As we discuss the subject of retirement there are many variables that we are approached with, for instance, one’s lifespan, interest rates and how the stock market will behave as time passes. However, one thing is nearly certain: as we age our health will change. Below are common misconceptions we hear in our industry and the facts we have come to understand.
#1 – A Government Program Will Take Care of Me
Fact: Custodial care is not covered by Medicare. Custodial care is non-medical assistance typically for activities of daily living (such as eating, bathing, dressing, toileting, transferring and continence). Custodial care is the most common form of long-term care.
Medicare will only cover a short stay in a skilled nursing facility, hospice care, or home health care and only under the following circumstances:
- You must have had a hospital stay of at least 3 days within the last 30 days.
- The facility must be a Medicare-certified facility and provide skilled care, such as some type of therapy.
If, and only if those conditions are met, Medicare will pay for a maximum of 100 days. The first 20 are 100% covered, then for the remaining 80 days, the patient must pay $140 per day
#2 – I Can Save the Money I’ll Need for Long Term Care Services
Fact: According to Genworth’s Long-Term Care Costs Across the US report, the cost of care for a private room in a nursing home in the state of Pennsylvania is over $300 per day and the average length for a nursing home stay is 2.5 years. You could be spending over $275,000 for your long-term care. Your nest egg should be for your retirement, not your long-term care. This is one reason you should consider purchasing long-term care insurance. An insurance plan will allow you to set aside budgeted premiums for your long-term care needs instead of dipping into your savings in retirement on a fixed income
#3 – Only Old People Need Long Term Care Services
Fact: The sooner you begin the long-term care insurance planning process, the more options may be available to you, the lower your premiums will be and the likelihood that you will be accepted for coverage is greater. This is because long-term care insurance plans are health underwritten and insurance carriers are becoming increasingly strict on whom they accept. According to LIMRA, the average age individuals are buying long term care insurance is age 48 and while that may seem very young, it’s never too soon to start planning for the rest of your life.
#4 – I Don’t Need Separate Long Term Care Protection Because I Have Health Insurance
Fact: Long-term care is NOT covered by other kinds of insurance, including your HMO, health or long term disability insurance. Only a long-term care insurance policy you typically purchase on your own covers day-to-day personal care assistance when you are unable to perform everyday activities like bathing and dressing.
#5 – I Can’t Afford Long Term Care Insurance
Fact: The amount you pay for long-term care insurance is considerably less than the cost of long-term care. In fact, even if you pay 20 to 30 years on a long-term care policy, you could get your money back in as little as 12 months depending on your long-term care needs. Discounts may also be available for applicants with preferred health and/or couples applying together.
#6 – Long Term Care Protection Pays for Nursing Home Care Only
Fact: Today, most long-term care insurance policies are considered comprehensive and allow your daily benefits to be applied to a variety of care settings, including your home, adult day care, assisted living facilities, hospice care and yes, nursing homes. What’s most important is to think about your preferred lifestyle 10, 20, 30 years down the road; what state you would like to retire in and what type of care environment would be best suited for your preferences and needs. The majority of today’s long-term insurance claims start with home care, not nursing home care.
#7 – We Don’t Need Long Term Care Protection Because We Have Each Other
Fact: A long-term care plan allows your loved ones to be care coordinators as opposed to your care providers. Being a care provider is mentally and physically exhausting and can be incredibly time-consuming and draining.
Some questions to consider if you plan on having a loved one care for you:
- Will your children or family member live nearby when their care will be needed?
- Will they be available, willing and able to perform the consistent level of care you may need for the full extended period of time?
- Will your long-term care needs interfere with your caregiver’s job or responsibilities for their own children?
While families do and will continue to provide care, it is not possible to know for certain whether your family will be available and able to care for you when the time comes. It is also possible that the type of care you might need will require professional help or a stay in a nursing home or assisted living facility. Also for many married couples, because the wife often out-lives her husband, she is less likely to have someone nearby who can provide care for her. Relaying on a family member can be a huge financial and emotional burden, it is so important for families to have a serious conversation to discuss how you want to be cared for.
According to a study done by the U.S. Department of Health and Human Services, more than 70 percent of Americans over the age of 65 will need long-term care services. This means a large percentage of our population will require professional medical care at home or in institutions such as nursing homes in the near future. Don’t let the misconceptions surrounding long-term care prevent you from planning for the care you or a loved one may need.
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