Critical Conversations About Financing Long-Term Care

1. Critical Conversations About Financing Long-Term Care This curriculum was developed by Marlene S. Stum, PhD., a National Initiative Development Team Member, from the University of Minnesota

2. Plan for changing health and independence --including long term care Act Identify how you will manage the risk of long-term care Evaluate Make changes as needed

4. Financing Long Term CareDilemmas and Decisions Major gap in financial planning throughout the lifecycle Critical gap in later life financial security Few have done any planning �we planned for a shorter and healthier retirement� �I never expected to live so long!� Won�t admit we might personally be affected

5. Financing Long Term CareDilemmas and Decisions We think we know more than we do! Don�t understand risk, costs, financing options Believe we have coverage when we probably do not (existing insurance/government sources) Gaps in knowledge makes it tough to plan for long-term care!

6. Reasons to Avoid We might make the wrong decision We don�t know how to begin It is too complex and overwhelming We don�t talk about money We won�t have any choices anyway Family members will never agree It is disrespectful to raise the issue

7. Critical Conversations About Financing Long-term Care Recognize your risk of long term care Understand possible costs and potential financial implications Sort out expectations and goals Understand financing alternatives and consequences Take action now, before a crisis

8. Long-Term Care Help with daily living activities and remaining independent Eating, bathing, dressing, transferring, walking, toileting, taking medications, shopping Wide range of personal, social and medical services Provided in a variety of settings: in-home, community, skilled nursing facility

9. Most who need long term care Live in their own homes Receive unpaid care provided by family/friends Overestimate the chance of needing skilled nursing care Underestimate need for in-home and community services Are unprepared for needs increasing gradually overtime Are unfamiliar with new and changing options

10. Who�s at risk? The long-term care population is diverse in age and level of disability. A risk across the lifecycle 57% over age of 65 40% below 65 years of age 3% are children

11. Who�s most at risk? Individuals 85 years and older Need help with more activities of daily living Experience increased rates of home care and nursing home use Individuals with chronic health problems Individuals who lack social support and unpaid caregiver

12. Who�s most at risk? Women Longer life expectancies Outlive unpaid caregivers

13. Prevalence of Long Term Care Need Age: 65-74 In Community: 11% In Institution: 1% Age 75-84 In Community: 22% In Institution: 5% Age 85+ In Community: 49% In Institution: 21%

14. What are the risks? After age 65, almost 3/4ths will need some home care and almost half will spend some time in a nursing home. Average lifetime home care use is just over 200 visits. Average lifetime nursing home use per person is one year.

15. Potential Costs: Underestimated In-home care: Degree of need and health status Type of service used Home health aide: e.g.$80/hour

16. Potential Costs: Underestimated Community services Adult day care: e.g. $60/day Assisted living�housing with services Common meals, housekeeping

17. Potential Costs: Underestimated Skilled Nursing Facilities One month average in U.S.-- $5000 ($60,000/year) Northeast and West highest: CT-$223/day; CO--$133/day; Arkansas--$79/day

18. Potential Costs? What are the costs of long term care in your area? Gather information on: In-home care Assisted living Skilled nursing facilities

19. Sort out Later Life Financial Goals and Expectations What are you really trying to accomplish financially? What�s most important to you? Multiple and competing goals are behind later life financial decisions Make unwritten and unspoken goals explicit! Goals provide direction for selecting financing alternatives Goals can be prioritized

20. If I would need long term care, I would expect to: Remain financially independent Maintain control of my finances Keep my financial affairs private Involve family members (care/financially) Utilize government services Leave an inheritance

21. Identifying Financial Goals There is help . . . Complete useful worksheets to identify meaning of goals, priorities, and concerns On-line versions available Print out and do on your own

22. Can we talk? Goals can be a common source of conflict Between spouses/partners Across the generations Who needs to be involved? Spouse or partner? Adult children? Find out where you agree or disagree On the meaning of goals, priorities, concerns

23. Understand Financing Alternatives and Consequences There is no one financial answer or solution Later life financial goals should influence which alternatives are most appropriate Consider a combination of alternatives Personal resources Insurance Government options

24. Who does pay for long term care? Income and life savings of elders and family members Sell home and use equity Unpaid family caregivers provide majority of long term care (3/4ths) Working caregivers spend an average of 22 hours a week providing elder care Caregiving responsibilities can last 8-10 years Working caregivers lose an average of $650,000 in lost wages, lost Social Security benefits, and lost pension contributions.

25. Who pays for long term care? Medical Assistance is a critical safety net A need-based state/federally funded program which does pay for home, community, and skilled nursing care Critical to understand income and asset rules �Healthy� spouses are protected from poverty

26. Who pays for long term care? NOT existing health insurance policies NOT Medicare except for some limited home health care coverage NOT Medicare supplement insurance

27. Who pays for long term care? Long-term Care Insurance Currently no more than 10% of population has purchased long term care insurance As an individual As part of a group--more employers are offering as workplace benefit Federal government offering in 2002 is largest ever! Few who have purchased have started to actually use their policies

28. Long term care insurance A new decision-making experience for most consumers Long term care insurance is not the same as disability insurance (replacing income versus paying for care expenses) Ask a lot of questions and compare! Use state-specific resources to make informed decisions

29. Long term care insurance Is not for everyone Can you afford the premiums today and in the future? Do you have assets you want to protect? No policy will protect against all costs Policy costs increase with age Too many wait until unaffordable or uninsurable

30. Factors affecting financing alternatives Health status Financial status Current and future income Current and future assets Calculate your ability to self-insure for all family members Community long-term care options What options will be available? What are local costs?

31. Understand Financing Alternatives and Consequences There is no one financial answer or solution Options and choices typically decrease with age and increased risk What was may not longer be . . .change is a given. Consider the consequences of �doing nothing�

32. Understand Financing Alternatives and Consequences Print fact sheet on financing alternatives and considerations Print and use checklists for selected financing options

33. Why plan now? Peace of mind--reduces fear and worry More choices and options are likely Increases likelihood your goals and wishes will be known and followed Reduces burden for others who will need to carry-on Reduces potential for misunderstandings and conflict

34. Critical Conversations About Financing Long-term Care Recognize your risk of long term care Understand possible costs and potential financial implications Sort out expectations and goals Understand financing alternatives and consequences Take action now, before a crisis

35. Plan for changing health and independence --including long term care Act Identify how you will manage the risk of long-term care Evaluate Make changes as needed

36. Make Critical Conversations About Financing Long-Term Care a Priority Today! You have completed the final module in this on-line self-study. Explore the rest of the website to find useful planning tools, conversation starters, fact sheets and other decision-making tools.