As individuals retire or age into Medicare, their insurance situation can change dramatically. There are a multitude of options open to those with Medicare. The terms are different, the prices are different, the products offered are dramatically different each year.
The purpose of this column is to give those who are eligible for Medicare, or soon to be eligible for Medicare, some understanding of their insurance options and how it could impact their health and finances.
These questions and answers are meant as a guide to help you understand the complex questions you are now thinking about. Each individual's specific situation may create a different solution. You shouldn't necessarily do what your friends, family and neighbors do.
Q: I recently saw an advertisement for "pre-need burial planning." What is that and what does it mean?
A: Most of us don't like to talk about funerals and burial, so I appreciate the opportunity to talk about this. We in health care often talk about planning for yourself for many of the end-of-life decisions. Things like DNRs (Do Not Resuscitate orders), living wills, health care proxies (HCP), Power of Attorneys (POAs) and wills are common topics I have talked about before in these articles. This topic moves us to the next step, death and burial.
A Pre-Need Burial Fund is something that you as an individual or couple can set up. This is usually done with your funeral home of choice. This process is pre-paying and pre-planning for your funeral. I recommend this process to almost every family and individual I work with. This pre-paying means you don't have to leave this debt to your family. You can take money now and make arrangements for your burial. This money is set aside in a CD or PrePlan account.
You can at this time sit down with your funeral home of choice and make many of the decisions about your burial. You may set up part of your arrangements or all of your arrangements. This could include: writing your obituary, deciding on burial or cremation, choosing your clothes, choosing your casket, choosing the type of service and what is included in that (hymns, readings, etc.). In making these arrangements you may decide to do this on your own or include your family and loved ones in your decision-making process.
You can also purchase your burial plot in your cemetery of choice. You can purchase your headstone and have it partially engraved with what you want it say.
All of these decisions made in advance save your loved ones from doing it at a time that is very difficult to handle later. It also allows you to be in control of what happens. It gives you time to research alternatives and make choices. If you have definite feelings about what you want to happen, you need to get that hammered out in advance. Your funeral home will be very willing to work with you in making these arrangements. It makes their job so much easier later. You will be given an itemized list of what you have arranged and what you have paid for. There are no additional fees associated with this pre-planning process.
I also just learned there is a way to appoint an "Agent of Final Disposition." This was developed in 1998 as a way for individuals to appoint an agent who would handle the many decisions at this difficult time. There are situations when family and loved ones do not agree on what should be done or what should happen. If you appoint this agent in writing, the individual will be given the full power to make and execute these after-death decisions.
In pre-arranging your funeral, you may choose to prepay for the arrangements. There are three types of guarantees that go along with this pre-payment. A no-guarantee agreement simply states that you have chosen your burial plan and have pre-paid it at today's costs. There is an understanding that these costs may increase, and that means the money set aside now may not cover the stated desires and plans. There may be additional debt at the time of death sometime in the future.
A guarantee excluding cash advances is a partial guarantee of pricing included in the written agreement between you and the funeral home of choice. When you pre-arrange and pre-pay for the funeral costs, some of these costs are guaranteed or covered by the pre-payment. Other pricing which the funeral home cannot lock in are not guaranteed. Some of these non-guaranteed prices could include internment at the cemetery, cost of the casket, flowers, etc. The funeral home direct-service costs are guaranteed.
A full guarantee pre-arrangement means that you have pre-paid and prearranged for your funeral, and the funeral home is guaranteeing that your prepayment will cover the full cost of your funeral as it is documented in full with what you have already paid them. This full guarantee is not as common.
Once this pre-need planning is done and paid for, your money is placed in that CD or PrePlan account. The financial statements for these accounts are sent to you. The money is still yours; it is just set aside to pay for your burial when it is time. These pre-need accounts are revocable. This means you can change your mind and your decisions any time. If you ever need to apply for Medicaid, you can keep this pre-paid account as well; it will just be amended to be an irrevocable burial account. So pre-paying your funeral arrangements has many benefits.
Many individuals and families do not look forward to talking about this topic of death, funeral expenses and plans. I encourage families to talk about it because I can guarantee that at some time it is going to happen. All of us are going to die. Our families at some point are going to have to make these decisions. Why not try to make these decisions when we aren't upset, grieving and pre-occupied?
Talk with your family or funeral home of choice to decide if now is the time to make some of these plans. It will make everyone's lives easier later.
Janell Sluga is a geriatric care manager certified and works for Senior Life Matters, a program of Lutheran Senior Housing, and has worked in Chautauqua County with seniors for more than 18 years. She is HIICAP (Health Insurance Information, Counseling & Assistance Program) counselor-trained by Office for the Aging. She does not sell insurance or represent any insurance company. She is an unbiased source of insurance and education to help seniors choose the best option for them.