Long Term Care Facts You Need to Know

by Senior Tax Advisory Group on March 14, 2017

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Recently I had the opportunity to meet with a most wonderful lady.  Unfortunately it was not under the greatest of circumstances.  In the couple of months prior to our meeting her husband had suffered a heart attack and while in the hospital suffered a stroke.  At the time of our first meeting he was showing good signs of recovering to the point of not needing a great deal of assistance.  Unfortunately that did not continue.

She was not going to be able to take care of him.  He is not able to feed himself, transfer from bed to chair or much of anything else.  Because he was in the hospital for the minimum required by Medicare (3 days) before transferring to a Skilled Nursing facility Medicare would cover the cost at 100%.  However, that expense is covered for only the first 20 days.  Then for days 21 – 100 you are responsible for a co-insurance amount of $164.50 per day and after day 100 you are responsible for 100% of the bill. 

The Skilled Nursing facility she is having her husband stay in is $7,800 per month. 

They had talked about getting Long Term Care policies but unfortunately had not gotten around to it, but fortunately do have assets to cover the expense for the next few years and with some good planning we are able to stretch those dollars.

Working with a professional, developing a good plan will help protect your retirement.  Request a meeting with an advisor and move one step closer to a Worry FREE Retirement!

While the only sure things in life are death and taxes, it's worrying about the quality of life that can really be a buzzkill.  Long Term Care is not something most of us want to talk about but roughly 70 percent of Americans over 65 will need some form of long-term care at some point in their lives, according to a study by the U.S. Department of Health and Human Services.  Once you hit 65, you have a 35 percent chance of entering a nursing home. The odds that you'll have to stay there for five years? About 20 percent. 

The fact is, the vast majority of Americans will need some sort of long-term care services, especially if you cannot perform 2 out of 6 Activities of Daily Living (ADLs), including getting in and out of bed, walking, bathing, dressing, and eating.  Even if you're healthy, we have a natural natural decline in eyesight, hearing, balance and mobility.

With statistics like these, it's no wonder there is a lot of talk concerning the purchasing of long-term care insurance.  Whether In-home care or a Skilled Nursing facility Long Term Care is expensive and can devastate what you have saved for retirement.  Here’s a chart from Longtermcare.gov (March 2017) with average costs here in the state of Colorado.Long Term Care average costs for Colorado

So I get it.  It’s expensive and the statistics show that there is a good chance I will need it.  This we can all agree on BUT…

  • Long term care is only for the elderly, right.
    Here are the Facts: The need for long term care can arise at any time in a person’s life. While the majority of people who require long term care are elderly, younger people can require it anytime due to severe unexpected illnesses, diseases, injuries or accidents.
  • I won’t need long term care insurance because my family will be able to care for me.
    Here are the Facts: While families certainly want to help and will continue to provide care, it's not possible to know for certain whether your family would even be available and able to care for you when the time comes. You may require the type of care that only a professional in a nursing home or assisted living facility can provide. More times than not the wife often out-lives her husband and she is less likely to have someone nearby who can provide care for her. In addition, caring for a family member can be a huge financial and emotional burden on your loved ones. It is so very  important to make decisions now on how you want to be cared for while at the same time making sure that you are protecting your family. The fact that family and friends may help supplement care does not mean the cost of coverage is any less.
  • Medicare or Medicaid will cover my long term care.
    Here are the Facts:
       Most people incorrectly think Medicare will pay for long-term care services. In reality, Medicare does not generally cover long term care. Medicare pays for skilled care in a nursing home only for short periods (only up to 100 days) during which you are recuperating following a hospital stay for a related condition. Once your care needs stabilize, and you need personal or custodial care, Medicare will not pay these costs. Medicare will only pay for care at home under very limited circumstances. Medicaid pays for long term care only for people with very low assets and limited income.
  • My family can’t afford long term care insurance.
    Here are the Facts: Long term care insurance is more affordable than you might think, it can be tailored to meet your needs and your budget. However the solution is not necessarily Long Term Care Insurance and the costs can be managed by creating a retirement plan or a financial plan that is right for you.  Getting expert advice is key to creating a comprehensive plan that protects your assets so income needs are met and your Estates remains healthy.

You may be asking, "so what do I do about it".  The first hurdle is getting past all the hype so you can evaluate whether you need coverage -- not everyone does.  Secondly, it's easy to confuse "long-term care planning" with long-term care insurance, but they're not the same and more times than not you just need a good plan.

In fact, making that mistake could literally send you into bankruptcy in your senior years.

Long-term care planning means developing a personal strategy and making decisions now about how you want your care needs handled when you or a loved one needs long-term care services down the line.

Insurance is just one of many options people consider for covering the costs of long-term care. If you buy an insurance policy but don't plan appropriately, your care could be compromised. If you develop a plan but never buy the appropriate insurance coverage or execute an advanced care directive, living will, and powers of attorney for health care and financial matters, you could wind up leaving all of your care decisions to others without the means to pay for them.

Planning for long term care needs is a vital part of your retirement.  Some plan is much better than no plan at all.  With all the options out there it’s hard to know where to start.  Sitting down with an advisor that looks at more than just how much income you need in retirement is essential and can save you and your family 10’s of thousands of dollars. A good plan protects assets, grows assets and puts you in control of the care you may need.

If you would like a FREE No Obligation consultation with one of our advisors request a meeting and one of our staff will get in touch to set a convenient time for us to get together.

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Topics: Long Term Care, Long Term Care Insurance, Retirement Planning, Long Term Planning, Risk Management, Life Insurance, Short Term Care Insurance