No Easy Answers for Long-Term Care by Ron Pollack
(Editor's Note: Ron Pollack is the executive director of Families USA, the national organization for health care consumers.)
Tax time has just passed. For many people, that's a time to take stock of finances and to start planning for the future. That should include plans in case you or a family member needs long-term care. It's a tough topic. But if you plan ahead, you're more likely to get the kind of care you want. Here are some questions and answers to help you jump-start the process.
If you need long-term care, what are your preferences?
Once, long-term care meant staying in a nursing home. Not anymore. Today, there are assisted living facilities, retirement communities with many levels of care, and devices that can help you stay in your home longer. Think about what you want, and then do as much as you can in advance to plan for it. For example, if you want to stay in your home, make modifications like adding grab bars and accessible entryways.
Should you consider buying long-term care insurance?
Planning is a good idea, but you may end up needing more care than you anticipated. That's where long-term care insurance may help. Long-term care is expensive: The average cost for a year in a nursing home is $84,000, and it is not covered by Medicare. Evaluate your finances and see what you can afford. You might consider buying long-term care insurance, but it doesn't make sense for everyone. Policies are expensive, what they cover varies, and you'll have to be able to keep up with premium payments for years or even decades. Talk to a financial planner or an elder care attorney to help you evaluate what's best for you. The web site www.eldercare.gov, operated by the U.S. Administration on Aging, can help you find an elder care attorney.
When should you start thinking about buying long-term care insurance?
Financial advisors suggest that it is best to purchase long-term care insurance when you are in your 50s. You can still get a policy if you are older, but the longer you wait, the more a policy will cost.
What should you look for in a long-term care insurance policy?
Policies vary a lot. Here are some things you'll need to understand before you sign up. First, make sure the policy includes inflation protection. Policies usually pay up to a certain amount per day and have a lifetime maximum. You might not need care for decades after you buy the policy, so you need to make sure that the amount it will pay keeps up with inflation. Most policies don't start paying until after you need care for a certain period of time, which is known as the elimination period. You need to know how long that is. Also ask how disabled you'll need to be before coverage begins: Policies require different levels of disability before they start to pay. Finally, make sure the policy covers both home care and nursing home care, and check to see if it excludes coverage for certain conditions. In the end, you need to balance what a policy costs and covers with what you're able to pay. Some experts recommend that you spend no more than 5 percent of your income on long-term care insurance.
What if you can’t afford long-term care insurance and end up needing expensive long-term care?
If you don't have insurance and need care, you generally have to pay for it yourself, which can eat up your assets. But if that happens, there is a safety net: Every state's Medicaid program pays for long-term care. While it's best to not have to qualify for Medicaid, it's there if you need it. It's the only reliable long-term care insurance we have right now.
Are there other options or resources?
Some states have what's called "long-term care partnership programs." If you buy an approved insurance policy through such a program, you can qualify for Medicaid when you run out of insurance coverage, instead of when you use up your assets. Check if your state has a program. Also visit www.longtermcare.gov, a resource clearinghouse for senior services that includes information on long-term care options.
Are there any policy changes on the horizon that might help?
Unfortunately, we don't have anything like Medicare for long-term care — a national insurance program for everyone. But there is hope for progress. President Obama and congressional leaders recently appointed members to a Long-Term Care Commission. Over the next six months, they'll be developing a plan to improve consumers' long-term care choices. Hopefully, you'll be reading about their recommendations soon.