Growing concerns about growing old;
Senior care is moving beyond family members

By: Mike Danahey

Your so-called golden years could turn out to be more like tinfoil.

That's a quip that law professor Richard L. Kaplan has heard about growing old. As members of the baby boom generation enter retirement, Kaplan said escalating costs give them reason to be scared, especially if they might need some type of help caring for themselves.

Kaplan, who teaches at the University of Illinois at Urbana-Champaign, is involved with the school's multidisciplinary Initiative on Aging (http://www.aging.als.uiuc.edu/) and has written on issues related to the elderly, particularly financial concerns.

According to Paul McNamara, a University of Illinois extension specialist in health and consumer economics, two-thirds of the services for older adults are provided by family members. The rest is paid care, either in an institution or at home.

McNamara added that people who don't have children or other family members to provide informal care are more likely to need a nursing home. Women on average live longer than men and are more likely to need nursing home care, too.

Increases in longevity also have led to assisted living care, which is for those who need some sort of less intensive help with daily living. According to census figures, about 6.5 million elderly Americans need some sort of daily help. That number is expected to double by 2020.

Leigh Morehead, interim executive director of Sunrise Assisted Living of Naperville, said the city meets the national trends of women outnumbering men. She also indicated there are financial benefits to assisted living.

"We are finding that nationally people are living longer, and assisted living is emerging as an alternative to skilled nursing homes," Morehead said. "Assisted living is much more financially friendly than many skilled nursing homes."

FUNDED BY SAVINGS
The scattering of families far from one another has contributed to the rise of this type of care -- for those who can afford its $3,500 or more monthly price tag. Still, the average per-diem rate for assisted living facilities is about two-thirds that of a similar room in a nursing home, according to the Assisted Living Federation of America.
Unlike nursing home care, most assisted care is paid for directly out of pocket. Jean Elliott, director of housing and assisted living for Life Services Network -- a statewide trade association based in Hinsdale with about 420 members -- said Illinois has another model, a supportive living program run through the Department of Public Aid. A moratorium on such offerings was lifted in late September, and right now there aren't a lot of such facilities out there, Elliott noted.
This means that for assisted care, people rely on savings, investments and insurance to afford it.
Kaplan said that 10 years ago or so, long-term care insurance was only for nursing homes, and then home health care options were added. Now most policies cover a variety of care.

Yet old-age insurance isn't a topic many people want to think about, Kaplan said. "Baby boomers picture themselves being active well into their later years," he said. "Plus, there's a possibility you won't need and don't want the insurance."

In Naperville, the Sunrise facility discusses payment options with families. Some families or clients pay for the care out of pocket, but others have insurance that offsets the cost. Morehead said it's important for families to know that if they contribute to the cost, a tax deduction is available.

COVERAGE VARIES
There are several caveats about such policies, too, Kaplan noted. For one, it is confusing to compare policies because the terms tend to vary more than those for other types of insurance.

The longer you wait to get long-term care insurance, the more expensive it will be. And if you have an older policy, it may not cover recent changes in the way care is offered, he said.

Another problem with long-term care insurance is that those drawn to it may include not only those who are worried about growing old, which is not necessarily bad for the pool of those covered, but also those who have seen the need in their own families or those who know they could develop a condition for which they would need help. Both are high-risk holders and thus bad for the pool. They can drive up the odds that policy money will be paid out and thus raise rates.

As premiums soar, as they are doing now, this may cause people to give up their policies, which leaves a smaller pool, and that can also cause rates to go up, Kaplan said. Several companies are opting out of offering long-term care insurance packages.

Kaplan suggests to his students that they may want to buy long-term care insurance for their parents -- not just to be good children, but to protect their potential inheritances from being eaten up by health care costs.

TOUGH TO FACE
All this comes at a time when the federal deficit is at an all-time high, making it unlikely the government will get involved. Concurrently, personal debt is at record levels, as is the number of bankruptcies.

Of course, money issues aren't always obvious, nor are they easy for families to discuss.

Molly Hofer is a gerontologist with the University of Illinois extension who lives in south suburban Matteson with her family. When Hofer's grandmother was 89, she decided to give up driving after a minor fender-bender. She had been on her own since becoming a widow at 53, and it turned out she was living below the poverty level, with her house her only asset and only $30,000 in savings.

When her grandmother required nursing home care, Hofer's father wound up paying for it out of his own pocket for six months before making a decision to sell his mother's house.

When the elderly make the move from independent to assisted living, they experience physical changes along with emotional issues, such as loss. For their adult children, the move marks not only a transition, but a realization of that their parents are changing.

But talking about long-term care for many families is "a dreaded topic, a hard topic," Hofer said. "Typically, people only talk about the issues because they have to, not in advance."