retirement Community (NORC)/Villages: Coordinates seniors in a given geographical area. Members remain in their homes, apartments, or condos. More and more of these types of community-based programs are being developed and so there is a potential opportunity to help create one in the community where you now live. Services provided can include: One phone number to call for any service; Coordinated billing; Pre-screened service vendors –including home health, personal care attendants; Transportation arrangements; Computer training and support; Volunteer services and opportunities; Newsletter; Check in service; Exercise programs; Access to social and cultural activities; Household and home maintenance services; Shopping assistance;

and Information and referrals.

• Assets to utilize that allow one to age in place:

- Viatical Settlement: If the person has a life insurance policy consider a viatical settlement, whereby the insurance policy is sold to a third party for immediate cash benefit. Viaticals use to be limited to those with life-threatening conditions but this is no longer true and many people needing cash sell them. Learn more at Understanding Viatical Settlements-Selling Your Life Insurance. 

• Reverse mortgages:  If you’re 62 or older – and looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, or pay for healthcare expenses – you may be considering a reverse mortgage. It’s a product that allows you to convert part of the equity in your home into cash without having to sell your home or pay additional monthly bills. Learn more about the three types of Reverse Mortgages and how to go about obtaining one from the Federal Trade Commission’s Consumer Information on Reverse Mortgages. 

One option that I haven’t discussed is long term care insurance. If this is something you’re considering, read Long-Term Care Insurance: The Risks and Benefits-Is long-term (LTC) insurance a good investment?