Cost of Long Term Care

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A lot of people incorrectly assume that health insurance and Medicare will cover long term care. They cover medically necessary care for up to 100 days, or until you stop improving or stablize. After that, you’re on your own.

The majority of Americans over 60 do not have long term care insurance yet 70% will need care. So, why do people not buy insurance?

Most will say the cost of the policy. An average policy, depending on age, health and benefits chosen, will cost $1,000-$3,000 per year per person.

But what about the fact that the same people who say they will “self-insure” for long term care will never “self-insure” a parking meter… they always put money in the meter, even though they could easily afford and “self-insure” the parking fine.

We make decisions based mostly on emotion. That’s what causes people to buy stocks when they are high and sell when it crashes, the opposite of what seasoned investors do.

What if you “self-insure” for long term care, how much will it cost you? The national average for nursing home care is $89,000/year with some areas over $140,000/year. Home care and assisted living average $50,000/year. See how much care cost in your state: download the Cost of Care brochure.

For every $1,000 of monthly retirement income you want to generate from your own savings, you will need about $230,000 in assets, according to the Schwab Center for Investment Research. For example, if you want only $3,000 a month, or $36,000 a year, you would need savings of $690,000. That’s a conservative estimate, assuming that you earn 5.2% on your investments and live off the earnings without dipping into the principal.

If you cannot afford a long term care insurance policy, how are you going to afford paying out of pocket? The other option is spending all your cash for your care. This includes anything of cash value: savings, investments like stocks, bonds, life insurance, annuities. Medicaid allows you can keep only $2,000.

There are 30 states with filial laws that allow the state to make your children repay Medicaid for your care expenses, although this is rarely done. Fifteen years ago the #1 reason people bought long term care insurance was they did not want to be a burden on their family. Today, the #1 reason is people do not want to outlive their money (and end up on Medicaid-Welfare Health Care).

Some people will buy long term care insurance for asset protection. Most states have a Partnership program that will protect assets from Medicaid if you own a Partnership long term care insurance policy.

You have five options to pay for long term care:

1. Self-insure.

2. Long term care insurance and Partnership.

3. Life insurance with long term care rider.

4. Annuity with long term care rider.

5. Medicaid.

The life insurance and annuity do not qualify for the Partnership (neither do group LTC policies). The life/LTC or annuity/LTC are often bought because: the person’s health will not qualify for traditional LTC insurance, or the person has too many cash assets and they’d never spend down to qualify for Medicaid. An old life policy or old annuity can be converted to one with long term care benefits without paying capital gains.

You can continue down the same road, uninsured, until either a diagnosis or a serious change of health, like a stroke, will disqualify you from insuring. Then you will only qualify for state assistance. At that point you would have to have used, sold or given away your assets 5 years before applying for Medicaid. Who has the ability to see 5 years into the future?

*  The best age to insure: the age your health will still insure you.
*  The best benefits to get: enough to cover what you cannot afford to pay out of pocket.


For updated quotes and more information visit: https://guidetolongtermcare.com


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30 States Have Laws Requiring Children to Repay Medicaid for Parents Care

 

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Filial responsibility laws date back to 17th century English law requiring children to financially support their parents when they couldn’t support themselves.

Because of age, or maybe an illness like Alzheimer’s, millions of Americans are no longer able to take care of themselves.

Spending one’s own money for care can wipe out a life’s savings in a short time. It could be someone in your family.

What happens when the money runs out? Out of love, you may feel a moral obligation to help. In some states, however, you may be legally responsible for paying your parents’ long-term care.

In these days of economic uncertainty it is essential that people have a sense of security in terms of their future. Long term care insurance is a way to preserve that.

Like car insurance, the prices for long term care insurance will vary by company. The premium will depend on your age, health and the benefits you want.
The LTC Partnership Program provides asset protection in most states.

Since care cost differs by type and location it is important to get the right information to make an informed decision.

Other than transferring your assets to an irrevocable trust five years before you apply for Medicaid, the only way to protect your estate from Medicaid is with a Partnership long term care policy.

 

Be Prepared: Get Long Term Care Insurance Quotes


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Caregiving and finances

As we begin the caregiving journey, we are mainly concerned about our aging parents’ well-being and safety. This can be a difficult time psychologically for adult children as they watch their parents, once vital and in charge, become frail and in need of help. In the rush to deal with day-to-day problems and scramble to figure out what to do if Mom or Dad is having difficulty at home or has a serious health crisis, the financial ramifications are often an afterthought.

However, sooner or later, finances will become a key part of the mix, whether we end up paying for incidentals, managing or coordinating parents’ finances, or paying outright for their care. It is not unusual for family caregivers to take on all three financial roles. A recent study finds that 92% of caregivers are “financial caregivers” along with more traditional caregiving responsibilities. Often people aren’t aware of what they are spending or how much time they devote to helping out with paperwork until they are deep into their caregiving responsibilities.

Paying out-of-pocket expenses
Whether aging parents or other loved ones are well off financially or not, family caregivers usually don’t think twice about picking up groceries, items from the drug store or medical supplies. And if they live in a different location from their parent, they are quick to get in their car or fly to a destination if a crisis occurs or simply to make sure things are okay.

Expenses for gas, airfare and all the incidentals can really add up. Caregivers spend an average of $6,954 yearly for out of pocket expenses, and for long-distance caregivers, the cost is nearly doubled. On average, those who care for someone who lives far away spends $11,923 per year. These expenses are generally unbudgeted and can take an unbudgeted bite into a family’s savings.

Coordinating and managing finances
It’s not unusual for someone who needs care or has a serious visual impairment to be overwhelmed by the paperwork generated from Medicare, insurance, utilities, and savings and checking accounts. Even if a parent has a financial professional, the day to day work involved of making sure bills are paid, taxes filed, accounts monitored, and insurance premiums and claims under control is part of this responsibility. Keeping track of legal documents such as powers of attorney, living wills and other safeguards also needs to be managed by someone. And that someone is usually a family caregiver.

Taking on this role has some pitfalls as parents are often reluctant to turn over anything related to money to their children. But it is an important role, because it enables the caregiver to make sure that the bills don’t stack up and that there are no suspicious expenditures. The annual loss to victims of financial elder fraud and abuse is estimated to be $3 billion a year; some estimate it could be as high as $36 Billion as four out of five incidents go unreported.

Whether fraud is an issue or not, financial caregivers find themselves spending many hours coordinating finances and making sure that their parent’s money is safe and secure.

Paying for care
As financial caregiving escalates and care needs increase, caregivers may need to confront a harsh reality. They may find that their parents don’t have enough money saved to afford paid care, whether at home, in an assisted living facility or nursing home, and do not have long-term care insurance protection. It’s also possible that assets have dwindled after one of their parents had to spend down savings to pay for the other spouses’ care.

The cost of care increases each year. The average rate for paid home care is now at $22 per hour and assisted living at $3.750 (base rate) per month. Studies indicate that about half of adult children feel an obligation to pay for their parents’ care should they need it. But families are often struggling with their own finances, worried about college tuition payments, mortgages, possible job loss and their need to save for their own retirement.

Transferring parents’ assets to a daughter or son, once considered a viable option, is risky and not always foolproof. Most states have look back periods, and thirty of them now have Filial Responsibility laws on the books requiring adult children to repay for the cost of care incurred by the government. While rarely enforced, a few lawsuits are currently pending. With state budgetary shortfalls in the news, it’s likely that these laws will have more teeth in the future.

Lost lifetime wealth
An alternative to paying for care directly is to ask a parent to move in, or as another option, to assume the caregiver role. For those who do the math, it may seem logical at first to leave the workforce altogether or step back to part time and become the primary caregiver. Paying for round-the-clock care is costly. Even if parents have money, the stress and emotions of providing care may drive a caregiver to stop working. Women, in particular, who take on intense caregiving roles, are more inclined to see this as an option and decide to cut ties with employment.

However, more sophisticated calculations show that a workforce departure or step-back can result in a significant blow to long-term retirement finances. For men, the loss of wages and benefits over a lifetime amounts to $284,000. It’s even worse for women at $324,000. People who do drop out often don’t think of the subtle ramifications in addition to the missed years of earnings and income growth. They forget about the 401 (k) match, the value of employee benefits, the career trajectory, and the roadblocks they might find when they try to get back into the workforce at the same salary level. Actually, continued employment might be the best thing to do, not only to maintain financial health but also for physical and mental health as well. Caregivers often say that work helps them take a break from the intensity and emotions of caregiving.

So what is a potential strategy?
Both the family and the financial professional can take the initiative and make a difference by confronting the issue of financing care early, before it is too late. A conversation with family members and with an advisor about care planning—who will provide care, where will care be delivered and how will it be paid for—is a very important step. It’s often forgotten or put off. Another topic of discussion with an advisor is what long term care protection options are available, not only to find out whether parents might be eligible but also as a planning tool for the adult children themselves. Financing the quality care that we all want and helping our families cope when they assume caregiving roles should be top of mind and incorporated into any discussion of long-term care.

Be Prepared: Get Long Term Care Insurance Quotes


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When Will We Have an Alzheimer’s Vaccine?

Scientists are working on a vaccine to delay or reduce Alzheimer’s disease. Researchers say they are close to testing the vaccine on humans.

In spite of all the research and money spent, no reliable Alzheimer’s treatments are available yet. But researchers believe they may be able to cut down the number of Alzheimer’s sufferers half.     

At the University of Texas Southwestern Medical Center, a team of scientists has developed an experimental vaccine that is designed to reduce two proteins in the brain, beta-amyloid and tau, that are associated with Alzheimer’s Disease. Buildup of these proteins prevents the brain from functioning normally. In mice, the vaccine reduces beta-amyloid protein by up to 40 percent and tau by up to 50 percent.

If the vaccine has the same effect on humans, it could delay the onset of Alzheimer’s by five years, or cut in half the number of people affected.

The main problem with animal studies is that human diseases and immune systems don’t always work the same way. Another problem is that proteins can build up in the brain for 20 years before a patient will have symptoms. So patients would have to agree to taking the vaccine long before they know if they are susceptible to the disease. At this time, tests that show who is at risk for Alzheimer’s are expensive.

The vaccine may be tested for safety on monkeys before trying it on humans, so it will probably be 10 years or more before it is available.

At this time, around 5 million Americans have Alzheimer’s disease. The Centers for Disease Control and Prevention estimate that by 2060 there will 14 million. The National Institute of Health will spend 2.3 billion on Alzheimer’s research this year.

Read more about Alzheimer’s and Dementia: Link

Be Prepared: Get Long Term Care Insurance Quotes


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Don’t Fall.

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The reason for the majority of Emergency Room visits by older adults may surprise you. It’s not heart attacks, or illness, or accidents. It’s falls.

Falls lead to more nonfatal injuries in seniors than anything else, and falls are also the number one cause of injury-related deaths in older Americans.

Almost 15,000 people 65 and older died from falls and about 1.9 million were treated for injuries in emergency rooms.

1 in 3 over 65 have a fall each year, 70% of accidental deaths in people over 75 are caused by falls.

Falls are responsible for over 40% of nursing home admissions.

Injuries from falls in the elderly can include broken wrists, elbows, arms and hips.

Falling can be caused by many factors:
* Internal factors such as slowed reflexes, balance disorders, low blood pressure, visual deficits, etc.
* External factors such as poor lighting, poor room layout, the effects of medications.

What can be done?
* Make an assessment of the risk you have by answering the questions below:
* Add up your score on a separate paper or print this.
* Read information listed at bottom of this page on prevention.

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SCORE:
0-5 = Low Risk
6-8= Moderate Risk
8+ = High Risk


Prevention:
* Tell your doctor about any falls you have taken.
* Talk with your doctor and pharmacist about medications you take.
* Inspect your home for any safety problems such as lighting, flooring, and furniture.
* Make your home safer by installing night lights, bathroom grab bars and slip-resistant floors.
* In addition to strength exercising certain exercises — yoga, tai chi, and trying to balance on one leg with your eyes closed — can help improve balance.

OTHER INFORMATION:
American Academy of Orthopedic Surgeons
National Athletic Trainers’ Association
Centers for Disease Control and Prevention – Injury

Be Prepared: Get Long Term Care Insurance Quotes


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Caregivers At Risk.

It is not easy to talk about our parents or even ourselves getting older and some day needing help with very basic things. Here is information designed to educate the public about these issues.

Finding the words to begin a long term care conversation. (Genworth)

Beyond Dollars Infographic exposing the true costs of a long term care event. (pdf)

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LongTermCare.gov – Basic information about what is covered by Medicare and Medicaid.

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There are different ways to fund long term care: self-insure, long term care insurance*, life insurance or annuity with a long term care rider*, life insurance with a chronic illness rider*, Medicaid.
* Insurance is medical underwritten. Insuring locks in age and health.
27% of applicants ages 60-69 are declined because of health.

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Promising New Research May Lead To Reversal of Alzheimer’s Dementia

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Scientists have recently discovered a possible new way to reverse Alzheimer’s disease.

A new study found that amyloid protein plaques, associated with Alzheimer’s disease, were eliminated when researchers removed a naturally occurring enzyme called BACE1 from the brains of mice.

Riqiang Yan and his team at the Cleveland Clinic studied mice that were genetically engineered to have a rodent form of Alzheimer’s disease. BACE1, known as beta-secretase, clings to the amyloid precursor protein, resulting in the production and buildup of plaques.

When the BACE1 enzyme was removed from the mouse brains, formation of amyloid plaques stopped, and plaque already in the brains of the mice disintegrated. Removal of the enzyme also improved learning and memory in the mice.

In the study, the scientists gradually removed BACE1 from the mice as they aged. By the time the mice were 10 months old (equivalent to the human age of 50 years) they no longer had any amyloid plaque in their brains.

Reducing BACE1 levels in the offspring mice also reversed other conditions found in Alzheimer’s disease, such as microglial cell activation and the formation of abnormal neuronal processes.

Yan published some of his discoveries about BACE1 in 1999 in the journal Nature. This recent study, published in the Journal of Experimental Medicine, is the first one in which researchers have seen a dramatic reversal of amyloid deposits in the brains of mice. It may lead to new therapies that could reverse Alzheimer’s disease. The next step will be to see if human brains react the same way.

Find out about the care of people with Alzheimer’s disease at the Guide To Long Term Care.

 

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