Each November since 2001, Americans have been encouraged to consider the impact of long-term health care, particularly during a month when families gather to celebrate Thanksgiving. This tradition continues, designating November as Long-Term Care Awareness Month. The need for awareness has become more crucial than ever as long-term health care significantly influences the quality of life for numerous American families.
The nation is grappling with the challenges posed by an aging population, placing long-term care at the forefront of concerns. The costs associated with long-term care services are skyrocketing nationwide, driven by increased demand, inflation, and high labor expenses.
A significant number of families find themselves ill-prepared to handle the financial demands and the burdens that come with aging and deteriorating health. There is a common misconception that health insurance, including Medicare, will cover these costs, but this is largely untrue. Medicaid provides assistance only to those with minimal income and assets.
Families often find themselves in the caregiving role without proper planning, with adult children taking on these responsibilities without the necessary training or preparation. As we express gratitude for our blessings and families this Thanksgiving, it is an opportune time to reflect on the potential impact of long-term health care on our loved ones and financial stability.
In 2001, dedicating an entire month to raising awareness about the crucial issue of long-term care, which affects millions of Americans, was a significant and necessary step. Over the past two decades, the impact and reach of this awareness month have substantially grown.
The onset of the COVID-19 pandemic has heightened public awareness regarding long-term care, underscoring the profound difference that quality care can make for both care recipients and their families. Numerous surveys indicate that caregivers are under immense pressure, and the consensus is clear: most individuals would prefer not to impose such burdens on their loved ones.
Long-Term Care Awareness Month
November marks the observance of Long-Term Care Awareness Month, prompting a crucial question: Will raising awareness motivate you to proactively plan for the future financial costs and caregiving burdens associated with aging?
Individuals often find themselves in need of long-term care services due to various reasons such as chronic illnesses, accidents, mobility challenges, and the natural frailties accompanying aging. The ramifications of requiring long-term care are extensive, with the most significant impact on your family and personal finances.
Acknowledging and preparing for the inevitable changes that come with aging and declining health is the first step toward readiness. Understanding how these changes can affect your family and financial stability is imperative.
There is a substantial challenge that individuals, their families, and our entire nation must confront. The awareness initiates conversations about the consequences of longevity and long-term care on families and finances.
Experts suggest you recognize the significance of long-term care planning and explore various options to alleviate the financial and caregiving strains on your family.
Crisis Ensues for Families Lacking a Long-Term Care Strategy
When a family member requires assistance with daily living or supervision due to cognitive decline and no financial plan is in place for care, the burden often falls on relatives. Typically, a daughter or daughter-in-law becomes the primary caregiver or coordinator of professional care services despite being untrained and unprepared for such responsibilities. This role brings many challenges spanning physical, emotional, and financial dimensions.
While the financial ramifications of long-term care are often the focus of discussions among financial advisors and insurance agents, many long-term care planning experts argue that the significant physical and emotional toll on family caregivers is an equally pressing concern. These caregivers find themselves in a strenuous situation, navigating the complexities of care without prior preparation or skills, which can lead to overwhelming stress and strain.
Kerry Peabody, CLU, CLTC, RICP, is a leading expert on long-term care planning. He says caregivers face their own health problems due to being a caregiver.
Caregivers experience higher rates of depression, more health issues and social isolation. Having a plan for long term care will provide your loved ones with resources to make sure that your care needs are met without bearing the entire burden themselves.
Family Caregivers Must Juggle Responsibilities
Elder care attorney Kaye Dent says she still has some clients who think their adult children can easily provide any care they may need in the future.
She emphasizes to her clients that familial responsibilities have evolved, acknowledging that their adult children, specifically daughters, and daughters-in-law, are likely to be engaged in their careers and have other familial obligations. This reality renders the caregiver role immensely challenging.
Dent points out that given the majority of adult children are employed full-time or have commitments outside the home, balancing these existing duties while also taking on caregiving responsibilities is a complex and demanding task.
Longevity is part of the problem, according to Dent.
A 90-year-old's 60-70ish kids don't usually have the physical ability and stamina to provide care, and they may even need care themselves.
In that situation, you may have multiple generations needing long-term care simultaneously, and the adult grandchildren are still working, unable to handle the responsibility.
I think everyone underestimates the toll of caregiver stress. It's nearly impossible to be a child and a caregiver at the same time. Don't make your kids choose. Absolutely everyone must assume that they could need long-term care at some point.
Dent says that you should have several items in place to prepare. Things like Long-Term Care Insurance, powers-of-attorney, living wills, and sometimes other financial products are needed to reduce the overall risks and burdens of aging.
America's Tsunami of Caregiving
Lawyer, speaker, and author of the book "Who Moved My Teeth" Preparing for Self, Loved Ones and Caregiving," Cathy Sikorski, says too many people remain unprepared for the tsunami of caregiving.
It's coming for you and all of us. You need to have your legal documents in order yesterday, and you need to have a plan for the cost of long-term care. Consumers are shockingly unaware of the debilitating cost of a long-term disease or aging loved ones, including themselves, and so they fail to have a plan, any plan.
Sikorski says you need a plan for long-term care. She says there are numerous ways to plan but having no plan is the worst plan.
I assure you, if you don't start with having your financial and health care powers of attorney and a conversation with the important decision-makers in your life, you will go down a road of hemorrhaging money when it does not have to be that way.
Laura Pierce is the Chief Operating Officer of Talem Home Care, who provides in-home health care services for clients in Colorado, Connecticut, and Wisconsin. She says planning ahead with Long-Term Care Insurance is the best gift you can give your children.
As a home care services provider, I have seen policies that have given families the choices and proper care that was needed to allow the patient age in place. Finding a knowledgeable agent who can guide you is key to purchasing the right policy.
Pierce says that she has seen policies where the agent failed to educate the client properly. The end result was the client was either dramatically underinsured or outlived their policy.
Goal: Maintain Control and Independence with Aging
Many experts suggest that planning allows a person to maintain control and independence, which also involves where a person receives care in the future. The COVID-19 crisis has again highlighted that being at home, for many, is where they want to be when they require help with daily activities.
Dallas financial advisor Liz Pace, CLU, ChFC, CLTC, says the pandemic's effect on long-term care facilities has highlighted the need to have more control and options over when and how you receive future care.
Clients with Long-Term Care Insurance may have been able to change where their care was being provided and alleviated the concern of having to stay in a facility during this international health crisis.
Pace reminds us that aging is a natural progression of life. Aging with options and dignity when addressing long-term care services comes down to planning for the future when you are healthy today.
Addressing long-term care while implementing your core financial plan strategies can provide a solid foundation that answers how to pay for and control when, where, and how services will be provided.
Avoid Running Out of Money in Retirement – Maintaining Lifestyle
Many experts agree there are three areas to consider when planning for the financial costs and burdens of longevity. These are income and asset protection, family and independence, and control.
Lynn Rockwell, CLTC, a Long-Term Care Insurance specialist from New Jersey, says that people fear running out of money in retirement due to health care costs as they age.
Like many Long-Term Care Insurance specialists, she says the three areas of concern should be reviewed when considering your future retirement. Rockwell explains that even for those who may think they have enough money to self-insure, the insurance is a hedge against using those assets and preserving them for family or more beneficial causes.
LTC Costs are Exploding Due to Increase Demand and Higher Labor Costs
Many individuals remain uninformed about the significant expenses associated with long-term health care. According to the LTC NEWS Cost of Care Calculator, the annual cost today for a nursing home can exceed $110,000, depending on where you live. Fortunately, the majority of individuals will not require nursing home care but will still need support at home or in an assisted living facility, both of which come with substantial costs that are steadily increasing.
Currently, the national average cost for a nursing home in the United States is $108,199 per year. Projecting 25 years into the future, this expense is anticipated to escalate to an annual cost of $210,613. It's crucial to note that these costs can vary significantly based on geographic location, as illustrated by the LTC NEWS Cost of Care Calculator - Find Cost of Care Where You Live.
Most care is outside of a nursing home, but while in-home care, adult day care centers, and assisted living facilities typically present more affordable options, their associated costs are also on the rise.
The expense of care is contingent on both the region you reside in and the specific type of care you necessitate. For those considering relocation in retirement, it's imperative to factor in the potential future care costs in the prospective area.
Rockwell highlights that the individuals she engages with express a strong desire to preserve their autonomy and dignity as they navigate long-term care needs.
The freedom to choose caregivers or facilities is very vital to remain in charge of your life.
Self-Funding Long-Term Care
Some financial planners propose allocating personal funds to cover future long-term care expenses. However, it's important to recognize that long-term care presents challenges beyond financial resources; it is a matter concerning both income and family dynamics. Addressing these costs directly impacts your lifestyle, depletes savings, and potentially impacts your financial legacy.
Noel Evans, a Long-Term Care Insurance expert based in Washington, D.C., highlights the complexities and potential pitfalls of relying solely on personal funds to cover these expenses.
According to Evans, while some individuals may possess the financial capacity to handle future long-term care costs, the escalating nature of these expenses poses a significant risk. For some, these costs have the potential to exhaust a considerable portion, if not all, of their financial assets.
Self-insuring involves timing. When will long-term care be needed? What happens if it is in a recessionary environment or a bull market? Then there are liquidity questions. What if your money is tied-up in the market or retirement accounts or real estate? You might not be liquid at the time of your need.
Keep in mind the unpredictability of financial markets and the timing of your care needs. Utilizing personal income and assets to fund long-term care also brings with it potential tax consequences. Withdrawing from an investment account may result in taxable gains, and even liquidating assets at a loss could have tax implications. Additionally, these liquidated assets are treated as income, which, if you are aged 65 or older, could lead to increased Medicare premium costs due to the added income.
Indiana specialist Don Strickler agrees self-funding can be short-sighted.
From a financial planning perspective, many consumers who are still active in the workplace make the mistake of looking at the current cost of care and measuring that risk against their current income and conclude that they can self-insure. However, the math changes dramatically because their income will go down when they retire, and the cost of care will double by the time they reach the age when they are most likely to need care.
Self-funding means being dependent on your assets when you need them. Raymond Lavine, an extended care benefits advisor from Gig Harbor, Washington, asks if you can really depend on your investments.
There is no "safe return on investment" available to you as an individual or with a spouse/partner to accomplish what an insurance company and the tax code provides in a Long-Term Care Insurance benefit.
Lavine is reminded that his mother owns a Long-Term Care policy despite having millions in income and assets. When asked why she had a policy, she explained that no one has that much money to pay for lifestyle expenses and pay for part or full-time caregiving. At age 100, she used her Long-Term Care policy for over ten years.
Leveraging Existing Assets for Future Long-Term Care
Some specialists and financial advisors support leveraging an existing asset to plan for future care. One such expert is Mark Goldberg, President of FPS Insurance Agency in Frisco, Texas.
There is no better instrument for leveraging money like a Hybrid Long-Term Care policy. The policy removes the risk of someone ever losing any principle. It is just sound financial planning. About 25% of my clients can self-insure, but they choose to transfer the risk to an insurance company smartly and efficiently.
Goldberg said some companies offer a cash benefit adding to the flexibility of how benefits get used at the time of claim.
But long-term care awareness involves multiple concerns that too many people fail to consider until an event occurs. Avoiding the crisis before it becomes a crisis is essential.
Getting access to quality care and dignity are two items Long-Term Care Insurance veteran expert Honey Leveen says are important for her and her clients. Leveen has been helping clients plan for the consequences of aging for 30 years.
Long-term care planning is about wealth preservation, undeniably. For my clients and me, it is equally or more about dignity, choices, grace, consideration, and quicker access to higher quality care, with much less pause or hesitation. This perspective is often overlooked by the public and by many professionals who serve them.
November is also National Family Caregiver's Month
Long-term care planning is about family, and not surprisingly, President Biden has declared November National Family Caregiver's Month. President Clinton signed the first NFC Month Presidential Proclamation in 1997. Every president has followed suit by issuing an annual proclamation recognizing and honoring family caregivers each November.
The tie-in with Long-Term Care Awareness month makes sense since family members often become the default caregivers for their parents. The burdens placed on them affect the caregiver's health, family, and career as they attempt to juggle these responsibilities.
President Biden said that National Family Caregivers Month is a time to recognize the important role of family caregivers and thank them for the invaluable and instrumental care they provide
Every day, millions of Americans provide essential care and medical assistance to their loved ones. These acts of love, commitment, and compassion enable their family members to receive the support they need to live a life with dignity. This has been especially true throughout the COVID-19 pandemic, during which Americans of all ages have made substantial sacrifices to keep family members safe and healthy.
Taking Action Now for a Happier Family
Awareness is one thing. Taking action is the only thing that will safeguard your income and assets and reduce the stress, anxiety, and burden that aging places on you and your family.
Several solutions are available. For many American families, affordable Long-Term Care Insurance is the best way to protect your family and finances.
Families that pre-fund future long-term care in some fashion are much happier and more unified than those who don't, according to Arosa+LivHome CEO Ari Medoff. The company provides in-home care and other services in California, Florida, Illinois, North Carolina, Tennessee, and Texas.
When adult children call to inquire about home care for a parent, we hear the relief in their voice when they share with us that their mother or father has Long-Term Care Insurance. We reassure them that it will pay for in-home care. The desire for seniors to age in place is stronger than ever.
He says that purchasing Long-Term Care Insurance is a gift you give your spouse, children, and all those you love.
The policy removes or mitigates the cost of care when the time comes and allows the family to focus on arranging the best care in your preferred setting.
Ohio financial advisor and long-term care advisor Greg Seals says it is simple, you either have a plan and do not need it or need a plan because to require care and not have it. He says the lesser of two evils is having a plan and never needing it.
The problem of long-term care is focused on the family. Long-Term Care Insurance expert Mary Ann DeKing reflects that long-term care doesn't just affect individuals.
It ripples through families, reshaping roles, responsibilities, and relationships. Long-Term Care Insurance not only safeguards your income and assets but also provides your loved ones with the freedom to be family rather than assuming the role of caregivers.
Researching LTC Planning Options
Given the significant expenses associated with long-term health care and the potential impact on your family, formulating a plan is a prudent choice.
While November serves as a dedicated month to raise awareness, your family’s well-being is undoubtedly a year-round priority.
Contemplating and exploring long-term care options can be done at any moment. Yet, it is most advantageous to do so while you are still in relatively good health. Since Long-Term Care Insurance requires medical underwriting, initiating the planning process before retirement is advisable. Many experts suggest starting planning in your 40s or 50s as part of your overall retirement plan. However, if Long-Term Care Insurance is the proper solution, you can still find affordable options in your 60s and even beyond if you have relatively good health.
A wealth of tools and resources are available to assist you in starting your exploration of long-term care options. LTC NEWS offers several tools and resources that you should find helpful:
- Who Needs Long-Term Care?
- How Does Long-Term Care Insurance Differ from Other Types Of Insurance?
- What is Underwriting in Long-Term Care Insurance?
- How Do You Apply for Long-Term Care Insurance?
- What Are The Components Of A Long-Term Care Insurance Policy?
These two websites also offer reliable information:
- AARP's Planning for Long-Term Care provides reliable information
- The U.S. Department of Health and Human Services LTC website
Many people ask the question, how much does Long-Term Care Insurance cost? It is not an easy question to answer, but many people find it very affordable - How Much Does Long-Term Care Insurance Cost?
Seek Help from a Qualified Specialist
The experts suggest finding a qualified Long-Term Care Insurance specialist who can help you navigate all the options, underwriting, policy design, and more.
There are tax incentives available in some situations if you own a qualified LTC Insurance policy. Plus, if you have a Health Saving Account, you can use the pre-tax money from the account to reimburse yourself the cost of the premium - Use HSA to Pay for Long Term Care Insurance Premiums.
However, several states are implementing a tax if you do not own a qualified Long-Term Care Insurance policy. The State of Washington was the first, and several others are discussing it. Although not a reason to get a policy, it could be an extra bonus to avoid a tax - Multiple States are Considering Implementing Long-Term Care Tax.
Partnership Long-Term Care Insurance
You have the opportunity to safeguard a portion of your estate, regardless of the duration of your long-term care event. Partnership Long-Term Care Insurance policies are available in most states, offering dollar-for-dollar asset protection. Even a modest policy can offer significant asset safeguarding through this unique type of plan.
Check to see whether your state offers partnership policies.
While long-term health care might not be a favored topic of contemplation, designating a month for awareness encourages us to confront what we intuitively know and proactively address our future care needs.
Planning is easy and affordable as long as we escape our own denial, says Matt McCann, a national expert on long-term care.
Most of us at least 40 years old have noticed changes in our health and bodies. It is normal to see a decline even if we work hard to eat right and exercise. Nature takes its toll. Now imagine the changes we will see in our health, bodies, and minds in the decades ahead. These changes are the reasons we should think about long-term health care planning. Not just to give us access to choice of quality care but to reduce the stress and burden otherwise placed on those we love.
Long-Term Care Planning Focuses on Quality Care - Where Your Loved One Can Flourish Now - Where You Can Flourish in the Future
Planning is nice, but what if your family is in crisis now? When selecting an in-home caregiver or facility for long-term care, consider the specific care requirements, personal preferences, and health conditions of your loved one. By doing so, you can secure top-notch care for your older parent in the present while keeping in mind your potential need for such services in the years ahead.
LTC NEWS offers help for you and your family in many ways. The LTC NEWS Caregiver Directory is an excellent resource where you can find the most comprehensive directory of all types of long-term care services no matter where your loved one lives - Long-Term Care Services Directory | Find Care Near You.
If your loved one has a Long-Term Care Insurance policy, that will open the door to many quality care options, as one of the first questions most home health agencies and long-term care facilities will ask you is if the care recipient has an LTC policy.
Be sure to use the benefits from a loved one's LTC policy; trying to save them for later is not a good approach since access to quality care improves a person's quality of life immediately.
LTC NEWS has combined efforts with Amada Senior Care, a leading in-home health care agency with locations throughout the country, to help you process a claim from any LTC Insurance policy.
There is no cost or obligation for this service - Filing a Long-Term Care Insurance Claim. If they don't have an LTC policy, Amada can still help develop a plan of care and provide you with many affordable in-home care options. Learn more now - Find Quality In-Home Care.
These four LTC NEWS guides will assist you in trying to find appropriate long-term health care services for a loved one:
- Finding Quality In-Home Care
- Adult Day Care Centers (ADCCs)
- Assisted Living and Memory Care Facilities
- Finding a Quality Nursing Home
Long-Term Care Awareness Month. Now you are aware. Now, more than ever, the time to discuss this topic should be high on your priority list.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
Long-term care planning is essentially preparing for the potential need for assistance with daily activities such as bathing, dressing, and eating, which may become necessary due to aging, illness, or disability. By planning ahead, you’re giving yourself the gift of choice.
Instead of being rushed into decisions during a crisis, you’ll have the time to explore different long-term care options and choose what works best for you. This not only ensures that you receive the quality of care you deserve but also helps reduce the emotional and financial stress on your family.
Including Long-Term Care Insurance in your retirement plan is a wise decision that can safeguard your savings and assets. Without it, the cost of care can quickly deplete your hard-earned resources, leaving little for your family and possibly affecting their financial stability. Long-Term Care Insurance helps to protect your legacy, ensuring that the wealth you’ve accumulated over your lifetime goes to your loved ones or the causes you care about rather than being spent on your care.
Moreover, having a long-term care plan in place allows you to maintain your independence and lifestyle for as long as possible. You can have peace of mind knowing that if the time comes when you need assistance, you have a plan in place to receive care in the setting of your choice, whether that's at home, in an assisted living facility, or in a nursing home.
Planning for long-term care in your 40s or 50s is a proactive step towards securing a smoother aging journey for yourself. Although, if you enjoy good health, you can find affordable options in your 60s and even into your 70s, although the longer you wait, the more expensive a policy will be. An LTC policy provides you with control over your future care, protects your assets, ensures your family’s well-being, and allows you to live your golden years with dignity and peace of mind. Don’t wait until it’s too late; start exploring your long-term care options today.
Find a Professional to Help You Shop
There are many licensed insurance agencies and financial advisors that could help you find LTC Insurance. However, most of them are not skilled in this area and understand underwriting, policy design, and the federal and state regulations that help provide you with consumer protections and tax benefits.
Seek an experienced independent Long-Term Care Insurance specialist who represents the top-rated insurance companies that offer long-term care solutions. A specialist is trained to provide you with accurate quotes from all the top insurance companies along with their professional policy design recommendations so you can find the best coverage at the lowest cost without overinsuring or spending too much money.
Remember, premiums for LTC Insurance and underwriting standards vary dramatically between insurance companies.
Find a qualified LTC Insurance specialist here - Work With an LTC Insurance Specialist.
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