The 4 Steps of Long Term Care Planning

This article is a synopsis of the National Care Planning Council's new book "The 4 steps of Long Term Care Planning." To learn more about this book and to obtain a copy, please go to the following link: www.4stepsbook.com

The Importance of Planning for Eldercare

According to some sources, 60% of us will need long term care sometime during our lives. It is important for all of us to prepare for that day when we will need to help loved ones with care or we will need long term care for ourselves.

We may prepare financially for unexpected disasters by covering our homes, automobiles and health with insurance policies. But no other life event can be as devastating to an elderly person’s lifestyle, finances and security as needing long term care. It drastically alters or completely eliminates the three principal retirement dreams of elderly Americans:

1. Remaining independent in the home without intervention from others

2. Maintaining good health and receiving adequate health care

3. Having enough money for everyday needs and not outliving assets and income

Yet, it is our experience that the majority of the American public does not plan for the devastating crisis of needing eldercare. This lack of planning also has an adverse effect on the older person's family, with sacrifices made in time, money, family lifestyles and even affecting the family’s or caregiver’s medical and emotional health.

Because of changing demographics and potential changes in government funding, the current generation -- more-than-ever -- needs to plan for long term care before the elder years are upon them.

What Is Long Term Care?

The need for long term care arises when an individual requires, from someone else, assistance with medical care, daily living activities, comfort, supervision or advice. This need for care may be caused by an accident, disease process, or frailty. Such conditions may require help with the ability to move about, dress, bathe, eat, use a toilet, medicate, and avoid incontinence.

Also care may be needed to help the disabled person with household cleaning, preparing meals, transportation, shopping, paying bills, visiting the doctor and answering the phone. Oftentimes, long term care in the form of supervision or confinement is needed due to cognitive impairment from stroke, mental retardation, depression, dementia, Alzheimer's, Parkinson's Disease and so on. Most long term care is provided at home by family members.

What Is Long Term Care or Eldercare Planning?

For seniors, the terms "long term care" and "eldercare" are synonymous. For younger people, "long term care" is the more appropriate phrase.

For the uninformed family member, eldercare or long term care might appear to be a very straightforward and easy-to-understand process. Unfortunately, the reality is that long term care is very complicated and finding care systems and providers is a frustrating and time-consuming process. There is no one single source to help caregivers find services or solve problems with a simple phone call or a single community contact. For this reason, planning for care requires a great deal of prior knowledge in order to avoid operating in a crisis mode trying to find help when the need for care suddenly arises.

However, knowledge of long term care systems is not enough. Because it can happen suddenly, at any time, you must take action now to prepare for the day when you will need to deal with eldercare for your loved ones or for yourself. This action involves

•Determining the care settings and services you or a loved one most likely would want.

•Providing funding for paying the cost of care, especially when government support programs are lacking or require sacrifice of assets.

•Completing a survey to determine necessary financial and legal arrangements to be made.

•Completing a written long term care planning document to provide instructions to caregivers and to your care coordinator in advance of needing eldercare.

•Assigning a care coordinator and determining the role of other family members, friends or advisers involved in caregiving.

•Holding a planning meeting and drawing up a written agreement for involvement between all those who are willing to participate in future caregiving for you or a loved one.

We have defined four crucial steps necessary in this process for long term care planning. These four steps will be described below. The four steps are based on the following four concepts:

1. Knowledge and preparation are the keys to success.

2. Having funds to pay for care greatly expands the choices for care settings and providers.

3. Using professional help relieves stress, reduces conflict, and saves time and money.

4. Success is assured through a written plan accepted by all parties involved.

STEP 1-Understanding the Nature of Care, Care Settings, and Government Programs (Knowledge and preparation are the keys to success.)

This step requires an understanding of 12 different living arrangements and four different settings under which care is provided. In addition, understanding the provisions and limitations of government programs is essential because the public generally has a misconception that the government will step in and provide care when the time is needed.
Government programs are limited and according research by the National Care Planning Council (www.longtermcarelink.net), only 16% of all long term care services are provided by government programs. The other 84% is provided free of charge by family members, friends, charity, church groups or volunteers or paid for by private funds.
Our new book goes into great detail on step 1 and provides a comprehensive single-source reference for understanding the issues above and how long term care systems fit in with your personal long term care plan.

STEP 2-Funding the Cost of Long Term Care

(Having funds to pay for care greatly expands the choices for care settings and providers.)

Much emphasis is being placed on purchasing long term care insurance or arranging for reverse mortgages in order to fund the cost of care. These are two excellent tools for providing funding but in reality, this approach for planning is not working that well.

After 30 years of being touted as the ultimate solution, less than 2% of the American public and only 9% of seniors own long-term care insurance policies and using reverse mortgages may be a good strategy but in practice, few seniors are using them to pay for care. Our new book definitely covers these two funding options but also addresses at least 30 other strategies that can be used when trying to provide funds to pay the cost of long term care.

STEP 3-Using Long Term Care Professionals

(Using professional help relieves stress, reduces conflict, and saves time and money.)

Long term care services are complicated and provider contacts are fragmented throughout the community. For the majority of Americans, eldercare becomes a frustrating do-it-yourself process. This approach is unnecessary. Using care professionals is the most cost effective and efficient way to provide help for a loved one.

Those people who need help with long term care and use the services of professionals often find they save money over doing it themselves. They also reduce their stress and they free up a considerable amount of their personal time. Another benefit with using professional help, such as a care manager, elder law attorney or mediator, is to help you alleviate or avoid family conflicts that often arise as a result of caregiving.

Hiring professional advisers or providers to help with long term care is no different than using professionals to help with other complex issues such as car repairs, dealing with taxes or dealing with legal problems With their education and training, long term care professionals also bring experience that only comes from dealing with countless hands-on, caregiving challenges.

In much the same way that a three legged stool needs all three legs to be useful, the care planning approach needs at least three key entities in order to be successful. It needs YOU, LONG TERM CARE PROFESSIONALS, and GOVERNMENT LONG TERM CARE PROGRAMS. Our new book describes this team planning approach in more detail and outlines 13 vital professional services necessary for a successful long term care plan.

STEP 4-Creating a Personal Care Plan and Choosing a Care Coordinator

(Success is assured through a written plan; accepted by all parties involved.)

The first three steps in the planning process are designed to give you a wealth of information about long term care. It is important for you to have an understanding of care systems and the resources you can turn to when the need arises. However, knowledge of long term care systems is not enough. You must take some tangible action now to prepare for the day when you will need to deal with eldercare for your loved ones or for yourself.

The final fourth step in the planning process will help you make a care plan. If you follow our instructions and prepare a written plan for you or a loved one, the challenge of dealing with long term care will unfold for you in a more manageable manner. You will experience less stress, have fewer costs, require less time committed and have fewer family conflicts.

Our book is designed as a self-contained reference for long term care services and advisers. The book also becomes your written care plan since it contains your personal document locator, your personal survey, your written care plan with instructions and a written care planning agreement between all parties involved. By including all of the necessary information, documentation and instructions under one cover, the book becomes a single-source, valuable resource used by family members, caregivers and the care coordinator for carrying out the plan. The book also introduces the unique concepts of assigning someone as a care coordinator, who is not a caregiver, and organizing a meeting and completing a written agreement between family members or others who are involved in the care.
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This article is a synopsis of the National Care Planning Council's new book "The 4 steps of Long Term Care Planning." To learn more about this book and to obtain a copy, please go to the following link: http://www.4stepsbook.com/


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Long Term Care Insurance

Why buy long term care insurance?

1. It will help you keep your independence and dignity and allow you to make choices. When the time comes for paying for your long term care needs, you may end up spending your savings and then relying on Medicaid for assistance. Medicaid typically pays for a semi-private room in a nursing home, but not all nursing homes take Medicaid. In many states it is not easy to get Medicaid to cover home care or pay for assisted living. Many people want to stay at home, but with Medicaid may not be able to. Insurance allows you to have a choice of where you want to live.

2. If you are married and you have a need for long term care, your spouse may be forced to pay for an outside caregiver. The cost is likely to come from your combined income and assets. This may leave your spouse with minimal funds in the future. Insurance solves this problem and allows the healthy spouse to keep the assets.
3. Many healthy caregiving spouses won't spend their money and choose to "tough it out" on their own without help. If care of a disabled spouse drags on too long, this can have a devastating effect on the physical and emotion health of the caregiver. Insurance will pay for professional care for the disabled spouse and allow the caregiver spouse needed rest.

4. If your children promise to take care of you when the time comes that you need care, insurance will help them do that. Probably neither you nor your children have thought of the prospects of moving you from place to place, changing your dirty diapers, cleaning up after "accidents" in the bathroom or helping you with bathing and dressing. Insurance will pay for aides to help your children with these tasks.

5. If you are single and a need for long term care arises, insurance can pay for and coordinate that care. With insurance you won't have to feel you would be a burden for family or friends.
6. If you have the desire to leave assets behind when you die, insurance will help preserve those assets from the cost of long term care.

Buy Long Term Care Insurance When You Are Younger

There is a bonus to buying long term care insurance at a younger age. The yearly premium is lower and the total premium over the life of the policy is also less. For example, a person in good health, currently age 45, buying a typical policy with inflation protection, could spend $42,075 in total premiums to age 78. The yearly premium for this policy is $1,275.

Suppose this same person chooses to wait to buy the equivalent coverage-- adjusted for inflation -- at age 65. If that same policy were available in the future, he could pay $44,759 in total premiums over his 13 remaining years to age 78. His premium is also considerably higher and in this case is $3,443 a year. By waiting, he saves no money in total cost, he will have a much higher yearly cost and in addition will definitely incur the following risks:

1.The same policies only stick around about three years and historically, new policies invariably have higher rates for the same ages as older ones. This means, all else being equal, he could pay two or three times more in total cost for an equivalent policy in the future.

2.The policy at age 45 is based on the best health rating and someone age 65 is very unlikely to get that same rating which means a much more expensive total cost in the future.

3.By waiting, his health may deteriorate to a point where he can't even qualify for a policy. Unfortunately, we have seen this happen time and time again to people who wait and all of a sudden desperately want coverage because of a change in health and can't get it.

4.He may need long term care before he turns 65. The chances of incurring a disability prior to age 65 are quite high.

We recommend you work with a long term care insurance specialist who understands the policy provisions and the coverage needed and can help you determine the best policy for what you want.

You can read more about long term care insurance and locate a specialist in your area at http://www.longtermcarelink.net/.

How to buy long term care insurance

There are dozens of long term care insurance companies selling hundreds of different types of policies. It can become very confusing. There are various benefit options for home care and nursing home care, waiting periods, qualifying periods, inflation riders, and the list goes on. Here is a checklist of some of the things you need to know before you purchase a policy.

LONG TERM CARE INSURANCE BUYING CHECKLIST

the more "yes" answers you get the better off you are.

1) Is the insurance company rated by A. M. Best (the rating company) with a rating of at least A, A+ or A++?

2) Is it a large diversified company with deep pockets and selling more than just long term care insurance?

3) Is the insurance representative an expert in long term care insurance? (Because of its complexity, almost all LTCi experts only sell LTCi; they seldom sell anything else.)

4) Does the representative have a degree and/or industry financial designations?

5) Does the representative own a personal long term care insurance policy for himself or herself?

6) Is the policy you like tax qualified, and if not, do you understand the ramifications?

7) Are there at least 6 ADL’s (Activities of Daily Living) allowed for in the benefit certification?

8) Does it allow "standby assistance"?

9) Is it a "pool of money" as opposed to a "stated period"?

10) Is it "integrated" as opposed to "2-pool"? (2-pool is not allowed in some states and very few companies sell these policies anymore but you must be aware of this.)

11) Do you understand how the elimination period works? (This is extremely important.)

12) Does it have prohibitive cost containment provisions?

13) Is there any "capping" of automatic benefit increase riders?

14) Do you understand how the waiver of premium works?

15) Does the assisted living facility benefit pay the same as for nursing home?

16) Are you buying adequate home care coverage?

17) Does the company have a history of premium rate stability without large periodic increases?

18) Does the policy pay for homemaker services and other nonmedical home care services?

19) Does the policy offer an alternative plan of care for services that don’t exist today?

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