Planning for Long Term Care

Our Executive Director, Nathan Sanow, was speaking to a group of employees recently who wanted to learn about Long Term Care (LTC).  Their employer, a private school, was getting ready to offer long term care insurance and they wanted to gauge how much interest there would be.  They were surprised to see the room full!

We tell people that long term care insurance (LTCI) isn’t necessarily the right thing for everyone, but having a long term care plan is!  During the meeting, Nathan was reminded of a meeting he had a few years ago with a local insurance professional who was an evangelist for LTCI.  He was such an champion he wrote a book about Long Term Care Insurance and wanted Nathan to review and edit it.  Nathan asked where his passion for LTCI came from and he shared his story.  For his own privacy, we will call him Bill.

Bill’s Story

Bill was in his late 20’s and out on a motorcycle ride on a beautiful weekend in rural Oregon when he got the call that his father had a massive stroke and was in the ICU.  Bill rushed to the hospital and learned his dad had suffered significant brain damage and without a medical directive and no spouse, Bill was asked to make the difficult decision whether to leave him on life support or not.  Bill decided to keep him on life support so his siblings could come in from the Midwest to see their father.  Bill told Nathan that he now regrets this decision, but in the chaos of life and death decisions of a loved one, it was very difficult.  His dad survived the stroke, but it left him significantly mentally impaired.  Since Bill lived close by, he was best-suited to keep tabs on their dad and his care, while his siblings eventually went back to their families in the Midwest.  What Bill’s siblings didn’t realize, like most people until they experience an extended care event, is the emotional, physical, and financial toll care takes.  Bill spent the next 5 years making sure his dad was properly cared for.  Hours were spent hiring, firing, and trying to find care givers that would provide reasonable, quality care without taking advantage of his dad.  Bill went to countless doctor appointments to make sure he knew what medications were needed, when to administer them, and what other medical conditions were affecting his father.  Bill’s siblings didn’t realize the emotional toll, cost of time off work, supplementing the cost of care, or managing his dad’s finances which created a divide between them when Bill would ask for help or more money.  This is why Bill is now such an ardent believer in proper planning and having LTCI in place to take the load off of the family.

 So what should a plan for Long Term Care include?

  • Advanced Medical Directive in place AND having it communicated to family.  In Bill’s case if he knew his dad’s wishes, it could have changed the outcome.
  • Create a logbook of all financial account numbers and passwords.  We have heard stories of a parent that had significant financial resources but their children could not access the accounts after their parent had an illness and could not communicate.  It nearly bankrupted the children (or child) paying for care out of pocket.
  • Decide who you want to provide care.  Maybe you don’t want a family member to provide care.  If you do, how will their loss of income or time spent providing care impact their own family and career.
  • Determine how care will be paid for.  If insurance is not the solution, then what other financial resources are available to pay for it.  The cost of home health care runs about $4,000 per month and facility care roughly $8,000 per month.  With an average claim duration of 3 years, this means it could cost $170,000-$280,000 per person.
  • Write it down!  Just like an Advanced Medical Directive, a plan doesn’t do anyone any good unless it is written down and communicated to those around you.

We call this talk the “adult version of the birds and the bees.”  It can be uncomfortable to think and talk about these issues, but it is very important for all to be on the same page.

Long Term Care Insurance can be a great solution to cover some or all of the financial implications of a LTC event, but a proper plan still needs the above elements to help minimize the impact to the family and receive the kind of care you desire.