The vast majority of caregiving for the elderly is not provided in nursing homes, assisted living facilities, or even adult day care programs. Most seniors are able to receive care at home, allowing them to remain in their community. And of those who can stay home, the overwhelming majority are cared for not by professional home health aides, but by family. Approximately 80% of home care services are provided by family caregivers.
At a time when the baby boom generation is still caring for their own children, concerned with their own careers, and even beginning to plan for their own retirement, caring for an elderly loved one can bring one's stress level to the braking point. Not only do family members provide care to elderly spouses and parents to the possible detriment of their own careers, family relationships, and health,...they do it for "free". Of course, "free" has its own price. The value of the services family caregivers provide for "free" is estimated to be $196 billion a year for the Nation. Yet with all of the hardship, family members continue to make the necessary sacrifices in order to provide ongoing care and assistance to their elderly loved ones.
Caring for ailing family members is a labor of love. And is usually provided for withut payment. But in the past, families had not been required to make quite the same sacrifices that they do today. With women in the workplace and the higher cost of living these days, staying home, or losing time at work has a real economic impact. For these and many other reasons, it is often impossible to provide the much-needed asistance without compensation. Certainly, the care provided has a dollar value. But how can an arrangement be structured to both provide appropriate payment to the caregiver and ensure that our senior citizen clients receive the services with dignity?
A personal care services contract is an agreement between an elderly person and those who promise to provide personal care services for the rest of the elder's lifetime. In consideration of this agreement, the elderly person forwards payment in one lump sum to the caregivers in advance of the provision of services. The underlying purpose of the contract is to prolong the senior's residence within the community and, if and when he or she needs nursing home care, offers greater assurance of continued quality care by requiring active and ongoing oversight. A properly drafted, arms-length agreement would seem valid and reasonable. But in the past, when reviewed by Medicaid upon making an application, this type of arrangement had been considered to be an uncompensated transfer of assets. It was treated as merely a gift.
This issue was recently taken on by our office. In our case an elderly client entered into a personal care services contract with his two children. The terms of the contract stipulated that the Appellant's two children wold provide the following: room; board; housekeeping, utilities; furnishings; laundry; personal assistance; financial management; and securing health care services. In exchange for providing ongoing care, the father agreed to pay his children, as caregivers, a lump sum which represented the cost of personal care services, room and board, and assistance with financial management. By its terms, the contract is to remain in full force and effect for his entire life.
The Medicaid Agency denied the application, stating that the father had transferred resources for less than fair market value. This resulted in a period of ineligibility of over two years when dividing the amount "transferred" by the average cost of nursing home care in the region. The Agency's reasoning was that the subject transfer of assets was for "love and affection" by the father to his children which has no market value. However, in this case we argued that the contract sets out in detail the rights and responsibilities of the parties and the services to be provided by the caregivers. The Administrative Judge agreed and ruled that by its expressed terms, the contract clearly shows that the parties intended that the personal care services provided by the children were for appropriate compensation.
This decision is an important victory and sends a strong message to both the elderly and their family caregivers. Rather than simply transferring assets to the children and hoping that they will be cared for, seniors can ensure ongoing assistance by contract. Family caregivers can receive payment for their services, even if it's family. And elder law practitioners have an opportunity for advocacy on behalf of seniors and their families to help keep our elderly clients at home with dignity.