What is involved in longterm care planning? Plan Act Evaluate.

What is involved in long term care planning?

Plan Act Evaluate

Reasons some people say why they were not prepared for later life

“I never expected to live this long.”

“We didn’t think it would turn out this way.”

“We planned for a healthy retirement.”

Financing Long term Care: Dilemmas and Decisions

Major gap in financial planning throughout life

Gap in later life financial security

Few of us have done any planning

Won’t admit we might be affected personally

Financing Long term Care:Dilemmas and Decisions

We think we know more than we do!

Gaps in knowledge make planning for long term care tough!

Financing Long term Care

1. Recognize your risk

2. Understand costs and implications

3. Sort out expectations and goals

4. Understand financing alternatives

5. Take action now

Long term Care

Help with daily living activities and remaining independent

Wide range of personal, social and medical services

Provided in a variety of settings

Most who need long term care:

Live in their own homes

Receive unpaid caregiving from family/friends

Overestimate the chance of needing nursing home stay

Underestimate need for in home and community services

Who’s at risk?

57 percent over age 65

40 percent below 65 years of age

3 percent are children

Who’s most at risk?

Individuals 85 years and older

Individuals with chronic health problems

Individuals who lack social support and unpaid caregivers

Women

Prevalence of Long term Care Need

Age: 65 to74 In community: 11 percent In institution: 1 percent

Age: 75 to 84 In community: 22 percent In institution: 5 percent

Age 85+ In community: 49 percent In institution: 21 percent

What are the risks?

Potential Costs Underestimated

In-home care Degree of need and health status Type of service used

Visiting nurse: $100 per visit (Kiplinger’s, 2004) Home-health aide: $15 or more/hour (Kiplinger’s, 2004)

Community services Adult day care: $60/day ($15,000+/year) Assisted living - housing with services (common meals,

housekeeping) in North Dakota: rent - $15,720/year; basic services - $7,284/year (NDLTCA, 2005)

Skilled nursing home care One month average in U.S.: $5,500 ($66,000/year)

(Metropolitan Life Insurance survey, 2003) Northeast and West highest North Dakota: $144.48/day ($52,735/year) (NDLTCA, 2005)

Sort Out Later life Financial Goals and Expectations

Multiple/competing goals behind our decisions

Make goals known

Goals provide direction

Goals can be prioritized

If I would need long term care, I would expect to:

Remain financially independent

Maintain control of my finances

Keep my financial affairs private

Involve family members

Utilize government services

Leave an inheritance

Oklahoma Long term Care Survey

Findings of an AARP study – Fall 2004

1,146 respondents over age 60

Can We Talk?

Goals can be a common source of conflict Between spouses/partners Across the generations

Who needs to be involved? Spouse or partner? Adult children?

Identify areas of agreement and/or disagreement

On the meaning of goals, priorities, concerns

Understand Financing Alternatives and Consequences

No “one” financial answer

Later life goals should influence which alternatives are most appropriate

Consider a combination of alternatives

Who does pay for long term care?

Income and life savings of elders and family members

Sell home and use equity

Unpaid family caregivers provide majority of long term care

Who pays for long term care?

Medical Assistance (Medicaid) is a critical safety net

Who pays for long term care?

Who pays for long term care?

Long term care insurance will pay

Long term care insurance is NOT for everyone

Why plan now?

Peace of mind More choices and options Increases likelihood your goals

and wishes will be followed Reduces burden for others Reduces misunderstandings

and conflict

References American Association of Retired Persons. (January 2005).

Oklahoma long term care: A survey of AARP members. Available from: www.aarp.org

Consumer Reports. (November 2003). Do you need long term care insurance?, 68(7), 20-24.

Kiplinger’s Personal Finance. (February 2004). If your parents need HELP, 58(2), 76-79.

North Dakota Long Term Care Association (January 2005). Issue and Data Book. Available from North Dakota Long Term Care Association, 1900 11th St. N., Bismarck, ND 58501. Telephone: (701) 222-0660. Web site: www.ndltca.org

Stum, M. S. (October 2004). Financing long term care: A resource for families. Available from: www.financinglongtermcare.umn.edu