The need for long term care can happen to anyone at any time, and it may result from being chronically ill or having a cognitive impairment. However, something as unexpected as an accident or injury could also trigger the need.
For most of us, it is unpleasant to envision a time when performing routine tasks may become difficult as the result of injury, illness or aging. If the time comes when you need substantial assistance performing daily tasks, it is unlikely you will want cost to be the primary decision-making factor for your long term care. Long term care (LTC) services can be expensive and costs generally continue to rise. Planning early can help ensure that you have more control in receiving the type of care you want — in the setting you choose, should the need arise.
What is Long Term Care?
Long term care includes a variety of services and supports to help meet personal care needs over an extended period of time. The services include help performing Activities of Daily Living (ADLs), such as: bathing, continence, using the toilet, transferring to/from a bed or chair, dressing and eating. Long term care services are generally not covered under personal health insurance or Medicare because they are not intended to cure, improve or treat a specific medical condition. Medicaid may help individuals with income and assets below state requirements.1
Whether long term care services occur in a nursing home, assisted living facility or your own home, the costs can be a huge expense. The average stay in a nursing home is 835 days (2.3 years) and $183,700.2 The national median hourly rate for a home health aide is $20 and that can add up quickly.3
Potential Ways to Pay for Care
A variety of sources may be used when expenses do not qualify under Medicare or personal health insurance.
In some cases, family members and friends may be able to help with some of the care you need — preparing meals, providing transportation; helping with housework, bills or medication for example. Caregiving can be rewarding, but it can also be stressful. It’s important to recognize when family caregivers need a break and/or can no longer provide the care you require.
When professional long term care is necessary, one option is paying with your own resources such as savings, investments, income (pension, Social Security, annuities) or even your home or home equity. Consider how long these sources might last and what other goals may be unfulfilled if these funds were used for care.
Another option is insurance designed for long term care expenses, or with the option to use the policy’s primary benefits for long term care if needed. For example, your existing life insurance or annuity may contain provisions to utilize benefits early in the event you need long term care. It is important to have an insurance professional review your existing policies and carefully explain the differences in the types of coverage available today.
Finally, you may be able to qualify for your state’s Medicaid program. Medicaid only pays after you meet eligibility requirements, including specific restrictions on income and assets.1
Making it Work
As you can see, there are many alternatives to consider when preparing for the possibility that you may need long term care. Generally, beginning early has advantages. First, at younger ages, you are more likely to be healthy and qualify for various types of insurance. Second, starting early means you may be able to meet your goal with lower installment savings amounts or annual premiums.
You don’t have to prepare for long term care expenses alone. Our team at Plan With Phil can review a variety of solutions that may help you meet your goals.
Long Term Care 101
What is long term care insurance?
Long term care insurance is one option that allows you to have a plan in place to help protect your assets and remain as independent as
possible if you require the need for long term care. Long term care insurance may help give you the peace of mind that comes with knowing you have more choices and more control over care options. This type of coverage may help you maximize your independence when you are unable to be fully independent.
Who needs long term care insurance?
If you are looking to help protect your assets from being depleted should a long term care need arise, long term care insurance might be a good option for you or a loved one.
What is covered by long term care insurance?
A long term care insurance policy may help you pay for the care needed when you are unable to do everyday activities such as eating,
getting dressed, bathing, maintaining continence and getting in and out of bed without assistance. The goal for long term care services is to provide assistance and improve the quality of life for those who are chronically ill or have a severe cognitive impairment such as
Alzheimer’s disease. A comprehensive long term care insurance policy may provide coverage for long term care needs in the home,
community-based settings, and assisted living facility or nursing home.