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Every day, we see clients for whom long-term care is the elephant in the room. They feel they can’t afford the costs, but they also feel they can’t afford not to have it either. So their solution is to pretend they don’t see the “elephant” and try to ignore the problem until it goes away on its own. Unfortunately, this often leads to our metaphorical elephant trampling on his life savings and any future inheritances he’s trying to leave behind. The older you are, the more expensive a long-term care policy becomes, and if you get sick before you have long-term care protection, it’s too late. Insurance companies are looking for your bottom line, and an already sick old man will scare them off.
The costs of these policies are also rising faster than inflation. Therein lies the conundrum for Boomers and Seniors: They are living longer than their parents and that means they need more money to get through “old age.” Finding long-term care is a difficult and complicated process. You’ll need to find a place that cares about people in your (or your loved one’s) circumstances. You need to find a place with the right facilities and staff, a place that leaves you with a good sense of security. And you have to be able to afford it too. This is not a one-size-fits-all situation. Everyone has their own specific services and conditions that they or their loved ones will need to meet. Remember, what we call “long-term care” is a broad category, with options ranging from residential facilities to your own home.
The biggest threat to financial security for Boomers and Seniors is the cost of long-term care (and Obamacare won’t help with this). Assisted living facilities are now climbing towards the $7,500 per month mark and a private room in a nursing home will range from $500 to $600 one day.
Many people choose to live in retirement communities where they can still be in charge of their own daily lives, but without many of the usual stresses of maintaining their own home. This option tends to be a little more expensive than living in your own home, but it does give you the option to “age in place.” Residents live in their own apartment and can increase their service levels as needed. For example: fully independent living, adding visits from health workers, even to the community’s own skilled nursing care facilities.
Of course, the least expensive option is still home health care, but it also has other benefits: It doesn’t require you to move, your mortgage is probably already paid off, and you already know where everything is. Unfortunately, the cost of home health care is also rising and may be more than many people realize when it comes time to pay. Fortunately, there are community health care programs that can help with home health care for those who qualify.
Some seniors have chosen to get long-term care insurance to help with these costs, but that, too, is becoming more expensive as companies increase their rates and reduce their coverage. Also, this insurance is getting more complicated as it now has to cover things like surviving spouse protection, caregiver issues, scams/identity theft, and making sure you have an advocate to fight for your rights in a system that is biased . against you.
In short, we are living longer, and unlike previous generations, people are generally not living with or near their children. Seniors are going to need more money for this longer life and for any unforeseen medical issues that may arise.
Do you know what is the fastest way for a Boomer or Senior couple to become an impoverished Boomer or Senior couple? Simple, one of them just needs to get sick before they get long-term care insurance. We see it every day, people who have worked hard and saved money their entire lives are forced to watch it disappear in an avalanche of medical bills as they age. It’s really heartbreaking, because if you’ve managed to save some money, you probably could have paid for long-term care.
Our life expectancies are increasing these days, as are the cost of health care, the distance seniors live from their children and families, and the financial pressures on Medicare and Medicaid. The new Affordable Care Act actually provides $500 billion in Medicare cuts for the next decade! Where to go if you or your spouse get sick? Home health care? Adult daycare? Assisted living? A nursing facility? Respite care services, which allow the caregiver to leave the older person for a limited period? Who is going to pay for it? And for how long? These are the questions to ask now, while you still have time to plan. If you haven’t bought long-term care before you or your spouse got sick…forget it. Nobody will insure you once you are sick! If this happens to you, you will run out of time, out of options, and very quickly out of money. And if you’ve planned to leave something to your heirs, there may be nothing left to leave them but a bunch of bills.
It’s an old (but true) cliché: those who fail to plan plan to fail. When it comes to health care expenses as you age, you don’t plan at the risk for yourself and your loved ones.