WHY DO WE FAIL TO PLAN FOR LONG-TERM CARE

Most of us do not know the facts surrounding our potential need for long-term care and what the cost of that care will be. This was reconfirmed recently by a telephone survey of 1,735 Americans over the age of 40, which survey was conducted by the Associated Press, NORC Center for Public Affairs Research. The survey points out the many misconceptions we have about long-term care, including the potential that we or a family member may need some long-term care within the next five years; the lack of knowledge of the positive impact of “person-centered care”; misunderstanding of what long-term care services are provided by Medicare, Medicaid and private insurance; and an increase in the lack of concern for the costs of such care when we have failed to plan.

Genworth, a company which has been a long time provider of long-term care insurance, conducted a Cost of Care Survey in 2015. It found that 70% of Americans over the age of 65 will eventually need some kind of long-term care, with the number of Americans over the age of 65 increasing to 22% of the population by the year 2040. This survey also showed an increasing number of people believing they will never need long-term care.

The survey defined person-centered care as “an approach to health care and supportive services that allows individuals to take control of their own care by specifying preferences and outlining goals that will improve their quality of life.” This leads us to consider coordinated care, which involves communication among various medical providers to prevent overlap of services, or medical oversights. Interestingly, the survey showed that 65% of adults over the age of 40 have two or more doctors and many of those adults (29%) report these medical providers do not communicate well or at all. The risks of this are fairly obvious.

The survey also showed a lack of understanding by many of what Medicare, Medicaid and private health insurance covers when it comes to long-term care. Medicare, in fact, does not pay for ongoing long-term care. It will pay for intermittent stays at nursing facilities, if certain requirements are met. However, 34% of those surveyed though Medicare would cover long-term care. Medicare also does not pay for care in the home, although once again a large percentage of those surveyed (36%) thought it did.

Further, most health insurance plans will also not cover long-term care services like a nursing home or home-care provided by a licensed home health care provider. Many surveyed believed their insurance would cover these costs.

Medicaid is the largest payer of long-term care services. Medicaid is a federally and state-funded needs-based benefit that will provide for some types of long-term care. However, remember that Medicaid is basically a “welfare” program, so there are very strict limits on your assets and income.

The survey reported that across the nation the average cost of a nursing home is approximately $80,300/year and of home health care approximately $44,616.

Even though this information is readily available, most of us are unprepared for the staggering costs of long-term care. The survey reflected that one-third of adults thought they would be very able to pay for long-term care. However, two-thirds of those surveyed reported doing no planning for long-term care.

So it appears that many of us are reluctant to face the possible loss of independence as it relates to aging, which leads to our failure to see the need for planning.

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