The Importance of Planning Long Term Care

The Importance of Planning LTC

No one wants to think about a time when they might need long-term care. So planning ahead for this possibility often gets put off. Most people first learn about long-term care when they or a loved one need care. Then their options are often limited by lack of information, the immediate need for services, and insufficient resources to pay for preferred services. Planning ahead allows you to have more control over your future.

Why Plan Ahead for Long-Term Care?

Planning ahead for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. About 60 percent of people over age 65 require some services, and the likelihood of needing care increases as you age.

Planning ahead helps you understand what service options are available in your community, what special conditions may apply for receiving services, for example, age or other eligibility criteria, what services cost, and what payment options – public and private – apply. Having this information helps ensure you will have a range of options when you need long-term care, and makes it more likely that you will have more choice and control over where and how you receive services.
Planning ahead is important because the cost of long-term care services often exceeds what the average person can pay from income and other resources. By planning ahead, you may be able to save your assets and income for uses other than long-term care, including preserving the quality of life for your spouse or other loved ones. With planning, there is a greater likelihood of being able to leave an estate to your heirs, because you are less likely to use up your financial resources paying for care.

Planning ahead also means less emotional and financial stress on you and your family. It can provide a way to involve your family in decisions without depending on them to bear the entire burden alone.

Finally, for many people, one of the most important advantages of planning ahead is to ensure greater independence should you need care. Your choices for receiving care outside of a facility and being able to stay at home or receive services in the community for as long as possible are greater if you have planned ahead.

Why People Don’t Plan Ahead

There are many reasons why people don’t plan ahead for long-term care. These include the natural tendency to avoid thinking about becoming dependent on others for your care, misinformation about the risks of needing care, and lack of knowledge about the cost of care and payment options.

Most people don’t like to think about getting older, developing a disability, becoming less independent, or needing help with personal care. Many people don’t realize that their chance of needing long-term care by the time they turn 65 is as high as 60 percent.

People commonly misunderstand how expensive long-term care is, and how it is paid for. Consumer surveys have shown that many individuals don’t realize that health insurance, Medicare, and/or disability coverage do not pay for most long-term care services. Medicaid pays for some long-term care services, but only if you qualify for the program because you have limited income and financial resources.

Some people find it too difficult to raise these subjects with their loved ones, making it difficult to explore and define their plans. Adult children often feel like they are patronizing their parents if they raise the subject or they are afraid of giving the impression that they might not want to provide care if it is needed. Parents often don’t want to make adult children uncomfortable or to discuss details of their finances with them.

Finally, some people realize it is important to plan, but don’t know how to go about it. The best way to begin is with small and easy steps. Even just talking with your loved ones is a great first-step!

Examples of People Who Planned

What exactly do we mean when we say “planning?” Below are some examples of how people might plan for long-term care before they need care. While these are fictional illustrations, they represent a variety of real-life situations.

The people described here are composites drawn from a variety of real-life scenarios; they illustrate the range of personal circumstances people might find themselves in and the different forms that “long-term care planning” might take. There is no “one-size-fits-all” plan. As you read these examples, think about your own circumstances and the types of options you might want to consider.

Mrs. F is 81. She has osteoporosis, arthritis, and high blood pressure. Otherwise she is basically healthy, but frail. She lives on a limited, fixed income and does not have significant assets to draw upon to help her meet her long-term care needs. She has been living in a modest one-bedroom rental unit, but is finding it difficult to maintain her apartment on her own.

* Plan:

o Pay for modifications to daughter’s home (outfit spare bedroom and second bathroom for Mrs. Friedlander).

o Move in with daughter.

o Establish “Advance Directive” and create “Durable Power of Attorney.”

“My daughter and I, we have a good time together. I know that until my time comes she’ll be with me, helping me. It was hard to talk about some of this, but I feel good that she understands. I worked all my life and I want to be at home. I don’t want to be in any hospital or nursing home.”

Mrs. W is 78. Since having a stroke several years ago, she depends on a wheelchair to get around. She and her husband still live in the three-bedroom house they bought when they were first married. The home’s value has increased dramatically since they bought it and they are lucky to have paid off the mortgage a few years ago. The upkeep of such a large home is taking a toll on both her and her husband.

* Plan:

o Sell home and use the resulting proceeds to move to a Continuing Care Retirement Community when she and her husband turned 75.

o With no children, the Wielands decided to establish a Charitable Remainder Trust to pay for their care and willed the remainder of the trust after they both passed away to the California Horticultural Society.

“George and I were fortunate all our lives. We both worked and managed to save. We don’t really have any family. Both of us were only children and we never had any of our own. We wanted to be able to stay together as long as we could, but be sure that the other would be cared for, no matter who was first to go.”

Mr. C is an 82 year old widower. He lives in the modest home in which he raised his children. He has prostate cancer and has had a pacemaker for the past two years. At this point he is still able to take care of all his physical needs and he is very keen on remaining at home to receive the care he needs, because of all the wonderful family memories it holds for him. But his income and assets may not be enough to pay for the care he needs at home.

* Plan:

o Stay at home and receive care there if necessary.

o Pay for care with a combination of savings and a reverse mortgage.

o Son and daughter to coordinate care and repay the reverse mortgage loan amount when it is due (upon Mr. Curley’s death or when and if he needs to permanently move out of the home). His children can keep the house in the family if they wish, after paying off the loan amount from other financial resources they or Mr. Curley have, or they can sell the home and use the proceeds to pay off the loan amount. They are allowed to keep any additional funds from the sale of the home that exceed the loan amount to be repaid.

“I know I’m not gonna be around forever. But I told my kids I was going nowhere! I want to be in my own place. Me and the dog. My son lives here in town and my daughter is only a few miles west. We worked it out so the house can help pay for care if and when I need it and then it’s theirs when I’m gone. I don’t want to be a burden to no one, but they’re good kids and this way I get to see the grandkids too. They mow the lawn. This house has important memories for me, but once I’m gone, the kids already have their own places; they don’t need or want this house, so I like the idea of putting the home’s value to work for me!”

At 46, Ms. S had the opportunity to purchase long-term care insurance as a Federal employee. She has chosen coverage that will allow her to be cared for at home, in an assisted living facility, or in a nursing home if necessary. She bought the policy now since the cost is based on her age when she buys it. Waiting would only mean higher premiums and the possibility that she might develop a health condition that would cause her to be declined for the insurance. She does not want to have to rely on her family to pay for or provide care for her if and when she needs it. She likes being independent and having peace of mind that comes from planning ahead.

* Plan:

o Purchase long-term care insurance, which she pays for through an automatic deduction from her bi-weekly paycheck.

o Prepare a living will so that her family will know her preferences and wishes for care and life support if she becomes unable to communicate or carry out her preferences on her own.

o Speak with daughter and niece and specify her preferences for care.

“Long-term care insurance is a great deal for someone like me. I have a daughter and a niece I’m close to, but I don’t want to become a problem for them; they have their own busy lives. This way, we’re there for each other, but when the time comes that I get sick or very old, they will know what I want and I’ve set up a plan ahead of time. I don’t want to worry and I don’t want them to worry.”


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