Women are disproportionately affected by long term care issues. The main reason: women live longer than men. As a result, their need for vital long term health care increases. Such care ranges from help with day-to-day activities to sophisticated therapy such as stroke rehabilitation. But that is not the full picture. Most importantly, women are less likely than men to have enough savings to pay for this care.

For centuries, women have served as the traditional primary caregivers of long term health care for their families. Today, women continue to bear the responsibility for the care of senior family members such as a parent, parent-in-law, aunt or sibling. More women are working outside the home than ever before, yet they continue to be challenged with personal responsibilities to loved ones in need of care. Some of these caregivers are still raising their own children. Many give up their jobs, plan their married lives around an ill parent or worry themselves sick over a parent’s declining health. The emotional strain and anguish that often arises when daughters, granddaughters, sisters and nieces are faced with such decisions can have devastating effects, not only on the emotional health of the caregiver, but also on her financial well-being and productivity. A national study conducted by the American Association of Retired Persons (AARP) found that:

80% of working caregivers reported emotional strain;

50% reported financial strain; and

40% missed work on a regular basis due to the health needs of an elderly loved one.

The baby boom generation is the first generation in history to include a disproportionate number of single women, many of whom face serious financial risks. Women in particular, are largely unprepared for the financial costs they will face upon retirement. Women:

Live longer;Have a greater need for long term care assistance;Face increasing long term care costs;Face decreasing public funds for care;Have the greater burden to provide long term care assistance;Make less money generally than men in equal positions and make even less money because of the stress and lost work associated with caring for another.

Their thanks? Statistically they will outlive their husbands and live their later years in poverty or near poverty levels.

On average, married women live 17 years after the death of their husbands and thus lack the spousal help at home that can prevent or delay the need for long term health care such as they provided for their spouse. Along with the trauma of outliving one’s spouse, is the fear of outliving one’s savings to meet future needs.

3 out of 4 residents in nursing facilities are women;

Nearly one half of all female nursing facility residents rely on Medicaid for their long term care services;

Women are 71% more likely than men to live below the poverty line in retirement; and

Unmarried women (divorced, widowed, never married) are 4 times more likely than couples to live in poverty.

2009 Poverty Guidelines (U.S. Dept. of Health and Human Services):

For a family of one: $10,830

For a family of two: $14,570

For a family of four: $22,050

A 2006 AARP study found that most U.S. citizens are unaware of the costs associated with long term care and overestimate the amount that government programs such as Medicare will pay. Expect to pay about $120,000 on average for yearly nursing home costs. Do not confuse Medicare with Medicaid. Medicare may provide payments for a skilled nursing facility IF one’s health continues to improve. If so, it will cover 100% of the approved amount the first 20 days; the next 80 days it will cover all but $133.50 per day (2009 rate); after 100 days it covers nothing.

To qualify for Medicaid assistance in Connecticut an individual must have no more than $1,600 in total assets – $2,000 in other states. Many people do not fall into this category. Therefore, if one does not qualify for Medicaid assistance, one must self-pay for care, utilize long term care insurance or make arrangements with family members to have the necessary care provided. Long term care insurance policies today cover:

Home Care;

Adult Day Care;

Assisted Living Facility Care;

Hospice Care;

Nursing Facility or Long Term Care Facility.

Planning for long term care needs, with or without long term care insurance, requires careful consideration of potential medical needs, their costs and available finances. Procrastination is the worst mistake. In the end, it is a matter of choice and control of your life.

Caregiver Agreements

Whether for a possible future Medicaid application or family harmony, a caregiver agreement (or personal service contract) is an essential tool when a family member takes care of another for long term care needs. It also may be the only permissible way to transfer assets to related caregivers without violating the Medicaid transfer rules. Medicaid ineligibility, family disharmony, and caring for a loved one without compensation, are just some of the many potential problems a caregiver agreement may alleviate.

The government looks five years prior to one’s application for Medicaid assistance for transfers of assets. Transfers without adequate payment in return – gifts – are one means of disqualification for Medicaid assistance. Without a legally enforceable agreement for services, compensation for caregiving services will be an impermissive transfer. Written agreements must precede the compensated services to avoid disqualification.

Often one family member, usually a daughter or niece, assumes the task of caring for an elderly family member. Other family members are unaware of the sacrifices, reduced income and stress that befall this younger family member. According to a 2004 AARP study, 44.4 million adult caregivers provide unpaid care to seniors or adults with disabilities. These caregivers expend an average of 21 hours a week for an average period of 4.3 years.

A written, dated, thorough, properly drafted document spelling out all services to be performed, makes it clear to other family members that there is an agreement and that compensation will be paid in return. The fee for services, if Medicaid is to be considered, must conform to costs for like services in the market place. Caregivers are well advised to document everything, not only entries in a diary but receipts for expenses and miles driven, especially if the caregiver’s car is used. Since this is a legally binding contract, it should not be treated lightly. It must contain the legal elements of a contract, fairly and adequately present both sides of the agreement and be drafted to anticipate potential litigation issues, particularly upon the elder family member’s death. Uninvolved family members may be the first to allege wrongdoing. Having the senior family member discuss the matter with all family members could help prevent any potential debacle. Often a family meeting with an elder lawyer to explain the issues is helpful. If the senior applies for Medicaid assistance, the lawyer drafting the agreement must also consider numerous federal and state factors.

If there is a caregiver arrangement in your family, consider a caregiver agreement.