Long-term care, like end-of-life planning, is a conversation that people often defer as long as they possibly can. But lifestyle habits, hereditary health conditions, and age may well lead you to understand the importance of planning for the possibility of long-term care and how you will pay for it. Individuals with Alzheimer’s disease, dementia, or cognitive impairment should plan for long-term care right away; others who are in good health may not have an urgent need for a plan, but it’s much cheaper to obtain insurance in your mid 50s and early 60s than if you wait, so there’s no reason to hold off. In any event, the wise course is to educate yourself on the subject and begin preparing early, because there are many factors to consider as you think through potential needs and financial resources.
Things to Consider
Where you want to age in your later years should be your first consideration. Most people prefer to remain at home as long as they can. If that describes your situation, think about how well your home would support you if you require long-term care. Fortunately, there are many services designed to help older adults who require ongoing care stay in their homes. The local branch of the Area Agency on Aging can provide a complete list of in-home care services. Think through the kinds of services that may be necessary, and assess whether they may be available to you at home. Consider personal care, household chores, meal preparation, and personal financial management and what services could provide help in these areas.
Consider the benefits of preparing a health care advance directive to spell out your wishes should you become debilitated. Discuss the matter with your family so there’s no disagreement or confusion about how you choose to arrange your long-term health care dispositions. If you haven’t already, you may also want to consider setting up a joint bank account with a trusted family member or friend. This will help ensure that they’re able to access funds for your care, even if you’re not with them to withdraw it. Having a joint account can also be helpful to your loved ones after you pass away, since they’ll be able to access the money needed for your final wishes, such as a pre-paid funeral, memorial service, cremation urn, or headstone.
How to Pay
Long-term care costs Americans billions of dollars every year, so it’s important to be as prepared as possible from a financial standpoint should the need arise. The nature and extent of your care will depend on your resources and ability to maintain services. People often utilize a combination of financial resources, including personal savings, pension funds, and stock income. Medicare and Medicaid can help fill in some of the gaps in your care routine, while many people opt for long-term care insurance, though this can be an expensive alternative.
The more financial resources you have lined up, the more you’ll be able to arrange the kinds of care services you need, where you need them. It’s an expensive proposition: a semi-private room in a nursing facility costs an average of $6,844 a month and nearly $7,700 a month for a private room. If you’re planning to remain at home, a health aide will cost about $21 an hour and $20 an hour for homemaker services. Remember that you can take action to alleviate the costs involved by making better lifestyle choices. Eat a healthier diet, get daily exercise, and adopt an active self-care routine by meditating, doing yoga, or spending more time in nature.
For people who lack the private financial assets to pay for long-term care, there are a number of insurance-based options. Much like Medicare, health and disability insurance will help cover the costs, but only for skilled, short-term, medically-necessary care. Long-term care will cover hospice, respite, and assisted living care, as well as Alzheimer’s and nursing home care. Therapy and skilled nursing are generally covered in a home care situation. People who lack insurance coverage often pay for long-term care using reverse mortgages, annuities, trust funds, or selling a life insurance policy that’s no longer needed, which can help provide money for daily expenses and medical care.
Long-term care is a scenario that becomes more pressing with each passing year. The high costs involved and the increasing unpredictability of life as one ages virtually demands that some form of preparation be made. At a minimum, make sure you understand all care and payment options and how insurance policies can be used to raise needed cash.
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June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is the author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.