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How to Build Your Long-Term Care Plan

Last update on: Jun 09 2020

The cost of long-term care is one of the major retirement financial worries. Survey after survey confirms that.

The data also confirms that few people do anything about long-term care, other than worry.

One survey even found that many people would rather go to the dentist than talk to someone about long-term care.

That needn’t be the case. You can put together a plan to pay for long term care, in case you need it.

There’s no magic bullet to long-term care planning. Instead, set your goals and consider all the tools available. Then, you’re likely to have a plan that both meets your needs and is affordable.

Remember, long-term care is more than nursing home care. Long-term care (LTC) can be any type of assistance with the activities of daily living.

Adult day care and someone to help clean and cook are LTC. Home health care is LTC.

So is some physical therapy, as well as residing in an assisted living facility and parts of a continuing care retirement community.

Of course, a nursing home or other full-time custodial care is LTC.

Most people want to stay in their own homes for as long as they can. That becomes easier each year. More and more long-term care is given in residences, though it might have to be given by a professional.

Some people want or assume that when they need help they’ll be assisted by family members.

Other people favor professional caregivers and don’t want to burden family members, yet some of those people don’t want strangers in their homes.

You need to decide your preferences and be sure they’re realistic, then consider the options available.

Most people understand that a majority of older people need long-term care at some point in their lives, but also believe that they won’t be among those who need it.

Most people also greatly underestimate the cost of long-term care, even home assistance.

I urge you to visit the websites of John Hancock Insurance and Genworth and review their cost estimates for different types of long-term care in your area of the country.

Now, let’s consider the elements of your Long-term Care (LTC) plan.

Family and friends. Family and perhaps some close friends are the likely sources of long-term care to many people.

We all know people who spent considerable time helping a parent or other relative who couldn’t fully take care of themselves. Yet, that isn’t always a good or viable option.

Is a family member even available? Family members might live too far away or have families, jobs, and other obligations.

Family care-giving might work in the short-term, but is it viable for an indefinite, extended period?

Studies also show family care-giving is burdensome, having negative long-term effects on the finances and health of the caregivers.

Qualifications are also an issue. A family member can help with cooking, cleaning, and other household chores. But other help you need might require training.

On the positive side, some long-term care insurance policies and other payors of long-term care expenses will reimburse family members for helping, under some circumstances.

Medicare. Despite what many people believe, Medicare isn’t likely to meet your long-term care needs.

While Medicare does pay a lot of money to long-term care facilities and professionals, the covered care is only for up to 100 days of long-term care following a hospital stay of at least three days. In other words, it is for rehabilitation after an illness, surgery, or injury.

Medicaid. A high percentage of nursing home expenses in this country are paid by Medicaid. Yet, to qualify for Medicaid you have to meet the program’s definition of being impoverished.

The exact standards vary among the states. Generally, you have to give away most of your assets five years before applying for Medicaid or spend down your assets for at least five years of care before applying.

Also, Medicaid pays for nursing home care but not for assisted living and many other types of long-term care.

Next Week: 5 more tips for building a smart Long-Term Care Plan.



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