Common Questions on Long Term Care

Long term care is something no one would ever dare to discuss during important family gathering or luncheon party; the exaggerating costs of health care services seem daunting for anyone trying to make both ends meet and earning on the middle tier.

 

So what is long term care? Why people try their best to avoid this in any conversation? Let’s discuss it without being too legalistic. The term “Long-term” simply refers to the length of period of time a person will need care.  “Care” denotes to the variety of services—medical, social, and personal—provided for people with physical and mental disorders.

 

More than half of the population will need long term care at some point in their lives. Unfortunately, most care services are provided outside the home, although most families prefer the latter, and the reality presents shocking rates of nursing homes and senior facilities. Any types of care will require help from family members or outside assistance from health aides, caregivers, and nurses.

Choosing the Right Approach to Long Term Care Planning

 

Many Americans have raised their eyebrows after hearing reports on the skyrocketing prices of long term care (LTC).  No one would ever dare compromising their lifetime savings for just a year in nursing home or assisted living, knowing that it would have damaging results to their loved ones. Learning that your parents or a loved one must be transferred in a facility or simply requires help from a caregiver, and you need more than half a million to  sustain a year for long term care, is one of the tragic news you’ll ever hear.

 

As life expectancy becomes longer than expected, millions of Americans will be affected since the majority of the senior population doesn’t have concrete retirement plans and insurance, and many are heavily dependent on government health care programs. Only a fraction of Americans have anticipated the likelihood of entering nursing homes or acquiring long-term illness and/or disability, so no wonder why a lot of senior folks and caregiving families are suffering the consequences of bad planning and decision-making. Even the healthiest people today may suffer any degenerative or geriatric diseases in the future. And, in fact, this proves that no one is in control of the future and one of the ways—next to faith—to lessen the weight of uncertainty is to entrust your future in long term care insurance.

 

However, many individuals commit mistakes when dealing with LTC because of lack of tact and knowledge on the subject. For them, it’s like treating a wound that may disappear overnight; but the reality is (as the name suggests) it can’t be resolved in a day or two.

 

The biggest mistake people commit when planning for future health care is they spend their entire savings on LTC services without looking at the dangers of becoming bankrupt and invalid at the same time. Relying on Medicaid and/or Medicare should be stripped off on your “dependency” list.

Making Respite Care Cheaper

The results of cost of long term care in last year’s survey stirred disappointment among millions of Americans who are advancing in age and are caring for loved ones with illnesses or disability. The nation’s average rate for nursing home’s private room increased 4.4% from $229 in 2010 to $239 in 2011. The assisted living rate also increased from 5.6% from $3,293 in 2010 to $3,477 in 2011.5.6%

With those figures alone, anyone will be frightened to spend at least a year in a facility and feel guilty being sick or invalid. The sandwich generation will bear the brunt of their aging parents or loved ones, and will be affected with the extremely high cost of care.

Unfortunately, adult day care also increased its rates, but remains the least expensive form of care in the country. Adult day centers have the national average rate of $6/day versus the average rate for home health aides of $19/hour. The reason for adult day cares much lower price is they are run by many non-profit organizations. According to survey, there are more than 4,600 adult day cares registered in U.S and become a haven for 150,000 American adults each day.

 

In fact, keeping a loved one in an adult day care is one of the families choose to save on respite care. Caregivers who wish to get out from the shackles of stress brought by caregiving may keep their loved ones in adult day cares. Adult day centers provide opportunities for family caregivers to regain strength and keep sanity at bay

Planning Long Term Care with your Parents

Your parents are getting older, and you’re probably worried that they might need care or get admitted in a much expensive facility few years from now.  It’s quite rare nowadays for elders in their 60s to maintain healthy mind and body, since more and more people—both young and old–are crippled with illnesses or disability as result of their lifestyle.

Now, let’s go straight to the point. The reason you’re anxious about your parent’s future care is you might be paying the hefty hospital bills, the caregiver’s monthly wage, and worst, the costly accommodation in a nursing home, because your parents have not anticipated their future health and their retirement savings would not suffice the devastating long term care costs.

Anyone who has experienced planning for long term care would exclaim the difficulty in starting a feasible plan, but the good results you will reap out of early preparation are thrice your stress and effort. One of the challenges is discussing your plans with your parents. Nevertheless, it would be better to inform your parents about your plans so this could best serve their interest.

Some of the aspects you need to evaluate with your parents are but not limited to  the following:

• care options
• type of long-term care the family can afford
• the possibility of buying long term care insurance
• assets that can be sold when the family runs out of budget or when rejected by insurance company
• the person/s responsible for care-giving
•  other financing alternatives?
• legal documents that may be needed

Rethinking of Long Term Care Insurance Option

The number of Americans who are becoming aware of the drawbacks of long term care has increased, but the percentage of people braving the LTCi scene remains low. Does it mean that Americans are not learning from their grandparents’ experiences?

 

Reality check: people already know the consequences but long term care insurance can never be on top of their list for couple of reasons—the most common is whether it is beneficial or not.

 

The public has keen eye on the pros and cons, testing if the economy will launch competitive returns should they throw off large chunks on premiums. LTCi premiums are not just soaring rapidly, many established insurance companies have shut down recently, warning the public that LTCi may not be a a good solution.

 

 

Despite controversies, why long term care insurance steals the spotlight?

 

Have you ever wondered why? I’m pretty sure you’ve heard a lot of negative things about LTCI, leaving you discouraged and skeptical whether to give it a try or not.

 

 

The recent rates of LTC services in the country could result to crippling debt among millions of middle-class Americans.  With rates so expensive, most financial analysts agree that purchasing an LTCi policy will be a sound investment to go with the flow. Nevertheless, the individual must purchase LTCi policy early before any signs of illnesses manifest.

 

 

 

How Sandwich Generation Cope with Long Term Care

The increasing rate in long term care services does not only threaten seniors and baby boomers as they are the frequent victims of the price increase; it alarms millions of the “sandwich generation”—both young and old. The sandwich generation simply refers to individuals who are expected to provide support for aging parents or loved ones. Whether it sounds as a curse or not, surely, there will be no person who would wish to include on that list particularly in this vacillating economy.

The staggering economy worsens the already tremendous scenario—seniors are slaving themselves to limited retirement savings, and their children are to carry the load filled with remorse that they should’ve planned earlier. After they have trumped college, now they are faced with much bigger responsibilities with their parents.

There’s a tough transition from being a “spoiled” child to an adult who has to look after an aging parent. For some, they consider using their retirement savings and cutting back retirement plans, but this move can literally results to “exhaustion.” This can give temporary solution, but the result is enduring.

 

Here  are some ways that give best results:

Looking at long term care insurance — Discuss this with your parents. Long term care insurance covers a lot of services both medical and non-medical, depending on your parents needs, and the daily benefits can be customized to meet such needs.

Considering adult day care — Those who had quit their jobs and chose to provide care to their parents turned sour over their wrong decision. If you quit your job, you will lose monthly income that might be used for your parents’ care. Enrolling them in adult day care is worth a try 🙂

Ask your employer of there are care-giving benefits –– Some big corporations and companies offer caregiving benefits to its employees. Be quick to ask your boss!

Ask about care-giving benefits at work

Some large employers offer elder-care service locators or other care-giving support as an employee benefit. And you can find out if your parents are eligible for federal, state and other benefits through www.benefitscheckup.org.

Long Term Care Insurance Inflation Protection Options

In planning to get the best LTC insurance policy that one would avail, it is also important to put into consideration the long term care insurance inflation protection that his potential plan might have because this specific feature is considered as the most important and most beneficial of all features that all LTC policies in America must have.

 

Discussing the different processes and how an LTC plan works as a whole is quite complicated but even if you try to analyze each aspect one by one, you would still need a lot of time and preparations in order to fully understand everything that you have to know about it.

 

Talking about inflation protection alone is kind of confusing especially for those who are not really familiar with insurance terminologies. But every individual who wants to get an LTC plan must understand and wisely comprehend every little detail that would be given to them so as not to miss out any important factors that might help them purchase a more budget-friendly LTC monthly premium.

 

First of all, one has to know that inflation protection has the capacity to adjust and regulate the value of a specific policy according to the present LT costs available. It has certain levels and options that are based on the age of the individual at the time of his insurance plan purchase. More often than not, insurance companies give or offer higher levels to those applicants or insurance plan holders who were able to avail their policies at a young age.

 

Since long term care insurance inflation protection is one of the mandatory features that all LTC plans must provide, an individual must discuss about this with his insurance provider. But there are some cases where the policyholder may not avail of an insurance plan with inflation protection especially if he acquired his LTC policy at age 71 and up. Nevertheless, his insurance provider will still have to explain this thoroughly and offer any applicable level to the person.

 

Below are just some of the inflation protection options that one can avail in order to maximize his policy benefits:

 

1. 5% Simple or Equal Inflation Protection – policies that have this kind of inflation protection can expect a 5% increase for their benefit amount every year. For example, if an individual has a $100 benefit amount, $5 will be added to his price limit and he might have a $200 benefit amount if he will use his policy after 20 years.

 

 

1. 5% Compound Inflation Protection – a policyholder with this level of inflation protection can get higher additional benefit amount over the years compared to those who have the simple inflation protection. However, this may cost a bit higher than the first inflation protection option.

 

 

1. Consumer Price Index (CPI) – the benefit amount and other insurance benefits of the insured person will based on the current CP Index, which will be computed by the government. But there is a big possibility that LTC and other medical costs increase more rapidly than the inflation in general.

 

There might be other long term care insurance inflation protection options that your insurance may provide. Inquire about these now so that you can decide and prepare yourself before you actually buy an LTC plan of your own.

 

Should I Self-insure or Not

Experts suggest middle-class Americans should purchase long term care insurance because they are more vulnerable to financial drawbacks brought by LTC. However, this creates confusion among upper-middle and high-income Americans as to whether purchasing LTCi or not would be beneficial, particularly these people think they have overflowing savings and resources to pay for the health care services, treatments and medication. Sometimes, over-confidence and complacency kill right thinking and decision-making.

People would reiterate, “I have saved more and won’t run out of savings in case my health fails big time!”  Good if it turns that way. Many individuals have retirement savings ranging between $500,000 and more, assuming that these nest eggs would last more than the average working class. Nevertheless, being realistic on the current condition of the health care system in the country will help you realized the things you’ve snubbed.

Most individuals consider using their retirement savings for a business or anything that would spawn money to keep their independence, and spending it for long term care services is excluded on the their priority list. Regrettably, the cost of care for just a year in a nursing home in 2011 ran the average of $85,775, according to Hancock Survey. Last year’s cost will eventually increase four-fold in the next few years. A typical Alzheimer’s patient would need care around four to eight years that may force him or her to spend the lowest amount of $700,000 to several millions. Having a realistic look at the costs of long term care, one will realize that he needs to exhaust retirement savings to sustain all those expenses

Present Issues On Long Term Care Insurance For Baby Boomers

The long term care insurance for baby boomers needs more attention and must really be prioritized but is seems like it is too late for the other “baby boomers” to get hold of an LTC insurance policy specifically because the rates are much more expensive nowadays and they now lack stable financial resources that they can spend to pay for their LTC services.

 

The cancellation of the Community Living Assistance Services and Supports Act, more popularly known as the CLASS Act, has made it even harder for them to get an opportunity to avail an affordable and more budget-friendly LTC insurance policy. This is one of the reasons why many of them worry of not getting the proper medical and health services that they might need in the coming years.

 

President Barack Obama signed this LTC policy option into law in 2010 hoping to address the LTC needs of the majority of the population that cannot afford paying the high-priced LTC plans available. But unfortunately, it was cancelled during the last quarter of 2011 due to “ineffectiveness” and “lack of sound trust fund” to support the services and facilities that the first wave of beneficiaries would need five years from now.

 

This cancellation posts bigger dilemma for the baby boomers especially because the rates of the policies that they were supposed to have increased drastically to the point that it just may take up all their life savings and personal assets if they purchase one now.

 

But this problem of long term care insurance for baby boomers could have been prevented if only they have been more vigilant and cautious on the possible consequences that they have to deal with if ever they have failed or plainly decided not to avail any LTC insurance plan that could cover their medical needs.

 

Due to the wrong perception that the rates will still be the same or would be lower as the person nears his retirement age, some baby boomers are now rushing to find other possible ways in order to have proper medical treatment and attention for all their LTC-related needs.

 

Purchasing an LTC plan requires the person to be financially ready and able to compensate for the monthly premiums that he has to pay until he satisfies the period that is indicated in his insurance contract. This is why early planning is necessary in order to be prepared for any monetary concerns that the individual might have should he decide to avail his own policy.

 

It could also give them more ideas on how to cut costs from their premiums and maximize all the possible benefits and other perks that their LTC policy could provide them. By doing this, they can avoid paying for expensive LTC rates without sacrificing getting their needed facilities and LTC services.

 

The problem with long term care insurance for baby boomers still needs to be resolved so that they can receive better services in the coming years. However, those who still have the time and financial resources to avail LTC policies should start thinking about their future and prioritize their LTC plan purchase.

Cost of Long Term Care Insurance Gets Worse

The American Association for Long Term Care Insurance reported that the prices of policies sold by the 10 of the country’s biggest insures have increased by 17 percent than last year’s rate. AALTCI’s executive director, Jesse Slome, said “Insurance prices have increased as a result of the historic low interest rates and yields on fixed income investments.”

 

 

AALTCI made a thorough study on consumer’s choice in purchasing from the available among the top 10 LTCi policies. The results show the average cost for a 55-year old single individual who qualified for preferred health discounts is $1,720 for between $165,000 and $200,000 of current coverage.  In 2011, a person would incur $1,480 yearly using the same coverage. The study reveals the gap between the lowest and highest cost of policy had stretched compared to last year.

 

The association also look at the policy prices among 55-year old single individuals and couples age 55,60, and 65. A 60-year old couple with the same benefits of $340,000 could pay around $3,335 annually, provided that the couples have qualified for health discounts.

 

Slome stressed that the policies are “properly” price, but agreed they are “expensive.” There are around eight million people with LTC, according to the AALTCI.