November is Long-Term Care Awareness Month and National Family Caregivers Month, which makes sense since the two are tied together. If you are not aware of long-term care and the issue of family caregivers, it is not surprising as Americans are also in denial that they will ever require long-term care services despite a large number of Americans who are already caregivers for an older parent or family member.
You shouldn't need a month to consider the problems associated with longevity. Yet, November is a great month the highlight the problem since it starts the holiday season.
The consequences of long-term health care are more than just about money, although the cost of care is expensive. Every family should understand how a long-term care event would impact them. Frequently, family members must take on the role of a caregiver, which has its own effects on the caregiver and their family.
Perhaps you have read about the statistics. There are so many. The United States Department of Health and Human Services tells us once we reach the age of 65, about half of us will need long-term care services in our lifetime.
Changing health, bodies, and minds lead to a higher risk of needing help with daily living activities or supervision due to dementia.
Care Costs Continue to Grow
The cost of long-term care continues to grow and places a tremendous strain on the budget of most American families. The LTC NEWS Cost of Care Calculator shows the national average of one year of home health care in 2022, costing almost $56.000 a year - nearly $4700 a month. However, in 25 years, the cost is expected to be almost $9,100 a month. Imagine the strain on your cash flow and lifestyle today or in the decades to come.
As expected, the news for assisted living is not a pretty picture. The national base cost averages $4,149 a month in 2022 and $8,076 in 2047 (sur-charges based on additional services you require will increase the cost anywhere from $500 to $1500 or more on top of the base). Skilled nursing home cost is even more, with an annual cost of over $105,000 today and over $205,000 in 2047.
Increasing demand for long-term health care, demographics, labor shortages, and increased labor costs are reasons we are seeing rising costs.
Family Caregivers Face Stress
Caregiving is not an easy task, and it places a physical, emotional, and financial burden on your family. Typically, a daughter or daughter-in-law becomes the default caregiver.
Family caregivers must balance their personal and professional obligations and those of their spouses and dependents. According to surveys, a caregiver's health and well-being are also significantly impacted.
Let's face it: taking care of one's family is emotionally and physically exhausting. People frequently disregard the issue until a family crisis happens. Have you planned for the extremely high costs of long-term care and the strain it causes on the people you care about?
Long-Term Care Insurance is one of the options that many American families are considering. These reasonably priced insurance plans offer substantial payouts that help people stay at home when they require care. The major insurance companies paid over $12.3 Billion in long-term care benefits in 2021. With the help of this money, families can safeguard their assets, access quality care, and give loved ones the time to be family instead of caregivers.
Women continue to need care more than men, although a husband typically will require care before the wife.
Mark Goldberg, who runs the FPS Insurance Agency in Frisco, Texas, says his clients express the desire to not ever be a burden on their family.
They have seen the impact on everyone in the family and [what happens to] their finances. They don’t want to be in that position.
With no advance plan, the full responsibility of either caregiving or managing paid care services falls on family members. Even managing paid care takes an emotional toll.
Access to Quality Care – Independence – Peace-of-Mind
Access to quality care and independence is a primary objective of many people who research long-term care planning, according to Michelle Perloe, a leading specialist in long-term care planning. In the end, she says, having a plan in place will serve multiple objectives.
The vast majority of my clients tell me its “peace of mind” they desire.
Perloe says that some clients would never have the funds to pay for the costs of quality care. Others are looking at protecting their estates, she says, either for their families or even for charities.
There are several types of Long-Term Care Insurance. Traditional insurance plans have been a solution that has been available for decades. You pay an ongoing premium, and when you need care, the insurance company will pay a monthly or daily benefit toward the cost of that care.
Partnership Long-Term Care Insurance
Most states participate in the Partnership Long-Term Care Insurance Program. These insurance policies provide an additional safety net by providing dollar-for-dollar asset protection if you ever exhaust all the benefits in your policy. A Partnership Long-Term Care Insurance policy allows you to access the Medicaid program's long-term care benefits without being poor.
The partnership program is one of the biggest secrets in retirement planning. Author and Long-Term Care Insurance specialist Margie Barrie says very few consumers know about the program, but she talks about it with every client. She says it is a very valuable concept but acknowledges that many agents don't talk about the program and its benefits.
Indiana based Long-Term Care Insurance specialist Don Strickler shares the positive potential impact of the partnership program with his clients.
The Partnership aspect of the [Long-Term Care] policy can literally be the difference between long-term care expenses forcing a person and their family into financial ruin or not.
Strickler says specialists will typically take time and educate their clients about the various types of Long-Term Care Insurance policies available.
Unfortunately, in my experience, many financial planners take advantage of their "trusted advisor" status and do not take the time to educate their clients regarding the different types of policies that are available. In short, they sell their clients something rather than help their clients purchasing something. The difference is remarkable.
Cassandra Watson, President of NextGen Long-Term Care Planning, says that many top financial advisors are very much aware of the risk that long-term health care can pose to their client's portfolios. However, she says, Partnership often flies under the radar.
Partnership can be critical to give people a security blanket against catastrophic issues, and it provides extra peace of mind.
Several Types of Plans Available
There are several types of plans which you could choose from. It can be somewhat confusing, but Long-Term Care Insurance specialists usually have substantial experience in this area. They can help consumers select the right plan and save money at the same time.
In addition to traditional and partnership-certified policies, asset-based or “hybrid” policies are available. These combine life insurance with coverage for long-term health care. With a hybrid policy, you will receive tax-free benefits for long-term care, or your family will get a tax-free death benefit. However, be sure the plan you are considering is an actual hybrid Long-Term Care policy that meets federal guidelines under Section 7702(b).
Goldberg says that hybrid options have become the most popular option for many consumers.
One way or the other you will get the money you invest back.
Most experts agree having some solution for long-term care should be part of your retirement plan. Being aware of the financial costs and burdens created with longevity is step one. Step two would be to start researching your options.
Use Research Tools
Start by finding the current and future cost of care services in your area. The LTC NEWS Cost of Care Calculator is an excellent place to start your research. You will also find critical state-specific information like the availability of Partnership Long-Term Care Insurance, tax incentives, and more. You will see both the current and future costs of long-term health care where you live.
The American Association for Long-Term Care Insurance, a national consumer education and advocacy group, suggests working with a Long-Term Care specialist to help you learn about your options and design and shop for the best coverage at the best value.
Planning for long-term care revolves around the family.
A Women’s Issue
According to Matt McCann, a leading expert in long-term care planning, says long-term care often creates a family crisis. This crisis often adversely impacts women.
This is a women's issue. Men need to plan for their wives and daughters. Women need to plan for their own security and peace of mind. About 80% of the health care workforce is made up of women. Often, a wife becomes the first caregiver when a husband becomes in need of extended care. Daughters, or daughters-in-law, often, without advance planning become a caregiver for a parent. We can do better. We can avoid crisis management with some type of affordable Long-Term Care Insurance.
The best time to plan is, ideally, before you retire. Be ready to answer many questions when you start the process of planning. This will include questions about your health, family history, and retirement plans so a specialist can make suitable recommendations based on your specific situation, as policies are custom designed.
The underwriting criteria differ between insurance companies, and premiums can vary over 100%. A specialist will help you navigate the many options.
There are several reasons people want to plan for the future costs and burdens of aging in place before they retire. Sure, asset protection and access to quality care options are fundamental. However, it comes down to family.
Caregiving is demanding, and caregivers must deal with stress, anxiety, and burden. You can give your loved ones the time to be family instead of caregivers. You will enjoy quality care options when you need them. Your legacy will remain intact. But you can't delay and ignore the risk.
Aging is a reality, and the consequences will affect all your loved ones.
Use this time during Long-Term Care Awareness Month and do your research and take advantage of potential tax benefits.
Premiums are much less expensive when you are younger and enjoy good health. If you live in a state considering the LTC Tax having a policy in place can help you avoid the tax.
Since Long-Term Care Insurance requires you to have reasonably good health to qualify for coverage, experts say you should not delay. The holidays are about family, and November starts the holiday season.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
Planning for aging and declining health is not a pleasurable experience for many people. There are real consequences with long-term health care; ignoring them can be costly for you and your family.
The ideal time to obtain coverage is in your 40s or 50s. Several types of policies, including traditional/partnership, certified policies, hybrid policies with death benefits, and limited duration, short-term plans are available. Here are some facts about long-term care:
- Yes, it is long. Be it five months or five years, it goes on and on.
- It is costly. Long-term care services are expensive, and the costs are rising sharply nationwide.
- It places physical and emotional burdens on loved ones. Often families never thought about long-term health care, and as a result, the adult children must step in and provide some or all of the care.
Lack of planning will mean you will either pay for professional care from your income and assets, your family will provide the care, or both. As a result, many people end up in a nursing home when they may have avoided it with quality in-home care providers or going into an assisted living facility where the quality of life would be much better.
As you grow old, you will see some decline in your health, body, and mind. These changes often result in needing help with daily living activities or supervision due to memory loss. Long-Term Care Insurance is an affordable way to address the costs and burdens of aging.
Affordable Long-Term Care Insurance provides guaranteed tax-free benefits that will give you access to your choice of quality care options, including care at home.
Several types of policies are available, including traditional/partnership, certified policies, hybrid policies with death benefits, and limited duration/short-term plans cash indemnity plans. Most people get their coverage in their 50s.
Resources and Tools Available on LTC NEWS
There are a variety of tools and resources that LTC NEWS offers that can help you in your research:
- The Ultimate Long-Term Care Insurance Guide - If you like details, you will enjoy this comprehensive guide to LTC Insurance.
- Long-Term Care Guides - LTC NEWS has several other guides that can help you plan or find quality care.
- Frequently Asked Questions - Get the answers to the most often asked questions about long-term health care planning and LTC Insurance.
- Filing a Long-Term Care Insurance Claim - Does a loved one - like your Mom or Dad - have a Long-Term Care Insurance policy and need to file a claim to get benefits? LTC NEWS will help. If they don't have a policy, but you need help in getting a plan of care and finding caregivers, LTC NEWS can also assist.
- Reverse Mortgages - Learn about reverse mortgages and ask questions about how they work and if you or a loved one would benefit from one.
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