L is for Learning about Long-Term Care
Personal Finance from A to Z
Eileen St. Pierre, The Everyday Financial Planner
According to the Centers for Medicare and Medicaid, people over 65 have a 70% chance of needing some form of long-term care. Long-term care includes different kinds of assistance you may need if you ever have difficulty caring for yourself for an extended period of time.
There are different levels of long-term care.
Level 1: Having Trouble Performing Instrumental Activities of Daily Living (IADLs)
Sometimes the need for assistance starts with the death of a spouse. The surviving spouse needs help with activities that the other spouse regularly took care of such as:
- Home repairs and yard work
- Cooking meals
- Paying bills
Other times the need for assistance is due to health problems. You have trouble lifting a gallon of milk or walking up the stairs. You sometimes forget where you put your car keys or where you parked the car. These may be normal signs of aging. They may also be caused by chronic diseases like arthritis or being overweight. You may become concerned about staying independent.
In these situations, you require help with what are called Instrumental Activities of Daily Living or IADLs. The government and long-term care insurance will not assist you in paying for help.
Level 2: Having Trouble Performing Activities of Daily Living (ADLs)
To qualify for long-term care insurance or some government programs, the requirements for assistance are limited to six Activities of Daily Living or ADLs:
- Getting dressed
- Incontinence hygiene
- Transferring (getting out of a chair or bed)
You must need substantial assistance with performing two or more ADLs. If you have a cognitive impairment like Alzheimer’s disease, you must need substantial supervision to protect yourself.
Doesn’t Medicare cover long-term care?
To understand what long-term care is, it helps to know the difference between custodial care and skilled care. Custodial care and long-term care mean the same thing. Many people think that Medicare will pay for custodial care. While Medicare does cover expenses related to skilled care, it does not cover expenses for custodial care. Skilled care is provided in relation to an injury or illness from which you are expected to recover. Medicare covers these expenses as long as you continue to recover.
When you reach a point where there is no further improvement, you are considered to need custodial care and Medicare will no longer pay for your care. The majority of the cost of custodial or long-term care is paid by the individual needing the care. Part of the reason for confusion is that skilled care can be provided in the same place as custodial care.
Where is long-term care provided?
Many people think that needing long-term care means wasting away in a nursing home. Nothing can be further from the truth. The majority of long-term care is provided for at home by unpaid caregivers, either in the individual’s home or at a family member’s home. According to Genworth Financial:
- 87% of caregivers provide daily living assistance, and 52% provide financial assistance.
- Caregivers provide an average of 21 hours of care per week.
- The typical caregiver is a 49-year old married woman taking care of a parent.
Even if you do not have family members or friends who are able to provide you care at home, you can still stay in your home and receive long-term care. There are many home and community-based services available such as:
- Homemaker services
- Home health aide services
- Adult day health care
If you find that you can no longer safely live in your home, there are other housing options available to you. Some examples include:
- Adult companion services
- Board and care homes
- Assisted living facilities
- Continuing care retirement communities
Last, there is the independent skilled nursing facility. It is also called a nursing home or convalescent care facility. This is the most expensive form of long-term care. Some people need these services for a short period of time, while others may need constant care or supervision.
Your local Area Agency on Aging can help you find out what services are available where you live. My next column will focus on the cost of long-term care.
Visit my Financial Planning for Later in Life page for more information.