| Health Care Crisis in America | | | | for about 5% of those with coverage. A whopping |
| A health care crisis is looming on the horizon for | | | | 58% of the LTC bill is being paid by private individuals |
| many Americans, one that could bring financial and | | | | who are being forced to whittle away their assets to |
| emotional devastation that would make zooming gas | | | | receive the care they need. |
| prices and bouncing stock markets pale in comparison. | | | | In order to qualify for Medicaid to receive care in a |
| The problem? According to Metlife, 70% of people | | | | state-run nursing home, you have to be below a |
| over the age of 65 will need some form of extended | | | | certain income level and can own only limited |
| care before they die, whether it's a visiting nurse in | | | | property. The rules vary by state, and new laws are |
| the home or full-time nursing home care. According to | | | | making it increasingly difficult to qualify. No longer, for |
| The Alliance for Aging, "nearly 9 out of 10 Americans | | | | example, can you transfer your assets to your |
| will have at least one chronic condition" by age 65. | | | | children and then enter a nursing home. Most states |
| Thanks to modern medicine, these conditions are | | | | have a 3 to 5 year look back period with a stiff |
| debilitating, but not immediately fatal. Most seniors | | | | accompanying penalty for those who have |
| express concern about paying for necessary care in | | | | attempted such a transfer. |
| the face of such a condition, but few do anything | | | | The Medicare Misconception |
| about it. | | | | Many people mistakenly believe that Medicare will pay |
| Laura Moore, senior vice president for long term care | | | | their nursing home bill. |
| insurance at John Hancock, says the issue is | | | | Medicare covers hospitals and skilled nursing facilities |
| "increasingly important because Americans are living | | | | for a limited time period. Medicare will pay for 100 |
| longer, care costs are rising, and company pensions | | | | days of skilled care in a skilled nursing facility--with a |
| are being cut back." Moore says that Americans are | | | | co-pay for days 21 through 100--if you are admitted |
| "not facing the reality of what lies ahead." | | | | to the facility within a 30 days of leaving a hospital |
| If you need extended care, but are unable to pay | | | | and have been hospitalized for the same condition |
| for it, the burden will fall to your families. The | | | | for at least three days. A medical professional has to |
| emotional, physical, and financial drain of caring for a | | | | certify that you need this care. |
| sick parent is so traumatic that, according to the | | | | Medicare pays for skilled nursing care in your home if |
| American Alzheimer's Foundation, 60% of family care | | | | the care is provided by a licensed home health care |
| givers die before the person they are caring for! | | | | agency, but you must be confined to your home, |
| Furthermore, if you are placed in a nursing home | | | | under the care of a doctor, and the care must be |
| without the funds to pay the bill, you risk not only | | | | intermittent or part-time. Medicare does not cover |
| your life long savings, but also the family home and | | | | housekeeping services, personal care services like |
| even your life insurance. | | | | help with bathing, dressing and other activities, meal |
| Understanding Long Term Care | | | | delivery, or full-time nursing care in the home. |
| Long term or extended care refers to care that is | | | | Medicare Supplemental Insurance (Medigap) and |
| needed beyond the time period covered by Medicare | | | | Tri-Care do not cover long-term-care services either. |
| or major medical insurance. It is often provided in a | | | | Determining Whether You Need LTCi |
| nursing home, but can also be provided in a person's | | | | Some experts say that only middle class individuals |
| home or in an assisted living facility. | | | | with over $100,000 in assets need LTCi. The very |
| The cost of assisted living, nursing home care and | | | | rich can afford to "self insure," (but may prefer to |
| professional home health care is high and climbing | | | | pass their legacy on to their children and let a |
| yearly. A 2003 study conducted by Metropolitan Life | | | | company pay for their care), while the very poor will |
| Insurance found the average rate to be $180 per | | | | be eligible for Medicaid. Those who are already on |
| day or $66,000 per year for a private room in a | | | | Medicaid are not eligible. Nevertheless, if you are |
| nursing home. Care in an assisted living facility | | | | forced to rely on Medicaid, your heirs may lose your |
| averages $30,288 a year while professional home | | | | home and all of your life insurance except for enough |
| care would cost $166,440 a year for round the clock | | | | to pay for your funeral. To make matters worse, |
| care at $19.00 per hour. Due to inflation, by 2021, | | | | relying on Medicaid restricts your choices to nursing |
| nursing homes may cost as much as $175,000 per | | | | homes that accept it. Medicaid does not pay for |
| year. | | | | assisted living and pays for only very limited home |
| There are three solutions to surviving these high | | | | care. If independence, and location are important to |
| costs of extended care. You can be rich enough to | | | | you, talk to your family to see if resources can be |
| pay all costs yourself, engage in a spend down to | | | | pooled to provide LTCi. |
| exhaust your assets and qualify for Medicaid, or you | | | | If you have investments, IRA accounts, or savings, |
| can purchase Long Term Care insurance (LTCi). | | | | having built a small to moderate estate, you definitely |
| Long Term Care Insurance | | | | stand to lose the most if you need care in your later |
| LTCi is an insurance program that pays for extended | | | | years. Several strategies can make the cost of LTCi |
| care when Medicare and private major medical is | | | | seem less intimidating. |
| exhausted, or for intermediate or custodial care | | | | Choosing a LTCi Policy |
| which are not covered by Medicare or major medical | | | | Companies that offer LTCi often have a wide variety |
| at all. The most comprehensive programs cover | | | | of packages; the language is confusing, and |
| home care, assisted living, and nursing homes. Simpler | | | | comparison can be difficult. In spite of the |
| plans provide home care only and are also less | | | | convenience of the internet and mail-order, it is |
| expensive. | | | | always best--when considering LTCi--to sit down with |
| The care usually involves assistance with daily | | | | a licensed, reputable agent who will answer your |
| activities such as eating, dressing, walking, bathing, | | | | questions and work with you to design a plan that |
| moving from bed to chair (called transferring) and | | | | fits your needs and your budget. |
| using the toilet, or, in the case of cognitive | | | | The policy should cover several levels of care, not |
| impairment, simply sitting with a person to prevent | | | | just care in nursing homes. Benefits should increase |
| him from danger to himself. | | | | along with the inflation rate. You should buy from a |
| Regardless of the type of plan preferred, it's like any | | | | company that will stay in business for the long run |
| other kind of insurance. You cannot purchase it once | | | | and that has a solid reputation for paying claims. |
| you actually need the care. | | | | Policies are priced according to your age, the length |
| Making the Decision for Long Term Care Insurance | | | | of benefit (ranging from one year to life time), and |
| Two factors that keep people from taking LTCi are | | | | the dollar amount payable per day. According to the |
| a refusal to accept the possibility that they might | | | | latest federal statistics, the average stay in a nursing |
| actually need it some day and the perception of the | | | | home is 30 months. While five years or more is an |
| insurance as "costly." While you may indeed never | | | | attractive benefit, a three year policy will drastically |
| need it, if you live a long life, the odds are that you | | | | reduce the price. |
| will. The cost of having it and not using it is far less | | | | Another way to save money is to take a waiting |
| than that of needing it but not having it. | | | | period, usually called an "elimination period." You can |
| The objection most people raise to purchasing LTCi is | | | | think of this as a "deductible" or number of days for |
| the cost. It is perceived as "expensive," and perhaps | | | | which you will pay for care yourself before your |
| it is, especially if you wait until you are in your 70's to | | | | policy will begin to pay. Part of your plan should |
| try to get it. However, when tempted to | | | | include a consideration of how you will pay during the |
| procrastinate, ask yourself if you could afford a bill of | | | | elimination period. |
| about $4000 per month on what you have today. | | | | Lack of Planning Could Mean Disaster |
| When you retire, are you likely to have more | | | | According to Financial Planner, Jeffrey D. Voudrie, |
| disposable money or less? Wouldn't it be better to | | | | ignoring the potential need for LTC is the wrong |
| pay a premium averaging $900 to $2000 per year | | | | decision. The National Center for Health Statistics |
| now rather than face the possibility of having to pay | | | | reports that currently some 1.6 million people reside in |
| twice that every month if you need care? According | | | | nursing homes. "That number is likely to increase |
| to Medical News Today, "LTCi can be quite | | | | significantly when the baby boomer generation |
| affordable, especially if you buy at a relatively young | | | | reaches their senior years." Voudrie reports that |
| age." | | | | many families are already finding themselves "caught |
| Relying on Medicaid to Pay the Bill | | | | in the nightmare of having to provide care that isn't |
| Medicaid is a state and federal program for people | | | | covered by insurance or the government. This |
| who are at the poverty level, or who have certain | | | | problem will not go away, as the government is likely |
| physical conditions. According to a 2003 report by the | | | | to cover even less care in the future." He advises |
| American Council of Life Insurers, Medicaid pays only | | | | families to "take action now. |
| 17% of America's LTC bill. LTCi currently pays the bill | | | | |