Long-Term Care
Long-term care (LTC) situations can devastate a family. The big question is whether you want to prepare for the real possibility. We hope you never need long-term care, but owning long-term care insurance gives you and your family options. We have experience with the top insurance carriers still offering competitive policies. Long-term care can be expensive, but that doesn't mean your long-term care insurance policy must be.
What is Long-Term Care?
Long-term care is a variety of services provided over a period of time to those with a chronic illness, injury or naturally declining health. Long-term care services can assist with Activities of Daily Living (ADLs), which are Eating, Bathing, Dressing, Toileting, Transferring, and Maintaining Continence. Requiring help with at least two of these ADLs triggers benefits in a LTC policy (or cognitive impairment alone).
Where Can Care be Received?
Care can be received at an adult day care, a home setting, an assisted living facility, or a nursing home facility. Most care is received at home now, because the cost can potentially be lower and people typically want to stay in their homes when needing extended care services.
Can This Happen to Me?
70% of those age 65+ will need some type of long-term care services1. And of this 70%, 20% will need 2-5 years of coverage, and another 20% will need more than 5 years of coverage. So, absolutely...this can happen to you. A plan should be in place to protect yourself and your spouse. Plus, your adult children should be a part of this planning. Keep them in the loop on what you and your spouse plan to do. This can avoid a lot of problems in the future, if done ahead of time.
How Much Does the Care Cost?
This depends on many factors, including where you live, the level of care, and whether you are in a home or facility setting. Take a look at three sample states to see the difference in median cost (from the 2017 Genworth Cost of Care Survey - www.genworth.com/costofcare):
- California
Home Care: $57,200 per year / Nursing Home: $116,435 per year - Ohio
Home Care: $48,483 per year / Nursing Home: $91,250 per year - New York
Home Care: $54,340 per year / Nursing Home: $140,416 per year
Ways to Pay for Long-Term Care
Medicare: Medicare pays for some skilled care in approved nursing facilities for up to 100 days, but not custodial care (long-term care). The big thing to notice is Medicare could cover part of your skilled care needs, and up to 100 days. Long-term care is exactly that...for extended care situations...not short-term skilled care needs.
Medicaid: To qualify for Medicaid, and have the program pay for your long-term care needs, you essentially have no assets remaining...with certain exempted assets. Each state has its own guidelines, but normally you see a cash limitation of about $1,500, a car, and primary residence for a caregiver. Other than that, your assets must be spent down to qualify for Medicaid.
Savings & Investments: Even a lifetime of diligent savings can be erased or severely reduced should long-term care services be needed for an extended period of time. In the state of Ohio, just a three-year stay in a nursing home facility could reduce your savings by $250,000.
Long-Term Care Insurance: Owning a long-term care policy provides you and your family with options. Options for quality care at home, an assisted living facility, or full nursing home facility. And options how much or little your family members need to be involved. If an insurance policy is reimbursing you for qualified LTC services each month, that really reduces your financial burden. Your emotional burden is also reduced because a plan is in place,
Three of the four ways to pay for long-term care services are either limited or unappealing. Which plan do you want?
You can learn more about long-term care at:
Life Happens | www.lifehappens.org
American Association for Long-Term Care Insurance | www.aaltci.org
U.S. Department of Health and Human Services | www.longtermcare.org
National Association of Insurance Commissioners | www.naic.org
1. U.S. Administration on Aging - Department of Health and Human Services - May 2010
