For many retirees, long-term care is more than a remote possibility—it’s a very real probability. The U.S. Department of Health and Human Services estimates that retirees have a 70 percent chance of needing long-term care at some point in their lives. Twenty percent of seniors will need care for more than five years.1
Long-term care is extended assistance with daily living activities such as eating, bathing and mobility. It could also include household chores like cleaning and meal preparation. Long-term care is often provided in the home or in an assisted living facility.
Regardless of where the care is provided, long-term care can be an expensive proposition. It can cost thousands of dollars per month, even if the care is provided in the home. Also, care is often needed for months or even years. It’s easy to see how that kind of expense over a long period of time can be a drain on your savings.
Too many seniors fail to plan adequately for long-term care costs. They believe that it won’t happen to them or that they can rely on friends and family for support. They may mistakenly believe that Medicare will cover the cost.
Many of these assumptions are born from a misunderstanding of what long-term care is and why it’s needed. Below are descriptions of some of the major health issues that can cause a long-term care need and what kind of care is often required. With a better understanding of the threat, you can implement a plan and a funding strategy.
Why do people need long-term care?
Many seniors associate long-term care with cognitive disease such as Alzheimer’s or Parkinson’s. It’s true that cognitive issues are a major cause of long-term care. In fact, Alzheimer’s is the leading cause. However, a wide range of other health problems can lead to a need for long-term care. According to the Society of Actuaries, the following conditions are the leading causes for long-term care:2
Nearly half of all long-term care need is caused by issues other than Alzheimer’s. Even if you never suffer from Alzheimer’s, there’s still a strong likelihood that you will need care. Also, keep in mind that many of these issues are progressive, so it’s possible that you may need more intensive care over time.
What services are provided with long-term care?
There’s a common incorrect assumption that Medicare covers all health care costs in retirement, including long-term care. Medicare is a valuable resource, but it doesn’t cover everything. In most instances, long-term care isn’t covered under Medicare protection.
Long-term care is often about comfort and lifestyle support. In many instances, there’s no actual medical treatment for a specific medical condition. Medicare may partially cover a stay in a nursing facility as a result of a hospitalization, but it won’t cover ongoing care, especially if the care doesn’t include skilled treatment.
Very often, long-term care doesn’t include any skilled treatment. Instead, it includes support for basic daily living activities such as:
If you don’t have a funding strategy in place, you may want to consider long-term care insurance. You pay premiums today for protection in the future. When you need long-term care, the insurer pays some or all of the premiums. Most policies even cover care provided in your own home.
Ready to develop your long-term care strategy? Contact us today at Stoll and Basler Financial Services. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
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18148 - 2018/10/17