By: Cristin Harris Rigg, CFP®

Early Planning Pays Off

If you’re considering long term care options for yourself or a loved one, start your research and discussions early. Waiting for a crisis could force you to make a decision you later regret.

According to the U.S. Department of Health and Human Services (2014), at least 70% of people over age 65 will require some long term care service at some point in their lives. The triggers for needing long term care are many and varied, and could include a chronic illness that results in a disability, being involved in an accident, or experiencing some form of dementia such as Alzheimer’s.

Understanding the Types of Long Term Care

To prepare for a long term care event, start by understanding the types of long term care services. This will make it easier to select the most suitable option for you or your loved one.

  • Adult Day Care – licensed programs that offer social interaction and activities for adults who do not need round-the-clock care
  • Home Care – licensed care provided in one’s home on a part-time or full-time basis
  • Assisted Living – licensed facilities with staff members to help with activities of daily living, such as taking medications, bathing, dressing, and eating
  • Nursing home – licensed facilities with 24-hour nursing care for individuals who are unable to care for themselves
  • Continuing Care Retirement Community – licensed facilities with several levels of care in one setting so residents can transfer to a different level as their care requirements change

Choosing the Appropriate Long Term Care Option

Whether you decide to stay at home or enter a facility, know your options and preferences. Consult with a Geriatric Care Manager who can guide you through the process. Geriatric Care Managers have expertise in the biological, psychological, and social issues surrounding this major decision and can provide a comprehensive assessment for your personal situation.

If you choose to move into a facility rather than stay at home, take the time to tour multiple facilities and ask yourself some important questions:

  • What level of service is needed? Do you or your loved one need help with everyday activities, such as walking, bathing, or eating?  What does the doctor recommended?
  • How does one facility compare with other facilities? What was your first impression? Is the facility clean and well-maintained?  Is management helpful?  Do the residents seem happy, are there an adequate number of caregivers, is the temperature comfortable, and are the room sizes reasonable?
  • What can you afford? Understand all costs. What services are included in the published monthly fee versus the services which carry an additional fee?

Paying for Long Term Care

Unfortunately, few Americans know how they will pay for long term care and the vast majority does not carry long term care insurance.

Many people believe the Affordable Care Act will cover their long term care needs, but contrary to popular belief, the Patient Protection and Affordable Care Act failed to resolve this issue. Importantly, understand that Medicare and private health insurance do not cover long term care, but cover only care that is medically necessary, such as doctor visits, prescription drugs, and hospital stays.

In some cases, low-income individuals with very few assets may qualify for assistance through Medicaid (Medi-Cal in California), a joint federal and state government program that helps certain individuals pay for some or all of long term care. Veterans may also have access to long term care assistance if certain qualifications are met.

For many others, long term care will be paid for with personal funds, long term care insurance, or private financing options, such as a reverse mortgage or certain life insurance policies. Since this can be the largest unknown expense in retirement, planning ahead is more critical than ever. There is no one-size-fits-all strategy. Your strategy will depend on age, health status, personal finances, and risk of needing care.

To learn more about the costs and important considerations when planning for long term care, please join our upcoming panel discussion in the TMMC Hoffman Health Conference Center on March 14, 2015 at 9:00 am. The panelists are members of the Professional Advisory Council, all of which serve as an expert in long term care issues. To register or obtain additional information, please click here.