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Planning
for Long Term Care should be part of everyone's financial decision-making
process. We all need to understand the problems of caring for someone who
cannot care for themselves. In addition to wondering who would provide
care for ourselves, we should all realize that our parents, spouse, or
even children may need care. Without planning, tough decisions will have
to be made on an emergency basis, and necessary funds may not be readily
available to provide the required care. In addition to worrying about
caring for others, the biggest responsibility we have is to plan for our
own care.
What is Long Term Care?
Long Term Care is the inability to care for oneself because of prolonged
illness, disability, or the effects of old age. Long Term Care is the
assistance needed to perform daily living:
•
Bathing
•
Dressing
•
Eating
•
Transferring
•
Toileting
•
Continence
Where
are Long Term Care services received?
( top
)
Long Term Care services may be received wherever you want, based on your
ability to pay:
• Nursing
Home
•
Assisted
Living Facility
•
Adult
Day Care Center
•
Hospice
•
Extended
care facility
•
Respite
Center
Or
•
Your
own home
Who provides Long Term Care Services? (
top
)
Services may be provided by:
•
Nurse(
RN, LPN, LVN)
•
Physical
Therapist
•
Respiratory
Therapist
•
Occupational
Therapist
•
Speech
Therapist
•
Dietitian
•
Licensed
Home Health Care Agency: providing home health aide services, home hospice
services or homemaker services (meal preparation, personal laundry, light
housekeeping, grocery shopping.If funding is not available, any or all of
the above services may need to be provided by a family member or friend.
Most
Long Term Care services received are custodial, which are defined to be
those services that help someone with daily living activities.
What does all this cost? ( top
)
The average cost of Long Term Care ranges from $36,000 to over $100,000
annually. Obviously, costs will vary from state to state and locale to
locale. For example, recent studies of the NY/NJ metropolitan area
indicate that current costs for both nursing home and home health care may
be from $200 to $350 daily. It is important that you become familiar with
what such costs might be in your geographic area.
Who pays for Long Term Care? (
top
)
Here is the reality:
Out-of-Pocket: 32.5%
Medicaid: 37.5%
Medicare: 17.8%
Private Health Insurance: 5.5%
Other: 6.3%Health Care Financing Administration Office of the Actuary:
Data from the Office of National Health Statistics, 1997 Will you need to
use the funds you saved to provide a comfortable retirement for you and
your spouse? Will you need to liquidate assets accumulated for your
enjoyment and the enjoyment of your family to provide this kind of care?
Remember, you could be writing a check for $5,000 to $10,000 a month.
Which assets in your portfolio will you sell first?
What are my chances of needing some kind
of Long Term Care? ( top
)
The risk of needing Long Term Care is probably much greater than most
people realize. Recent studies report that of those people who are 65 or
older today, 2 out of every 5 people will need nursing home care at some
time in their lives (1) and will be confined for care for an average of 19
months (2). (1) 1996 Guide to Long Term Care, HIAA
(2) "Avoiding Fraud When Buying Long Term Care Insurance: A guide for
consumers and their Families." The Personal Injury Law Page, 1996.
What are your experiences with Long Term Care?
( top
)
This could never happen to me! The major obstacle to planning for Long
Term Care is our unwillingness to accept the fact that we may someday need
help with the basic activities of our daily lives. People between the ages
of 18 and 64 make up 40% of the people needing Long Term Care.* Stroke,
accident, illness, and even the normal effects of aging may trigger the
need for assistance. Most people carry adequate amounts of insurance to
protect their assets against natural disasters such as fire, floods, and
earthquake, hoping the need to submit a claim never occurs. Protecting
your assets from the draining effects of Long Term Care costs is equally
important. *Life
Insurance Selling, December 1995
Three ways to pay… ( top
)
There are only three ways to pay for Long Term Care:
1.
You
may liquidate assets,
2.
You
may qualify for Medicaid (after your assets have been depleted), or
3.
You
can cover the risk with Long Term Care Insurance.
Why should you plan?
( top
)
1.
To
preserve your independence. Adequate insurance coverage can provide you
with the ability to choose from a variety of care services and facilities.
By having funds available when they are needed, there's no need to ask
friends or family members to care for you during convalescence.
2.
To
protect your financial future. With adequate coverage, you will not need
to liquidate retirement savings and family assets.
TODAY
YOU CAN CONTROL THE DIGNITY OF YOUR FUTURE AND THE LIFESTYLE YOU WISH TO
PRESERVE FOR YOURSELF AND YOUR FAMILY. PLANNING FOR LONG TERM CARE CANNOT
WAIT UNTIL YOU NEED THE COVERAGE. YOU DECIDE.
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What is Long Term Care?
Where are Long Term Care services received?
Who provides Long Term Care Services?
What does all this cost?
Who pays for Long Term Care?
What are my chances of needing some kind of Long Term Care?
What
are your experiences with Long Term Care?
Three ways to pay…
Why should you plan?
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