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What is
Long-Term Care? By When people consider the subject of long term care,
they often think about nursing homes. In fact, long term care has little to do
with nursing homes. Understanding the
difference can help you protect your family and finances. The
Consequences of Living Longer Long term care is a continuum of care services and
housing you will need when you live a long life. Think you won't live a long
life? Think back 25 years ago. If you had cancer or a stroke, you simply died.
Few ever heard of Alzheimer's. Today, Alzheimer’s disease is the leading reason
for needing long term care services. The longer you live, the more likely you
are to need care. The question is not who will take care of you, because your
family will most often, but rather what providing that care will do to your
family and finances. Long-Term Care
is Usually Custodial Care Long term care is defined as needing assistance with
your activities of daily living (toileting, bathing, dressing, eating,
transferring from one point to another, and continence). It also includes
cognitive impairment so severe that the individual needs constant supervision. If you need custodial care, chances are it will be
delivered in the community, not in a nursing home. Many have heard compelling
statistics from The New England Journal of Medicine stating that 43% of those
over age 65 will need nursing home care. What the article actually said is that
that 43% are likely spend at least some time in a nursing home. The fact is,
few end their days in one. Every study conducted finds that care is
overwhelmingly provided at home. The key question, of course, is who is going
to pay for it? Who Covers the
Cost? Medicare, the primary health care program for
retirees pays only for skilled or rehabilitative care, not custodial care in
any venue. Medicaid, a federal and state program for financially needy
individuals will pay for custodial care, but primarily in nursing homes.
Funding for home care and assisted living is very limited and based on
availability of funds. Veterans believe that the VA will pay for home care,
adult day care, or assisted living. As with Medicaid, funding is limited and
generally based on a significant service-connected disability. The result is that consumers are forced to pay
privately for their care. Unfortunately, the best thought-out retirement plan
rarely takes into consideration living a long life. Put another way, those
assets and income have been allocated to pay for a good retirement lifestyle,
not for the consequences of living a long life. This results in the need to
invade principal and divert income. As a result, one of seniors' greatest fears
- that of outliving their assets - may literally come true. The Role of
Long-Term Care Insurance The use of long term care insurance thus becomes an
important part of planning for disability caused by living a long life. The
product has two roles: helping keep families together and allowing your
retirement portfolio to execute for the purpose for which it was intended,
namely retirement. From a family perspective, think about who will be
providing your care. Like it or not, children will play a role. Long term care
insurance doesn't replace the need for family involvement in providing care but
rather builds upon it. It pays professionals to assist the person with the
toughest tasks such as toileting, bathing, feeding and continence. This, in
turn, allows the family to provide care better and longer at home. From a financial point of view, long term care
insurance allows your retirement plan to remain intact. This insurance product
protects your retirement assets and gives you choices about where, and from
whom, you will receive needed care. Long term care insurance also protects
income. Although you may (the rules were
tightened again in 2006) qualify for Medicaid to pay for nursing home costs by
transferring assets, your income (pension, social security, IRA and or 401k
payout) cannot be protected. When buying this insurance, look for someone who
specializes in long term care planning. Consider their experience, training,
educational credentials, and commitment to help solve your long term care
needs. The key is whether they talk first about a plan or a product. If they
are interested in the plan, you are dealing with a professional. If they focus
first on product and price, consider getting another opinion. | ||||