Long Term Care Options for End of Life Care

Are you prepared for the last few years of your life?  Many people do not want to even think about what will happen if they become ill and can no longer take care of themselves. Others assume that their spouse or their adult children will be able to care for them.  However, are you sure your spouse or children are actually capable of lifting you if you fall, help you shower, keep you safe if you lose your memory, or deal with insulin injections or home dialysis?  Unless they are already in the healthcare business and know what they are doing, this may be more than they can handle.

Everyone should anticipate that they will need extra care during the last few months or years of their life.  While some people do die a sudden, unexpected death, it is far more common for people to spend the last few years of their life in a frail condition, dependent on others to care for them.  Who will be able to care for you?  How will you pay for it?

Before you make any decisions, you may find it helpful to read: “How to Care for Aging Parents: A One-Stop Resource for All Your Medical, Financial, Housing and Emotional Issues.”   The more you know about your options, the easier it will be for you to make an informed decision for yourself and/or your parents.  

Below is a rundown of the most common options people have for paying for long-term care. 

Will Medicare Pay for My Care? 

If you assume that Medicare will pay the cost of your medical care during the last few years of your life, you will be disappointed.  If you spend at least three days in a hospital, Medicare will cover up to 100 days of needed care in a Medicare approved nursing facility.  After that, Medicare will no longer continue to pay and you will have to make alternative financial arrangements.  If Medicare determines that your illness does not require you to stay for the full 100 days, then you may not even be covered for that long. 

What about Medicaid?

Medicaid (called MediCal in California) is an option for low income people with few assets.  You have to apply for this coverage and meet their financial and medical qualifications.  Many experts suggest you apply for Medicaid the minute you or your loved one enters a nursing home, to see if you qualify financially.  If Medicaid will cover your expenses, it will remove a huge burden from you and your family. 

Should You Self-Insure for Your Long-Term Care?

If you have enough income and assets to cover assisted living or a lengthy nursing home stay for both you and your spouse, you probably do not need to worry about the cost of long-term care.  You can pay out-of-pocket when and if one or both of you need to go into a nursing home for the last few months or years of your life.  However, most people do not have sufficient assets to feel confident they could pay for all the care they need for an indeterminant length of time. 

What About Middle Income People?

The group which has the most significant problem covering the cost of long-term care are those in the middle class.  These are the people who have too much income and savings to qualify for their care to be paid for by Medicaid, but not enough savings to pay out-of-pocket for a lengthy stay in a nursing home.  What options do they have?  How can they prepare for the final years of their lives?

Purchase Long-Term Care Insurance as Early as Possible

One good option is to purchase a long-term care insurance policy, which will pay an inflation adjusted amount of money per day for your care for the length of time you believe you will need that care.  The younger you are when you purchase a long-term care insurance policy, the lower the premiums will be.  You can prepare for the future by purchasing a policy in your 50s, while you and your spouse are both in good health.  There are a variety of types of policies, including some which allow couples to share a policy.  You can also buy policies for varying lengths of time.  For example, you could get two or three years of coverage, or lifetime coverage. 

Your long-term insurance will begin paying for your care at the time you are no longer able to handle at least two of the following basic activities of daily life, which include dressing yourself, feeding yourself, toileting, safely bathing or showering, or transferring yourself out of a bed or chair.  A nurse may be sent to evaluate you before the insurance company will pay the claim. Depending on your policy, you may be able to have a caregiver come to your home, or you may be able to move into an assisted living facility or nursing home. The insurance carrier has to approve your plan. 

The advantage of these policies is that they bring you peace of mind and will help cover your expenses if you should become incapable of caring for yourself.  The disadvantage is that the premiums could rise, even if you start with a low premium.  One way to deal with rising premiums is to cut back on the amount the company may have to pay out by reducing your years of coverage, the daily rate they will pay, or the inflation factor they are using.   

Combination Life Insurance and Long-Term Care Insurance Policy

Another option is to purchase a life insurance policy which will allow you to draw on some of the value of your future death benefits to pay for long-term care.  If you never need long-term care, your heirs receive the full face value of the life insurance.  If you need some of the money for your long-term care, you can use some of the funds while you are still alive.

Move into a Continuing Care Retirement Community

Another option is to move into a CCRC or Continuing Care Retirement Community.  This usually requires you to sell your current residence and purchase a condo or cottage in the CCRC.  You pay the CCRC a monthly fee in addition to the “buy-in” you paid for your condo when you moved into the community.  In return, they guarantee they will take care of you for the rest of your life.  

Most of them require you to be in good enough health at the time you move in that you are “ambulatory” or able to walk on your own and do not need any immediate assistance caring for yourself.  As a result, do not wait until you are already seriously ill before deciding to move to a CCRC.  The CCRC provides you a place to live, meals, maid service, social activities and other amenities.  If you need future care nursing home or memory care, they will provide that, as well.  When you die, they will pay your heirs part of the remaining value of the condo, but it will be less than the price you paid when you purchased it.  How much your heirs receive is determined, in part, by how much the CCRC has spent on your lifetime care.

Plan Ahead and Plan Early

You may also find it helpful to read: “How to Care for Aging Parents: A One-Stop Resource for All Your Medical, Financial, Housing and Emotional Issues.”   ABC News referred to this book as the Bible of eldercare and it also received high reviews from AARP and other sources. 

As you can see, you have a number of options which will help you prepare for the future without depending on your children or other family members to care for you.  What is important is that you start looking at your options while you are in your 50s or 60s, and then take the necessary steps to follow the plan which seems wisest for your situation.  For example, visit the Medicaid approved nursing facilities in your area and see if you are likely to qualify to live in one; if not, make arrangements to purchase a long-term care insurance policy.  You may also want to visit the CCRC’s in your community and see which one appeals the most to you and how much it would cost to purchase a condo in one.  Once you have a plan, you will worry much less about what the future has in store for you.

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