It’s Time to Start Thinking About Long Term Care
It’s not something we like to think about: what happens if at some point I cannot care for myself and I need help from others because of an illness, injury or the effects of old age?
WHAT IS “LONG TERM CARE?” What we are referring to is “Long Term Care.” But, it may not be what you think. Often, when we think of “Long Term Care,” we think of being elderly and being in a nursing home. While that is sometimes the case, more often than not it is NOT the case; that is, we need help with everyday tasks and we are not necessarily elderly and we are not in a nursing home.
According to the U.S. Centers for Medicare & Medicaid Services, approximately 70% of people over age 65 will require Long Term Care services in their lifetimes¹. But, a relatively low percentage of care is actually received in the one place we most often think of, and the last place most of us want to be – a nursing home. And, you might be surprised to know that while 63% of people who need Long Term Care are over the age of 65, 37% (more than one in three) are ages 64 and younger².
In fact, of all the Long Term Care that is received in the U.S. 79% of that care is received is received in a home or community based setting, rather than a nursing home³. And, you might be surprised to know that while 63% of people who need Long Term Care are over the age of 65, 37% (more than one in three) are ages 64 and younger^4.
To be clear, we need to define what “Long Term Care” actually is. Long Term Care is often defined as “a continuum of medical & social services designed to support the needs of people living with chronic health problems that affect their ability to perform everyday activities.” Those activities consist of things like the ability to dress and feed oneself, and to be mobile, among others. If we can’t do them ourselves, we need help, and that’s where Long Term Care services come in.
HOW DO WE PAY FOR IT? The problem often becomes, without family or friends to provide that care, how will I pay for it?
Many people think we can rely on government funds to pay for our care. Unfortunately, that’s often not the case. Medicare typically pays only for skilled care that is received and intended to improve my condition (Long Term Care, by definition, is generally care for a chronic condition that is not expected to improve, at least any time soon). Medicaid, while paying a fairly high percentage of LTC costs in the U.S., generally requires that I spend down my assets to certain levels and spend my own income on my care before it steps in as a payment source.
That’s where Long Term Care Insurance (LTCI) comes in. LTCI steps in at the time when it’s needed most, and can pay for care in the most popular care settings – including at home, in an assisted living facility, while attending adult day care and, as is sometimes the case, a nursing home.
Traditional LTCI policies allow the policyholder to customize the benefit to suit individual needs and budgets. While ancillary benefits vary from product to product, an LTCI purchaser can choose the right daily benefit amount (how much of the cost of care do you want the policy to pay?), benefit duration (how long do you want the policy to pay?), length of time before policy benefits begin once on claim (how long are you willing to pay out of pocket before your policy starts paying?) and whether and to what extent inflation protection is included (do I want the policy benefits to increase automatically each year, or only when I purchase additional coverage?).
SO, HOW DO I FIND OUT IF LTCI IS FOR ME? LTCI is not for everyone. Some people may not qualify for the coverage (there is a health qualification process) and some may feel the premiums are unaffordable (although that is often a misconception remedied by the flexibility in designing coverage).
To find out if it’s right for you, meet with an LTCI specialist who can walk you through the underwriting process. Then you may be able to tailor a policy to meet both your needs and budget. If nothing else, you’ll at least know if LTCI is even an option for you.
The Hudson Heritage Federal Credit Union will be offering a free seminar to teach about Long Term Care insurance at the Rykowski branch on Wednesday, June 10 at 6 PM. Please contact the branch or Melvin Mills at firstname.lastname@example.org or 845.481.3635 to sign up.
1 2014 Medicare & You Medicare Handbook
2 Who needs long-term care? Fact Sheet, Long-Term Care Financing Project. Washington, DC: Georgetown University Press, 2003
3 Agency for Healthcare Research and Quality – 2000
4 Who needs long-term care? Fact Sheet, Long-Term Care Financing Project. Washington, DC: Georgetown University Press, 2003
NOW is the time to plan for Long-Term Care Needs! By: Bob Vandy. CLU, ChFC, LUTCF, CLTC