Parents and their adult
children can never begin too early to think about their families’
potential needs for care in their “golden” years, and there’s no
better time than November to begin that discussion. Why November?
November is National Alzheimer’s Month, National Family Caregivers
Month, National Hospice Month, and National Home Health Care Month.
All of these awareness-building efforts underscore the growing
number of Americans who need or will need long-term care:
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National Alzheimer’s Month recognizes the
progress being made against Alzheimer’s disease and demonstrates
understanding and support for the individuals with the disease,
as well as their families and friends. The Alzheimer’s
Association says 4.5 million Americans have the disease, and up
to 16 million are expected to be diagnosed with it by 2050. As
Alzheimer’s becomes more prevalent, more people, including
spouses and family members, will become caregivers. (Archives of
Neurology August 2003).
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National Hospice Month and National Home
Health Care Month recognize the dedicated professionals and
volunteers who provide hospice and home health care, emphasizing
the importance of respecting and honoring life in all of its
seasons.
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National Family Caregivers Month recognizes
that approximately 47 million baby boomers in North America are
or will be facing the role of caregiver to a parent, relative or
elderly friend over the next decade. At the same time, countless
thousands of seniors will face the dilemma of caring for a
chronically ill spouse.
As a certified long-term care specialist,
husband, father, and member of the Alzheimer’s Association’s South
Florida chapter, I’ve experienced the impact the need for long-term
care can have on families and caregivers. Each day that I meet with
people to help them protect their future, I am reminded of how my
wife’s grandparents and extended family were affected by
Alzheimer’s. That’s why I’ve decided to focus my career on educating
people about their long-term care needs and protecting their future.
During the past 19 years, I’ve found that the
majority of people quickly understand the value of retirement
planning and are able to calculate their life insurance needs. Yet,
the concept of long-term care insurance protection is more
challenging, since people can’t predict when the need for long-term
care will arise, how long it will be needed, and what the most
suitable care will be. By breaking the review process into
manageable parts, I’ve found it easier to gain a better
understanding of the emotional and objective aspects of the decision
process and overcome some of the myths.
It’s An Emotional Decision
Several emotions drive the decision to
investigate long-term care planning. Understanding these underlying
emotional forces help when it’s time to guide decision-making
thought processes. When meeting with clients, the first conversation
point is a reality check: a discussion of family members or close
friends who have required long-term care. I’ve found that everybody
knows somebody close to them or has a close personal friend who has
senile dementia, Alzheimer’s or another debilitating ailment. As we
all get older and live longer, this occurrence is more commonplace
than ever before.
I try to help people realize that long-term care
planning and insurance protection is a way for a family to stay
focused on the emotional needs of the family member who needs care
instead of worrying about a financial burden.
Plans Made Today Will Have a Broad Impact on the
Future, Family and Workplace. According to the US Census Bureau
(2002), by 2020, the 65 years and older segment is projected to
exceed 53 million. This trend indicates an ever-increasing reality
that more people will need care than the health care system will be
able accommodate.
Well-intentioned families are taking the brunt
of the care demands upon themselves – or at least delegating it to
one member. In fact, a 2004 “Caregiving in the U.S.” study by the
National Alliance for Caregiving and AARP, reported that an
estimated 44.4 million American caregivers age 18 and older provide
unpaid care to an adult age 18 or older. Almost six in 10 (59
percent) of these caregivers either work or have worked while
providing care. And 62 percent have had to make some adjustments to
their work life, from reporting late to work to giving up work
entirely.
The impact of
long-term illnesses and the stresses they place on families is
difficult to measure in the workplace, but studies in recent years
have also shown that U.S. employers lose significant dollars in
productivity each year in tardiness, absenteeism and “presenteeism,”
when employees show up for work but are too distracted by the
responsibilities and issues of caring for a sick family member to
perform well.
Overcoming the Myths
A large part of my role when meeting with families is to help them
understand the important role families and long-term care insurance
can play in a parent or loved one’s future. For every truth
associated with long-term care insurance, there are 10 myths. Here
are some of the top myths that should be addressed in long-term care
planning:
Most people can pay for their own care
Many people think they can liquidate taxable or tax-deferred
assets, including retirement plans or annuities, to pay for
long-term care costs. The buzz surrounding reverse mortgages has
also given momentum to the concept of paying for care instead of
having a policy. As with all financial decisions, you should first
consult a trusted financial professional and a tax advisor to
determine the tax implications and the recommended sequence for
liquidation before doing so.
Long-term care insurance is only for nursing home care
When most people think of long-term care, they think of nursing
homes. However, over 80 percent of persons receiving long-term care
are in home- and community-based settings, not in nursing homes,
according to “Long-Term Care: An Overview.” (Testimony before Senate
Committee on Finance, March 27, 2001, statement of Carol
O’Shaughnessy, Specialist in Social Legislation, Congressional
Research Service.)
All long-term care insurance is the same
Actually, many policies offer various options, and all policies are
not created equally. When making a direct comparison from one
policy to another, keep in mind that five key elements of any policy
contribute to price and quality: the financial strength of the
company underwriting the policy, the daily benefit, benefit period,
deductible, and inflation protection:
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Financial Strength Ratings: Be sure to weigh the reputation and
financial strength of a company in the decision-making process,
so families have a sense of confidence, as high ratings are an
indication that the insurance company will be able to pay any
future claims against the obligations they have outstanding.
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Daily Benefit: Understanding the current cost of care in the
area is very important in helping to make a decision as to what
daily benefit amount is needed for care, and which policies can
help meet that need.
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Benefit Period: The length of time payments will be received
from the insurance company, once care is needed, is difficult to
predetermine, so many opt for policies with lifetime or
unlimited benefits. Many policies often come with shorter
benefit period options as well, which is a good upfront
cost-saving measure from an annual premium perspective.
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Elimination Period or Deductible: The number of days that policy
holders will be responsible for paying for their care before the
policy coverage kicks in is an another important factor. The
amount of time one can afford to pay for care or to make other
arrangements is critical in helping determine the policy
elimination period.
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Inflation Protection: In a May 2003 report, the American Health
Care Association estimated the average cost of a nursing home
stay at $50,000 per year, or about $137 a day. In Florida, the
exact percentage of inflation cannot be calculated due to the
unpredictability of how market factors will impact the cost in
future years. By adding inflation protection, people can help
ensure they have adequate benefits in the future.
The government is there for people who need long-term care
Don’t count on it entirely. Many think they can rely on
Medicare or Medicaid, but don’t realize that Medicare covers only a
limited amount of long-term care services, while Medicaid covers
some long-term care services – primarily care in a nursing home –
for people who have limited income and assets.
Thinking long-term as caregivers and caregiver supporters, and doing
our part to raise awareness, are strong initial steps in eliminating
the myths about long-term care. Preparing well in advance to meet
our own needs and those of our loved ones should undoubtedly be our
first step.
Kenneth Schulman, CLTC, LTC Specialist, is with DBS Financial Group,
MassMutual’s South Florida general agency in Ft. Lauderdale, Fl.
You can reach Ken via e-mail at kschulman@finsvcs.com or by calling
(954) 938-8800. C: 72951
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