Health care has been the topic of discussion lately, but the greatest threat to your financial health is long-term care. This is the kind of care you need if you are not able to perform normal daily activities (such as eating, dressing, bathing and toileting) without help, and it is expected that you will need this help for an extended period of time, often for the rest of your life.
I often find myself addressing long-term care insurance in the estate planning meeting. Long-term care is often needed due to aging, chronic illness or injury, and with people living longer, most of us will need it for at least some time before we die. But it is not just for the elderly–a good number of younger, working-age adults are currently receiving long-term care due to accident, illness or injury.
The Key Takeaways
o The cost of long-term care is the greatest threat to your financial health.
o Most of us will need long-term care for at least some time before we die.
o It is better to assume you will need long-term care and plan for it than to just hope it doesn’t happen to you or a family member.
The Expense of Long-Term Care
Long-term care can be provided in your home, in an assisted living facility or in a nursing home. All can become very expensive over time.
For example, home health care can easily run over $20,000 per year–that’s at $16 per hour for just 25 hours per week. Depending on the skill required, number of hours needed and where you live, it can cost considerably more.
Assisted living facilities can cost more than $25,000 per year. Here, everything is a la carte–the more services you need, the higher the cost. In Bozeman, Montana the 2013 average cost of a nursing home facilities, with round-the-clock care, was $71,456 per year.
Costs for long-term care are hard to estimate. The average stay in a nursing home is three years; patients with Alzheimer’s usually need care longer, often in specialized facilities. Again, the actual costs will depend on the kind of care you need, how long you require it and where you live. Expect these costs to increase as the cost of medical care, in general, continues to rise.
What You Need to Know: Long-term care expenses are not covered by health insurance, disability income insurance or Medicare. If you do not plan for these costs, and you or another family member requires long-term care, the results can be financially devastating for your family. Often we will have to discuss emergency medicaid planning, with a client who is in this situation.
Actions to Consider
o Find out what costs are for long-term care in your area. Your financial and/or insurance advisor will be able to give you some parameters. You can also ask friends and neighbors; you probably know someone who has a family member receiving care at home or in a facility.
o Have an honest discussion with your spouse (and possibly other family members) about these costs and your desires about long-term care, should you need it. Most people want to stay in their homes. Find out what it would cost to make that happen–renovations to your home, home health care, etc.
Here at the Bryan Law Firm, PC we work to meet your Estate Planning, Business Planning, and Elder Law needs.