Youngstown
Gailor Blake, 88, opened the door to his Austintown home at 9 a.m. to welcome Terri Zarlingo with a bright smile.
“She’s like family,” Blake said, as Zarlingo, a driver for Celtic Healthcare’s hot- meals delivery program, arrives.
Once Zarlingo finishes her short, friendly discussion with Blake, she sets his meal out and leaves. She may be the last person Blake — one of the last survivors of his own family — sees that day unless neighbors visit.
Many independent-living seniors in the Mahoning Valley face similar situations: They live alone with no one to check on them but social workers or home-nurse aides.
Other senior citizens do not receive home-visit services at all.
Several organizations in Youngstown and Mahoning, Trumbull and Columbiana counties provide services for the area’s aging population, but no overarching agency exists to centralize these services and standardize the well-being of the Mahoning Valley’s independent senior citizens.
Youngstown Councilwoman Annie Gillam thinks the city could benefit from a central agency.
Gillam, D-1st, said accounting for every person in the city may not be possible, but getting involved with programs through churches and area agencies could prove beneficial to better inform elderly citizens about available services.
Older adults living alone with no one to check on them could be in danger, said Alan Bayowski, gerontologist and director of the Shepherd Foundation, an affiliate of Shepherd of the Valley, which provides senior services in the Valley.
Should a senior fall or become too ill to seek treatment, that person could be left alone for days or even weeks, he said.
Lisa Solley with the Area Agency on Aging 11 Inc., Niles, said most older citizens want to stay in their homes, but they need some assistance.
Her agency collects federal, state and local funds and then distributes them to local providers in Ashtabula, Trumbull, Mahoning and Columbiana counties. Those providers then help those who qualify for services.
Solley said most people who request services might not qualify for funds, but the agency still tries to link them up with appropriate services. If no state funding is available, federal programs can sometimes be used, she said.
Ohio’s citizens and service organizations face the challenge of no state funding for citizens above the poverty line.
Organizations such as Celtic Healthcare, 3530 Belmont Ave., provide food, home-health aides and transportation for qualifying adults over 60 through grants.
Other federal funds provide services such as air-conditioning units for households in need. Solley said this service was used by AAA11 clients more recently in the high-temperature conditions last month.
Extreme weather conditions exacerbate danger when ice on the drive between the door and mailbox causes the senior citizen to slip or high heat affects pre-existing medical conditions such as breathing problems or congestive heart failure.
Choices: Understanding and preventing elder abuse
After a lifetime of hard work and responsibility to others, the latter years of our lives should be the “golden years.” Unfortunately, for many, that is not the case.
Each of us is aware of an elder adult for whom we feel compassion. We may have observed that he/she appears confused and conclude that s/he may have dementia or the beginnings of Alzheimer’s disease. She complains of repeated broken bones and frequently has bruises. Her children do not call or visit. Even former friends avoid her, which in itself, is a form of abuse. Instead, turn your compassion into understanding. It will help you learn how to take proactive steps to improve the life of an older person instead of avoiding him.
Why should you care? You should get involved, because it could happen to you. Elder abuse is an under recognized problem with devastating, and even life threatening, consequences. The National Center on Elder Abuse, a division of the United States Department of Health and Human Services, estimates that more than 500,000 older people are abused each year and that number is growing.
Elder abuse can occur anywhere; in the home, in nursing homes, or other institutions. It affects seniors across all socio-economic groups, cultures and races. Research indicates that more than one in 10 elders may experience some type of abuse, but only one in five cases are reported. Why? Because many of us just don’t want to get involved.
“Elder abuse” refers to intentional or neglectful acts by a caregiver or “trusted” individual that lead to, or may lead to, harm of a vulnerable elder. This includes physical abuse; neglect; emotional or psychological abuse; verbal abuse and threats; financial abuse and exploitation; sexual abuse; and abandonment. Self-neglect is also considered mistreatment.
Physical abuse includes the use of force to threaten or physically injure a vulnerable elder. Abused elders may have slap marks, unexplained bruises, pressure marks, and certain types of burns or blisters, such as cigarette burns.
Emotional abuse, perhaps the most devastating to the human spirit, includes verbal attacks, threats, rejection, isolation or belittling actions that cause mental anguish, pain or distress to a senior. Children and other close relatives may refuse to visit an older parent if they “don’t behave.” Visitation with grandchildren may be denied (article to follow).
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Feature – Funding care for the elderly
The Dilnot Commission Report on the funding of care and support for older and disabled people is still attracting considerable debate. Ian Atkinson from Retirement Solutions takes us back over Dilnot’s recommendations and what it means for the mortgage lending industry, in particular equity release
The Commission on Funding of Care and Support recently released its findings on the current provision of care for elderly and infirm adults in England. Set up by the coalition government last year, the Commission was tasked with analysing the current system of care provision - a system that many feel is out-dated and unfair. Not only do people feel they are incorrectly assessed under the care system, they also feel it was not designed to cater for an ageing population.
As many as 10 per cent of English people will need care at some point in their lives, and as many as 90 per cent of those people would lose most of their assets under the current care system. The report stressed that a lack of awareness and clear information and support, meant that many people in need of care are losing almost their entire life savings. In many cases, this occurs with little or no warning. The Commission also states that people in different areas of the country experience very different care provision, with a wide variation in the quality of information they receive. Current users of the care system in England feel that they are not adequately protected against unexpected care costs, which can run into tens of thousands of pounds. This sudden financial drain can come as a shock to many people, especially those who incorrectly assume the NHS covers all care costs.
While the report began on an upbeat note, “it is a matter for celebration that people are living for longer.” The gloom soon descended when you see in black and white the scale of the issue and why it simply can’t just be brushed under the carpet. In the UK alone, there are currently around 400,000 elderly in residential care, and with this number predicted to nearly double to 750,000 in 2031 and more than triple to 1.5 million by 2081, we all now need to be made to take an element of responsibility for provision of care in our later life.
Means tests
At present, thousands of elderly people have to either use up nearly all of their savings or sell their homes in order to pay for care as currently, any financial support from the council is means tested. This means that anyone who has assets valued over £23,250 is expected to fund the majority of their care bill. The report suggests a higher limit for means-tested state support. This would result in a fairer system, which provides more safeguards to people in care, but at a cost of £1.7 billion to the taxpayer. The report also suggests that a new funding system could open up new financial markets to insurers and mortgage providers.
The key suggestion in the report is to cap the contribution of any individual at £35,000. The limit for means testing would also be raised from £23,250 to £100,000. This would reduce asset loss from 90 per cent to 30 per cent. Anyone who develops a care need before reaching adulthood would not be expected to pay anything at all.
Insurance
One of the key criticisms of the current care system was that people are unable to plan ahead, or are unaware of the enormous cost of care beforehand. Along with an awareness campaign, the Dilnot Report suggests highlighting the importance of saving for old age, and emphasises the opportunity to develop new financial products to insure people against the cost of care. At present, there are no pre-funded insurance products in the market which could assist with the cost of care, simply because the risk is so difficult to define. Once new caps are in place, the Commission believes that products could be developed to spread or cover these new, clearly defined cost boundaries. A government awareness campaign could greatly increase the amount of people willing to consider alternative financial products to protect against unexpected accident or illness in the future.
There are three main areas where the report suggests new products could coincide with the new care system. The Commission on Funding of Care and Support suggests the adaptation of current life insurance policies to incorporate provision for care as a policy benefit, or provide a cash back scheme for living costs in care. Annuities could also be adapted to reduce regular payments, but pay out much more if a care need or disability develops later. This is a product the chair of the Commission, Andrew Dilnot, particularly would like to see.
With the current means testing limit of £23,250, most people have no choice but to spend their entire housing assets on care. If the overall cost of care is lower, and thresholds and means testing is altered accordingly, more people may choose to stay in their home, rather than move into residential care, and release the equity in the property, rather than selling it outright.
Equity release
The report suggests that equity release products could continue to play a key role in helping people to release sufficient funding from their home without having to move out. The benefits of this would cascade down to family and carers, and would mean that the stress of illness could be reduced to some extent. Equity release could therefore become a very popular way for elderly people to pay for their care needs without losing the familiarity of their own family environment.
The Commission on Funding of Care and Support suggests that new mortgage products could be produced specifically to provide for situations where equity release is the best solution. Given that one of the key considerations of the report was to introduce protection against all assets being used when a property was sold to pay for care, this is likely to be one option which would increase in popularity if the reforms were brought in.
Changes in 2014
As yet, no decision has been made on the Dilnot Report. Prior to its release, many believed it would be rejected outright due to the cost of the plans to the state. Andrew Lansley, the health secretary, will publish a white paper in early 2012 in response to the report. Regardless of the decision, any changes to the current system would not be implemented until 2014.
Andrew Dilnot points out that the £1.7 billion required for the reformed care system would amount to just a quarter of one per cent of public spending as a whole, and as the reforms would not be brought in for two to three years, the economy would probably be in a better position to absorb the cost by the time the new rules were active.
Dilnot also asserted that there would be wide-ranging political implications of scrapping the recommendations in the report. He is keen to see better integration with the wider healthcare system, as well as the financial services industry as a whole, if and when the government approves the recommendations.
Current market
As the population grows older it is estimated that one in three people will require long-term care during their retirement with 40 per cent of these having to fund part or all of it themselves.
With around 25 per cent of people over the age of 65 facing care bills in excess of £50,000 and a further 10 per cent looking at a bill of over £100,000. The proposed cap would mean that these people would only have to pay £35,000 of their care bill and a capped amount of between £7,000 - £10,000 per annum toward general living costs such as food and heating if living in a residential home, before the government would step in to continue funding.
Perhaps rather surprisingly, current figures suggest that only 5 per cent of self-funders seek independent financial advice and therefore never get to find out about products such as immediate needs annuities or equity release.
Helping clients plan for old age and their long-term care is a complex process but as a result of the report, more products are sure to be made available. But one solution available immediately to fund care costs is an equity release mortgage.
Reviewing the providers
So has the Dilnot Report promoted a reverse in fortunes for the equity release market that was left devastated a few years back following the exit of some big name providers?
Back in April 2011, SHIP (Safe Home Income Plans), the trade body for equity release providers, which represents over 90 per cent of the equity release sector announced that the total advances in the first quarter of 2011 had fallen by 4 per cent to £181.6 million to 3,838 customers. However, while customer numbers and the value of the market fell, the average amount released was £47,323 – 4 per cent higher than Q4 2010 and in fact the highest average amount since Q4 2009. Although a decline, there was a cause for optimism given that lending was achieved with fewer providers.
The number of new equity release mortgages has declined by 30 per cent in the past three years with just over 20,000 in 2009. The main reason is that 10 of the 24 providers have withdrawn from the market in the same period leaving just 14 accepting new business.
The most notable provider to have left was Prudential who in 2008 had a 23 per cent share of the market reduce to just 12 per cent in 2009. It cited funding for the main reason for the withdrawal as well as the onset of the credit crunch, which ruined any hope of securing its mortgage book. Stonehaven and Hodge Lifetime closely followed the Prudential out of the market in 2010.
However, the sector now looks set to experience a revise in fortunes thanks to the release of the Dilnot Report. With Retirement Plus already confirmed as returning to the market later in 2011, and Stonehaven returning after a break of just one year, things could be looking up.
What the Dilnot Report will enable providers to do is design new or tailor existing products specifically for the care fees market. As the cap on the amount people are expected to pay has provided the transparency that simply hasn’t been there in the past. Andrea Rozario, director of SHIP, echoed Retirement Solutions’ optimism for the equity release market recently, by saying: “We are well on the way to a resurgence and we are looking to see more providers in the market and even some new names. It will not happen overnight, it will take a bit of time. It’s a case of watching this space.”
Among those rumoured to be carefully watching the market is Saffron Building Society after Stonehaven received “a really good response” to its relaunch, suggesting that a demand was there for the products, and Hodge Lifetime confirming that it too was “looking to refocus equity release and bring out new products in the next 12 to 18 months.” However, on the flip side, Prudential confirmed it has no plans to re-enter the UK equity release market, where at present the market is shared between four major players; Just Retirement, Aviva, LV= and Bridgewater.
What is guaranteed is that Dilnot’s observations, driven by an aging population with inadequate pension provision, will be a catalyst for providers to enter the market to meet future care funding needs.
Ian Atkinson is long term care expert and IFA at Retirement Solutions, an independent financial intermediary providing specialist advice for the over 55s
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