What is Long Term Care?
What is Long Term Care?
– A wide range of services designed to manage limitations as well as to
minimize further deterioration caused by a chronic condition.
– “Custodial” care for functional and cognitive conditions.
Long term care refers to “chronic” custodial care, which encompasses a broad
range of supportive medical, personal, and social services needed by people
who are unable to meet their basic living needs for an extended period of medical, physical and cognitive conditions caused by an accident, illness or frailty.
Long term care involves the assistance or supervision of another person(s) to
perform the essential activities of daily living when these tasks can no longer be
performed independently. The assistance may be provided at home by formal
(paid) care givers, such as home health aides, or by informal (unpaid)
care givers, such as family members or friends, or in an assisted living facility
or a nursing home.
What is a Functional Impairment?
Functional Impairment is a chronic condition that limits a person’s ability to
perform Activities of Daily Living (ADL’s).
Activities of Daily Living (ADL’s):
Long Term Planning
Most people are more afraid of needing long term care than of dying prematurely or outliving their retirement savings. What would you do if you suddenly faced an additional yearly expense of $50,000 or more?
Where would the money come from?
How would it affect your spouse or your life style?
How would it affect the estate you wanted to leave behind?
The high cost of long term care makes paying for it a challenge. What is even more challenging is that the alternatives that most people are drawn to have serious limitations. For most people personal savings is not sufficient to meet retirement income and long term care needs. Furthermore, there are both financial and emotional costs associated with the liquidation of assets, such as the tax you will have to pay for gains in stocks and bonds for example or higher income taxes for withdrawing or cashing out IRA’s or more importantly depleting the assets your spouse or children may need.
While improvements in healthcare have made sudden death from acute diseases less likely, the chances of incurring a debilitating disease that may require long term care have increased.
People do not like to pay for something they may never use; I have never used my home owner insurance. Would I ever go without it?
According to a study by the U.S. Senate Committee on aging, of all Americans who are 65 or older today, one half of women and one third of men can expect to spend 2.5 years in a nursing home.
Did you know a baby boomer turns 50 every 8 seconds.?
Did you know someone has a coronary incident every 29 seconds?
Did you know someone has a stroke every 45 seconds?
Did you know the age people enter a nursing home gets older and older?
In the past, people did very little planning for long term care needs because life expectancies were so much lower and family members were usually able to provide care. Changes in our society and the family make this much more difficult today. Smaller families, family members moving to other locations, both heads of household working, mean family members are less likely available as a care giver while at the same time you are much more likely to need a care giver. Your children will be sandwiched between you and their own children. Women were traditionally the care giver, now 47% of women work outside the home. Adding parental care to a life style already packed with the demands of work and family can be too overwhelming making the relationships between you and the children begin to deteriorate at a time when you need your relationships to be better than ever. Family care givers are much more likely to experience depression and anxiety.
Long term care is provided to people who are unable to perform the basic tasks of everyday living on their own for an extended period due to chronic medical, physical, or cognitive conditions, or disabling injuries.
The need for assistance is often diagnosed by one’s ability to perform Activities of Daily Living - transferring, walking, bathing, dressing, toileting, etc.
Long term care insurance covers long term care services provided in your home, other community based settings, an assisted living facility and a nursing home. Medicare, supplemental insurance and traditional health and disability insurance do not cover chronic long term care services. Long Tern Care insurance does. There are two general types of long term care insurance sold in New York State; Traditional Long Term Care and New York State Partnership for Long Term Care.
Long term care insurance premiums are dependant upon many factors. The age at which you purchase, your health, the amount of coverage you want and how long you want to cover are a few of the most important considerations. New York State provides an income tax credit and the Federal government allows deductions, dependant upon your age, for all tax qualified long term care insurance policies to help people afford long term care insurance coverage.
A key difference among policies is the home health care provisions. No one wants to go in a nursing home so who will provide your home care is extremely important. Each long term care provider has different guidelines. Certain carriers and certain policies within a carrier take a managed care approach. They require that the care needed can be selected from a pre-determined network and that a plan of care meet the carrier’s approval. Other carriers take a much more liberal approach.
How you want to be reimbursed is another factor you must decide. Do you want to submit all of your receipts or simply receive a cash disbursement? Additional factors are benefit period, the elimination period and the inflation protection.
The financial security of the insurance carrier is important. You want to be sure that they will be there when you need them.
For many people switching from disability insurance, which protects against lost income due to disability, to long term care near retirement age is a painless transition. When you think about it, a person who needs long term care is every bit as disabled as a person who can no longer work and earn a living. The biggest difference is long term care offers asset protection as opposed to disability which offers income protection.
As long term care costs increase, quality long term care insurance is a way to protect your financial independence. A properly designed long term care plan can provide you with peace of mind that comes with knowing that you will have access to range of quality care options and facilities, allowing you to get the right type of care when you need it without using your retirement resources, without depending upon your children or your families.
No one wants to see a lifetime of hard work swallowed up by final expenses, estate and income taxes for a few years of long term care. No one wants to leave his or her spouse or children in a difficult financial position or put them in a position to provide ongoing long term care.
Possibly the only thing scarier than the possibility of needing long term health care is the prospect of not being able to pay for it.
Rosalynn Carter said “There are only four kinds of people in the world; those who have been care givers; those who are currently care givers; those who will be care givers; and those who will need care givers.”
Call Metro ElderCare Agency, LLC for a free evaluation.