Every day I hear stories or talk to folks who were doing just fine, thinking they had a firm plan in place for their future, until someone (typically a spouse or a parent) gets sick. As the illness continues, now faced with long-term care expenses, they realize their ‘plan’ did not include nearly enough to keep up with the ever-increasing health care costs.
“How will we pay for this?” Is the number one question I hear regarding long-term care. Long-term care costs have two components, the nursing home, assisted living, or living situation, and the indirect component, the unpaid caregiving. The people who come in to help you, your family members, or the things that long-term care insurance doesn't cover. Did you know over $500 billion a year is spent in ‘unpaid’ caregiving in this country? And these costs get higher every year.
A lot of that care is provided by family members, most of whom never planned on becoming caregivers, but in many cases it’s the only option.
Long-term care insurance is an option, but the long-term care insurance market has become rather costly because so many people need care. There are hybrid policies that people can buy that are a combination of either long-term care life insurance or long-term care and an annuity, but it depends on when you use them whether they end up being a good deal.
Which is why establishing a long-term care plan is the best way to go.
Here’s a scenario, you mom falls, breaks her hip, and suddenly starts to decline. You and your spouse work full time, so your only option is some sort of caregiving and you quickly move to panic mode based on how you will pay for it. However, if we help people plan for the logistics of aging, such as when should you move to a safer situation or quit driving, or who will help with healthcare decisions if they arise – you can avoid the ‘panic situation.’ Putting a plan in place long before there's trouble can greatly reduce the costs of long-term care.
Which is why working with an elder law attorney who can help you think about and troubleshoot some of those long-term care costs, can save you time, money, resources, and best of all – piece of mind.
How much you’ll need for long-term care and how you’ll pay depends on your age, or your parent’s age, your general health, and what you will want available. For example, planning through the logistics of where you are going to live and who can assist with your care can help you determine how much to plan for. For people who have nobody to help them, the costs are going to be a lot higher than people who have extended family willing to pitch in.
The major ways of paying for long-term care are insurance policies, hybrid policies, or self-funding. But the major funder of long-term care expenses in the U.S. is Medicaid. Many folks are under the misunderstanding that if they exhaust their resources they can fall back on Medicaid, and that is simply not true. To qualify for Medicaid there are several factors that need to be met in order to qualify. Medicaid, however, can benefit those with pre-planning and forethought, but waiting until the crisis hits is not when you’ll want to start.
Again, having a plan long before any situation arises is the way to go, and we can help!
For more information, if you have additional questions or concerns about long-term care planning, contact experienced estate planning attorney Bob Michaels to schedule an appointment.
Bob Michaels is extremely passionate about providing the best possible legal experience for his clients, and focuses his practice on elder law, estate planning, business, and real estate matters. Bob has been able to provide piece of mind and a solid foundation to many folks in the Puget Sound area over the years and wants to provide resources and relevant information whenever he can.