How you can prevent a long term care financial threat!
There is an inevitable epidemic on the horizon that millions of Americans will face in the years ahead – an epidemic that could make today’s current out-of-pocket medical expenses look almost microscopic. This potential financial threat is the need for long-term care from a family member or skilled nurse.
You may be thinking, “What exactly is long-term care?” Long-term care, or LTC as it’s known in the insurance industry, is the care many of us will need as we get older and cannot perform the actions that we once took for granted. Those actions, or activities of daily living (ADL’s), as they are technically referred to as, consist of eating, bathing, dressing, toileting, transferring (walking), and continence. As these skills diminish for each of us, there is a greater chance that we will be unable to perform the necessities of living, or at least living in a comfortable manner, on our own.
an epidemic that could make today’s current out-of-pocket medical expenses look almost microscopic
So, what is your plan? Everyone’s got one, whether they are aware of it or not. Those that are not aware or that are less proactive in making prudent decisions well before a situation like this may occur for them personally, may have lesser options when it comes to the type of care they’re eligible to receive. In a nutshell, the four ways to plan for a LTC event are: relying on government aid, self-funding, hoping a family member or friend will provide assistance, or seeking out private LTC insurance in the open market.
seek long-term care insurance from a private insurance carrier.
I’ll touch on these four planning methods for your potential long-term care situation. The scope of government aid is ever-changing. Though it may seem nice at first glance that the government is willing to pay a portion of the costs associated with LTC for a citizen, you might find that the accommodations aren’t as appealing as one may like. The options you have may not be as enticing or comfortable as you’d prefer as you are nearing the end of your life. The worst part about qualifying for government aid is the required imposed spend down by Medicaid. Because Medicaid is a “needs based” program, one must be financially unable to support themselves and prove that. Though this may not sound like your desired plan, unfortunately for many Americans, this is their only plan.
Secondly, a very popular method is to hope friends or family will assist with your inability to perform the activities of daily living. This may seem cost-effective and convenient, but what are the down sides? Are you sure that you will feel the same way that those respective friends and family do as it pertains to helping you with sometimes very private instances in your personal life? What about the consideration of possible physical strain of your loved ones as they care for you? Will they be able to take time out of their day to help you with duties that they may preferably not have to perform for you? This method of planning may seem like the best bet now, but it may prove to be the least attractive in the long run.
The average cost of long-term care in a semi-private nursing home is $6,235 per month
Next, self-funding is a method of paying for long-term care. That is, paying for the ever-increasing costs of care out of your own pocket. In the event you or a loved one does utilize this method, this is far-and-away the costliest way to plan for LTC. The average cost of long-term care in a semi-private nursing home is $6,235 per month, according to www.longtermcare.gov. Self-funding is typically for a person who doesn’t plan at all and ends up having too many assets upon this event occurring where they are unable to adequately spend down assets to qualify for government assistance, or for the very well-to-do that prefer to take the chance that they will not need care before their passing. If they are wrong and end up needing care for a prolonged period of time, much of their wealth will most likely be spent on the costs associated with their care.
Lastly, and possibly the most prudent decision, would be to seek long-term care insurance from a private insurance carrier. This is not the answer for every person – some may disqualify themselves if they feel they’d rather rely on government assistance, prefer to self-fund, hope to rely on friends or family, believe that premiums for private insurance is more than they want to spend, or do not qualify medically, as evidence of insurability is a requirement of all insureds (imposed by each respective private long-term care insurance carrier).
Currently, long-term care is a major issue. In the next two decades it will be, in my opinion, the single-most occurrence in an individual’s life that can rob them of their financial security as income and assets are compromised, their physical and emotional well-being and that of their friends or family, and perhaps most importantly: the ability to maintain one’s own dignity. Please, take the necessary actions to protect yourself and your family’s financial freedom, and at the very least, consider what your plan is for long-term care. It may be the most important decision you ever make.
Written by Jason Frederico, CreativeNurse Team member in Las Vegas
2016-29254 Exp. 10/17