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Face the need for long-term care

By Jennie L. Phipps ·
Tuesday, November 13, 2012
Posted: 12 pm ET

According to the U.S. Department of Health and Human Services, Americans reaching the age of 65 have a 70 percent chance of needing long-term care.

Research by long-term care insurer Genworth concludes that just 40 percent of Americans ages 45 to 54 have any long-term care plans, and while that percentage rises as people get older and closer to retirement, it never reaches 100 percent.

Why do people avoid making plans to pay for long-term care? You don't need a study to figure that out. It's a tough topic. Who wants to think about getting so old that you're unable to go to the bathroom without help? The thought makes me cringe.

But the alternatives are even less comfortable. Here are the options.

Family. What would your grown children say if you announced at Thanksgiving dinner that you needed help -- and you were moving in?

The government. Medicaid will pay for long-term care if you have less than $2,000 in assets. The Department of Veterans Affairs also has a plan if you served during time of war and you're impoverished.

Savings. The median cost of a private room in a nursing home is $81,030 a year. Most of us will blow through every penny we have quickly.

Long-term care insurance. Conventional long-term care insurance costs $2,000 a year on average for a single person age 55 and about $2,500 a year for a 55-year-old couple, according to the American Association of Long-Term Care Insurance. But don't let those numbers stop you from exploring the possibilities. There are some lower cost options, so it pays to talk to an expert.

It also makes sense to think creatively about long-term care. For instance, your children might be willing to kick in on an insurance policy if it makes it more likely that they won't have to face the need to provide more direct care or you won't have to sell the family lakefront cottage to pay the bills.

Anyway you look at it, the need for care when you're old and decrepit is a tough topic, but grappling with it as part of retirement planning while you still have options is better than waiting until you don't.

Correction: An earlier version of this post incorrectly stated that only 18 percent of Americans between age 45 and 54 have long-term care plans.

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November 14, 2012 at 11:23 am

Ben and Rachkien - Having dealt with dead and dying parents for more than 15 years I can tell you that diet and exercise won't guarantee a life free of worries for long term care. Dementia and Alzheimer's often strike in spite of lifestyle. Ben's comment about taking you own life is sad because the people suffering these brain disorders do not know they are unable to take care of themselves. Medicare doesn't help because it is classified as custodial care. Watch your LTC policies, many do not cover custodial care.

November 14, 2012 at 11:07 am

Gee, what a surprise that Genworth, the LTC provider, says we will need insurance. I absolutely agree with Rachkien--exercise, eat healthy food and keep your mind active. I am 66 years old and I have many friends in their 80s and 90s who still live at home. It's a waste of money!

November 14, 2012 at 10:38 am

Medicare will only pay up to 100 days of Long Term Care, and only about 20 days at 100%. Make sure to check the facts.

November 14, 2012 at 10:25 am

What do you bet that the insurance companies are behind this scare article. It sounds like propaganda to me. Start now to become and stay healthy by changing your diet to a healthy one and get plenty of exercise.

November 14, 2012 at 9:35 am

The author of this article failed to note the purpose of LTC insurance. LTC policies are intended to cover care involving Activities of Daily Living (ADLs), which include bathing, dressing, toileting, continence, transferring and eating, and are not considered medically necessary. Care which has been determined to be medically necessary is covered by Medicare.

Carla Adam
November 14, 2012 at 8:16 am

This is for Marilyn and others who have had an increase in LTC premiums, look around if you can still qualify you may be able to get a better deal from another carrier. Chose a carrier that is financially strong as they will need to be around to pay out benefits if you'll need them. Some carriers also have an option that you would get all your money back if you do not need the LTC benefits. This is a full refund of premiums paid that would go to your beneficiaries or your spouse. Good Luck!

November 14, 2012 at 12:55 am

I've seen both my parents fight for every last breath before expiring. I don't understand that and never will. It's called quality of life. If you can't make it to the bathroom it's time to go. That simple. There's no euthanasia machine (yet). So find a deep ocean and call it a life.

Marilyn J
November 14, 2012 at 12:09 am

I've had LTHC for about 15 years. This year the premium increase was 47% - that is not a typo. But there was a very nice letter with it that said if I couldn't afford it, tough. I could not pay the premium and lose everything I've paid into it and all future benefits. Nice choice. And, that's the second huge increase. The last one was nine years ago and it was mere 50%. But,the insurance company tells me they have to raise the rates because more and more people are getting benefits. Duh!

November 13, 2012 at 6:52 pm

Short and to the point. One must also look into not just standalone LTC policies but also a life insurance policy with a LTC rider. This could sastisfy two different needs and may at times be easier to qualify for.