June Duncan, Guest Blogger
Understanding the Ins and Outs of Long Term Care
Authored by June Duncan ~
Most of us will need long-term care eventually. However, many people are not well-prepared to pay for long-term care. How do you know if you are likely to require long-term care? And if a need arises, how will you pay for it?
Planning for Long-Term Care
While statistics indicate the majority of us will require long-term care at some point, how do you assess the likelihood that you or a loved one will fall into that category? First, it’s important to understand exactly what constitutes long-term care.
Some experts explain long-term care falls into three designations:
1. Skilled care, which is 24/7 care by medical professionals.
2. Intermediate care, which is rehabilitative and nursing care provided intermittently by medical professionals.
3. Custodial care, which is supportive care for daily living activities, such as dressing, eating, running errands, and using the toilet.
Most people receive long-term care at home. For those needing custodial care, this duty is typically undertaken by a close friend or relative. Some people don’t have a family member living nearby to rely on should a need for long-term care arise, and there are certain conditions that could predispose you to needing long-term care.
One recommendation is to carefully consider your lifestyle and the aspects that might lead to needing long-term care. Are you in good health and making overall healthy lifestyle choices? Are there hereditary illnesses and conditions which could impact you? How close are you to retirement? Could you afford long-term care without insurance to cover the costs?
Paying for Long-Term Care
There are several ways to pay for long-term care. Of course, one of the ways to pay for care is out-of-pocket. Some experts explain the average long-term care facility costs $10,000 per month. For those with a hefty amount in savings, this could be arranged out-of-pocket or from an existing income from a pension, Social Security, investments, and the like. For those with very little income and minimal savings, Medicaid could cover the expense. Everyone in between needs to find ways to cover those costs.
Long-Term Care and Insurance
Insurance offers a couple different payment options. One option is to sell a life insurance policy to help pay for daily living expenses and medical care. Another option is to purchase long-term care insurance. As US News & World Report notes, purchasing a long-term care policy while relatively young means lower premiums up front, and if you have hereditary concerns such as cancer, you enjoy the peace of mind of knowing you’re covered.
You may wish to purchase long-term care insurance to just cover the potential cost your income wouldn’t cover. For instance, out of that $10,000 per month stay in a long-term care facility, if you can afford $5,000 per month, you could purchase enough long-term care insurance for the other $5,000 per month. With insurance alleviating dipping into other savings or investments, you wouldn't need to make decisions affecting your financial health or the inheritance you intend to leave to family members.
Another idea for covering long-term care costs is to get a reverse mortgage. With a reverse mortgage, you draw funds from your home’s equity, and you don’t risk losing your home. You can calculate how much this would be by using an online reverse mortgage calculator.
You should consider what you can do now at home or in your lifestyle to reduce the risk of injury or onset of illness. Think about whether you participate in dangerous hobbies or unhealthy lifestyle choices. For example, even if you are a non-smoker, Healthline notes being subjected to secondhand smoke increases your risk for lung cancer. While many people associate secondhand smoke with cohabitating with smokers, where you work or socialize can also be a contributing factor, such as bars or restaurants. Altering your exposure to secondhand smoke can lower your risk for lung cancer.
Plan and Prepare
Most people eventually require long-term care. The key is to plan and prepare to meet your needs. With smart decisions right now, you’ll be in great shape for your future.