Failure to plan for future health care expenses? Denial of aging?
Most of you have heard of my caregiving journey. It sounds like many of you are caring for very elderly, stubborn folks who survived the dust bowl, the depression, world war II, etc. My father at 95 will cry and despair that he never thought he would get old. Honestly, there NEVER was a plan that they may need skilled nursing care or in home care. Total denial- that is for OTHER people.
Now mother has been gone for many years, father in SNF.... owned assets. Money is going rapidly to pay for care. I am so thankful that they were frugal. Father made some serious bad financial decisions as dementia set in. So there has been $ so far, but now it is getting more difficult as it is going to be neccessary to plan to sell things, etc.
Those of you with folks that purchased long term care insurance....what a blessing. Anyone else dealing with this?
12 Answers
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You're right - many people don't think ahead and don't plan. They don't expect to get old, and when it happens they're completely taken by surprise. At that point, it's too late to go back to work, or to start saving money.
At the reported average cost of long term care ($91,000/ year in USA) even the most frugal average working person will unlikely be able to afford LTC for any significant length of time. Long term care insurance is a great idea, if you can get it and if you can afford it once you are retired. Paying the $300 - $400 or more monthly premium might not be bad when you're working but can you still afford it when you're living on social security and a pension? Don't forget, you may have medicare when you retire but you'll still need to buy a medical policy to cover what medicare doesn't pay and don't forget you'll probably need a policy to cover your meds too.
The one thing I have learned through this caregiving experience is that getting old in the USA is a financially devastating ordeal for the middle class. If you're rich you can afford your LTC, if you're poor the government will step in to assist. The old idea that so many of our parents had of work hard, save some money and when you die your kids will inherit a bit is dead. The reality is, now, most of us will be reduced to poverty before we die. Don't be so hard on your Dad. Be glad he was able to save as much as he could.
The cost of elder health care I expect will just go through the roof far worse than it is now. My dad also made very bad financial decisions and now it's come home to roost. I read earlier today the costs are triple, quadruple that if one has dementia. I all but fell out the chair when I read the estimates. I wish they had gotten some type of LTC insurance but they said oh that costs too much. I said well look what's it's costing now.
Mom saved a good chunk of money and I'm using that to pay for their in home care now trying to space it out and increase later for that or other living. It's just extremely frustrating because they always talk about other people and say well those people have those problems. I told them yesterday, well now You Are those people so we need to deal with it. I rarely shout or snap like that on them but I had enough since I also had hazmat cleanup duty yesterday. Won't even talk about the cost to caregivers for giving up their lives or portions of it to provide the 'free' care they get daily.
The costs for Medicare & Medicaid are not going to be supportable for the oncoming tsunami of baby boomers who will be applying for services. And many if not most of the boomers aren't going to have the nest egg that their parents had. Medicare does have existing cost controls for the older sectors of the system but the newer trends - like hospice - payable by Medicare are skyrocketing. LTC Medicaid costs are going to bankrupt state governments. MERP recovery can maybe make a dent at best as the costs of care are staggering. Emphaszing PACE or other "community" programs rather than a NH is just a band aid as the boomers aren't going to have kids who put a hold on their life to provide the support system that coommunity based care requires as many of us do for our 70, 80 & 90 year old folks. LTC insurance is narrowing down as many companies who wrote these cannot support the payout and either are increasing premiums if they can or do not write new policies. Universal single payer health insurance seems impossible to ever happen in this country. Government - both state & federal - are going to have to find ways to contain costs.....one way is to re-think what is acceptable end of life care that has lower costs. Add to this that many of us who have been up close & personal with our elderly folks care do NOT ever want to saddle our kids with what we have gone through. The whole right to choose end of life care movement & assisted death is going to be accepted in maybe another 15/20 years. Politically you see this trend starting on the west coast in CA & OR.
It is not a comfortable concept for many. But just as the hard & fast rule for many religions that cremation was not ever an option, is now passé so will be what self directed end of life planning is.
Genworth just sent out their annual costs of care report. Alaska came in at the most expensive at $ 281,000.00 for annual NH cost. Over a qtr of a M! Average Private room NH was 92K; semi private 80K. AL $ 3,600 a mo; home health $ 20 hr. You would probably need 400/600K liquid to private pay for a 3year NH stay.
Personally I'd rather the Sol Roth approach than be bedfast with end stage dementia on hospice in a NH for 18 mos as my mom was. Full 20 minutes.....
There is a movement towards "tiny houses", etc. I have been trying to pass on "treasures" to the grandchildren. No takers...just dont have room for bric a brac...maybe that is good and the Generation X and Y kids have a lower expectation and "less is more" attitude. I am truly starting to admire that mentality.
Anyhow, I hope to have a plan of simple lifestyle as I head into the older years. Most of us are going to have to live off a garden if Social Security goes bust! Yup, just keep me from living too long and being in the state of denial myself! garden!
However, there are newer LTC products on the market now with many more bells and whistles than the early policies. These policy may have inflation riders as well as return of premium clauses in them in case the insured passes before any of the payouts begin. Just keep in mind that the premiums are age rated, meaning the older you are when you apply the more they will cost. And they "ain't" cheap. Another option may be a to invest in a deferred annuity with regular payouts.
I do worry about what will happen when we are no longer able to live on our own due to the cost of NH and in-home care. It is expensive now and I shudder to think what that cost will be in the next 20 years.
My folks are in their mid-90's and thankfully they planned ahead money wise, but not physical and mental wise. The stress is about to kill me now and here I am not even a hands-on caregiver, it is just trying to deal with the stubbornness. Thus way too many sleepless nights that have proven to damage your health :(