Long-Term Care

Prepared by Eileen St. Pierre, Ph.D., CFAPersonal Finance Extension Specialist

Oklahoma State UniversityOHCE Leader Lesson

July 2009

Questions

• What is long-term care?• Where is long-term care provided?• How much does long-term care cost and how

will I pay for it?• How do I choose a long-term care insurance

policy?

What is Long-Term Care?

Long-term care includes different kinds of assistance you may need if you ever have difficulty caring for yourself for an extended period of time.

There are different levels of long-term care.

Level 1: Inability to Perform Instrumental Activities of Daily Living (IADLs)

• We need help doing “little things” around the house that keep us independent.

• Need for assistance may start with death of spouse or a health problem.

• Help from family and friends.• Make home modifications.• Take a course to learn to do these

things yourself.• Need to pay for these costs

yourself!

Taking care of the yardMaking household repairsPaying billsTaking a shower without falling or slippingOpening a jar of picklesWalking up the stairs

Level 2: Inability to Perform Activities of Daily Living (ADLs)

• What insurance and health care industries refer to as long-term care (LTC).

• Also called custodial care.• To qualify for LTC insurance and

some govt. programs, must need substantial assistance performing 2 or more ADLs.

• Expenses not covered by Medicare or private health insurance (only cover skilled care).

• What’s the difference?– Skilled care: temporary, expected to

recover– Custodial or long-term care: condition

is permanent, not expected to recover

EatingBathingDressingToiletingIncontinence HygieneTransferring - getting out of a chair

or bed

Where is Long-Term Care Provided?

• Majority is provided at home by unpaid caregivers

The typical caregiver is a 46-year old woman who ismarried and employed and is caring for her widowedmother who does not live with her.

• Other home and community-based services:Adult Day Care CentersHome Care Services

Ge Geriatric Care ManagersMeals-on-WheelsRespite CareSenior Community Centers

Where is Long-Term Care Provided?

• If you can no longer safely live at home, there are other housing options available to you:Adult Companion ServicesBoard and Care HomesAssisted Living FacilitiesContinuing Care Retirement CommunitiesIndependent Skilled Nursing Facility (Nursing Home or Convalescent Care Facility)

• Long-Term Care Community Provider Information Sheet.

How much does Long-Term Care Cost?

• Cost depends on 3 factors:1) General level of charges in your area2) Specific expense rate or the services you need3) How long you need the care

• Genworth Financial 2009 Cost of Care SurveyOklahoma one of the least expensive states for nursing home care and assistant living facilities

• To keep costs low, stay in your home and receive care there as long as possible!

How do I pay for Long-Term Care?

• Retirement income and personal assets• Medicaid for nursing home costs if you qualify.

Medicaid has also started to cover other long-term care expenses. In Oklahoma, there are two programs to help individuals remain at

home and pay for long-term care services: the Medicaid ADvantage Program and the State Plan Personal Care program.

• Long-term care insurance• Talk to your financial advisor about other options

How do I choose a Long-Term Care Insurance Policy?

• Three ways to purchase LTC insurance

1) Individual policy2) Group policy (through work)3) Oklahoma Long-Term Care

Partnership Plan

• Handout Long-Term Care Insurance Policy Features

• Insurance premium should not be more than 5% of your income

Ways to save money onLong-Term Care Insurance

1) Don’t procrastinate! The younger you are, the lower your premiums (and the less likely you will be turned down for coverage)

2) Buy a policy with the longest elimination period you can afford3) Consider buying a policy that will pay most, but not all, of the average

nursing home costs in your area.4) Look for LTC Riders on life insurance policies5) If you are married, consider a joint policy6) Shop around! Look for companies with A++ and A+ ratings

Wrapping UpDon’t forget the evaluation form!

List of Resources

American Association of Retired Persons: http://www.aarp.orgGenworth Financial 2009 Cost of Care Survey:

http://www.genworth.com/content/genworth/us/en/products/long_term_care/long_term_care/cost_of_care.htm/

Insurance Information Institute: http://www.iii.orgNational Association of Insurance Commissioners: http://www.naic.orgOklahoma Area Agencies on Aging: http://www.o4aging.orgOklahoma Department of Human Services, Aging Services Division:

http://www.okdhs.org/divisionsoffices/visd/asdOklahoma Health Care Authority: http://www.okhca.orgOklahoma Insurance Department: http://www.ok.gov/oidOklahoma Long-Term Partnership: http://www.okltcpartnership.org U.S. Department of Health and Human Services National Clearinghouse for Long-Term Care

Information: http://www.longtermcare.gov

Thank you!