Thanksgiving Thoughts on Long-Term Care Costs

November is Long Term Care Awareness month. And unless you have a parent who requires home care, or care in assisted living or a nursing home, you will probably stop reading here -- and whisper a silent prayer that it doesn't happen to you or your loved ones. That's not a good strategy.
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In Scott Turow's new novel, Identical (which I highly recommend as a great read), there is a scene where a homicide detective working on an old case goes to visit the mother of the man who was imprisoned for the crime. The frail, elderly woman is well taken care of in an expensive nursing home, with photos of her twin sons on the nightstand.

But she is suffering from dementia. And when the detective attempts to ask her about events long past, he learns she doesn't even remember the names of her sons! A helpful nurse gently prods her memory -- but the point is well made: Old age will turn many of us back into the nearly helpless infants we were as we entered this world.

We just don't want to think about it, now when we can prepare. And once we can't think about it, we suffer the consequences of lack of planning.

November is Long Term Care Awareness month. And unless you have a parent who requires home care, or care in assisted living or a nursing home, you will probably stop reading here -- and whisper a silent prayer that it doesn't happen to you or your loved ones.

That's not a good strategy. According to a new report from the U.S. Department of Health and Human Services, at least 70 percent of Americans age 65 and older will require some long term custodial care.

And that care is expensive these days, with an average annual nursing home cost of $83,950, and nearly double that in large cities, according to the Genworth annual cost of care survey.

Could you afford that for yourself, or your spouse? Could you and your siblings afford that kind of care for your parents -- and would you share the costs?

Those are the questions that should come to mind as your family gathers around the Thanksgiving table this month -- giving thanks for family and good health, and perhaps making plans for the future.

Plan While You Can

The paragraphs from Scott Turow's novel, described above, also appear in a preface Turow wrote for a new book: Alzheimer's and the Law (ABA Senior Lawyers Division), written by legal expert Kerry Peck. In that preface Turow explains the impact of his mother's six year struggle with dementia before she passed away in 2011. His preface is an endorsement of the need for planning, both for care and costs, although the latter was obviously not a problem for him.

But statistics say it will likely be a problem for you -- or someone you love.

Peck's book covers the entire spectrum of Alzheimer's issues -- from the stages of the disease, to the legal protections for the individual, and the prevention of financial exploitation of the elderly. It covers powers-of-attorney and special needs trusts, and personal care contracts. It gives information about nursing home contracts, as well as the spectrum of potential government benefits.

One thing is clear: Dementia is typically a slow decline over a period of years, starting with cognitive impairment that is difficult to diagnose early -- and it is costly, very costly, in all its legal and care implications.

All long-term care is not about dementia. My 92-year-old father reads the Wall Street Journal every day, frequently calling me to point out articles he thinks I might have missed! A few years ago he walked a mile every day; now he does "laps" on his balcony, and needs assistance to shower. We just "triggered" his LTC policy, with approval from his physician. All those years of premium payments are now paying off, giving him a better quality of life at home.

Costs and Coverage

There's been a lot of bad publicity recently about long term care insurance premium increases. Many who bought policies 15 years ago were shocked that premiums did not stay level, as had been illustrated. The insurance companies acknowledge they made big pricing mistakes, underestimating longevity and also the usage of the policies. Last year insurance companies paid out nearly $7 billion in claims on existing policies!

But now, the industry is on more solid footing, so future premium increases are not likely to be so dramatic. Plus, the industry has come up with combination policies that package life and long term care benefits, so if you die without using the LTC benefits, your heirs will recoup some of your investment.

The time to buy is when you are younger, because premiums are lower and your health is not likely to be an issue, says Brian Gordon of MAGA, LTC, one of the largest independent LTC insurance agencies. He notes that every year you delay, the premium increases. And women are starting to pay higher premiums because they are likely to live longer.

There's no age limit on the need for long term custodial care -- care not covered by Medicare or your supplemental policy. Even younger people could benefit if they are accident victims. But the odds increase greatly as you age that you will need some help doing just the basic activities of daily living. And that kind of cost can devastate anyone's retirement planning.

So, before you sit around the family dinner table this Thanksgiving, and before you rush off to the couch for the football games, you might want to make sure your family has a plan for dealing with this huge issue. It's a tough conversation to have -- but one that is based on love and concern. I can't think of a better Thanksgiving topic. And that's The Savage Truth.

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