The Three-Legged Stool of Long Term Care

Most of us have come to realize that with the tremendous advances in the medical sciences, we are likely to live very long lives. What we may have failed to comprehend is that our longevity likely means that at some point we will become ill and require care for an extended period of time.

This fact should lead us to the development of a long term care plan, and if it does, our plan will probably have three legs: 1) family assistance, 2) community/government programs, and 3) financial resources.

Family Assistance

Families play the predominant role in providing care for their loved ones who suffer from a disability that prevents them from performing normal activities of life, such as bathing, dressing and moving about the home without assistance.

The support offered by spouses and children is without equal, but without additional resources, the impact of caregiving on family members can be devastating from physical, mental and career perspectives.

This is where the other two legs of the stool are required to supply the appropriate balance so that both the individual being cared for as well as the caregiver maintain the highest quality of life possible.

Community/Government Programs

Southwest Florida has long been viewed as "America's retirement home". Because of this, our area has a well developed network of community support programs that are among the best in the nation. Programs such as meals-on-wheels, adult daycare and volunteer home visits are very helpful for those with long term care needs.

The outlook on the government side of the ledger is not nearly so bright. Medicare and Medicaid are the government programs most frequently looked to for caregiver assistance, and unfortunately, their level of under-funding makes the Social Security 'crisis' appear to be child's play by comparison. This has led to severe cutbacks in the amount of support available and a shrinkage in the pool of individuals who qualify for the assistance.

While there are a few exceptions, Medicare has exited the long term care arena, especially when one desires to obtain assistance in the home. This burden has fallen to Medicaid, the joint federal & state health program that is means-tested so as to limit benefits to the poorest of the poor.

Medicaid Planning, an industry that has grown up among the legal profession, has been widely successful in utilizing loopholes in the means-testing laws to provide Medicaid benefits to the country's middle class. The Deficit Reduction Act of 2005 has virtually closed all of those loopholes in an effort to salvage the financial integrity of the Medicaid program. The DRA '05 did add a carrot among its provisions and discussion of this leads to the third leg of our long term care stool.

Financial Resources

The type and amount of financial resources which are available to help pay for caregiver services will play a major role in the level of excellence which will manifest itself in the period of caregiving.

Retirement savings are the default source of finances which are considered for the payment of long term care expenses. Unfortunately, there are many other considerations that must be addressed before tapping this 'nestegg', not the least of which is the quality of life of a care giver spouse.

The transference of risk that is available with long term care insurance(LTCi) is frequently seen as the best alternative. The DRA '05 provisions have served to further encourage the use of LTCi by the creation of 'Partnership Plans'.

Partnership Plans are LTCi policies which have met stringent government quality benchmarks. These plans allow a dollar-for-dollar protection of assets for a plan owner who finds themselves needing the assistance of the Medicaid program. The amount of dollars in the benefit pool of the LTCi policy equals the amount of assets that will not have to be 'spent-down' in order to qualify for Medicaid benefits.

The federal government has such a strong desire for 'Boomers' to consider LTCi protection that they have developed the 'Own Your Future' long term care awareness campaign. It is up to each of us to make sure that the financial resources leg of our LTC stool is as strong as possible.

Posted by: Thomas Kenyon CLTC Posted on: September 14, 2007


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