Today is a good time for those who haven’t yet reached retirement age to begin considering some key factors related to health scenarios they might face later in life.
“The bottom line is none of us knows ahead of time what our health will be in our 60s and beyond,” says Chris Orestis, Executive Vice President of GWG Life (www.gwglife.com) and author of the books Help on the Way and A Survival Guide to Aging. “Will you need longterm care? If so, to what degree, and how will you pay?”
Statistics suggest that long-term care could very well be in your future. Seventy percent of people over age 65 will require some type of LTC services during their lifetime, according to the U.S. Department of Health and Human Services.
Costs can be exceedingly high. The annual-median cost of a private room in a nursing home, for example, is more than $80,000 a year.
On the flip side is the toll taken on family members when they provide personal home care. The National Family Caregivers Association reports that more than 75 percent of adults receiving home LTC are being cared for by family and friends. And 37 percent of those informal caregivers had to switch from full-time to part-time employment due to the LTC demands. Orestis lists four questions people should ask when weighing LTC options:
• Does Medicare or Medicaid pay for it? Medicare will not cover LTC for most seniors. It covers LTC only for rehabilitation requiring extended stays in a nursing home for about three months, or LTC for skilled in-home services for a limited period. Medicaid will pay for LTC, but the user’s income must fall below a certain level. “Long-term care service providers prefer private pay, such as savings, long-term care insurance or other income,” Orestis says.
• What does LTC include? Much of it is assistance with personal tasks, not medical care. Among those tasks are eating, dressing and using the toilet. Additional tasks LTC assists with are meal preparation, grocery shopping, money management and pet care.
• When is the time to buy LTC insurance? Most advisors suggest the best time to buy LTC insurance is when you’re in your early- to mid-50s and in good health. About 25 percent of people in their 60s are turned down for LTC insurance. “There’s a significant risk in waiting too long, when your health status may disqualify you for coverage,” Orestis says.
• How else can people pay for LTC? People who have failed to plan still have private pay options available. Orestis says veterans can access the VA Aide & Attendance Benefit, reverse mortgages for home owners can generate cash for home care, and the owner of a life insurance policy could exchange their death benefit for living benefits such as a tax-free LTC Benefit account, a lifetime income annuity or even take a lump sum of cash.
“For some, government assistance may be appropriate but limits your options,” Orestis says. “For others, their nest egg or private pay options may help take care of them. But first it’s important to understand what forms of long-term care are available and how you will pay for it.” •
ABOUT THE AUTHOR:
Chris Orestis, Executive Vice President of GWG Life (www.gwglife.com), is an over 20-year veteran of the insurance and long-term care industries and is nationally recognized as a healthcare expert and senior care advocate. He is a former Washington, D.C. lobbyist who has provided legislative testimony; the author of two books: Help on the Way and A Survival Guide to Aging; a frequent columnist with a series entitled “The Healthcare Hunger Games”; and has been a featured guest on over 50 radio programs and in The New York Times, The Wall Street Journal, USA Today, Kiplinger’s, Investor’s Business Daily, PBS, etc.