It may be impossible to know when you’ll need long-term care, but chances are good that you will. Think Advisor’s recent article, “Making Sense of Long-Term Care Planning” says that statistics show that 70% of older Americans will need long-term care in their later years.
However, to some degree, an individual’s circumstances can predispose them to needing assistance. Some factors include:
- Lifestyle choices that you’re making now that could factor into needing care;
- Participation in risky hobbies or health-maintenance choices that could contribute to the onset of debilitating illness;
- Ways in which you might reduce risk of injury or illness;
- Home modifications you can make to better accommodate changes in mobility; and
- Hereditary illnesses and conditions that increase your risk.
Not everyone qualifies for long-term care insurance, and those with certain health conditions could be denied long-term care insurance. Lifestyle choices that affect health conditions, can weigh into their projected need and planning.
To make wise financial decisions for meeting long-term care needs, begin with a realistic understanding of the cost of long-term care. Roughly 25% of all seniors will need to pay over $50,000 for long-term care. If someone choose to pay for in-home care, the national median annual cost of an in-home aide in 2017 was $48,000. For 24/7 care in your home in the Conejo Valley and surrounding areas, you can expect to pay $215,000 per year. If you choose to "employ" caregivers directly instead of going through an agency, you should consult with an employment attorney or you could end up paying a lot more than $215,000 per year if you fail to carry worker's compensation insurance, do not pay overtime when required, or fall into other traps that those not familiar with California employment law often face once they are sued by their former employees.
Unless you’re very wealthy, odds are you’ll need a safety net in place to cover long-term care costs. When deciding how to begin, review these factors:
- How close are you to retirement?
- What savings and insurance programs do you have to help pay for long-term care?
- Do you have a plan to pay for the costs of long-term care?
It’s a common misconception that Medicare will pay for long-term care. It will not. There are several other ways to cover the cost of care:
Long-term care insurance. While you hear a lot about rising premiums on long-term care policies, it’s still a good move for many individuals, who fall into the gap between qualifying for Medicaid and being wealthy enough to afford long-term care outright.
Supplemental insurance. Some people may benefit from Medicare Supplement insurance or Medicare Advantage plans. Medicare Advantage plans are an alternative to Medicare Part A and Part B. Medicare Supplement insurance can help to pay for deductibles, co-payments, and other out-of-pocket expenses.
Prepay funeral costs. Funeral costs are big, and even with a good financial plan in place, paying for a funeral before the estate is settled, can create a financial hardship for loved ones. You can avoid that with a prepaid funeral plan.
Are there millions of other things you’d rather think about? Yes, but this is something that prior planning can make far easier for you and your loved ones. Call our office to discuss a life care plan with our attorneys and medical social worker, so we can help you assess what type of long-term care you can afford given your financial resources and you needs.
Reference: Think Advisor (September 4, 2018) “Making Sense of Long-Term Care Planning”