Come ye, say they, I will fetch wine, and we will fill ourselves with strong drink; and tomorrow shall be as this day, and much more abundant. (Isaiah 56:12)
In other words, let’s drink and be merry and not save for the future. And somehow (let’s not think about exactly how) there will be much more drink and abundance tomorrow.
Most people are not planning for long term care needs, but they are worried about how they will pay for it.
Here are some quick facts from the Genworth national poll. See how you compare to the average American.
75% of people have made no preparations for their or a loved one’s long term care needs
59% of people are worried about how they will pay for long care for themselves
44% believe their health insurance (either Medicare or a private health plan) will pay for their long term care needs. Neither program generally covers long term care
So how did you stack up? Are you like most Americans?
People are right to be concerned about the cost of care. It can have devastating financial and emotional effects on a family. When people purchase long term care insurance, they have their reasons: To avoid these bad consequences.
Specifically, these are the 5 biggest reasons people buy long term care insurance. Do any of these apply to you?
I want to protect my family – I don’t want to be a burden on my children. I don’t want them or their spouse to have to quit a job to bathe me, dress me, or help me on and off the toilet.
I want to protect my money – I worked hard for everything I own. I know how expensive long term care can be. I also know that I’ll have to spend my money down before Medicaid will pay. I don’t want all my wealth wiped out.
I want to keep my independence – If I go on Medicaid, I’ll have to receive care on their terms. He who pays the piper calls the tune. Since Medicaid would pay, I’d have a low likelihood of getting care at home or in an assisted living facility. I’d be on the fast track to the nursing home, and I’d have no say in the matter.
I want access to good quality care – I know that not all caregiving services and institutions accept Medicaid. I’ll have to go to one that does accept Medicaid if I become impoverished and can’t pay my own way. I know that Medicaid will only reimburse a nursing home a fixed amount, not what it costs the nursing home to provide me care. If I cost the nursing home more than Medicaid pays them, they might not give me the attention I need.
I want to protect my children’s inheritance – I have some assets that I want to stay in the family. I’d hate to have to spend them on myself in old age.
If you are like most Americans wanting long term care insurance, you’d probably agree with one or more of these reasons.
If any of these reasons seem applicable to you, I recommend you begin today to develop a plan that will protect your future. It doesn’t have to be the purchase of long term care insurance, but that is still a good choice. There are other actions you can take.
You could buy a house next to one of your children so he/she could have easy access to you if you need care. This could help minimize costs for professional care. If your child lives in the same city, you won’t even have to uproot yourself from a town you're familiar with. If your child is in another city, are you prepared to leave you hometown behind?
If you don’t have any kids you may have to seek other options. A reverse mortgage on your home might be possible to fund your expenses, and in this case you wouldn’t be worried about leaving an inheritance.
The bottom line is this: Develop a plan for the future that is realistic and workable. If your children can’t take care of you because they are financially incapable or geographically far away, don’t make your long term plans around them helping you. You are setting yourself and your family up for a difficult road. Don’t dismiss the help of a long term care insurance policy because of unrealistic alternative plans.
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