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What You Need to Know about Long-term Care

According to a 2003 study by Roger & Komisar for the U.S. Department of Medicare, in the year 2000 almost 10 million people needed some form of long-term care in the United States. Of this population, 3.6 million (37%) were under age 65 and 6 million (63%) were over age 65. The study notes that 70 percent of people turning age 65 will need this type of care at some point in their lives.  
In this post, I have included information from this study that I think you need to consider so you will be prepared in case you or your parents need some kind of long-standing care in your later years. How you handle the difficulties of old age and disability will be unique to you, so here is a list of important questions for you to think about:

  1. What is long-term care?
  2. Who needs it?
  3. How much care will I need?
  4. Who will provide my care?
  5. Who pays for long-term care?
  6. Will I need an attorney to facilitate it?

What is Long-term Care?
Here is what Roger & Komisar explain from their study:

Many people think the phrase “long-term care” refers to an insurance policy. While insurance may be part of your strategy, long-trm care encompasses everything from [extended care] services, support systems, finances and to where you will live and how you will navigate the plethora of legal, family, and social dynamics along the way. It is a range of services and supports you may need to meet your personal needs. Long-term care is not medical care but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living or ADLs. 

These ADLs include bathing, dressing, using the toilet, transferring (from bed to chair, etc.), caring for incontinence, and eating.
Will I Need Long-term Care?
Once a person cannot do any two of the above-noted ADLs, then they will need long-term care. Of course the first place people turn is to family members — spouse, children and grandchildren perhaps, or even a devoted niece or nephew. If you need assistance and other family members are already deceased, you can suffer if you have not planned ahead.  My father-in-law said to me, at age 93, that all of his friends had already passed away.  He then quipped, “I wonder how many people will still be around to attend my funeral?”  He passed away the next year and had lots of wonderful family and friends attend but his point was 2397well taken:  Who will assist us as we age? If family and friends are not likely to be available, then you will need to plan to take advantage of paid long-term care either inside or outside your home.
What are your chances that you will need long-term care? The following online statistics posted at the U.S. Department of Health and Human Services may help give you an idea of your risks:

  • Women need care more than men and they usually need it longer, obviously because they live longer than men on average. Men need care an average of 2.2 years, while women need it 3.7 years.
  • Any services for long-term will last on average three years and be used by 70 percent of anyone reaching age 65.
  • Professional at-home services will last one year and be use by 59 percent.
  • Unpaid care only lasts one year and is used by 42 percent.
  • Assisted living will last less than one year and be used by 13 percent.
  • Skilled care in a nursing facility lasts one year and is used by 35 percent.
  • Information about caregivers shows that 1 in 4 adults were unpaid family caregivers to an adult or child in 2009.  About two-thirds were women and 14 percent of those giving care were over age 65.

How Much Long-term Care Will I Need?
Because there are other daily tasks that must be performed in addition to ADLs that can become more difficult as you age, you will need to consider purchasing long-term care services that include help with such things as:

  • Housework
  • Managing money and paying bills
  • Taking medication
  • Preparing and cleaning up after meals
  • Shopping for groceries or clothes
  • Using the telephone or other communication devices
  • Caring for pets
  • Responding to emergency alerts such as fire alarms

Who Will Pay for Long-term Care?
This is a hard one to answer.  The cost for assisted living is between $3,000 and $7,000 per month.  This kind of cost can quickly wipe out a lifetime of savings in a matter of months or just a few years.  Here is what the National Patient Advocate Foundation’s newsletter said as quoted in the September 2012 issue of the Patient’s Voice:  

Sixty percent of all bankruptcies are due to health care costs, and 80 percent of those [who declared bankruptcy] had health insurance.

The cost of long-term care will be a growing concern for the next 100 years as we all live longer and longer.  Just consider the cost of food for the next 20 years.  
Example:  2 people x 3 meals/day x $10/meal x 7 days/week x 52 weeks a year x 20 years = $436,800! Just for food alone!
Now consider retiring for 30 years or more.  If you worked for 40 years, this is only 10 years short of the time you actually worked!  It is a huge possibility that you may be retired longer than you worked.  
What to do?  You must plan ahead and don’t assume that counting on Social Security is “planning ahead.”  The actuaries that forecasted the tax needed to pay for Social Security benefits used age 75 for males and 77 for females as the death age. But actual life expectancy ages for males and females are 81 and 83, respectively. In a Reader’s Digest article by Alan Greenspan in 1988, he said that every year we live longer will require one trSocialSecurityillion more dollars to be paid out (in 1988 dollars).  Inflation will bring that number into the trillions now. The long and short of it is to not count on Social Security alone to help pay long-term care costs. It is up to you to plan ahead now. Look into getting a long-term care policy that you can pay on now in case you need it later. If you are a woman, there is a very good chance you will need it since you tend to live longer than us men.
Will I Need a Lawyer to Prepare for Long-term Care?
Because you need to be protected legally in your old age, it may be wise to get an attorney involved before you need long-term care. This will also take great burdens off your spouse and children at the time you begin receiving care. Here are some of the documents an attorney can help you prepare that you will need in a long-term care case:

  • Advance Medical Directive, or a “Living Will”
  • Power of Attorney
  • Will/Trust (these documents will be needed to help advocate on your behalf any disputes from insurance companies, etc.

Even little things like modifications to living quarters required by law to help you live can be arbitrated by an attorney, especially if you have aLegalAgreements landlord, for example, that doesn’t want those modifications made. In addition, an attorney could be needed to determine if you qualify for Medicaid.  Most elder attorneys do not charge for their initial consultations.  Take action in advance of the need by determining what attorney services you may need and by finding a good lawyer that you can trust and afford.
In conclusion, the need for long-term care will soon be upon many of us.  Remember up to 70 percent of us will be affected by this problem whether we like it or not.  Planning ahead can prevent unnecessary expenses and ill feelings with loved ones.  Do as Money Mastery Principles 5 and 7 teach and “Know the Rules” and “Always Look at the Big Picture” so you can be prepared for a life event that is more than likely to occur for you.  To find what resources are available to you, visit: http://www.eldercare.gov/Eldercare.NET/Public/Index.aspx

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