5 important facts about Long Term Care (LTC)

You Are Probably Not Going Into A Nursing Home, But Don’t Confuse That With Not Planning For Extended Care 

When people consider the subject of elder care (often referred to as long term care), they often think about nursing homes. However, elder care has little to do with nursing homes. Understanding the difference can help you protect your family and finances.

Twenty-five years ago people who were diagnosed with a stroke or cancer simply died. Few ever heard of Alzheimer’s, which today is the leading cause for Long Term Care services. As people are living longer, getting sick and needing care is a likely consequence. The question is not who is going to take care of you, because your family has no choice but to set aside their lives to provide assistance and/or supervision on a 24 hour basis. Rather, the question is what the consequences of providing that care will have on your family and life savings.

These are 5 important facts you need to know about Long Term Care:

1. Long Term Care is usually custodial care. The need for care is created by two impairments. One is a physical impairment, a chronic medical condition that compromises the individual’s ability to get through the most basic of daily routines. The second is cognitive, a measurable decline in intellect that compromises an individual’s ability to safely interact with his or her environment.

2. Medicare pays only for skilled or rehabilitation care, not custodial cares in any venue.

3. Medicaid, a federal and state program for impoverished individuals, will pay for custodial care but only in a nursing home, the one place where people do not want to be.

4. Providing care to those who are chronically ill makes healthy caregivers chronically ill. It often forces a child to put his or her life aside, their family suffers the consequences and the child’s relationship with his or her siblings also suffers.

5. Long Term Care services are overwhelmingly provided at home or in the community, not in a nursing home.

The result is that consumers are forced to pay privately for their care. Unfortunately, the best thought out retirement plans rarely take into consideration that living a long life might mean getting sick and needing care. In other words, those assets and income have been allocated to pay for retirement, not the consequences of living a long life. This results in the need to invade principal and divert income. As a consequence, one of seniors’ greatest fears – that of outliving their assets – literally may come true.

Extended care is not a condition that eventually causes one to end up in a place like a nursing home or assisted living facility. Rather, it is a life-changing event that has real time consequences to those that one loves.

Consider the following questions to help you in the process of Long Term Care planning:

1. Who and what is important to you?

2. Do you have certain financial dreams and commitments that you want to continue in one form or another into the future?

3. What is the best Long Term Care plan to allow you to remain safe at home, having others provide care? How can you keep your financial commitments by having a source of income to pay for this care? How can you plan for extended care while both protecting the emotional and physical wellbeing of the family?

4. How will you finance your elder care plan?

5. How does Long Term Care insurance factor into your plan?

Find more information about funding and preparing for chronic illness and elderly care on our resources page or contact us at 617.225.2600 to set up a meeting.