Why It's Time To Consider Long-Term Care Planning
In a “post-pandemic” world, Healthcare In Retirement and Long-Term Care (LTC) planning may become a more significant planning item. And, when a large percentage of Americans will need some form of LTC, and too few have planned for it, addressing this topic is simply prudent planning.
With more than 75,000,000 Baby Boomers in or nearing retirement, they have various choices about where and how they receive basic healthcare services, but the same can't be said when it comes to the delivery of services focused on Long-Term Care. As those Boomers age, it's important to educate yourself about the healthcare landscape and become better prepared to navigate the uncertainty of it all.
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 many of those conditions are excluded by most policies or plans.
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 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, some 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 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. Such a plan will mitigate the financial, physical, and emotional impact of a Long-Term Care event, but it will also address those needs based on what's appropriate for a specific situation and individual family dynamics.
Hopefully, this information helps you better understand why it's time to begin discussing Healthcare in Retirement and Long-Term Care. With the proper plan in place, you will have peace of mind knowing that whatever type of care is needed - and whenever it's needed - it won't be limited to reliance on government programs. Put it all together, and there is a tremendous opportunity to take a proactive approach and implement Long-Term Care planning for a more secure future.
Please contact your advisor when you're ready to begin the Long-Term Care Planning process....