‘Medicare Will Pay for It’ and more myths about long-term care
There is no requirement to own a plan to pay for 'activities of daily living,' why have the conversation about long-term care benefits?
1. Caregiving means daily living activities, which means you will someday transition from an active lifestyle to needing assistance with daily living activities.
2. You have choices. You and your family may use your personal resources or telephone or write to your Health Insurer, Medicare, Veterans Benefits, or other social services to ask them how and where they will pay for your caregiving.
3. Owning an LTC plan allows you and your family to decide where and with whom you want assistance with your daily living activities.
4. LTC benefit payments paid to you or a care agency are not subject to income taxes.
5. Some of your premiums may be deductible if you are a Corporation, Partnership, or LLC.
WHAT IS LONG-TERM CARE?
Many think the phrase "long-term care" refers to an insurance policy. While insurance may be part of your strategy, long-term care encompasses many other decisions. It would be best to decide where you will live, how you will navigate the myriad of legal, family, and social dynamics, and the many options for paying for everyday help. Though several government programs may help pay for some long-term care services, many people face significant out-of-pocket costs.
Long-term care is provided in different places by different caregivers, depending on a person's needs. Most long-term care is provided at home by unpaid family members and friends. It can also be given in a facility, such as a nursing home, or the community, such as an adult day care center. While no one can predict the future, long-term care planning explores the options for care and the financing possible should the time arise when services are needed.
Let's now look at some myths that may be keeping some from adequately planning for long-term care.
MYTH: I WON'T NEED IT
•Fact: About 70 percent of Americans over 65 will need some help with the activities of daily living for months or years as they age. It may be due to an illness, chronic disease, or disability. But often, care is required because of a natural decline due to aging of one's eyesight, hearing, strength, balance, or mobility. Long-term care is not just for older adults. Nearly 41 percent of long-term care is for those under 65 who may need help after a chronic disease, injury, or mental illness diagnosis.
MYTH: IT MEANS AN INSURANCE POLICY
•Fact: Many people confuse "long-term care planning" with "long-term care insurance plans," but they differ. Insurance is one of the many options people consider for covering long-term care costs. Long-term care planning means developing your strategy and making decisions now for how you want a range of things to be handled later when you or a loved one needs long-term care services.
MYTH: IT'S TOO SOON, OR TOO LATE, FOR ME TO PLAN
•Fact: The best time to create your long-term care strategy is before you need long-term care. If you're over 50, there's no time like now to begin. But, even if you are receiving services for yourself or a loved one, it's still helpful to go through the planning steps. That way, you can be better informed, prepared, and in control of decisions.
MYTH: LONG-TERM CARE = NURSING HOME
•Fact: Contrary to popular belief, long-term care does not mean a one-way trip to the nursing home. Long-term care today is more likely to be delivered in various settings such as homes, adult day centers, and assisted living facilities.
•Fact: Several public programs, including Medicare and Medicaid, may help pay for some long-term care services under certain circumstances. However, each program has specific rules about what services are covered, how long you can receive benefits, whether or not you qualify for help, and how much you have to pay in out-of-pocket costs. Medicare has never paid for long-term care. It may cover up to 100 days of care in a skilled nursing facility for each "benefit period," which begins the day you check into a facility and ends 60 days after you check out. If someone needs more than 100 days of such care in a benefit period, they must pay out of pocket. In most states, Medicaid reimburses some long-term care costs, but only if you fall below certain income thresholds.
MYTH: MY FAMILY WILL TAKE CARE OF ME
•Fact: Home Care is one of the fastest growing industries for one primary reason — families work and live farther away from their parents than ever. In addition, many adult children in the sandwich generation may have a young child and a parent they care for. This additional care results in a rather large undertaking and stress and comes with a financial cost if they stay home.
MYTH: IT DOESN'T COST THAT MUCH
•Fact: Long-term care is more expensive than most people think, and you will likely be responsible for paying out of your pocket for the care you need. Because there are many kinds of long-term care services and supports, there is a wide range of costs depending on the type of care, where it is given, and by whom. Here is a quick breakdown of typical expenses for caregiving according to a 2021 Genworth Cost of Care Survey.
•$27 an hour for a home care aide
•$78 a day for care in an adult daycare center
•$4,500 a month for care in an assisted living facility
•$7,800 a month for a semi-private room in a nursing home
•$8,910 a month for a private room in a nursing home.
Note: These figures are national averages, and care services will vary by geographical region. The above numbers are simply a guide to help you make a more informed decision about the affordability of long-term care.
Do you have a plan for long-term care?
Because we don't live forever, it's essential to be prepared if you or a loved one needs long-term care. Many people learn about long-term care the hard way: when they or a loved one is in crisis. Too often, that's when they discover that long-term care can be expensive and Medicare doesn't cover it. So, remember, begin by thinking about what would happen if you became seriously ill or disabled. Talk about long-term care with your family, friends, healthcare provider, or lawyer. It's well worth the effort.