The Good News Is We Are Living Longer
The bad news is for some, there may be adverse consequences longevity brings that will have an impact on you, your loved ones and your financial resources.
Extended care — also known as Long Term Care — is care that you need if you can no longer perform everyday tasks by yourself due to a chronic illness, injury, disability or the aging process. Long term care also includes the supervision you might need due to a severe cognitive impairment such as Alzheimer’s disease.
You can receive long term care in your own home, a nursing home or another long-term care facility, such as an assisted living facility.
According to the U.S. Department of Health and Human Services (HHS), about 70% of people turning age 65 will need long term care services at some point in their lives. And, contrary to what many people believe, Medicare and private health insurance programs do not pay for the majority of long-term care services that most people need.
Planning is essential for you to be able to get the care you might need.
Long term care is not just for the elderly. Long term care is provided to people under age 65 who need help taking care of themselves due to diseases, disabling chronic conditions, injury, developmental disabilities, and severe mental illness.
In today’s society, adult children are more apt to live further away from their parents. Taking care of a family member is a time-consuming commitment that often demands a significant number of hours from multiple family members.
Even if family members can find the time to provide caregiving to a family member, it often comes at a tremendous financial cost. Caregiving can cost the average caregiver in lost wages, pension benefits, and Social Security. Not to mention the time away from their own family responsibilities.
While having a family take care of you might be an option, it might be difficult to do without additional assistance.
Medicare is generally available for people over age 65 and the disabled. It only pays limited amounts for skilled care following a hospital stay and it is not intended to cover care that assists people with activities of daily living for long periods of time. Specifically, Medicare covers the first 100 days of skilled care in a nursing home after a hospital stay of at least 3 days and as long as you enter a nursing home within 30 days of leaving the hospital. Medicare covers some home health care for the treatment of an illness or injury.
Medicaid (Medi-Cal in California) is a state-based program supplemented by Federal funds that provides health services to the poor and impoverished. Medicaid might cover you if you meet your state’s poverty criteria and receive care that meets your state’s guidelines.
Many people attempt to “spend down” their assets to state required levels or try to transfer their assets to family members to become eligible for Medicaid. States now have the authority to examine a Medicaid applicant’s past five years of finances and impose penalties. (State requirements do vary, contact your state Medicaid office for details.)
Health insurance rarely covers ongoing chronic care needs. Most health plans, including FEHB, TRICARE, and TRICARE for Life, are intended to cover skilled, short term medical care as you recover from an illness or injury.
Paying from personal savings is one way to cover long term care expenses. However, you should consider the cost of long term care services before relying on this method. Below are some national average costs for long-term care in the United States (in 2016).
(Source Administration on Aging, LongTermCare.gov U.S. Department of Health and Human Services – Last modified: 10/10/2017)
The cost of long-term care depends on the type and duration of care you need, the provider you use, and where you live. Home care which most people prefer-is generally more affordable than nursing home care but still can be expensive.
Paying for long term care out-of-pocket may be an option for you if you can afford these expenses.
