I had lunch with Denny Joe, today’s guest blogger, about two weeks ago. We had an excellent discussion on long-term care insurance, so I asked him to write an introductory post designed to answer some key questions such as; What is long-term care insurance and who needs it? What are some of the misconceptions and relevant statistics around long-term care insurance? Denny is the Director of Long-Term Care Sales with VIP Insurance, a broker we write much of our long-term care insurance through, who provides some interesting thoughts for anyone considering long-term care insurance for themselves, a business partner, or a parent.
Long-Term Care – care that provides assistance for a people who are unable to perform one or more Activities of Daily Living (ADLs-Bathing, Continence, Dressing, Eating, Toileting, and Transferring) and/or someone who has a Severe Cognitive Impairment.
“Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force:
“There are three kinds of lies: lies, damned lies and statistics.”
Excerpted from Mark Twain’s Own Autobiography: The Chapters from the North American Review.
One need not look too far nor dig too deep to find some mention of long-term care these days. Our communication mediums are rife with articles on some aspect of our aging population. “Baby Boomers this and Baby Boomers that…” Yes, this enviable moniker, given to those of us who were fortunate enough (but had no choice in it) to have been born between 1946 and 1964 pervades our lives in endless fashion.
I will respectfully submit that none of us likes to consider ourselves as a statistic – unless, of course, it is a good attribute. Then, of course, each of us wouldn’t consider that a ‘statistic’ since a statistic, in and of itself, connotes status that is somehow ordinary and in no way individualistic.
Here’s a statistic, according to the Pew Research Center “10,000 Baby Boomers will reach the age of 65 every day for the next 19 years.” The sheer number itself doesn’t lend itself to individualism. Reaching age 65 is a point in time that is inexorable. It will happen in most cases – whether we like it or not. I could ramble on about how we are living longer, will grow frail as we age, the fragmentation of the immediate family and so on. Suffice to say, statistical data leans toward a high likelihood of needing long-term care as we age.
Now, whether or not each of us will need some type of long-term care is arguable. I submit that each of us has already received long term care….as babies. None of us thinks we will be “the one” who will need long term care in our adult years. It’s always someone else – not us. I believe it. This is possibly the main reason why most people have not taken steps to insure this risk.
It is a common belief that Medical Insurance, Medicare or Medicaid will cover the expenses of long-term care. Allow me to dispel the misconceptions:
- Medical insurance DOES NOT cover long-term care services.
- Medicare will cover some long-term care if the admission to a nursing home is preceded by three days stay in a hospital and the admission must be for the same reason for the hospital stay.
- Medicaid will cover some long-term care. This coverage is for those of us who have few or no resources. In order to be eligible for Medicaid, you MUST meet Income and Asset requirements prior to applying for this coverage. The state of Texas allows for a maximum of $2,000 in assets and $60 monthly needs allowance.
Medicare nor Medicaid will cover services that are Custodial in nature. Custodial Care is care associated with one’s inability to perform their Activities of Daily Living (ADLs). Since 95% of all care delivered in a nursing home is Custodial in nature, Medicare or Medicaid may not be viable options.
It’s not about pre-planning for long-term care by setting aside funds to help with paying for care IF you need it. It’s even much less about considering what YOU will do IF you need it. Again, none of us thinks we will ever need it.
I respectfully submit that it is . . .
“…more about how a long term care event will impact your family’s financial and physical well-being.”
Denny Joe, CLTC
Director of Long-Term Care Sales