Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Posts Tagged ‘Long-term Care

When Your Long-term Care Insurance Rates Rise

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Over the past several months, many long-term care insurance policy holders have received unwanted news from their LTC insurance company:  your rate is going up.

There are a number of reasons prices on policies issued years ago are going up now.  The current low-interest rate environment; more people are holding onto their policies rather than lapsing (stop paying); and people are living longer so more are expected to use their benefits than originally projected. 

But raising rates?  Can they do that?  You probably don’t remember it, but your policy includes language that the rate can be increased in the future.  And many companies have held off on increases.  But to maintain a financially stable program, the rates have to support potential claims.  Those insurance through the Federal government employees long-term care insurance program found that out last year when some rates increased as much as 25%.

It’s also important to recognize that the increase does not reflect anything about you as an individual.  When companies make these changes they do so for an entire class of policy owners, i.e. people who bought a certain policy during a certain period of time.  So you aren’t being singled out. 

You’ll receive a letter from the insurance company telling you when the rate is going to increase and the options you have if you don’t’ want to pay more.  

So, what are your options?  

Cancelling should be the last resort.  Unless you have a provision in your contract that lets you stop the policy and receive the benefits you’ve accrued to date, you will lose all the money you have paid in for the insurance.  Work with the insurer to find a benefit level that you can afford. 

Buying a new policy at a lower cost usually isn’t an option.  LTC insurance is priced by the age at the time you apply – the older you are, the more it costs.  So switching probably won’t save you money if you’ve had your policy more than a few years. 

If you are happy with the policy and you can afford the rate increase that solves the problem. 

But, if you can’t afford the increase, you can change the benefits.  The letter will outline what you can change and the impact it will have on your price. 

A good place to start can be the additional “riders” you purchased.  See if they are still as important to you as they were when you bought the policy.  Be careful about cutting inflation protection if you have it (the percentage at which the daily benefit increases each year — for example, 5% compound growth.  That’s what keeps your pool of money growing to keep pace with the costs of care when you need it in the future. 

Then take a look at the core benefits: daily benefit, policy years, and elimination period (deductible).  Your agent or the company can help you work through the tradeoffs.  Ask about the average costs of care in your area.  That can help you determine how far your coverage will go.

For those in the sandwich generation, if your parent is finding it difficult to pay the higher amount you might want to consider chipping in and paying the difference.  Continuing the level of coverage may be a huge financial relief in the future for all of you.

Don’t wait until the last minute to make the decision.  Give yourself time to review and consider the financial tradeoffs.


Written by Laura Rossman

August 13, 2010 at 3:28 pm

Long-term care crisis looming-time to talk

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5 Generations

If we needed long-term care tomorrow, most of us are not financially prepared. 

If our parents needed long-term care tomorrow, most of us have no idea what financial resources they have or their expectations and desires for where to live, who will care for them.

Statistically, 72% of Americans will need some level of care later in life. 

The crisis in long-term care is coming.  For many of us, it is already here.  So what do we do about it? 

I attended a session on Women and Aging 2010:  America’s Emerging Crisis last week in Washington sponsored by the Volunteers of America.  They have a robust senior housing program including a program that helps those who want to stay in their home or community (Aging with Options program at Volunteers of America). 

Good research, good discussion by a good panel – but no answer to the question of how do we even begin to have the family conversation about long-term care and finances.  Parents – especially the GI Generation _ don’t want to talk about money.  Baby boomers are generally in denial that they will ever need care.

Everyone agreed we need to have family discussions about this topic.  But, no one had an answer on how to have that conversation before crisis mandates it. and that, of course, is the worse time to try to make any decisions about money or long-term care.

Michelle Singletary, a finance columnist from the Washington Post (her column on the panel)  recommended starting the conversation with children now – hopefully once you need care, they’ll know what you have and what you want.  She also joked that her long-term care plan is that she has 3 daughters (and long-tem care insurance.)

But what do you do if you are caring for a parent now?  As a friend said to me today after her 92-year old mother went to the hospital with a hip fracture – “If I just knew what to plan for now –how long, what resources, what’s next. ”  But as those of us who have found ourselves in caregiving mode, planning need to happen a long time ago.  We just bump from crisis to crisis now – juggling life and catching our breath when we can.

This is a particularly important topic for women because we live longer and generally have lower incomes to support ourselves as we age.  The Volunteers of America survey said that among women caregivers, almost half (48%) say the recent economic downturn has made it harder for them to care for older loved ones.

And this is a middle class problem. As panel members noted — lots of money and you can pay for care, no money and you’ll qualify for government programs.  But a pension, Social Security and some savings and you’ll be figuring out how to pay for this care on your own.

 It’s not just the conversations at home – it’s flexibility in the workplace.  Almost half of the women surveyed (ages 45-65) expect to be called on to provide care to an older family member at some point in the future.  Yet elder-care doesn’t get the same flexibility in the workplace.  And the nature of eldercare giving is different – lots of doctor’s appointments and crisis events.

Volunteers of America says this is the beginning of a year-long discussion about women and aging.  That’s a good thing.  Because we’ve got a lot to talk about – and hopefully it can begin at home with a conversation today – or around Father’s Day if you need an event – to begin to talk about long-term care before the crisis hits.  It’s not just about money (though it’s an important part of the conversation)  it’s gaining the emotional intelligence so when the time comes you feel like you are on the preferred path.

 Michelle Singletary begins her column:  “The time has come.” 

Yes, it has.

America’s Caregiving and Aging Challenges, Volunteers of America research

video of Women and Aging panel discussion

Aging with Options program

Written by Laura Rossman

May 18, 2010 at 7:08 pm

3 Tips for Mothers Caregiving Mothers

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As we approach Mother’s Day, many of us find ourselves providing care or assistance for our mother. 

It might be every day in our home, or weekly check in calls from afar; or providing financial support or just more frequent check-in visits.   If the research is right, most of us didn’t see it coming, there was a crisis involved –and we still may be moving through periods of calm and crisis. 

As caregivers – or whatever word we use to describe our new duties – we’re juggling our own life at the same time which could include the demands of work, kids, and partner/spouse.  Sandwich generation.

 It’s exhilarating – sometimes – and exhausting– most times. 

But one thing I know to be true, most of us are wondering (out loud or to ourselves) how do I keep this from happening to me as I age?  Will my children face the same burden in caring for me?  

And while I am blessed with a very healthy mother that was not true with my father and that round of caregiving took its toll – and taught me a couple of lessons.  And now my mother and I are blazing a new relationship as we live in the same area for the first time in 35 years.  

There’s a very poignant article in the New York Times about the growing number of Alzheimer’s patients and the challenges wandering brings.

 So here are three suggestions for what you can do today to better prepare for tomorrow. 

1.  If you are a mother, caring for a mother, get some help and take a break on Mother’s Day– for yourself and for your family.  I know that can be challenging financially, but breaking for even a bit from the rigor of caregiving is essential.  You may even want to spend the day with Mom, but for once let someone else take on the caregiving and worrying. 

2.  Plan for your own long-term care needs.  No matter how scary it might be, sit down and start working on a plan.  How you want to receive care, where, from whom, how will it be paid for?

 3.  Talk to your children about your long-term care plans. If they are in their teens or 20s or 30s–they see what is going on, what you are going through and are wondering what’s in store for them.  As a society we tend to shy away from talking about money and about such things as long-term care and death.  Yet, what a gift it is to your children to know that you have thought about this and have plans and resources.

The fact is that women live longer than men.  They need more financial resources to make it through a longer life.  And they are likely to need some assistance as they age.  We’re still all trying to figure out what longevity means to us as caregivers or as one being cared for. 

So if you are a mother caring for a mother, remember to take some time for yourself this Mother’s Day. As they tell you on the airplane, put your mask on first so that you are able to help those around you.

Happy Mother’s Day.

Written by Laura Rossman

May 5, 2010 at 8:40 pm

A New Plan for Long-term Care

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Nothing like gathering around the holiday dinner table to remind ourselves we’re getting older – as in aging.

 And the older generations is, well, older too.  And caregiving, for Gen X and baby boomers,  is a huge stressor…financially and emotionally..

 So the prospect of a government sponsored long-term care program should come as good news.  And it is, sort of.  Because the fact is that so many of the facts about the program are still unknown that it is hard to tell what kind of benefit it will be for the future.

 I’m referring to the CLASS Act program in the Health Care Reform bill.  It hasn’t gotten much notice yet.  It is the first time a widely available-long term care program will be in place to help older and disable individuals who can care completely for themselves.  The timing couldn’t be better with the first of the baby boomers turning 65 next year. 

CLASS stands for Community Living Assistance Services and Supporters Act.  It sets up a new voluntary national program which you will be able to sign up for, pay a monthly premium and receive benefits after five (5) years. The benefit is expected to be $50-$75 per day.   It will generally be offered through employers and workers will have to opt out of the program.  For those working but self-employed or their employer does not offer the program, consumers will be able to sign up directly. 

The benefits of the program, the cost to consumers and how it will work are details yet to be determined.  The government has until October, 2012 to issue rules.  Detractors fear only those who need the benefits will sign up, sending premiums high and bringing the viability of the program into question.  Of course, in any insurance program like this, it only works if both the healthy and not-so-healthy sign up.  

 So, what do you do now? That all depends on your situation, your health and health history and your appetite for risk.

 1. If you have long-term care insurance, hold onto it. 

2. If you are in your 50s or older, waiting for the government program might be a pretty high risk plan, since the details are incomplete right now.  But it is clear that you’ll need to pay in for five years before you can receive benefits.So waiting might not be realistic.  Or, you could consider a long-term care insurance benefit level that covers some of the potential costs and leave yourself room to add the government program.  Or you could look at a higher level of premium that you could reduce later if you wanted to add the government program.  Or proceed with a long-term care plan from a private company and know that you’ll probably opt out of the government program. 

If you are younger, you need to weigh the risk, your own personal financial situation and your potential need for long-term care.

Sorry, no quick and easy answer.  Your personal circumstances should dictate your decision.  Get help from an expert who can look at your circumstances and help you think through different financial scenarios. 

3. If you can’t qualify for long-term care insurance, the CLASS Act could be a great benefit for helping to pay for care in the future. Watch for details over the next year.

 So, we’ll keep watching for details on the CLASS Act. 

And while it might not help you with today’s long-term care needs, for millions of baby boomers and those in the sandwich generation, it’s a ray of hope for how we might finance our own long-term care.

 Because if there is one thing the bill makes clear, long-term care costs will continue to be a personal responsibility. 

Some links about the CLASS Act

 Kaiser Health News   

American Association for Long-term Care Insurance

Written by Laura Rossman

April 5, 2010 at 8:27 pm

Too High Cost of Caregiving

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If your solution to long-term care is, “my kids will take care of me,” there’s new research that shows just how high a price your children may pay in compromising their own health.

 Employees in the U.S. who are caring for an older relative are more likely to report health problems like depression, diabetes, hypertension or heart disease.

 That costs employers an estimated $13.4 billion per year, according to a MetLife Study of Working Caregivers and Employer Health Care Costs.  And some of those health care costs are borne directly by the employee.

 Here are some more findings:

 * Younger caregivers (18-39 years old) demonstrated significantly higher rates of cholesterol, hypertension, COPD, depression, kidney disease, and heart disease compared to non-caregivers of the same age.

 * Caregivers tend to skip their own preventive health screenings such as mammograms.

 * Caregivers are more likely to miss days of work and often switch from full-time to part-time to care for their elder.

 * Employees providing eldercare were more likely to report fair or poor health in general.

 * Female employees reported higher stress levels at home than non-caregivers.

 * Eldercare may be closely associated with high-risk behaviors like smoking and alcohol.

If you know anyone who is or has been a caregiver, you know this first-hand. 

While eldercare is often thought of as an issue you hit in your 50s, this survey shows caregiving responsibilities across all age groups, with some of the heaviest health toll taken by those ages 18-39.

The report, directed toward employers, calls for better coordination of wellness and eldercare programs, more work time flexibility and stress reduction seminars, among other benefits.  And while reducing employer health care costs is a lofty goal, we can’t help but wonder if in the current economic environment the call for more resources will fall on deaf ears.

But, this report can be a wake-up call to anyone thinking that having their children care for them as they age is a long-term care solution with no consequences.

It’s good reason to figure out now how to finance your own long-term care, whether though your own assets or long-term care insurance. I know the current economy makes that difficult for many of us. 

But after all the years of keeping them healthy, getting them to eat their vegetables, and get exercise — the loss of their good health for elder caregiving is too high a price  to pay.

Written by Laura Rossman

February 3, 2010 at 7:53 pm

5 Sandwich Generation Money Lessons from 2009

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2009 – almost over. Whew!  So, let’s take a look back at money lessons learned in 2009 for those of us in the sandwich generation.  Here are five money in the middle lessons from 2009.

Add your own to the list!

1. A house is just a house – We got caught up in thinking about our homes as anything but a place to live.  It was a piggy-bank to bank roll our purchase of a car, an education, a vacation, a second home – you name it we figured out how to tap the growing equity in our homes to purchase more.  It was our retirement plan – forget about retirement savings, we’ll sell the house for multiples of what we paid and live happily ever after on the

The crash of the housing market brought us back down to earth.  But now millions of homeowners of all generations find themselves with more due than the house is worth and foreclosure threatening.  Or stuck – wanting to sell – but can’t sell for enough (house arrest as the condition is now popularly called).

So hopefully we have all learned the value of down-payments, understanding mortgage terms and conditions, and buying what you can really afford – a house to live in. 

2. Credit in moderation only –.  We started to get a handle on the concept of good credit and bad credit in 2009.  Regular saving returned.  Paying down credit became a priority.  Paying cash became fashionable.  College bound children and their parents began making some tradeoffs between piling on college loans and getting started with community college classes. 

Family conversations about money – among all ages from kids to parents to grand-parents—became more frequent, if even still a bit uncomfortable.  Especially important for young adults who have grown up in a “charge it” world who will benefit from learning early the danger of too much debt.

3.  Working in Retirement – This is a phrase that just 18-months ago would have been met with laughter.  Pretty serious stuff now.  While 401(k)s and IRAs have begun to rebound and the stock market looks a bit rosier, the concept of working longer and working in retirement has become the norm. Life has become practical –waiting to take Social Security until full retirement age, staying on the job a bit longer to rebuild savings and keep health care, finding an Encore career (for both money and our mind) and figuring out how we don’t outlive our money.

4.  Having a long-term care plan is a gift for your children– Okay, maybe you are one of those people who say it will never happen to me, but the fact is that living longer can create financial havoc.  I find that more conversations among baby boomers friends turn from the kids to talk of parents – assisted living, nursing homes, Alzheimer’s, stroke  — the emotional and financial pressure of figuring out how to care for our elders who never thought they’d live this long.

A lesson more of us are learning (I hope) is to have a plan for long-term care and share it with your children.  Where do you want to live, if you can’t take care of yourself is there money to help pay for care, what do you expect your family (children, sibling) to do for you?  Who knows exactly how it will all play out but having a plan is a tremendous gift to those faced with helping you.

5.  Families make a difference –This was a year about families pulling together — children moving back in with parents, older generations helping younger generations make house payments, student loan payments; sharing resources and sharing knowledge about money and life.  More talk about values and less about stuff.

It’s been a hard year but in so many ways a good year. Lot’s of lessons learned across the generations.  What do you think? Add a money lesson from 2009.

Tackling the Tough Talk with Parents

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Talking with aging parents about money and or their wishes about care is never easy.  Most of us have spent a lifetime making sure we stayed away from such personal issues.  Good heavens, a lot of us don’t even like to talk with our spouse/partner about money.  But, the conversation can be so helpful in reducing stress and adding some sense that you are “doing the right thing” when the time comes to lend a hand.

 A new website from Genworth Let’s Talk ( provides some great tips on how to bridge the communication gap, including recognition that sometimes you just have to back off, and come back to it later.

 “Families must face reality and understand that their financial, emotional and physical well-being will be vastly improved if they are prepared for the long-term care needs of their loved ones. The goal of the ‘Let’s Talk‘ campaign is to help families communicate openly, plan for the future and ensure that every member of the family is cared for and protected,”  said Colleen Goldhammer, senior vice president of Long Term Care insurance at Genworth. 

Don’t worry.  It’s not a site about long-term care insurance, though there are plenty of references about long-term care. It provides good practical tips on how to have a very difficult conversation.  Ask anyone who has ended up in a caregiver role (on-site or long-distance) having had a conversation that gives you a sense of what your mother or father or aunt or uncle would like helps you make choices when the time comes.  Without that background, the best you can do if do what YOU  think is right.  That might be just the opposite of what they want, but we just don’t know.

 I saw a quote yesterday that I think captures the reasons for tackling this tough talk:  Rather than planning for the future: plan for the surprises.

 Any caregiver who has taken “the call” can tell you that planning for the “surprise” would have made life easier for both them and their parents.

 Tackle the talk.

Written by Laura Rossman

June 4, 2009 at 1:13 pm