What is involved in long­term care planning?  Plan  Act  Evaluate

Reasons some people say why they were not prepared for later life  “I never expected to live this long.”  “We didn’t think it would turn out this way.”  “We planned for a healthy retirement.”

Financing Long­term Care: Dilemmas and Decisions  Major gap in financial planning throughout life  Gap in later­life financial security  Few of us have done any planning  Won’t admit we might be affected personally

Financing Long­term Care: Dilemmas and Decisions  We think we know more than we do!  Gaps in knowledge make planning for long­term care tough!

Financing Long­term Care 1.Recognize your risk 2.Understand costs and implications 3.Sort out expectations and goals 4.Understand financing alternatives 5.Take action now

Long­term Care  Help with daily living activities and remaining independent  Wide range of personal, social and medical services  Provided in a variety of settings

Most who need long­term care:  Live in their own homes  Receive unpaid caregiving from family/friends  Overestimate the chance of needing nursing home stay  Underestimate need for in­home and community services

Who’s at risk? 57 percent over age percent below 65 years of age 3 percent are children

Who’s most at risk?  Individuals 85 years and older  Individuals with chronic health problems  Individuals who lack social support and unpaid caregivers  Women

Prevalence of Long­term Care Need  Age: 65 to74 In community: 11 percent In institution: 1 percent  Age: 75 to 84 In community: 22 percent In institution: 5 percent  Age 85+ In community: 49 percent In institution: 21 percent

What are the risks?

Potential Costs Underestimated  In-home care Degree of need and health status Type of service used  Visiting nurse: $100 per visit (Kiplinger’s, 2004)  Home-health aide: $15 or more/hour (Kiplinger’s, 2004)  Community services Adult day care: $60/day ($15,000+/year) Assisted living - housing with services (common meals, housekeeping) in North Dakota: rent - $15,720/year; basic services - $7,284/year (NDLTCA, 2005)  Skilled nursing home care One month average in U.S.: $5,500 ($66,000/year) (Metropolitan Life Insurance survey, 2003)  Northeast and West highest  North Dakota: $144.48/day ($52,735/year) (NDLTCA, 2005)

Sort Out Later­life Financial Goals and Expectations  Multiple/competing goals behind our decisions  Make goals known  Goals provide direction  Goals can be prioritized

If I would need long­term care, I would expect to:  Remain financially independent  Maintain control of my finances  Keep my financial affairs private  Involve family members  Utilize government services  Leave an inheritance

Oklahoma Long­term Care Survey  Findings of an AARP study – Fall 2004  1,146 respondents over age 60

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?  Identify areas of agreement and/or disagreement On the meaning of goals, priorities, concerns

Understand Financing Alternatives and Consequences  No “one” financial answer  Later­life goals should influence which alternatives are most appropriate  Consider a combination of alternatives

Who does pay for long­term care?  Income and life savings of elders and family members  Sell home and use equity  Unpaid family caregivers provide majority of long­term care

Who pays for long­term care?  Medical Assistance (Medicaid) is a critical safety net

Who pays for long­term care?

 Long­term care insurance will pay  Long­term care insurance is NOT for everyone

Why plan now?  Peace of mind  More choices and options  Increases likelihood your goals and wishes will be followed  Reduces burden for others  Reduces misunderstandings and conflict

References  American Association of Retired Persons. (January 2005). Oklahoma long­term care: A survey of AARP members. Available from:  Consumer Reports. (November 2003). Do you need long­term care insurance?, 68(7),  Kiplinger’s Personal Finance. (February 2004). If your parents need HELP, 58(2),  North Dakota Long Term Care Association (January 2005). Issue and Data Book. Available from North Dakota Long Term Care Association, th St. N., Bismarck, ND Telephone: (701) Web site:  Stum, M. S. (October 2004). Financing long­term care: A resource for families. Available from: