A substantial portion of Americans will require long-term care at some point in the future. Should you or a loved one require long-term care, what arrangements will you make? How will you finance the expense? Consider your options now to ensure the best possibilities for you and your loved ones later. Here’s how to get started.
Arranging Long-Term Care:
When you are planning for long-term care needs, you should consider the various types of long-term care available, as well as the likelihood that you or a loved one will require care. Long-term care is generally broken into two categories.
- Skilled care requires professional training and is performed by medical personnel.
- Custodial care relates to the tasks of daily living, such as dressing, eating, bathing and running errands. This kind of care is often performed by a spouse, another family member, or close friend.
Likelihood of Need
Think through the following questions to help determine the likelihood that you or a loved one will require long-term care.
- Lifestyle. Are you making lifestyle choices right now that could contribute to needing long-term care? For example, do you participate in dangerous hobbies such as rock climbing, scuba diving, or motorcycle riding? Or, do you regularly participate in an unhealthy indulgence, such as smoking cigarettes or eating fried foods?
- Lower risk. How can you lower your risk of injury or onset of illness? Some experts advise changes in lifestyle can be difficult but often can improve health or lower risks.
- Home environment. Are there any modifications to your home environment you should make? Universal design concepts improve safety and enhance independence should mobility become restricted.
- Hereditary concerns. Are there hereditary illnesses and conditions which could affect you or a loved one? Several health issues can run in families, such as kidney disease, cancer, and diabetes.
Financing Long-Term Care:
Our general population is growing older. According to Family Caregiver Alliance, 13 million people required long-term care in 2000, and that number is expected to rise to 27 million by 2050. The average costs for care in 2004 were as follows:
Private room, skilled nursing facility: $192 per day, $70,080 annually.
Semi-private room, skilled nursing facility: $169 per day, $61,685 annually.
In-home health aide: $18.12 per hour.
With those numbers in mind, consider the following concerns.
How long until you retire? US News points out workers can make investments or purchase insurance to pay for long-term care. If you are close to retirement, you might need to start aggressively preparing for financing.
What are your plans for paying long-term care costs? Wealthy families can pay out-of-pocket, but what options are available if you need help paying for care? Do you have assets you are prepared to sell? Remember, sold assets cannot be left as an inheritance, and they need to be accessible. Are you a veteran, or is your spouse a veteran? Veterans and their surviving spouses can receive assistance from the Veterans Administration. Another idea is to sell a life insurance policy and use the cash to help cover medical care and daily living expenses.
Homeowners have another option to consider: a reverse mortgage. A reverse mortgage allows homeowners to convert equity in their home into cash. This can be useful for paying for living expenses when you’re a senior. However, not all reverse mortgage lenders are created equal, so it’s important to do plenty of research to ensure the lender you select is reputable and trustworthy.
Have you explored savings and insurance programs that are available now to help pay for long-term care? Here are some options:
- Medicare Advantage plans, which offer the same coverage as Medicare (Parts A and B). Some Medicare Advantage plans, such as Humana’s, include benefits for fitness services, vision, dental, and prescriptions. There are also caregiver support and a 24/7 nursing advice line. Costs vary depending on the selected plan, medical facility and required services, so be sure to do your research in order to be informed of each detail.
- If you are still working, opening a health savings account (HSA) is a great idea. You can set aside funds to be used later toward your medical expenses, tax-free.
- Long-term care insurance is designed to cover long-term care expenses. The younger you are when you purchase a policy, the better, since premiums rise as you age.
Choices Now for a Brighter Future
Your golden years can be more safe and secure with proper planning. Think through your choices and what you can do to meet long-term care needs. What you decide right now can mean a more comfortable life later.