JOSH MELTZER The Roanoke Times

Shannon Abell, the LOA Area Agency on Aging's senior resources director, had the paperwork in order when it came time to apply for a Medicaid nursing-home bed for his elderly father in 2003.

Photos by JOSH MELTZER The Roanoke Times

Rick Beason worries more about his peers' ability to pay for late-life care than his parents'. At right, Ann Holloman became the "community spouse," in Medicaid lingo, when she placed her husband in a nursing home after spending down much of the couple's assets.

Photos by JOSH MELTZER The Roanoke Times

Rick Beason worries more about his peers' ability to pay for late-life care than his parents'. At right, Ann Holloman became the "community spouse," in Medicaid lingo, when she placed her husband in a nursing home after spending down much of the couple's assets.

If growing old isn't for sissies, as the saying goes, then neither is trying to help your spouse or parent navigate the frailties of late life.

The truth is sad but undeniable: Anyone who reaches the age of 65 stands a 2-in-3 chance of needing assistance with care for some stretch of time before death, according to the AARP. How do families manage the costs of arranging for their relatives' long-term care?

Nationally, nearly two-thirds of nursing home residents rely on Medicaid, the federal program designed to provide health care for the indigent and disabled.

Many are genuinely impoverished, having depleted their assets to pay for nursing care, while others have orchestrated the so-called "Medicaid spend down" and shifted assets well in advance of their need for care.

The practice is legal but complex, and it requires documentation, planning and financial savvy.

"The key is to look at your options early on -- before you're grieving at the same time you're faced with losing $5,000 to $6,000 a month on nursing care," says Roanoke lawyer Ann McGee Green. "The earlier you take control of the process, the easier it will be to make sure your loved one is well cared for."

Sweating the details

The phrase "colorfully outspoken" doesn't begin to cover it. The LOA Area Agency on Aging's senior resources director, Shannon Abell, once gave a newspaper reporter such a blisteringly honest review of Medicare Part D that two people from the Medicare office in Philadelphia actually traveled to Roanoke to "take me to the woodshed," as he puts it.

"Did he say anything that was factually wrong?" director Susan Williams recalls asking the officials.

Not technically. They just didn't like the way he said it.

Which is to say: Abell reads the fine print, and he's happy to recite it back to area seniors who are navigating the public benefits system. He'll do it in language that's easy to understand -- and oftentimes blunt.

He can explain rules for the Medicaid spend down in excruciating detail, and not just because he's read the footnotes to the addendum to the Medicaid manual. He also knows it from personal experience.

Abell, 54, had the paperwork in order, including six months of bank statements, when it came time to apply for a Medicaid nursing-home bed for his elderly father in 2003.

Eight years earlier, his parents had transferred ownership of their house to their only son. The move was well within the law, which states that any gift must have been handed down to children at least five years prior to an application for Medicaid coverage.

A lifelong bachelor, Abell lived with both parents at the time. His father, a carpenter who built his North Roanoke County home with his own hands, did not want to see it sold to cover his or his wife's long-term care.

"My parents knew that I had a financial mind, and I was already living with them, so it was an acceptable deal. Now it's my home, and I'm going to take care of it."

The transfer was perfectly legal, he adds, but it was not without risk. "If I run through a school bus and get sued for 10 million dollars, what do you think somebody's going to put a lien against?

"Or what if I'm a drunk and I gamble away all the money?"

These are the questions Abell advises seniors to consider as they're planning their own late-life care. "If you can afford it, you go to an elder-law attorney for good legal advice," he urges, preferably when you're in your early 60s and/or before you retire.

When Abell finished applying for Medicaid for his father, "I got out in the street, took a deep breath and didn't have to think about it again."

His dad's funeral trust was already set up, the grave-opening fee already paid, and Abell had even written the obituary well in advance of his father's death in 2006.

He still lives with his 85-year-old mother, Martha, who would have to live in a nursing home if it weren't for her son's willingness to look after her. He checks her pill box weekly to make sure she's taking her medications correctly, pays the bills and double-checks her medical and insurance statements on a spreadsheet.

"She has four doctors and 12 medications. I looked at her pill box and noticed one day that she'd taken three of her vitamin D pills instead of one," Abell says.

"I didn't think that was right," she told her son. "But you were so busy, I didn't want to bother you."

Bother away, Abell told her. He says the same thing to the seniors who call him at work.

The earlier you educate yourself, the better you'll be able to advocate for yourself. "I had a Hollins professor with multiple Ph.Ds who had not a clue about applying for Medicare," let alone what the Medicaid spend down was.

"There are a lot of people in Roanoke who would qualify for Medicaid but don't know how to go about it," he says. "It's not a program where the government tries to make it easy. I mean, you don't see them having fliers about qualifying for Medicaid sitting in the post office, do you?"

The best-laid plans

As a longtime minister and statewide leader in the United Methodist Church, the Rev. Jim Holloman thought he was doing right by his wife, Ann. He socked away an above-average portion of his salary into his retirement account.

Months before he retired in 1997, he bought airline tickets in anticipation of a post-retirement vacation in California. For years, he had encouraged parishioners to do the same. "Don't wait. Go while you can," he said.

But a freak accident during a church ceremony -- on the very day of his retirement -- brought his own plans to a halt. A minister standing next to him caught her heel in her robe and fell into him. When he hit the concrete floor with full force, he broke both arms and both legs. The plane tickets went unused.

Thus began nine years of full-time caregiving for Ann Holloman, a 74-year-old Vinton woman who has seen her husband through a steady roller coaster of emergencies that developed after the fall. First a broken back and then a stroke, and finally, most devastating of all: dementia.

She tore both rotator cuffs trying to care for him at home. When she finally heeded her own doctor's advice to place Jim in a nursing home two years ago, he was hallucinating, accusing her of having affairs and threatening violence.

Bills for his treatment and hospitalizations were already decimating the couple's savings. With a lawyer's advice, Ann began the spend down process so Jim could qualify for a Medicaid nursing home bed.

Per the rules, she spent half of their remaining savings, down to $50,000, paying for a funeral trust and cemetery markers, a few extra mortgage payments, home improvements and $20,000 worth of health care bills.

She still gets $5,163 a month in income from his retirement fund and their Social Security. But by the time she pays a hefty co-payment to the nursing home, she has just $1,800 left to pay her bills, including a $1,000 mortgage. "I go into my savings real often," she says.

"It's not easy, but I'm grateful for what I do have. The things that I do are the things I really love to do" -- occasional visits to see her children, church-related conferences and retreats.

Her advice to other caregiver spouses:

n Smile even if it hurts.

n Give yourself a break from visiting the nursing home; take at least two days off a week.

n Join a support group. Ann calls the one she visits at the Carilion Center for Healthy Aging her lifeline.

n Try to plan something the patient can look forward to: "Our son comes and sees him every Sunday and brings him fried chicken. We talk about it every day; that's the joy of his life."

Though Jim's dementia is severe -- and he still begs her daily to take him home when she leaves -- the minister amazes his wife with the prayers he leads for other nursing home residents. "You'd think he's known that person for ages. His prayers are perfect."

Even through the fog of dementia, Jim still frets about her finances, frequently asking her: "Mama, have you got enough money?"

"Yes, honey, I do," she says, lying because she knows the truth would only upset him. "If he were capable of it, he would be devastated to think that I didn't have enough to live the way we'd planned."

Parents over peers

Rick Beason imagines his parents both dying peacefully of old age, at home. It's the way William and Venice Beason would want it, he knows.

But he also knows this from his decades of experience as a financial planner and accountant: Most folks don't go quietly into the night.

Beason, 55, isn't too worried about his parents' final years. But after peering into the financial statements of many about-to-retire baby boomers, he has found cause for concern. Too many boomers have raided their 401(k) plans and home equity lines to pay for children's college tuitions, home improvements and the like.

Indeed, Boston College's Center for Retirement Research reported last year that nearly 45 percent of American households are going to fall short of meeting their expected retirement income needs.

"A family making $30,000 a year can put some money aside and still have a fairly nice life," Beason says. "It's better than living wide open on $200,000 a year and not putting anything aside, which I see a lot."

Unlike his parents' generation, which was more likely to retire with company pensions -- and their Depression-era frugality fully intact -- many boomers are supporting their children well into their late 20s.

"I'm not taking my own advice," Beason concedes sheepishly. Two of his own twentysomething sons still live in his Botetourt County home.

He worries more about his peers than he does his parents. With their modest house in Mason Cove long paid off and no debt to speak of, Venice and William Beason are much better than he is at distinguishing a want from a need.

His parents don't have long-term care insurance because they don't have enough wealth to merit it. (Beason recommends $150,000 in cash assets to justify buying the insurance.) If they had to enter a nursing home, Medicaid would likely take over -- after the home was sold and the assets depleted via spend down.

"Nursing home is definitely a fear for most people, but typically your stay there is less than a year if you've been in fairly good health," he says. "If you have Alzheimer's, where your physical health remains long after your mental function is gone, that's when it really becomes devastating." (He recommends that boomers with a family history of Alzheimer's investigate long-term care insurance, ideally in their early to mid-50s.)

Retired from the railroad with a pension plan, his 86-year-old father has macular degeneration, a vision ailment, to the point where he can't recognize his son when he walks into the room. But he still manages to weed his rows upon rows of tomatoes with a plow.

"Last year, I couldn't figure out how he was still doing it, and he told me he had run a string down the rows and held onto it from his plow," Beason says. "He can't slow down." His mother, 82, spends her days baby-sitting a 3-year-old great-grandson.

At this point, his parents are healthy enough that the family has sidestepped the touchy discussions about transitioning to long-term care. "We all just say, 'Don't worry, we'll take care of it,' " he says.

"The likelihood's more that daddy will die out in the field and mama inside chasing the young 'un around."

Myth No. 1: In order for my spouse to go on Medicaid, I'll have to give up all my assets. In fact, the community spouse can keep his or her home, one car and a minimum in cash assets of $20,880 and a maximum of $104,400, according to Medicaid eligibility workers Lois Lloyd and Connie Moorman at the Roanoke Department of Social Services. For a single person, all assets must be reduced to $2,000 before Medicaid can pick up the nursing home bill.

Myth No. 2: If I give my children most all of my assets, then I'll be poor enough to qualify for Medicaid. The law says that a person applying for Medicaid can't have given away any assets for the previous 60 months -- the so-called "five-year look back" -- without incurring a penalty. Legitimate spend down items include medical and long-term care, basic goods and services, and burial expenses (area funeral homes will help arrange a funeral trust).

Shannon Abell, director of senior resources at the LOA Area Agency on Agency, advises people to buy a nice television and a recliner for the nursing-home room, and because the community spouse is only allowed to keep only one car, why not sell off the old clunkers and buy a reliable one instead?

"The bottom line is, as long as you get goods or services in return, you can count it toward your spend-down," Moorman said. "The clincher is, you just can't give it away."

Myth No. 3: There's no sense in applying for Medicaid for my spouse's nursing-home care because I still have $100,000 in the bank. If you had applied when you still had $208,800 in cash, then you could have kept half -- or $104,400, the maximum allowed for a community spouse. If you apply now, you'll be allowed to keep half -- which is only $50,000.

"If you're not sure, come in or call" the social services department in your locality, Moorman said. "To me, it's better to have an application denied rather than wait and find out you could have kept more of your resources."

Myth No. 4: My neighbor was able to keep X amount of dollars; certainly, the same rules will apply to me.

"Don't listen to what friends or relatives have done," advises Roanoke elder-law attorney Ann McGee Green. "The rules changed drastically on Feb. 8, 2006.

"My best advice is to make sure you get good legal advice from somebody who understands the current Medicaid eligibility rules." The Web site of the National Academy of Elder Law Attorneys (NAELA.org) can point you to area lawyers who are members, but Green suggests also doing your homework.

Ask for references; don't assume that your longtime family lawyer has the right expertise. Ask the lawyers you interview: How much long-term care planning do you do? Have you helped people apply for Medicaid?

"Every day I have people who have worked with attorneys who have done terrible things from a Medicaid perspective," she added. "You really need someone who knows the public benefits system."

Green charges $300 for an initial 90-minute consultation. "The advice I give, they're not going to get it from the nursing home, and they can't get it from eligibility workers because they're not allowed to give advice."

Myth No. 5: Medicaid will pick up the tab for my assisted living care. A Medicaid assisted-living auxiliary grant is available, but it's only for people who receive less than $1,000 in monthly income, Green said. Even then, openings are hard to find. "It's incredibly tricky to find a placement if you have $1,300 a month of income, and you need assisted living but not nursing care." (Medicare likewise doesn't cover assisted living.)

Myth No. 6: Medicare will cover my nursing home bill. It will, but only for a very short time: a maximum of 100 days, though most qualify for far fewer days. After that, the options are private pay, long-term care insurance or Medicaid.

Myth No. 7: I'm a veteran; therefore, my long-term care costs will be covered by my Veterans Affairs benefits. Not unless your disability is service-related. Otherwise, the same Medicaid rules apply -- though Green points out that veterans can receive a discount at the Virginia Veterans Care Center.

Myth No. 8: If I would have just purchased long-term care insurance, all my worries would be gone.

Not necessarily. Abell often finds himself counseling modest- and middle-income seniors who are "insurance poor" -- they're paying as much as $500 a month for long-term care insurance and yet they can't afford to replace the roof on their house. Some have even gone without medications and/or food in order to pay their premiums.

"You don't want to strap yourself for something you may never need," he said.

The average senior in Roanoke -- with a median household income of $28,542 a year -- simply can't afford long-term care insurance, he said.

It also burns him when insurers claim the rates will never go up based on age only to, years later, legally ask for a rate increase from the Virginia Bureau of Insurance.

Roanoke County financial planner Rick Beason counsels his clients to consider long-term care insurance only if their cash assets are at least $150,000 and they have an annual retirement income of at least $30,000 to $40,000.

Green advises people who are 50-plus to consider the option if they can afford it -- especially if it's offered through an employer. The younger (and healthier) you are when you buy it, the cheaper the premium. "Why go through the public benefits system if there's another way to do it?" she said. "Some great facilities don't take Medicaid, and you can't go to them unless you can pay."

"Community spouse": That's often the first strange term that seniors have to confront in the midst of a health care crisis. If your spouse is rapidly losing his or her independence -- and likely to go into a nursing home soon -- you're the so-called community spouse, the one who will remain at home.

You're also the one most likely to be in the throes of navigating the Medicaid maze, or figuring out some other way to pay the hefty $5,000 to $6,000 monthly nursing home bill.

We talked to area experts, including financial planners, elder-law attorneys and advocates for area seniors, to find out what the most common financial myths are surrounding this difficult phase of life.