When people consider the subject of long-term care, they often think about nursing homes. In fact, long-term care has little to do with nursing homes. Understanding the difference can help you protect your family and finances.
Many People Wonder, What is Long-Term Care?
Long-term care is a continuum of care services and housing you will need when you live a long life. Think you won’t live a long life? Think back 25 years ago. If you had cancer or a stroke, you simply died. Few ever heard of Alzheimer’s. Today it is the leading cause for long-term care services. The longer you live, the more likely you are to need care. The question is not who will take care of you, because your family will most often, but rather what providing that care will do to your family and finances.
We define Long-term care as needing assistance with your activities of daily living (toileting, bathing, dressing, eating, getting in and out of the bed or chair, and continence). Another type of long-term care is the supervision needed for someone with severe memory loss.
If you need on-going, custodial care, chances are it will be delivered within the community, not in a nursing home. Every study conducted finds that care is overwhelmingly provided at home. The key question, of course, is who or what is going to pay for it?
Medicare and Veterans…
Medicare, the primary health care program for retirees, pays only for skilled or rehabilitative care, not general maintenance care in any venue. Medicaid, a federal and state program for financially needy individuals will pay for custodial care, but primarily in nursing homes—the place people most want to avoid if possible… Funding for home care and assisted living is very limited and based on availability of funds. In recent years it has become increasingly difficult to qualify for Medicaid.
Veterans believe that the VA will pay for home care, adult day care or assisted living. As with Medicaid, VA payments present limited funding and generally based on having a service-related disability.
The result forces consumers to pay privately for their care. Unfortunately, the best thought-out retirement plan rarely takes into consideration living a long life. Put another way, most assets and income pay for retirement, not for the consequences of living a long life. This results in the need to invade principal and divert income to pay for care. As a result, one of seniors’ greatest fears – that of outliving their assets – literally may come true.
The use of long-term care insurance has become an important part of planning for disability resulting from living a long life.
Think about who will be providing your care. Chances are your children will play a key role especially if they live nearby. Long-term care insurance doesn’t replace the need for family involvement in providing care but rather builds on it. It pays professionals to assist the person with the toughest or most personal tasks such as toileting, bathing, feeding and continence. This, in turn, makes it easier for the family to maintain the individual at home.
For extended health care needs, at any age, you are limited. Options include self-funding, Medicaid (for the impoverished), and long-term care insurance. Each of these options is appropriate for certain people in certain circumstances. None of these is right for everyone. It is important to make an informed decision, in advance, as to how best fund an extended health care need and then to communicate that decision to your family. With financial challenges already addressed, the emotional challenges of a health care crisis are easier to handle.