Friday, February 28, 2014
If you were to sustain a debilitating injury or illness while employed, your accumulated sick leave may cover your living expenses and the cost of your care – at least for the short term – but what about the long term? Without a steady income, how long would it be before your savings and investments would be depleted?
What is long-term care?
Long-term care includes the care and services provided to a person who requires supportive help or supervision for a period expected to last 90 days or more. It includes the assistance needed with the activities of daily living (often called ADLs) such as eating, bathing, dressing or moving from a bed to a chair; if you suffer from an injury like broken hip, an illness, a stroke; or from advanced age and frailty. It also refers to the supervision that may be needed with severe cognitive impairment, such as Alzheimer's disease or other mental illness or brain disorders, that can limit a person's ability to think or reason.
Many people in their 40s, 50s, and 60s probably don't spend a lot of time thinking about these questions or planning for long term care, especially while enjoying good health. Typically, unless a friend or family member has required extended care, most of us know little about what's involved. But with the rising cost of care and rate of inflation, it's never too early to consider your options for funding long term care.
I’m not old enough to be concerned... or am I?
Although it may be difficult to talk about the prospect of declining health, in the blink of an eye your circumstances could change.
In addition, the likelihood of needing long-term care often increases with age-related diseases. A 2011 report from the Alzheimer's Association, “2011 Alzheimer's Disease Facts and Figures,” estimates nearly 10 million baby boomers will develop Alzheimer's disease with another 4 million to develop some type of dementia.
Does long-term care mean a nursing home?
Years ago, long-term care usually meant nursing home care. Today, most long-term care is provided informally at home, either by family caregivers or friends, or by paid home health care providers.
Long-term care services are also provided in assisted living facilities and at community-based adult health care centers. The more advanced levels of care are provided in nursing homes, including those with memory impairment or Alzheimer's units.
How much can it cost?
That varies depending on the level of care, the type of residential facility, and the geographic location. However, the financial impact should not be underestimated. According to the Genworth 2013 Cost of Care Survey conducted by CareScout, the median nationwide cost for a one-year stay in a nursing home (private room) is $83,950 and may be higher in certain parts of the country. At those rates, it's easy to see how long-term care costs could deplete retirement income and assets accumulated over a lifetime.
What about my health insurance?
It's a common misconception that long-term care is covered by health insurance. In fact, most health care insurance policies do not cover long-term care. Generally, Medicare only covers long-term care under very specific circumstances for a limited time following a qualifying hospital stay. One of the eligibility requirements for Medicaid includes spending down your assets.
How can I make sure I’ve prepared properly?
The best solution is planning. And part of that planning should include looking into all of your available options, including long-term care insurance.
Are cancer survivors eligible for long-term care insurance?
Being a cancer survivor does not automatically disqualify you. Many survivors who have a long-term care insurance policy applied for coverage and were accepted subsequent to diagnosis and treatment. Every applicant is evaluated individually, as is every type of cancer. The type of cancer, stage, the type of treatment, the length of time since diagnosis and treatment, and your current health are among the factors our underwriters consider.
How do I find out if I can apply as a cancer survivor?
If you have had cancer, consult a long-term care insurance agent/producer to determine if you are eligible to apply. For cancer survivors and other individuals, eligibility to apply does not guarantee that an application will be approved; however, finding out if you are eligible to apply is the first step in the process.
Aren’t people who have had cancer charged higher rates?
Not necessarily. Each insurance company has its own underwriting standards and price structures. Planning for your long-term care needs can help you be prepared for whatever the future may bring.
Beverly Blanton is a licensed long-term care insurance agent with an office in Mount Pleasant, S.C. and can be reached at 843-654-7400 or firstname.lastname@example.org.