Budgets and Planning

Long-Term Care is a Woman’s Issue

By Candace Bahr, CEA, CDFA and Ginita Wall, CPA, CFP

Women! Hear us!  We know you don’t need anything else to worry about, what with working, caring for children, and being the only one who replaces the toilet paper roll when it’s empty. But there is a crisis in long-term care coming to America that will affect you and your family profoundly.

According to US Census projections, by 2030, one in five Americans will be a senior citizen. By 2010—which is just around the corner—almost half of the US workforce, mostly those in their forties and fifties, will be caring for an elderly parent. And it isn’t just the elderly who need care. A third of the people who have a stroke every year are under age 65, and 40 percent of the people who need long-term care are aged 18 to 65.

But won’t the government look out for us if we need care?
Not really. Medicare does not cover long-term care for most medical situations. You might get a few weeks of skilled care at your home, or in a nursing home. After that, you’re on your own.

And Medicaid, originally intended for the destitute elderly, is a means-tested welfare program for the very poor, which requires that you spend or give away all of your assets before you qualify for benefits. Artificially depleting assets to qualify, by hiding money in exempt assets, transferring assets to children or other relatives, or, in extreme cases, getting a divorce, doesn’t work either. Medicaid no longer turns a blind eye to many questionable asset-shuffling schemes.

If you are wealthy, you will have enough money to purchase the private care you need. But the vast majority, regular middle-class America, is severely underinsured—which is a nice way of saying that we are all heading for big trouble.

Why is that a woman’s issue?
Women, especially, bear the brunt of these care costs. Because women live longer than men, they require lengthier care as they age, and because women often assume responsibility for their family’s health and welfare, the task of caring for elderly parents, an ill spouse, or disabled brothers and sisters usually falls to us. With long-term care insurance, you can get the assistance you need and your loved ones deserve.

When deciding on long-term care insurance, consider all of your options.
Long-term care covers a broad spectrum of products and services, including home health care, hospice care, medical equipment, and home-delivered meals.

Also consider your finances. Many people who believe that they can self-insure for the risk are not taking into account the risk of disability in the early part of their lives. An early disability can wipe out even a considerable fortune, and with the cost of care growing exponentially, even a disability when you are older could cost hundreds of thousands of dollars.

It’s time to talk about the problem.
Talk to your employer  -- the number of employers offering long-term care insurance is growing at an average annual rate of 30 percent. Talk to your family -- have a real conversation with your parents about their future, and discuss your own long-term care options with your adult children.

Review your situation with a financial planner or insurance agent familiar with long-term care planning, to learn about the latest products of the rapidly changing long-term care insurance industry. Remember that planning for long-term medical care is just another part of a continuous lifelong financial plan.

Long-term care planning is an issue for everyone. Counting on artificially impoverishing yourself in order to use the government safety net for the poor is not a good long-term strategy.

Do You Need Long Term Care Insurance?
Ask yourself these three questions to see if long-term care insurance is for you.

1. How old are you?
   Generally, the best age to apply for long-term care insurance is between 50 and 65 years old.
   
   
2. What is your net worth?
   If your net worth is between $75,000 and $3 million, long-term care insurance can help protect your estate. If your net worth is below $75,000, Medicaid (government assistance) will pay for your care as soon as your assets are depleted. If your net worth is over $3 million, it might be cheaper just to pay for the care yourself.
   
   
3. Do you have a family history of chronic memory loss, liver cirrhosis, muscular dystrophy, Parkinson's Disease, Alzheimer's Disease, senility or dementia, or multiple strokes?
   If these diseases run in your family, chances are greater than average that you will need long-term care at some point. But if you already have any of the above symptoms or diagnoses, you may not qualify for long-term care insurance. 

At WIFE we welcome your comments. Please feel free to contact us.

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