13th Aug 2015
A new report (http://aspe.hhs.gov/daltcp/reports/2015/ElderLTCrb.cfm) compiled in July of 2015, by the Office of the Assistant Secretary for Planning and Evaluation (ASPE), was released following the White House Conference on Aging held earlier this year. According to the report, Americans grossly underestimate the risk of developing a disability and needing long-term services and supports (LTSS). According to the ASPE brief, one in seven adults will develop a disability for more than five years and, on average, an American turning 65 today will incur a staggering $266,000 in future LTSS costs.
Misconceptions about Long-Term Care
Some of the more common misconceptions surrounding long-term care include the misconception that Medicare will cover the costs, or that that owning long-term care insurance is the same as having a comprehensive long-term care plan, or that family members will be in a financial position to care for you.
Medicare Doesn’t Cover Long-Term Care: One of the major limitations with Medicare and private health insurance (including Medicare supplement policies) is that in general they do not provide any benefits for long-term care (defined as care needed in excess of 100 days). For shorter stays in a nursing home (typically for rehab or acute medical conditions), Medicare may cover those costs. However, for anything longer than 100 days, you are on your own.
Long-Term Care Insurance May Not Be Your Best Solution: People used to buy long-term-care insurance because they saw what happened to their parents or grandparents. Some insurance policies still cover what needs to be done, however, now some of these same policies themselves are making buyers nervous. The coverage—which is intended to pay for some or all of the costs of nursing homes, assisted-living facilities and home health care for people unable to take care of themselves, has been coming under fire. Premiums have been rising and fewer insurers are selling the product.
Further simply because you have a long-term care insurance policy, does not mean you have a plan for how long-term care will be delivered. Review your policy with your insurance provider. Many of the policies which have been sold recently cover a limited amount of care, generally up to a certain dollar amount. You need to give thought to what happens if an insurance policy is exhausted.
If you have done your research and decide long-term care insurance is right for you and your family, you should incorporate it into your estate plan, and not leave the insurance policy isolated, thinking everything is covered. Keep in mind that there are dozens of long-term care asset protection strategies other than long-term care insurance, which can and, many times should be incorporated into your estate plan.
Take time to review your estate plan with an estate planning attorney to verify that your long-term care insurance or other asset protection strategy has been incorporated appropriately. This will help protect you and your family.
Caregivers are giving out!
The physical, financial, and time burden of caring for family members has literally burned out tens of thousands caregivers. Although family members are the most common source of long-term care help, in spite of their desire to do so, they may not be able to provide all the care you need, or be there every hour of the day. As part of your long-term care strategy, look into caregiving services in your area, including in-home care providers, elder daycare centers, or other care programs. How can you choose the right service provider for your needs? One starting point is the Utah Division of Aging and Adult Services (http://www.hsdaas.utah.gov).
Additional consideration you should consider include what if you are unable to communicate to your loved ones what you want and need? What if you are no longer of sound mind? Thought needs to be given to what your preferences are for how care will be delivered, in advance. Our offices see numerous instances where adequate advance planning has waited too long and incapacity prohibits a proper care plan. Money is generally at the center of the decision making process, will, or can the care be delivered at home, an assisted living facility, or a nursing home? Of course, you cannot predict the exact outcome of your long-term care needs, but you can discuss your preferences with the people who might be involved in helping to coordinate your care needs in the future, and include your preferences in your planning documents.
Medicaid planning can be, and should be, started while you are still able to make legal and financial decisions. If you fail to apply while legally competent the process an adult child acting as agent under a properly drafted Power of Attorney, may be used if you are already in a nursing home or receiving other long-term care. If you do not have a Power of Attorney, contact our offices to see if you are eligible.
If you are still healthy you should consider our asset protection planning tools, which may protect your assets and still qualify you for Medicaid assistance benefits. It is imperative to start this process to comply with the governmental five year look back, qualification period. Planning for long-term care will not eliminate your risk of needing it, but it enables you to sort options and make smarter decisions ahead of time. As a result, you’ll have the peace of mind that no matter what happens, you will know what to do as a family. If you or your loved ones have not done Long-Term Care Planning, please call us as soon as possible to make an appointment for a no-cost consultation with one of our estate planning attorneys:
Christensen Young & Associates, PLLC
9980 So. 300 West, #200
Sandy, Utah 84070
(801) 676-6447 or toll free (866)861-3333