Disclaimer: Since Medicaid rules and insurance regulations are updated regularly, past blog posts may not present the most accurate or relevant data. Please contact our office for up-to-date information, strategies, and guidance.
Chances are you’ve already heard The Twelve Days of Christmas playing on the radio this holiday season. Well, since we don’t have a partridge in a pear tree to offer, we wanted to share the twelve reasons to plan for long-term care.
Long-term care planning is a vital discussion to have with your clients. Some of them may tend to shy away from this conversation, but these twelve reasons will help you provide some new insight into why long-term care planning is so crucial. After all, avoiding the discussion puts your clients’ retirement assets at risk and can have a devastating impact on the lives of your clients and their families.
Read More: The Risk of Longevity
- Long-term care is about your family since they will more than likely provide some degree of care for you. The level and frequency of care as well as the impact it has on them depends on how well you pre-plan.
- There are currently 53 million unpaid caregivers aiding their loved ones. Typically, these caregivers are not trained for the level of care they need to provide, and they are often responsible for care decisions, physical and emotional support, and monetary assistance if skilled care is required.
- Long-term care is not just about Alzheimer’s disease or other dementias. Although, they make up a large portion of Americans that need help. Stroke, cancer, and musculoskeletal and respiratory diseases are also common illnesses that lead to Americans requiring care.
- Many people believe a long-term care crisis won’t happen to them. However, according to a 2021 report from the U.S. Department of Health and Human Services, 56% of Americans turning 65 years old today will require some form of long-term care.
- Women require more long-term care services than men. In fact, about 70% of nursing home residents are women. Women have a longer life expectancy than men, outliving them by about seven years. This often leaves women alone without their spouses toward the end of their lives.
- For those turning 65 today, the average projected length of long-term care is 2.8 years, and the average lifetime cost will be $298,000.
- Staffing shortages in long-term care are staggering and only getting worse. A recent survey from AHCA reports that 89% of nursing homes and 82% of assisted living facilities report a moderate to severe staffing shortage. Some facilities are even limiting admissions because they don’t have enough employees to care for residents. This staffing shortage also impacts home health care agencies.
- Long-term care costs are increasing—even showing double-digit percentage increases in 2021. This is due to the soaring demand and lack of supply as mentioned above, as well as the rigorous guidelines for health screening and cleaning for COVID-19.
- 52% of Long-Term Care Insurance (LTCI) policyholders were caregivers themselves. They understand the need for planning for the risk of dependency.
- Fortunately, Millennials and Gen Xers are interested in planning for their long-term care needs. Many of them are currently providing care to their parents and grandparents. Preparing for long-term care with an insurance policy should start early to ensure insurability and take advantage of beneficial health discounts.
- Medicare does not pay for long-term care. Medicare will pay for limited assistance for beneficiaries who meet the three-day prior inpatient hospitalization requirement. Typically, this benefit is used for a condition that is improving yet requires skilled nursing care or rehabilitative therapy, such as recovering from a hip replacement surgery. Medicare does not pay for ongoing assistance with personal chores or ADLs.
- On the other hand, Medicaid does pay for long-term care but only if you meet specific financial requirements. This usually requires spending down assets or purchasing a Medicaid Compliant Annuity to accelerate eligibility. While the MCA is a great tool for crisis planning, purchasing LTCI ahead of time offers the best opportunity for clients to preserve their assets and receive care in their preferred location.
Watch Now: How to Talk About LTCI with Your Clients
This holiday season as you are reaching out to your clients with holiday greetings, set up an appointment with them to discuss their long-term care plans. Not sure how to start the long-term care conversation? Contact a member of our team for some helpful tips!
Thank you for your business! Happy Holidays!
