Why It's Time To Consider Long-Term Care Planning
In the near future, COVID-19 will likely become a manageable illness like the flu and the burden to our healthcare system will likely end.…But now imagine this same system coping with the healthcare needs of 75,000,000 Baby Boomers in or nearing retirement. They may have a limited choice concerning how they receive basic healthcare services, but the game changes when it comes to the delivery of services focused on at least one aspect: Long-Term Care
As those millions of Boomers age, it's important to educate yourself about healthcare and how you can better prepare yourself for the future.
Health Insurance 101
To start with, most people don't realize that health insurance and ACA plans (Obamacare) for those under age 65 provide almost ZERO coverage for Long-Term Care. Thus, millions of Americans think they're covered for chronic or debilitating illnesses when in reality they're uninsured for those conditions.
Then there's Medicare and Medicaid...Both have limitations on coverage and how one qualifies for that coverage. Even more problematic is that both programs could see significant changes due to government budget constraints in the future.
A Look At Medicare
Medicare is now the primary health insurance provider to those 65 and older, and it is meant to cover acute illness, disease and injuries. With respect to Long-Term Care, benefits may be available (1) for possibly the first 100 days per benefit period, (2) in a skilled nursing facility or (3) when someone enters a facility within 30 days after hospitalization of at least three days AND skilled care is required to recover.
However, Medicare does NOT cover custodial care, chronic care or age-related care. Not only could care be necessary for an extended period, but the cost associated with providing care for “activities of daily living” can also be extraordinarily high. Keep in mind that Medicare was created in 1965 when the average life span was just 68 years. The program was never DESIGNED to provide care for a "Boomer" generation with life expectancy now longer than ever. Changes, in some way, shape or form, are a near certainty...
Medicaid is a joint federal and state insurance program that pays a large portion of Americans' Long-Term Care expenses. However, to become eligible for Medicaid, income and assets are taken into consideration and individual state laws require a Spend Down of one's assets to qualify for the program. Many states have proposed changes to Medicaid that could further limit eligibility in the future. Additionally, one's choice of care is also limited with respect to where care is provided and what kind of care is available.
Perhaps the most critical issue is that demand for care is on an increasing trajectory and Medicaid continues lowering reimbursement payments to providers. This will almost certainly limit the future availability of "Medicaid Eligible" beds in facilities and create an environment where fewer service providers will agree to be part of the program.
Personalized Long-Term Care Planning
Given all the challenges facing Medicare and Medicaid, and the fact both programs will likely experience changes in the future, a personalized Long-Term Care plan is a far more dependable option. Not only will you have a plan to mitigate the financial, physical and emotional impact of needing Long-Term Care, but it will also address those needs based on what's appropriate for your individual situation.
Hopefully, this information helps you better understand why it's time to begin discussing Healthcare in Retirement and Long-Term Care. With the right plan in place, you will have peace of mind knowing that whatever type of care is needed - whenever it's needed - it won't be limited to reliance on government programs that may or may not exist when the time comes. Put it all together and you have a tremendous opportunity to take a proactive approach and implement Long-Term Care planning to better position yourself going forward.
Please contact us when you and your advisor are ready to begin the planning process!!