November is Long Term Care Month, a time set aside to encourage all of us to think about both our needs and the needs of the people we love. It’s never too early to think about the future.
By the time you turn 65, you have a 50-percent chance of needing some kind of assistance with your daily activities. In fact, long-term care has become the greatest healthcare need of older people.
What Is Long Term Care?
Long term care (LTC) is a catch-all phrase that refers to the services a person might need to meet both their medical and personal needs when they aren’t able to meet those needs alone. LTC refers to both skilled and unskilled care. It includes things like:
• Skilled nursing home care
• Assisted living
• Memory care
• In-home health care
• Home health aides
• Transportation services
• Meal delivery
The majority of seniors who need LTC simply require help with daily living activities and not skilled nursing care. However, this is typically the most challenging service to find and fund.
Activities of Daily Living (ADL)
Two-thirds of all seniors in the U.S. need help with personal grooming and food preparation. These are often referred to as Activities of Daily Living (ADL). It could be as simple as moving from the bed to a chair or bathing. Seniors often rely on family members to help, but that doesn’t always work well.
Nathalie Vasquez and her husband, Joe, are discovering that right now. They’re on a journey to find the best care for Nathalie’s mother.
“My mom is 79 and is, thank God, in great health,” said Nathalie. “But she has horrible arthritis in her knees and can’t get around very well. I can’t get her in and out of the bathtub, and she feels really weird about having Joe do that. And she can’t really get dressed all the way by herself.”
Nathalie was able to find a home health care aide to visit her mom twice a day. The woman helps her mom get a bath, get dressed and prepares her meals for the day. While it’s a relief for Nathalie and Joe to know their mother is well-cared for, they don’t know how long they can pay the bills. The cost is almost $3,000 a month, and insurance doesn’t cover a penny.
Long Term Care Costs
It’s somewhat ironic that unskilled home health care (care that doesn’t require a nurse) is often significantly more expensive in terms of out-of-pocket costs than nursing care. As Nathalie and Joe Vasquez discovered, Medicare doesn’t cover the kind of help their mother needs.
“I was absolutely floored,” said Joe. “It honestly never occurred to me that Medicare wouldn’t pay for the (home health care) aide. I thought that’s what it’s there for.”
Medicare doesn’t cover what’s called custodial care, or care that doesn’t require a doctor or a nurse. It won’t pay for in-home help with personal hygiene needs, dressing, food preparation or getting to the bathroom. It also doesn’t cover nursing home care that isn’t considered “skilled”.
So, what is “skilled” care? Broadly defined, it refers to services provided by a nurse or other licensed medical professional. That could include:
• Physical therapy
• Occupational therapy
• Speech-language pathology
• Wound care
• Intravenous (IV) therapy
• Monitoring of vital signs
• Medical equipment
Even though Medicare does cover skilled care, it only does for a limited amount of time. For example, it will cover 100 days of skilled nursing home care. Once the patient doesn’t need that level of care, they assume the full cost of their stay in the facility.
It’s easy to see why LTC is the most common catastrophic health care expense today. The average cost of LTC is $140,000 a year. John Hancock offers a free online calculator to help you see what different types of LTC cost in your area.
How to Pay for Long Term Care
A 2019 study in Health Affairs called “The Forgotten Middle” found that middle income seniors, those with access to less than $75,000 a year will simply be priced out of the LTC market. Specifically, 80 percent of these seniors will have less than $60,000 a year on hand.
But the estimated cost of assisted living plus out-of-pocket medical expenses will hit $62,000 in the next ten years.
This group can’t afford care that doesn’t require a doctor or nurse. They must rely on family and friends to help with meals, bathing, dressing and transportation.
Roughly eight million Americans have turned to long term care insurance. They pay a monthly premium and can draw on their benefits when, and if, they need LTC. These policies cover most of the services that Medicare does not.
LTC insurance isn’t perfect. The premiums do increase over time, and policy holders who don’t use it, lose it.
Hybrid life insurance policies offer an alternative. They provide life insurance that is payable to beneficiaries upon the policy holder’s death. They also include a provision for LTC should the policy holder need it. If they don’t use the LTC benefit, the full amount may be paid to the beneficiary in addition to the life insurance when the policy holder dies.
Regardless of what type of LTC insurance you want to explore, the time to act is well before you need it. Like life insurance, the premiums can rise with age. Even if retirement seems like a lifetime away, planning now can significantly reduce your costs.
Reducing the Need for Long Term Care
We can’t plan for every possible aging scenario, but we know that a healthy lifestyle now can reduce our chances of developing serious health problems later in life. Just keeping up with regular doctor’s appointments can help you stay on top of issues and address them before they cause a health crisis or a chronic condition.
For example, regular blood tests might detect pre-diabetes that can be treated with simple changes in the diet. Increasing cholesterol levels can be addressed before they cause heart problems. Slightly elevated blood pressure can often be treated with diet and exercise.
The bottom line: healthy eating, regular physical activity, not smoking, and limited alcohol consumption can help you stay healthy and potentially reduce your need for long term care as you age.