What is Long-Term Care?
By E. Shel Yetman
When people consider the subject of long-term care, they often think about nursing homes. In fact,
long-term care has little to do with nursing homes. Understanding the difference can help you protect
your family and finances.
The Consequences of Living Longer
Long-term care is a continuum of care services and housing you will need when you live a long life.
Think you won't live a long life? Think back 25 years ago. If you had cancer or a stroke, you simply
died. Few ever heard of Alzheimer's. Today, it is the leading cause for long-term care services. The
longer you live, the more likely you are to need care. The question is not who will take care of you,
because your family will most often, but rather what providing that care will do to your family and
finances.
Long-Term Care is Usually Custodial Care
Long-term care is defined as needing assistance with your activities of daily living (toileting, bathing,
dressing, eating, transferring from one point to another, and continence). It also includes cognitive
impairment so severe that the individual needs constant supervision.
If you need custodial care, chances are it will be delivered in the community, not in a nursing home.
Many of you have heard compelling statistics from The New England Journal of Medicine stating
that 43% of those over age 65 will need nursing home care. What the article actually said is that
number may spend some time in a facility. The fact is, few end their days in one.
Every study conducted finds that care is overwhelmingly provided at home. The key question, of
course, is who is going to pay for it?
Who Covers the Cost?
Medicare, the primary health care program for retirees pays only for skilled or rehabilitative care, not
custodial care in any venue. Medicaid, a federal and state program for financially needy individuals
will pay for custodial care, but primarily in nursing homes. Funding for home care and assisted living
is very limited and based on availability of funds.
Veterans believe that the VA will pay for home care, adult day care, or assisted living. As with
Medicaid, funding is limited and generally based on service-related disability. In fact, the federal
government has as much said this to veterans by encouraging them to purchase long-term care
insurance through the new Federal Long-Term Care Insurance program.
The result is that consumers are forced to pay privately for their care. Unfortunately, the best
thought-out retirement plan rarely takes into consideration living a long life. Put another way, those
assets and income have been allocated to pay for retirement, not for the consequences of living a
long life. This results in the need to invade principal and divert income. As a result, one of seniors'
greatest fears - that of outliving their assets - literally may come true.
The Role of Long-Term Care Insurance
The use of long-term care insurance thus becomes an important part of planning for disability caused
by living a long life. The product has two roles: helping keep families together and allowing your
retirement portfolio to execute for the purpose for which it was intended, namely retirement.
From a family perspective, think about who will be providing your care. Like it or not, children will
play a key role. Long-term care insurance (LTCI) doesn't replace the need for family involvement in
providing care but rather builds on it. It pays professionals to assist the person with the toughest tasks
such as toileting, bathing, feeding and continence. This, in turn, allows the family to provide care
better and longer at home. That leads to a critical question: have YOU planned for the consequences
of living a long life?
From a financial point of view, LTCI allows your retirement plan to stay intact. That is particularly
important given the recent steep decline in portfolio value. The product, in effect, protects the
balance of your account value. LTCI also protects income. Although you may qualify for Medicaid
to pay for nursing home costs by transferring assets, your income (pension, social security, IRA and
or 401k payout) cannot be protected.
When buying this insurance, look for a long-term care specialist. Consider their training, educational
credentials, and commitment to help solve your long-term care needs. The key is whether they talk
first about a plan or a product. If they are interested in the plan, you are dealing with a professional.
If they focus first on product and price, consider getting another opinion.
E. Shel Yetman is a Pennsylvania licensed insurance professional. His practice is focused on
retirement issues and is dedicated to Protecting and Preserving the Lives, Hopes and Dreams of
Today's Baby Boomers. He can be reached at the Yetman Agency at 724-260-5492 or by e-mail at
syetman@theyetmanagency.com.
Back to Articles
By E. Shel Yetman
When people consider the subject of long-term care, they often think about nursing homes. In fact,
long-term care has little to do with nursing homes. Understanding the difference can help you protect
your family and finances.
The Consequences of Living Longer
Long-term care is a continuum of care services and housing you will need when you live a long life.
Think you won't live a long life? Think back 25 years ago. If you had cancer or a stroke, you simply
died. Few ever heard of Alzheimer's. Today, it is the leading cause for long-term care services. The
longer you live, the more likely you are to need care. The question is not who will take care of you,
because your family will most often, but rather what providing that care will do to your family and
finances.
Long-Term Care is Usually Custodial Care
Long-term care is defined as needing assistance with your activities of daily living (toileting, bathing,
dressing, eating, transferring from one point to another, and continence). It also includes cognitive
impairment so severe that the individual needs constant supervision.
If you need custodial care, chances are it will be delivered in the community, not in a nursing home.
Many of you have heard compelling statistics from The New England Journal of Medicine stating
that 43% of those over age 65 will need nursing home care. What the article actually said is that
number may spend some time in a facility. The fact is, few end their days in one.
Every study conducted finds that care is overwhelmingly provided at home. The key question, of
course, is who is going to pay for it?
Who Covers the Cost?
Medicare, the primary health care program for retirees pays only for skilled or rehabilitative care, not
custodial care in any venue. Medicaid, a federal and state program for financially needy individuals
will pay for custodial care, but primarily in nursing homes. Funding for home care and assisted living
is very limited and based on availability of funds.
Veterans believe that the VA will pay for home care, adult day care, or assisted living. As with
Medicaid, funding is limited and generally based on service-related disability. In fact, the federal
government has as much said this to veterans by encouraging them to purchase long-term care
insurance through the new Federal Long-Term Care Insurance program.
The result is that consumers are forced to pay privately for their care. Unfortunately, the best
thought-out retirement plan rarely takes into consideration living a long life. Put another way, those
assets and income have been allocated to pay for retirement, not for the consequences of living a
long life. This results in the need to invade principal and divert income. As a result, one of seniors'
greatest fears - that of outliving their assets - literally may come true.
The Role of Long-Term Care Insurance
The use of long-term care insurance thus becomes an important part of planning for disability caused
by living a long life. The product has two roles: helping keep families together and allowing your
retirement portfolio to execute for the purpose for which it was intended, namely retirement.
From a family perspective, think about who will be providing your care. Like it or not, children will
play a key role. Long-term care insurance (LTCI) doesn't replace the need for family involvement in
providing care but rather builds on it. It pays professionals to assist the person with the toughest tasks
such as toileting, bathing, feeding and continence. This, in turn, allows the family to provide care
better and longer at home. That leads to a critical question: have YOU planned for the consequences
of living a long life?
From a financial point of view, LTCI allows your retirement plan to stay intact. That is particularly
important given the recent steep decline in portfolio value. The product, in effect, protects the
balance of your account value. LTCI also protects income. Although you may qualify for Medicaid
to pay for nursing home costs by transferring assets, your income (pension, social security, IRA and
or 401k payout) cannot be protected.
When buying this insurance, look for a long-term care specialist. Consider their training, educational
credentials, and commitment to help solve your long-term care needs. The key is whether they talk
first about a plan or a product. If they are interested in the plan, you are dealing with a professional.
If they focus first on product and price, consider getting another opinion.
E. Shel Yetman is a Pennsylvania licensed insurance professional. His practice is focused on
retirement issues and is dedicated to Protecting and Preserving the Lives, Hopes and Dreams of
Today's Baby Boomers. He can be reached at the Yetman Agency at 724-260-5492 or by e-mail at
syetman@theyetmanagency.com.
Back to Articles
Copyright © 2007 All Rights Reserved
The Yetman Agency
| Safe Solutions for Today's Baby Boomers |