What do I do when I can’t take care of myself anymore?
What do I do when I can’t take care of myself anymore?
Getting custodial care is not just about you!
At some point in our lives we may be faced with the problem of no longer being able to do the daily activities of living that we do each day. We will need some sort of extended or custodial care. To better understand “extended” care, think of the activities that you performed when you woke up this morning.
– Climbed out of bed (Transferring)
– Used the bath or shower (Bathing)
– Walked to the bathroom (Continence)
– Got dressed (Dressing)
– Used the toilet (Toileting)
– Ate breakfast (Eating)
This kind of care is often needed due to aging, chronic illness or injury, and 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.
An unexpected need for long-term care services may create stress for family members confronted with issues of caregiving. Caregiving may take a physical toll on family members who may have to help with bathing, dressing, and other tasks associated with custodial care. It can also have a financial impact on family caregivers who have to miss time from work, change from full-time to part-time employment, or even leave their job completely. Finally, caregiving may have an emotional impact on family members having to take care of Mom or Dad — someone whom they have always seen as strong and in control. Physical and mental illness sometimes brings an unexpected role-reversal to the parent-child relationship.
What are my options?
Care can be provided in your home, in an assisted living facility, or in a nursing home. All can become very expensive.
Home health care can easily run over $20,000 per year. That's at $16 per hour, for just 25 hours a 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; the more services you need, the higher the cost. Nursing home facilities, with round-the-clock care, are now $50,000 or more a year. Expect to see these costs go even higher, thanks to rising medical costs.
Also, expect to pay these costs for a while. The average stay in a nursing home is three years. Alzheimer's patients usually need care longer.
Unfortunately, long term care is not covered by health insurance, disability income insurance, or Medicare.
Health insurance plans cover nursing home expenses only for a short period of time while you are recovering from an illness or injury.
Disability income insurance will replace part of your income if you are not able to work after a specified time, but it does not pay for long term care.
Medicare, which covers most people over the age of 65, provides limited coverage for skilled care for up to 100 days immediately following hospitalization. After that, you're on your own.
So who will pay the cost if you need long term care? There are only three sources: your (or your family's) assets, Medicaid, and long term care insurance.
Medicaid pays the bills for a large number of people in nursing homes today. But because the program is designed to provide services for those who cannot support themselves (children, the disabled, the poor), you will have to "spend down" your assets and be practically penniless in order to qualify for benefits. Your spouse is also limited to the amount of assets he or she can have. Also, you will only be able to receive care from a facility that accepts Medicaid. But if you have minimal assets, it may be the best option for you.
Choices in Long Term Care Health Insurance
Until recently, consumers had few choices when it came to long term care health insurance. Traditional policies, which provided a certain amount of selected coverage, were the norm. Policies could be designed to cover care expenses for a few months, or much longer, even providing benefits for the insured’s lifetime. For example, consumers could purchase coverage that would provide $100 a day in benefits for a period of three years. When calculated, the $100 daily benefit multiplied by 365 days in a year for 3 years would create a $109,500 “pool of money” available for care. This pool of money would pay for care in a nursing home, assisted living facility, adult day care, or in the personal residence of the policyholder once certain criteria had been met.
The Hybrid or Linked Long Term Care Insurance Policy
In response to customer and agent demand, insurance companies have designed what can be best described as hybrid or linked policies. These policies combine the benefits of an annuity or life insurance agreement with a traditional long term care contract. With hybrid policies, the consumer has the guarantee of long term care benefits or, if no care is needed, the promise of insurance benefits to themselves and their beneficiaries.
When planning for long term care, the experience and advice of a qualified professional can be most helpful. If you are considering trying to qualify for Medicaid, make sure you talk with an expert in Elder Law before you do anything. An innocent mistake could disqualify you from receiving benefits for many months.
Ray A. Hawkins CFP ® ADPASM, AWMA®
VP Financial & Estate Planning
AEPG® Wealth Strategies
25 Independence Boulevard, Warren, NJ 07059