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Posted on July 10, 2019

Under the Influence – Financial and Medical Planning Through a Terminal Illness

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By Shawndi Purselley, CFP®, CDFA®

As I have mentioned in my previous blogs, I was raised by my grandmother and grandfather Glen and Janet.  They had three biological daughters, and my mother was the oldest.  I was born when Grandmother Janet was 34. While Janet lived a long life with relatively few health problems, she developed small cell carcinoma about 6 years ago which spread quickly throughout her body and ultimately to her brain.  She lived about 24 months after the diagnosis and passed away 4 years ago last October.  During one of her initial oncology visits she completed an advanced medical directive.  This document stated her wishes outlining care regarding such things as resuscitation, treatment options, life sustaining measures and organ donation.   It specified what actions should be taken for her care when she could no longer make the decisions for herself due to her illness.  She also completed a healthcare power of attorney naming me as the person that would be in charge of making decisions on her behalf when the time came.

Janet fought hard to extend her life for as long as possible, but the brain cancer consumed her relatively quickly.  After her diagnosis, she fell in her home due to weakness and was transported to a local hospital.  Although she was medically stable, she was still too weak to go home and function as she could not walk or move around, and she wasn’t eating much.  The hospital authorized her to be moved to a rehabilitation facility in order to begin receiving therapy to regain strength so that she could return home.  Due to this being a “rehabilitation” diagnosis from the hospital with the presumption of recovery, Medicare covered their appropriate portion of the cost of the facility and the care.  However, after about a week the therapist knew Janet was not going to get any better.  The therapist notified Medicare and the doctors they would discontinue rehabilitation.  This meant that Medicare would no longer pay for the care nor the facility.  My decision was to either take her home, self-pay for the care and the facility, or apply for Medicaid on her behalf.  I decided to agree to self-pay for the facility at a cost of $8,000 per month for a semi-private room and apply for Medicaid in the meantime.  Her health declined quickly and a few days later I also requested that hospice begin providing services.  Medicare does cover hospice services, but they do not cover the cost of the facility.    She only lived about 24 hours on hospice.  My grandmother was able to apply and receive Medicaid because they qualified as low income and low assets under the state’s Medicaid laws.  Her Medicaid was actually not approved until after she had passed.

It’s important that people understand the difference between what Medicare will and will NOT cover when it comes to long-term care and care facilities.  Needing extended or long-term care is a very real issue.  Absent a plan, the consequences to yourself, spouses and families are significant.  Assets can be depleted.  Medicare does NOT cover long-term “custodial” care.  It may cover rehabilitation services, but as I explained in my example above, as soon as the care becomes custodial in nature, Medicare may cease to cover these types of expenses (as a general rule).  So how does a family cover long-term custodial care for a loved one?  Typically, long-term care (custodial care) is either paid for with personal savings and investments, Medicaid (welfare), or long-term care insurance.  I am a firm believer in purchasing some form of long-term care coverage for many reasons.  The primary benefit is not having a plan and no method to fund the plan is unacceptable.  If you are interested in learning about this, please come sit down and talk with Brian or me and let us help you navigate these plans.

In addition, please sit down with an estate planning attorney and work through legal documents like your power of attorney, medical directives, living wills and medical power of attorney.  The basic forms Janet used from the doctor’s office were ok, but they left out a lot of things I wished had been included.  Visiting with an estate planning attorney can provide your loved one with a document that includes your very specific wishes, which is always best.

This piece is designed to provide accurate and authoritative information on the subjects covered.  It is not, however, intended to provide specific legal, tax, or other professional advice.  For specific professional assistance, the services of an appropriate professional should be sought.