There is good news: Medical advances mean Americans are living longer. The not so good news: We may not always live better. Chances are that if you live a long life, you may at some point need long term care. This is not the type of care that is intended to cure you—if you experience a chronic illness that prevents you from caring for yourself, it is the care you need to manage daily living. If you need such care, do you know how you will pay for it?
There are many misconceptions about what long term care is and who pays for it. Contrary to what many people believe, Medicare and private health insurance programs generally do not pay for the majority of long term care services that most people need. What’s more, the cost of care could exhaust a lifetime of savings.
Like many Americans, you might not have taken the proper steps to prepare for it.
Unfortunately, for the most part, people have not yet realized that preparing for long term care is just as important as saving for retirement. After all, it was not too long ago that most Americans looked to their employers to provide them with pension plans for retirement income. Now many save for retirement on their own through various self-funded plans. A similar change is needed for the private funding of long term care services. Here are some points to consider when planning for long term care.
It’s not just for older Americans.
When we think of long term care, many of us think of it as a problem for the older generation. But the need for long term care can occur at any age. Automobile and sporting accidents, disabling events such as a stroke or brain tumor and disabling illnesses such as multiple sclerosis or Parkinson’s disease are examples of injuries and ailments that can happen to anyone at any age.
The right time to plan could be now.
It’s hard for most people to think about long term care, especially when they are young, healthy, and want to be optimistic about the future. But it’s always easier and best to make a decision about long term care before a crisis, not after one has occurred. The younger you are when you begin to plan for long term care, the more options will be available to you. The longer you put off making these important decisions, the more costly it could become.
A nursing home isn’t the only option.
Many people have a hard time talking about long term care because they associate long term care with a nursing home. But today things are different. There are many more options, such as assisted living facilities, senior daycare centers and even receiving care at home. The costs vary, but they can still add up.
Long term care affects your immediate family.
As we age and our life span increases, it’s important to think about the consequences of living a long life. Will your spouse or children really have the time and physical ability that might be required when care is needed? What would you think about someone who told you that he or she had no homeowners, health or automobile insurance? One way to think about long term care is to look at it like any of the risks you and your family insure against.
"For the most part people have not yet realized that preparing for long term care is just as important as saving for retirement".
Government help is limited.
With respect to long term care, many people incorrectly believe that some “other” program already covers them. They are unaware of the policies of Medicare or Medicaid.
Generally, Medicare was designed to pay for medical expenses only, not custodial care— the kind of care that people typically need as they age. Medicaid is a program designed to help only those with limited resources. Recent legislation makes it even more difficult to qualify for Medicaid. Generally, to qualify a person must “spend down” his or her assets to meet a level of eligibility—right now, you’d need to have less than $2,000 in liquid assets. A lifetime of savings may be at risk in order to become eligible for Medicaid.
Disability insurance may not be available when you need it.
Disability insurance will help replace lost income while you are actively employed. Generally the coverage ends at age 65 or upon retirement. Disability insurance will not cover the duration and high cost of long term care.
Self-funded care might not cover your life expectancy.
Yes, you could allocate savings to pay for your long term care, and that may work for you. But long term care can be very expensive. Nationally, the average median cost for a one-year stay in a private nursing home room is $74,208 or over $200 per day . Long term care costs can quickly deplete your savings. Also, long term care is sometimes necessary for a longer period of time than you might have planned for. For example, someone with Alzheimer’s disease could need care for 10 years or more.
Long term care insurance could provide help for expenses.
Long term care insurance is not for everyone. But if you have assets or income that you want to leave to your spouse, children or a charity rather than be used to pay for the high costs of care, then you might want to consider long term care insurance. Having a plan in place for long term care can help protect your assets and personal savings, preserve your quality of life and allow you to participate in choosing your care options, and provide you with the resources you need while relieving the burden of care from your loved ones. When you’re ready to consider long term care planning options, talk to your family members about which options might be right for you.
“Genworth  Cost of Care Survey” conducted by CareScout®.