Planning for Long Term Care is Best Done Early..

…countless Americans face dilemmas on how to prepare for the day they need help getting by. The choices can be daunting, and expensive, for long-term care insurance, nursing homes or assisted-living facilities.

Amen - I’ve been in this game since 1967, when Antie Ida got “dementia”. Since then 6 other family members needed care costing nearly $1.7 million in total. Ouch…!

In its annual benchmark cost survey, Genworth Financial Inc. reported in March that the annual average cost of a one-bedroom unit in an assisted-living facility rose 7 percent from 2005, to $32,294. The average hourly rate for a home-health aide jumped 13 percent, to $25.32 per hour, and the average annual cost for a private room in a nursing home was $70,912, a 2 percent increase.

An Alzheimers stay can average 8 years, I understand. Do the math and weep…

Some planners say buying into assisted-living facilities too early just for the peace of mind isn’t worth it.

“I don’t think I’d pull the trigger until I actually needed assistance,” said Warren McIntyre, a financial planner in Troy, Mich. “There’s nothing wrong with staying put.”

One strategy that can help with longer-term planning is to purchase long-term care insurance, which McIntyre generally recommends clients obtain when they are in their 50s. Some advisers recommend it earlier, starting at 40. This insurance covers nursing-home or assisted-living care, as well as home-care services, depending on the policy.

LTC insurance is the most sensible strategy, as I see it…

…many advisers recommend waiting, even into your early 60s. Of course, the older and sicker you are when you start, the higher the premiums will be, or there is a good chance that you may not qualify to enroll at all.

A Genworth spokesman said policies purchased by people in their 50s generally cost $2,000 to $3,000 a year, depending on policy type.

Edward Kirchmier, a planner in Hollywood, Fla., counsels clients to think about long-term care in much the same way as homeowner’s insurance - a necessary item, but something you hope not to use.

All insurance is hopefully never used, right?

Even if you do decide to buy a long-term-care policy, a befuddling task awaits.

The AARP Public Policy Institute last week released a report on the state of long-term-care insurance choices nationwide, and the results weren’t encouraging.

“Consumers are getting into the [long-term-care insurance] marketplace and finding a confusing morass,” said Enid Kassner, an AARP senior policy adviser and an author of the report.

This is why it’s good to use the Buyer’s Advocate system.

The report called on the insurance industry to standardize benefits, provide at least the same level of benefits that federal government workers receive in their plans and widen the types of living arrangements that qualify for benefits. Federal coverage includes several types of care facilities, with up to a 90-day waiting period before benefits kick in. Employees pay the premiums.

Consumers, for their part, need to be certain they read and understand every section of their policy, Kassner said.

You can check out policy details through your state health insurance assistance program.

… and through the Buyer’s Advocate system.

Emotional blocks are sometimes just as daunting as the technical hurdles, said Mary Brooks, a financial planner in Colorado Springs.

“I start talking about this with clients when they turn 40, because nobody wants to talk about it when they’re older,” said Brooks, who has been involved in caring for several older family members.

“People’s expectations of what they are capable of doing are far higher” than what they can realistically do, she said, referring to family members’ abilities to care for aging relatives without paid help.

Right. Bravado and wishful thinking can cloud one’s vision, which leads to an insufficient plan.

- Commentary (in bold) by Clayborne Cotton