Long Term Care

senior

Understanding Long Term Care

Think of long term care as the day-to-day help needed by people with illnesses that last a long time (chronic illnesses), disabilities, or other conditions. Some people need long term care for several months, while others need it for years or a lifetime.

Long term care can include:

  • Changes to your home to make it safer, more comfortable, and easier to get around
  • Technology that helps you stay independent
  • Help with housekeeping, meals, and personal care like bathing or getting dressed
  • Skilled medical care provided by a nurse or other health care professional

CHALLENGES:  While people are living longer, many have little idea about the added pressures on their “long life care”– fiscally and emotionally.

TYPES OF CARE:  Today, consumers have more choices than ever when planning for potential long term care needs.

PLANNING FOR CARE:  Another factor to consider in planning for long term care is, how to pay for it.

Surprising Facts

 Most Important Fact —–Medicare does not cover long-term care (much to the surprise of most of the population, who at one time believed Medicare did cover most nursing home care).

  • According to the Alliance for Aging Research, as of January 1, 2012 10,000 baby boomers will turn 65 years old each day for a 20 year period.
    (Source: Haya El Nasser. Number of 90-plus people likely to quadruple by 2050. USA Today, 11/17/2011.http://usatoday30.usatoday.com/news/nation/story/2011-11-17/90-years-old/51272472/1)
  • One in four people are likely to spend at least some time in a nursing home after age 65, increasing to about one in three if they live to age 85.
  • The number of people living to age 90 and beyond has tripled in the past three decades to almost 2 million and is likely to quadruple by 2050.
    (Source: Haya El Nasser. Number of 90-plus people likely to quadruple by 2050. USA Today, 11/17/2011.http://usatoday30.usatoday.com/news/nation/story/2011-11-17/90-years-old/51272472/1)
  • At least 70 percent of people over age 65 require some type of long term care in their life time.
    (Source: Medicare & You, National Medicare Handbook, Center for Medicare and Medicaid Services, Revised 12/2011)
  • Over the past five years the cost of care among facility-based providers has steadily increased at a rate compound annual growth rate of 4.28 percent. In contrast to facility-based care, rates for home care providers for “non-skilled” services has remained relatively flat. – Genworth Financial Cost of Care Survey, conducted by CareScout, April 2012
  • The national average median cost of one year in a private nursing home room is $81,030 – Genworth Financial Cost of Care Survey, conducted by CareScout, April 2012

Challenges

Long Term Care is one of the most pressing issues and likely the greatest retirement expense facing Americans today– it will only get more urgent as the nation ages. While people are living longer, many have little idea about the added pressures on their “long life care” to their family – financially and emotionally. Those who had planned to tap their hard-earned nest egg to cover the future long term cost of care may face a shock.

What to Consider

It is never too soon and almost always better to have talked and made plans in advance. Talk with your parents and family. Having the right plan in place now can help make sure your loved one has the financial resources to cover the exorbitant costs while receiving the right quality of care. It will help them maintain their dignity and provide the flexibility to participate in making choices that impact their care.

It’s important to consider care options while a person is healthy. That’s when the best rates and options are available and families are in much better emotional shape to discuss long term care-related planning. The simple truth is that during a crisis, situations can quickly escalate and cause tension or introduce issues that could have otherwise been avoided.

Important to Know

While there is much to gain by talking as soon as possible, there’s a staggering amount to lose if we miss the chance. The list is long, but here are just a few things you should know now, rather than discovering them the hard way later:

  • Health insurance and Medicare cover virtually none of the cost of nursing homes, assisted-living facilities or in-home care– the care many people require late in life. Many people pay out of pocket until they are practically destitute and then Medicaid kicks in. Many who thought they had saved adequately end up impoverished, getting substandard care.
  • Without a durable power of attorney (a simple document that is easy to obtain), you may have to go to court to gain guardianship over your parent so you can handle his or her affairs if he or she becomes incompetent. Guardianship is necessary so you can handle your parent’s affairs. Going to court is expensive, time-consuming and stressful.
  • A loved one’s health status can change over night. It’s better to have long term care plans and insurance in place prior to their health taking a turn. At that point it may be cost prohibitive or simply may no longer be an option due to the age or health of the person who will need care or coverage.
  • Many of the best care facilities have waiting lists, and some of them require that your parent be able to live independently in order to move in.
  • Sometimes it is not the big health problems that ruin the golden years, but the smaller annoyances– the inability to pursue a loved hobby, the difficulty hearing, or the fear of falling. When you talk, try to get at these less obvious issues too, as many of them can be resolved.

Being prepared will mean less work, less stress, less worry and fewer regrets. Talk. Talk now. Because we need to prepare for aging like we prepare for everything else in life.

Two key questions to ask yourself

While there can be several components to creating a retirement strategy, there are two key questions that you need to ask yourself for long term care planning:

  1. “What is my written plan?” You plan to live a long and productive life, but at some point you may need long term care. What is your plan for this, including where you would like to receive care and who you would like to care for you? Is your preference care at home? Will family members be close by? If not, who will care for you?
  2. “How will I pay for this care?” Most likely from your retirement savings, right? However, this was established to fund a retirement lifestyle, not a long term care situation. Consider the impact needing long term care would have and review your options.

OPTIONS—   We all have options.

Medicare

Generally, Medicare is the federal program that provides hospital and medical insurance to people age 65 or older and to certain ill or disabled persons. Benefits may be available for home health care, but only if certain conditions are met.

Medicare may pay for up to 100 days of care in a skilled nursing facility per benefit period — 100 percent for the first 20 days (after a three-day hospital stay, provided skilled care is needed). Then, for days 21-100, Medicare requires a co-payment. To help cover the co-payment, many seniors also have a Medicare supplement insurance policy. In general, once Medicare stops paying for care, the supplement payment also will end.

Self-Insure (or Out-of-Pocket Payment)

Another idea is for you to assume the primary financial risk for the cost of long term care by allocating a portion of your savings for this need. In considering self-funding, think about potentially needing care in your older years. This strategy includes a review of the cost of care in your area, which should consider inflation and living expenses for you and your family. This can be the information baseline for the savings you will need to set aside for long term care.

Medicaid

Medicaid generally pays for certain health services and nursing home care for those with low incomes and limited resources. Medicaid may also pay for some long term care services at home and in the community. Medicaid has limitations on the amount of assets you may own and the amount of income you may receive each month before you are eligible for benefits. Who is eligible and what services are covered vary from state to state. There also are restrictions on transferring assets to others in order to qualify for Medicaid.  This option may require you to spend down most if not all your savings and assets BEFORE it will kick in for coverage.  This can be a very hard option to choose.

Long Term Care Insurance

The easiest option by far.   You insure your car, your home, and your health.   Preparing for Long Term Care shouldn’t be any different.

Long term care insurance covers a variety of service models. It is designed to help reimburse the cost of skilled or custodial long term care whether that be at home or in a facility.

Plan design and product feature flexibility enable this coverage to be available to meet most budgets.  We can help guide you through selecting a solution that best meets your needs. Long term care insurance covers a variety of service models. It is designed to help reimburse the cost of skilled or custodial long term care whether that be at home or in a facility.

Many states participate in the Long Term Care Insurance Partnership Program (“Partnership Program”). The Partnership Program is designed to encourage individuals to plan for their long term care needs by allowing them to retain more assets than would otherwise be allowed under state Medicaid eligibility requirements. As a result, policyholders are able to retain assets they would otherwise have to spend down prior to qualifying for Medicaid benefits. Generally, individuals can participate in their state’s Partnership Program by owning a long term care insurance policy that meets the requirements for the Partnership Program. Policies qualifying under the Partnership Program generally do not cost more than non-qualified policies with similar benefits.

Call us TODAY and we can get you the information you need to make the right decision.   There will be NO SALES PRESSURE.  As independent agents we do NOT have a single plan to force upon you.  We can go out and shop for you until we find the best fit at the best price.   We will supply you with the all the available information and you go home and consult with family or friends and ask as many questions as you can some up with.

Again…. WE WILL NOT APPLY SALES PRESSURE.   We will simply help you do the research and answer your questions.

Call us Today   (859) 643-8400  OR    (855) MURPHY1

 

Copyright © 2013. All Rights Reserved.