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Financing Long Term Care 24-Item PowerPoint Presentation
Script Option 2
Slide 1. Program Title Slide: Financing Long Term Care
Introduction
Consider the couple who have multiple chronic illnesses and care for each
other, because home care aides are too expensive. They live on Social Security.
They save money by often skipping prescription refills due to high costs. They
checked out long term care insurance and couldnt afford the premiums. They
dont want to go to a nursing home. Their $95,000 in life savings and the value
of their home wouldnt go far. Everyone knows who is on Medicaid in the nursing
home and they dont want to be dependent on the county. They wont accept money
from their grown children. They desperately want to die the day their money runs
out!
Slide 2. Few individuals plan for their 60s and beyond. They dont
recognize what it means to live to 100 or what they can do to prepare for that
possibility. They dont think about the risks that come with changing health and
independence, and specifically managing the need for long term care. It is
important to (point to slide) plan for changing health and independence,
take action to decide how to manage the changes and evaluate and
make changes as needed.
Slide 3. Consider these long term care dilemmas and decisions. (See
slide.)
Few have planned for long term care.
Hard to admit we may need long term care.
Know too little about our options and long term care
insurance.
Gaps in knowledge make it hard to plan.
Slide 4. You can protect your later life financial security by being
pro-active. Take time to:
Sort out expectations, goals concerns talk about your
situation with your spouse or kids or other advisors, Make decisions before a
crisis occurs.
Learn the risks of going to a nursing home or needing home
care.
Learn the costs.
Consider how you will pay for long term care.
Prepare yourself to take action.
Suggested Activity: Ask each participant to complete the quiz, Long Term
Care: Do You Know the Facts?
Slide 5. Financial Expectations and Long Term Care
Not everyone agrees how to manage the costs for long term care.
Unfortunately, there are many ideas of what to do and most are not compatible.
What is it you want the most?
Financial independence
Financial control
Expect family members to provide long term care or money to
cover the costs.
Use government services to provide your care.
Leave an inheritance.
Do other family members know how you feel?
Slide 6. The need for Long Term Care is determined by your ability to
perform tasks called Activities of Daily Living (ADLs). Persons suffering
from dementia may be able to perform the tasks but often cant remember certain
tasks such as when to take medications.
ADLs (Insurance and Medicare Definitions)
Bathing, eating, toileting, dressing, transferring (for
example, from bed to chair), walking.
Taking medications, shopping, housekeeping (applies to
assisted living and home care)
Performed in a home, community, or skilled nursing facility.
Slide 7. Who needs long term care? 1 (refers to first item in
questionnaire)
How did you answer Item 1 (Long Term Care: Do You Know the Facts?)?
The answer is false.
Many are misinformed about what the risk of needing long term care means.
Many also fail to learn what their choices are. Most long term care is received
at home from family members and friends. As you get frail, you may need some
help with dressing or meal preparation or other ADL. You may need some skilled
care, such as therapy. You may need community services such as help with bathing
from a home care provider or adult day care while a family member who cares for
you in the evening can keep her job. You may be advised to go to a nursing home
because your care is demanding, intensive, and your health needs cant be met at
home.
Slide 8. Who is most at risk to need long term care? 2-3
How did you answer Items 2 and 3 (Long Term Care: Do You Know the Facts?)?
Both answers are true.
Your risks increase as you get older and if you are a woman. Persons under
age 65 who need long-term care often have chronic health problems such as severe
arthritis or disabling injuries. The women at risk for long term care are those
who outlive their husbands, live alone and therefore do not have an unpaid
caregiver in the home.
Slide 9. What are the risks? 2-3
(Again referring to Items 2 and 3)
If you are over 65, you have a 75% chance of needing some long term care at
some point in your life. Average lifetime home care use is over 200 visits
(whether five times a week (5 x 40 weeks = 200 visits) or a few times (3 times a
week = one year and three months). Persons spend an average of one year in a
nursing home.
Slide 10. What are the costs of long term care? 4-5
How did you answer Items 4 and 5 (Long Term Care: Do You Know the Facts?)?
Item 4 is false; item 5 is true.
While the 2003 average daily nursing home rate at $100 is more than the
hourly rate for a home health aide, total daily cost for home care can up if
several hours of care are needed each day.
Ask: What kinds of rates have you or friends and family members paid for home
health care?
Slide 11. How do you expect to pay for long term care? 6
Studies suggest than many individuals have different and competing financial
goals each is trying to accomplish.
How did you answer Item 6 (Long Term Care: Do You Know the Facts?)?
The answer is true.
The questionnaire, Critical Conversations About Financing Long Term Care:
Can We Talk? Identifying Financial Security Goals for Later Life Worksheets A
or B, can help you sort through your feelings. You and your partner will
want to discuss these.
Suggested Activity: Demonstrate how to use the questionnaire by having
participants answer sample questions for one section OR at least one question
under each potential goal.
Next, review how you might pay for long term care.
individual/family resources (savings and earnings;
liquidating investments or other assets)
immediate family (spouses resources)
buy long term care insurance (while you can pass medical
underwriting and premiums are affordable)
government (Medicare or Medicaid).
Consider a combination of resources. Be prepared for conflict. Not everyone
will agree on the same solution for mom and dad or even for yourself!
Slide 12. Who really pays for long term care? 7-8
How did you answer Items 7 and 8 (Long Term Care: Do You Know the Facts?)?
Both answers are true.
Individual/family resources are the income and life savings
of elders and family members.
Family home is protected for spouse or if you are able to
leave nursing home and return home.
Medicare pays for less than 7% of total. It pays for initial
rehabilitation and never for routine physical care.
Medicaid pays nursing home costs after financial resources
are spent-down.
Slide 13. Who else pays for long term care?
How did you answer Item 7 (Long Term Care: Do You Know the Facts?)?
Item 7 is true.
Unpaid family members provide the majority, roughly
(three-fourths) of long term care.
Working caregivers spend an average of 22 hours a week
providing elder care.
Working caregivers lose an average of $650,000 in lost
wages, lost Social Security benefits, and lost pension contributions.
In planning for your long-term care, it is important to consider how and if
your adult children, who are most likely employed and responsible for your
grandchildren, can modify their lifestyles to accommodate your increased
frailty. What can you do to support your children as they assist you?
Slide 14. Medicaid is a safety net 8-10
How did you answer Items 8, 9, and 10 (Long Term Care: Do You Know the
Facts?)? Item 8 is true. Item 9 is false. Item 10 is true.
State and federal funds pay for home, community, and nursing
home care when an individual has both insufficient assets and monthly income.
Elder choices in Arkansas is an example of home care paid by Medicaid funds.
Critical to understand income and asset rules. They are
discussed in the next slide.
"Healthy" spouses are protected from poverty. A spouse
living at home may keep a certain level of income and assets, including the
home. The home does not have to be sold to raise funds to pay the nursing home.
This helps protect a healthier spouses financial security. Before you deny
yourself or your loved ones medical assistance, contact the Medical Services
case worker in your County Department of Human Services (DHS) office to learn
"up front" your options. See next slide.
Slide 15. Medicaid Spend-Down Rules 11
Single persons can keep $2,000 in assets. Their income must be $1,635 per
month or less (2002) figure. If your monthly income is insufficient to pay the
nursing home but above the monthly limit, DHS can explain your options.
If you are married, the other spouse can keep between $17,856 and $89,280 in
assets (2002).
Spend-down amounts are adjusted each year for inflation.
Slide 16. Does Not Pay for Long Term Care 12-13
How did you answer Items 12 and 13 (Long Term Care: Do You Know the
Facts?)? Both answers are false.
Examine your health insurance policy carefully. It pays for medical services
but not for daily living care (ADLs).
Medicare pays for a limited amount of skilled home care and nursing home
care, usually rehabilitation. For example, after knee surgery, Medicare will pay
for physical therapy, while you learn to use your own or replacement knee.
Medicare supplement insurance pays for a portion of the Medicare deductibles
and copayments, but not for services that are considered ADLs.
Slide 17 Dont Buy Long Term Care Insurance 14
How did you answer Item 14 (Long Term Care: Do You Know the Facts?)?
Item 14 is false.
Before you buy long term care insurance, think about whether you can afford
the premiums for the rest of your life. Long term care insurance benefits can
help pay part of the nursing home costs so you do not have to spend your assets.
That way you can leave an inheritance.
Long term care policy benefits usually have limits. Policies often limit
coverage to specific settings (licensed facilities and licensed medical
providers), specific lengths of time (12, 24, 36, or 60 months), and certain
dollar amounts per day ($75, $100 or $125 per day). It is possible to buy
lifetime coverage.
Slide 18. Long Term Care Insurance Covers
15
How did you answer Item 15 (Long Term Care: Do You Know the Facts?)?
Item 15 is false.
Custodial care ADLs. Keep in mind long term care insurance typically
protects against potential non-medical long term custodial care costs as defined
by the ADLs.
Long term care insurance is indemnity insurance. Benefits are bought using
fixed amounts, for example, up to $100 per day or up to a certain maximum amount
such as $200,000.
The maximum benefit is figured by multiplying a daily benefit times a certain
period of time, for example, $100 per day for 3 years equals $109,500. In this
example, you will receive no more than $109,500.
Slide 19. If You Buy Long Term Care Insurance? 16
How did you answer Item 16 (Long Term Care: Do You Know the Facts?)?
Item 16 is false.
Long term care premiums will increase with age because the risk of needing
care increases with age. Keep in mind, the risk of becoming uninsurable or
passing health underwriting, also increases with age.
When applying for long term care insurance, disclose everything on the
application. Companies will "look back" at your health records for at least 5 to
7 years.
Slide 20. Long Term Care Insurance 16
Most experts recommend you consider buying long term care insurance between
ages 50 and age 65.
Fewer competing demands
Good chance of passing medical underwriting.
Premiums are relatively low.
More likely can buy a policy to fit your needs for now and
until the end of your life.
Slide 21. Long Term Care Insurance: Inflation Rider 16
Experts recommend you buy a policy with an inflation rider, preferably with a
compounded inflation rider.
A simple interest inflation rider will add 5% periodically
to the daily benefit. You will be required to pay a higher (between 45% to 85%
higher) premium.
A compounded interest inflation rider, usually a 5%
compounded per year addition to the daily benefit means a 65% to 200% higher
premium. Experts recommend this option.
In the example, $100/day room benefit, in 35 years @ 5% compounded, increases
the benefit to $552 per day.
Slide 22. Long Term Care Insurance 16
Use the Rule of 3 when you shop for long term care insurance. That is,
compare three different policies. Either listen to a sales presentation or
compare policies on the Internet. The slide compares three real examples.
Slide 23. Have A Critical Conversation 17
How did you answer Item 17 (Long Term Care: Do You Know the Facts?)?
Item 17 is true.
You need a complete picture of your income and assets before you shop for
long term care insurance. If you know you cant afford or dont qualify
medically for a policy, there is no need to go further. It may be more important
to assess how you will pay the costs if you are required to spend-down your
assets.
Make sure you, your spouse and perhaps your adult children have a critical
conversation together or even with yourself so you:
Recognize your risk of long term care.
Understand possible costs (home care, nursing home, etc.)
Sort out your expectations and goals.
Understand financing alternatives and consequences.
Take action now before a crisis.
Slide 24. Closing credits.
Distribute "Long Term Care and Your Financial Security." This handout
includes the answers to each of the questions in the quiz.
2003. Judith R. Urich, Ph.D., CFP, Family Resource Management Specialist
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