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Planning for Your Future - - All About Long Term Care

Why is this an important topic? Why should you care? Definitions, statistics, and encouragement to PLAN!

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Planning for Your Future - - All About Long Term Care

  1. 1. Planning For the Future:Long Term CareJennifer LavelliCertified Senior AdvisorLife, Disability and Health Insurance Advisor
  2. 2. Topics We’ll Cover Today• Why Are We Hearing So Much About Long Term Care (LTC)?• What is LTC?• What Does it Cost to Receive LTC, and How is it Paid For?• Planning for Future Needs• Resources
  3. 3. Why Are We Hearing So Much About LongTerm Care?What’s New, What’s Changed?
  4. 4. The World’s NewDemographics• For the first time in history, people aged 65 and over will soonoutnumber children under the age of 5• Throughout the world today, there are more people aged 65 andolder than the entire populations of Russia, Japan, France,Germany and Australia—combined• By 2030, 55 countries are expecting their 65 and olderpopulations to represent at least 20 percent of their total• By 2050, the U.N. estimates that the proportion of the worldspopulation age 65 and over will more than double, from 7.6%today to 16.2%Source: United Nations, 2009*Residential Care Facility in California
  5. 5. Other Dynamics• The U.S. Dept. of Health and Human Services predicts that 70% ofall Americans age 65 and older will likely need some form of LTC• Health care advances keep more people (of all ages) alive, andoften create a need for long term care where none existedpreviously• Alzheimer’s and other forms of dementia (and the associated needfor 24/7 care) are more likely as one ages (1 in 8 older Americanscurrently have Alzheimer’s)• Seniors with fixed incomes have longer lives, more care needs, andhigher healthcare costs - - this combination can have devastatingfinancial impactsSource: U.S. Dept. of Health and Human Services’ National Clearinghouse for Long Term Care Information
  6. 6. What Exactly Is Long Term Care, Anyway?
  7. 7. Long Term Care Defined• Long Term Care is a phrase used to define care required during apersistent or chronic state of health, throughout which time a personis unable to independently handle some of the basic activities ofdaily living (ADL’s), or requires supervision due to cognitiveimpairment (conditions that can be due to Alzheimer’s disease, braininjury, or stroke)• This type of care is referred to as Custodial Care, and most healthplans and insurances do not cover this care• Activities of Daily Living (basic physical maneuvers that healthyindividuals perform daily without assistance) include:- Eating - Bathing- Dressing - Toileting- Continence - Transferring (from bed to chair)
  8. 8. Other Levels of Care• Though a need for assistance with ADL’s, or a cognitive impairmentdefine and “trigger” Long Term Care from an insurance perspective,there are also Instrumental Activities of Daily Living (IADL’s) thatdefine another range of tasks considered instrumental to self-sufficiency:- Shopping - Preparing meals- Performing household tasks - Doing laundry- Managing money - Using the telephone- Taking medications by oneself
  9. 9. Where Do People Receive LTCServices?• Family Home• Adult Day Care Center• Assisted Living Facility (ALF)• Nursing Home• Hospice Facility*Residential Care Facility in California
  10. 10. Staying Home: the #1 Choice - - Who isProviding Care?• 65.7 million family caregivers make up 29% of the U.S. population• 52 million family caregivers provide care to an adult 18+• 43.5 million of adult family caregivers care for someone 50+ years of ageand 14.9 million care for someone who has Alzheimers disease or otherdementia• Many caregivers of older people are themselves growing frail. Of thosecaring for someone aged 65+, the average age is 63 years with one thirdof these caregivers in fair to poor health• An estimated 66% of family caregivers are female. One-third (34%)take care of two or more people, and the average age of a femalecaregiver is 48• 70% of working caregivers suffer work-related difficulties due to theirdual caregiving rolesSource: Caregiving in the U.S.: AARP and National Alliance for CareGiving, 2012
  11. 11. Staying Home: the #1 Choice - - How Can aBetter Family Outcome be Facilitated?• Planning ahead for staying at home can go a long way to helpingrelatives age in place, and stay OUT of a facility• Support services typically necessary for the frail and elderly tocontinue living in their own home:– Help with household tasks, like cleaning and meal preparation– Help with personal tasks, like bathing and dressing– Services provided by a visiting nurse or home health aide– Special equipment, like a walker, wheelchair or respirator– Home modifications to enhance safety at home• Planning and financing for required resources can free up familymembers to continue with their lives, while overseeing a lovedone’s care, and spending quality time with them
  12. 12. How Much Does it Cost to Receive LongTerm Care Services?- And -How is It Paid For?
  13. 13. The 2012 Cost of Care “Outside NYC”• Semi-private room in a nursing home was as high as $136,875/yr• Projected to be $363,170 by 2032• Private 1 bdrm in an ALF was ~$70,200/yr• Projected to be $186,261 by 2032• Full-time Home Health Care Aide cost ~$53,539/year• Projected to increase to $142,055 by 2032• The average nursing home stay is 3 years• Home care needs continue longerSource: Genworth’s Cost of Care Study, 2012
  14. 14. How Are LTC Services Paid For?• Private/Company Health and Disability Insurance?• Skilled acute care only• Will not pay for long term custodial care
  15. 15. How Are LTC Services Paid For?• Medicare?• Medicare and related insurances (MediGap, MedicareAdvantage) do NOT cover long term custodial care, only medicalcare related to an illness or injury:• Acute Care Services• Rehabilitative Care- limited amount, either at home or in a nursinghome.• Limited Home Care (HC) Coverage• Medicare WILL cover a Skilled Care/Skilled Nursing Facility,provided:• Three day prior hospital stay required• Enter facility within 30 days• Full costs covered for 20 days• Minimal costs covered for next 80 days• No coverage after 100 days in that benefit period8. The Centers for Medicare & Medicaid Services and U.S. Department of Health and Human Services. “The 2005 Guide toHealth Insurance for People with Medicare.”
  16. 16. How Are LTC Services PaidFor?• Medicaid?*• Must “spend down” assets to NY State’s required 2012 level of$14,250 for an individual over 65• Medicaid provides limited in-home care• Choice of facilities is limited*Eligibility requirements apply and vary by state
  17. 17. How Are LTC Services PaidFor?• Personal Assets/Family?• One long term illness may jeopardize an accumulated retirementsavings/nest egg, and leave a partner/spouse without resources• Most family members are struggling to manage their ownfinances, and cannot afford to support a loved one’s care
  18. 18. Planning for YOUR Future Needs
  19. 19. Have “The Talk”• Every day, thousands of Americans over age 40 experience a significantchange in their health status. Even changes that, due to advances in healthcare, are no longer life threatening... can be life altering• 75% of people have not had a conversation with their loved ones aboutlong term care planning in the last 12 months• Talk to your parents. No doubt you hope your parents have made plansthat consider a potential health or financial crises, have finalized their willand power(s) of attorney, and made plans for their long term care.Unfortunately, the odds are good that they have not.• Talk to your spouse and other close family members. Even couples andfamily members that have shared “everything” may find they dont alwaysknow each other’s preferences - or may find those preferences havechanged over time. Talking about health, finances, and long term care willbetter equip you to make informed decisions together; decisions that willreflect both your individual and collective wishes.Source: Genworth 2011 Financial Reality Check
  20. 20. Make a Plan: Important At Any Age• Complete your financial/health/estate plans and documents, andshare them with family:• Advance Directive (Durable Power of Attorney for healthcare, Living Will,DNR)• Will and Trust to pass on assets• Durable Power of Attorney for financial affairs• Funeral and Burial plans• A serious accident or debilitating illness can happen at age. That iswhy it’s wise to make a plan when you are young - and healthy.• 37% of those that needed LTC in 2000 were under the age of 65¹• The probability of losses in physical functioning increases with age –dramatically so for the population aged 65 and older.²¹Kaiser Family Foundation, “Medicaid and Long Term Care”²Congressional Budget Office, “Financing Long-Term Care for the Elderly”
  21. 21. A Sound Plan for Your FutureMay Include Long-Term CareInsurance The statistical risk of needing long term care is greater than the risk of ahouse fire, and more likely than an auto accident.* People have many types of insurance to help protect their assets:– Automobile insurance protect their car– Homeowners insurance protects their home– Life insurance protects their family– Disability insurance protects their income Most people would never consider going without home and car insurance --but havent planned to protect their finances and family in case of a criticalor chronic illnessSource: www.longtermcare.gov/LTC
  22. 22. Should You Consider LTCInsurance?Some considerations -- do you need to or want to :Protect your retirement and other family savingsRely on additional financial support for future care needsPreserve your independenceFree your family/other care-givers to spend quality time with youRetain control over your choicesObtain care planning expertise, advice and resources when you needcare₁₁With traditional LTC policies only
  23. 23. Is LTC Insurance Something You CanAfford?• Premiums are based on a variety of factors, including your age andhealth when you buy a policy and the level of coverage, benefits andoptions you select for your policy• If you buy a policy with a large daily benefit, a longer maximumbenefit period, or a home health care benefit, it will cost you more• Inflation protection and non-forfeiture benefits (return of premium,reduced paid up policies, etc.) can increase premiums for long-termcare substantially• Inflation protection can add 25% to 40% to the premium.• Non-forfeiture benefits can add 10% to 100% to the premium
  24. 24. Is LTC Insurance Something You CanAfford? The older you are when you buy long-term careinsurance, the higher your premiums will be, as it’smore likely you will need long-term care services If you buy at a younger age, your premiums will be lower,but you will pay premiums for a longer period of time Recent studies have found the average age of purchaserswas age 65 in the individual market
  25. 25. Additional Options and Resources
  26. 26. Additional LTC Funding Options Life Insurance and Annuities with Chronic Illnesscoverage Health Care Savings accounts
  27. 27. RESOURCES YOU SHOULD USE The U.S. Dept. of Health and Human Services’National Clearinghouse for Long Term CareInformation www.longtermcare.gov/LTC National Institutes of Health http://nihseniorhealth.gov/longtermcare New York State Dept. of Health http://www.health.ny.gov/facilities/long_term_care/ Family CareGiver Alliance, National Center onCareGiving http://www.caregiver.org

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