Long-Term Care for "Graying" America--Practical Considerations

Long-Term care situations are becoming more prominent especially with maturing Americans living longer with more vital lives. How will they afford the growing cost of healthcare?

While various forms of insurance typically cover routine doctor visits and emergency medical situations sufficiently, coverage for ongoing long-term healthcare needs is often limited and restricted. And, paying for long-term care needs can quickly deplete even substantial savings.

Long-term care: Not just for the elderly

This year, about 9 million Americans over the age 65 will need some form of long-term care, and that number will reach 12 million by 2020. Typically, the majority of people who require long-term care are over the age of 65. But a substantial 40 percent of those requiring long-term care are between the ages of 18 and 64.

Consequently, everyone should have reasonable provisions for healthcare financing in place.
Long-term care covers a range of services and supports, both medical and personal, to help individuals over an extended time with a chronic illness or disability (including cognitive impairments such as memory loss, confusion, or disorientation).

The bulk of long-term care involves non-skilled personal assistance with performing “activities of daily living” (ADLs), such as bathing, dressing, toileting, getting around the house, and eating.

Another category of assistance, “instrumental activities of daily living” (IADLs) includes preparing meals, shopping, bill paying and managing money, cleaning and other household chores, using the telephone or computer, and taking medication. Much of long-term care can be provided in your own home. You can have help come to you for the assistance you need and still be living in the comfort of your own home.

According to the U.S. Census Bureau, the chances of needing long-term care are higher for women:

However, one in five will need this care for more than five years. Long-term care needs often develop gradually and may include: home care from nurses, aides, therapists; community-based services; and care in a variety of long-term facilities.

Assistance from family, friends, and community

Perhaps the most important aspect of what you will want from long-term care is the ability to continue an active lifestyle with the greatest degree of independence as possible. While paid services can be extensive and partly or wholly covered by your insurance, most people also rely on help from family, friends, and community.

Case managers, typically nurses or social workers, can assist you and your family in designing a practical regimen for long-term care needs.

The trend today is to help older people stay within the community, preferably living at home (or in a family member’s home). Many communities offer adult day service programs, volunteer visitor/companion services, meal programs, transportation services, senior centers, and respite care—to give family members necessary relief to avoid caregiver “burn-out.”

Home care may also include emergency response systems, and great advances in technology can now help family members monitor an older person’s daily regimen while preserving a high degree of independence.

Assisted living housing, nursing homes, hospice programs

Generally, there is a movement away from broad-based reliance on nursing homes if possible. This may include adult foster care homes, which provide room and board, 24-hour availability, help managing medications, and assistance with ADLs.

Unlike skilled nursing homes, which are highly regulated and licensed by state governments, adult foster care homes and their licensing requirements vary greatly from state to state.

Assisted living facilities help people who need some level of care but not as much as they would receive at a nursing home. Residents often have their own apartments or rooms, but also receive support services—daily meals, assistance with personal care, help with medications, housekeeping and laundry, 24-hour security, on-site staff for emergencies, and social programs.

Costs vary widely, and the requirements of these regulated facilities vary from state to state.
Families often turn to nursing homes for round-the-clock care when it is no longer possible to care safely or cost-effectively for a person at home. The majority of nursing home stays are for less than a year, with 30 percent being less than three months. However, 20 percent of nursing home stays are for more than five years.

Hospice programs, generally, help patients and families cope with terminal illness. Many patients are reluctant to use these programs because they are required to forgo advanced medical treatments in order to qualify.

However, some hospices and private health insurers now allow more extensive medical treatment. The combination of services has already shown encouraging, life-prolonging results.

Long-term care insurance

The costs for prolonged long-term care can be high. Frequently, Medicaid covers long-term nursing home residents; but you usually have to “spend down” your available assets (generally to $2,000) before you are eligible. Long-term care insurance can protect you financially in worst-case scenarios, and help you avoid the depletion of your estate.

However, insurance for those worst-case scenarios is expensive, and only a small number of policyholders need that much coverage. You may prefer a more modest policy that will cushion part of the financial drain.

These insurance policies typically cost less for younger people. Also, the older you are, the greater the likelihood that you will be denied coverage. Another consideration you should investigate before buying a policy is the rating and stability of the insurance company: will they be around in 20 or 30 years when you need the coverage? While there is no guarantee, you may want to consider a carrier rated highly by Standard & Poor’s, A.M Best or Weiss Ratings.

Healthcare, especially long-term healthcare costs, should be an integral part of your financial plan. What insurance coverage you want, what lifestyle independence levels makes sense, whom you can rely on to help, and what you can afford—all these pieces need to be fitted together into your broader-based investment, retirement and estate planning needs.

The wisest solution is to consult your trusted advisors to help you structure a comprehensive strategy for your longevity. Ask Mr Long Term Care is a Long-Term Care specialist. He is well informed on the changes in plans as well as government changes. The industry is changing and you need an expert to help see if this is something that fits well in your own financial plan.

Dane A. Petchul CLTC, LTCP is a specialist in Long-Term care planning and Long-Term Care insurance. He can be reached at 949-854-3001 or 1-877-GO-4-LTCi or send an email to dane@LongTermCareInsurancePros.com

Visit LongTermCareInsurancePros On this site you can ask a question, get a quote or join a free teleseminar to get all of your questions answered.