Many seniors will need some form of long-term care in their lifetime, but the amount of support for such care is minimal. Medicare and Medicaid plans do not tend to cover this type of care, nor do most types of private insurance plans.
This can be a serious problem. To make matters worse, the need for long-term support often comes on suddenly. For example, a single fall can be enough to strip a senior of their independence, even if the physical damage from the fall is minimal.
Long-term care can also be expensive. Many families haven’t planned for such costs or simply have not been able to save.
Thankfully, there is a growing interest in providing a better support structure and processes for caregivers (and for seniors). This includes funding that can help support long-term care in the home or outside of it. Washington is leading the charge in this area.
Washington’s New Program
In April 2019, Washington became the first state to approve a publically funded program for long-term care.
It can provide as much as $36,500. This money can be used in a variety of ways, such as for meal delivery services, nursing home fees or improvements to make the home a safer environment. The funding probably won’t be enough to meet all of a senior’s needs in many situations. Even so, the program is a powerful start and could dramatically ease the financial strain of long-term care.
There was initially bipartisan support for the bill and it even had three Republican co-sponsors. Even so, its eventual passage mostly occurred along traditional party lines. While Republicans agreed with the concept behind the law, they were not happy with some of the individual provisions.
Funding will occur through a monthly payroll tax, which starts in 2022. This tax is low – just 58 cents per $100 earned. Estimates suggest that this works out to around $18 per month.
The program is one example of the growing tide of support for caregiving.
Policymakers are beginning to see the importance of developing effective support processes for caregivers, especially due to the aging of the American population.
The Importance of Long-Term Care
Many seniors will need some form of long-term care as they age. This can include services and products to help them age in place, all the way through to support outside of the home through assisted living facilities, nursing homes or similar options.
Providing this care is essential for the senior’s long-term health and their independence.
In fact, any approaches that help to promote health could potentially reduce future long-term care needs. This makes it important to address needs early on – before they become critical.
The Costs of Long-Term Care
Long-term care is such a problem area because it can get expensive – fast.
The costs are unpredictable as well. It’s hard to know what healthcare needs a person will have and these can quickly change. For example, it only takes one fall, or a similar event, to dramatically reduce a senior’s independence.
Even small changes to independence can create long-term care costs. Eating is one example. There are many situations where seniors are unable to safely cook for themselves. Solutions to this challenge can often involve areas like prepared meals for seniors, which sometimes come with extra costs.
That’s just one example. There are plenty of cases where seniors need extra support that is going to cost in some way. This is true for treatment needs and also for home support products.
Gaps in Coverage
To make matters worse, it’s easy to overlook the area. Many caregivers don’t realize the limitations of Medicaid until it is too late. It’s easy to assume that Medicaid and Medicare will cover more than they actually do. The same is true for other types of healthcare insurance.
Out-of-pocket expenses add up too. A 2011 study found a 12% increase in these expenses from 1997 to 2006. There’s no sign that increases are declining. In fact, Medicare participants pay an average of around $39,000 on medical care needs in the last five years of their life. That’s an average, so some people will be paying more than that.
One example is the cost for hospital stays. Medicare requires an initial deductible for hospital care, along with co-payments that are often daily.
Even policies for long-term care are limited. One caregiver found that the policy purchased provided up to $200 per day in assistance. This was nowhere near enough to pay for the amount of assistance needed.
The end result is that families often are not aware of all the potential costs of long-term care and support, and certainly do not have the resources to cover these costs.
Meeting Long-Term Care Costs
Long-term care can sound stressful and confusing. There simply isn’t enough support out there and families are often underprepared. Thankfully, there are various approaches that you can take to fund these costs. The best solution will vary depending on the situation, but could often involve a combination of different approaches.
Savings and Insurance
Savings and insurance are some of the most powerful approaches, but they do require planning ahead of time. Getting the required savings often involves starting early and cutting down on costs as much as possible. It’s also important to over-estimate the potential costs of healthcare. Many families will find that they spend more money on healthcare needs than they ever expected to.
Long-term care insurance policies are an especially important approach. These are designed for the field, so they can provide valuable support.
Even so, you need to be careful with research and planning. Take the time to compare individual plans and figure out their limitations.
It’s always best to start this insurance before health problems occur. Doing so helps to keep the premiums reasonable and to ensure that the senior is covered.
Downsizing
Selling the family home and moving an elderly parent into a smaller place or an apartment is often one of the only solutions for long-term care costs. Caregivers who do so talk about this isn’t a desirable approach, but it can be the only way to raise the needed funds.
Downsizing tends to mean fewer living costs. It can also result in a safer living environment, one that is easier to care for and keep clean.
The process often means that there are funds from selling the house. These can help to meet key medical bills or ongoing expenses.
Medicaid
While Medicaid generally doesn’t cover long-term care, there is one main exception. For a person to have access to this funding, they need to have less than $2,000 in savings and minimal assets. That approach actually encourages poverty and leaves families with few fallback options if they find themselves faced with significant out-of-pocket costs.
Other Policies
The recent focus on seniors and caregiving support does mean that options for funding are growing.
One example is the CHRONIC Care Act, from early 2018. This was designed with a focus on chronic health conditions. It provides additional funding and support in some areas, including telehealth and non-medical benefits. Both areas can help to support long-term care.
The outcomes of the Act won’t be relevant to all seniors and caregivers, but the Act is a starting point.
There is also the RAISE Family Caregivers Act. This passed into law in early 2018. It develops an advisory body that aims to find solutions to current challenges.
Outcomes from this Act won’t be seen any time soon. The advisory body doesn’t need to provide recommendations for three years. Those recommendations will just be the beginning. It will then be a matter of trying to make realistic legislation and ensure that it is passed.
As such, RAISE will be important for future solutions. While it could lead to increased opportunities for long-term care funding or decreased costs, the Act isn’t highly relevant to current caregivers.
Beyond this, there may be other local or state-specific options – like the program in Washington. Such programs may only offer partial support and could be hard to find, but they are still valuable.
The increased focus on caregiving and continued advocacy will hopefully lead to the development of more laws in the future. There is a clear need for financial support. Such support may even be financially beneficial for the government in the long-term, helping to keep seniors out of the hospital and help them to remain relatively independent.
Look for Support
There may also be other sources of support. For example, local non-profit organizations may offer some services at a low cost or free. You may be able to find programs that provide you with some funding for long-term care.
The process might seem frustrating and even hopeless, but it truly is worth digging around. There are often surprising sources of funding out there, ones that can make a big difference. If nothing else, you never know what is available until you take the time to examine the options.
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