Top 7 Questions Seniors Ask About Long Term Care
- What exactly is long term care?
- Should I consider long term care insurance?
- What types of care are there?
- Where is long term care provided?
- What does long term care cost?
- Who pays for long term care?
- Can I afford long term care insurance?
Long term care is the care people need when they can't perform the tasks of ordinary living independently. Bathing, dressing, toileting, continence, eating, and moving around. It can also be care related to cognitive impairment like memory loss or dementia. A person may be able to dress themselves and get around, but they may have trouble remembering to take their medication.
It's not something any of us like to think about, but the reality is that many of us will need this type of care in our lives, and it can be financially devastating.
If you are very wealthy and can easily self-insure, you can get along without long term care insurance. Of course, many wealthy people who could easily afford long term health care costs of $55,000-$70,000 a year choose to purchase a long term care insurance plan to protect their assets.
On the other hand, if you have a low income and the monthly premiums for LTCI would seriously compromise your lifestyle, it may not be appropriate. If you have no assets to protect, it probably doesn't make sense either.
For everyone else--the vast majority of Americans--long term care insurance is vital. If you want to protect what you've worked so hard for, maintain your comfortable lifestyle, and have peace of mind, long term care insurance is the solution. In 2007, $3.5 billion in long term care insurance benefits were paid (source: American Association for Long-Term Care Insurance, 2008 LTCi Sourcebook.)
Acute care is the type usually provided in hospitals and emergency rooms for things like heart attacks and strokes. Health insurance and Medicare will likely cover some or all of these expenses.
Chronic care is usually for conditions that are treatable but generally not curable: arthritis, diabetes, hypertension, Alzheimer's, etc. Health insurance and Medicare may not cover these expenses when care needs extend over longer periods. Long term care for chronic conditions is usually provided in one's home, an assisted living facility, or a nursing home.
Skilled care is the type usually delivered in a nursing home, but it can be home care as well. If the skilled care meets strict criteria set forth by Medicare, then the provider is referred to as a skilled nursing facility. Medicare defines skilled care as services and rehabilitation that require the technical or professional services such as that of registered nurses, licensed practical nurses, and physical or occupational therapists. For example, someone with a recent hip replacement will recover fully, but may need physical therapy and could be admitted to a skilled nursing facility for that.
Non-skilled care is defined as the type provided to people who need help on a regular basis with their activities of daily living because of a physical limitation, chronic problem, or a cognitive problem. Also known as custodial care, this type of care is often provided by a family member. For example, someone with rheumatoid arthritis may have difficulty getting dressed or bathing. A family member comes to the house to help with those two things once a day.
Health insurance or Medicare may cover acute care, but for all other types of care, expenses are usually out-of-pocket and can be huge. Long term care insurance may be appropriate in those situations.
Skilled nursing facilities, also known as nursing homes, provide both skilled nursing care (which may be covered by Medicare), and non-skilled custodial care (paid for out-of-pocket or with long term care insurance benefits.)
As an example, Ann had a stroke 12 months ago. Immediately after her stroke she was admitted to a skilled nursing facility in the Medicare section and received rehabilitative therapy on a daily basis. After about 45 days, her therapists determined that she was not getting better and would need help with her activities of daily living for the rest of her life. Because she did not have anyone to take care of her at home, Ann was transferred to the non-skilled wing of the skilled nursing facility where she will live the rest of her life.
Assisted Living facilities provide non-skilled care for people who need help with daily living but can also provide much of their own care. Usually, skilled care is not provided in assisted-living facilities. These institutions are an excellent alternative to nursing homes. The residents may live in apartments that they can personalize. Meals are usually provided in a community dining room, and there are lots of activities and social events.
As an example, Barbara was 87 years old and living in her own home. She was not getting out of the house and not socializing with anybody. Her daughter, Cheryl, arranged to have her mother move to an Assisted Living Facility after she realized that she was forgetting to take her medications and was not able to handle her own hygiene issues. She didn’t need skilled nursing care, but she did need help with her activities of daily living. Now Cheryl won't worry as much since there will be caregivers ensuring her mother gets her medications and assistance with her personal hygiene. Her mother will be able to participate in the weekly activities so she will remain active socially.
Home care recipients often live with a family member. About 1.3 million are cared for at home by paid helpers, who provide skilled or unskilled care with basic personal activities. Another 5.5 million Americans receive unpaid help at home from family members. Home care is generally considered appropriate at the custodial and non-skilled care levels. When skilled care is provided in the home, it can be very expensive.
As an example, Shirley was diagnosed with Parkinson’s disease two years ago. Now she is unable to walk without assistance. She can't bathe or dress herself. Her daughter, Marie, is currently helping her with these needs. Her daughter has to go back to work in order to save money for her two children that will be going to college in the next two years. Shirley is now going to have to tap into her life savings and pay for a caregiver to come in and help her, instead of her daughter, so that she can stay at home.
Adult Day Cares help people stay at home rather than moving prematurely into nursing homes. Adult day care facilities offer custodial care during weekdays and sometimes on weekends too. This care is appropriate for people with moderate impairment who need minimal assistance, such as Alzheimer’s or senile dementia patients.
As an example, Bob lives with his daughter, Michele, who works full time. Lately, Michele has noticed that Bob has been forgetting to prepare and eat his meals when she is away at work. One day she is called at work by a neighbor who found Bob wandering down the street. Michele wants to take care of her father after work and on the weekends, but she needs help during the day. An adult day care would provide an ideal solution.
The 2006 average daily rate for a semi-private room in a nursing home was $183 ($66,795 annually), a 7.7% increase from the 2004 daily rate of $169 (MetLife Market Survey of Nursing Home and Home Care Costs, 2006, www.MetLife.com.) The cost for a semiprivate room in a nursing home is projected to increase to $190,600 per year by 2030 (Long-term Care: Medicaid’s Role and Challenges, (publication 2172) The Henry J. Kaiser Foundation, November 1999, cited in "What Does LTC Cost?," The Federal Long Term Care Insurance Program, December 24, 2002 edition.)
Home health care and assisted living costs aren't quite as expensive (usually about half that of nursing homes), but costs continue to rise, far outpacing inflation.
There are four options for paying for long term care services.
Rely on a family member, usually a spouse or child, to provide the help needed. This option is great if you have family close by who could provide the type of care needed, and wouldn't mind taking the time to do it.
Self-insure and pay for long term care with your nest egg and income. If you are very wealthy, this is certainly a good option.
Spend down all assets and then qualify for Medicaid (Medi-Cal in California.) New federal legislation passed in 2005 makes this option much more difficult and less attractive than it was in the past.
If you're in reasonably good health and can qualify, consider a long term care insurance policy. You'll have peace of mind, protection of your nest egg, and maximum flexibility and options if you ever need care down the road.
Excellent question, and without knowing your current health condition and financial situation, the best answer we can give is...maybe. For many of our clients, it turns out to be less expensive than they thought it would be.
In general, the longer you wait, the more it will cost. You also risk not being able to qualify for a top-rated plan if something were to change in your health.
If you'd like to see just how affordable and simple long term care insurance can be, please fill out the following form. One of our senior specialists will contact you shortly to help answer your questions and give you some choices. No pressure and no obligation whatsoever. Make your decision based on facts.