The LTC Solution
		Long term care insurance can be a blessing for millions who want to live longer, healthier lives free of undue worry. With LTC protection, they can be secure in the knowledge that funds for care will be available without bankrupting themselves or burdening their children.

1. What exactly is long term care?

Generally, long term care is the care people need when they can’t perform the tasks of ordinary living independently. These are items such as bathing, dressing, toileting, continence, eating, and moving around indoors or in the community. Or, the person may be able to do all of their activities of daily living but still need care and supervision due to a severe cognitive impairment (memory loss, dementia, etc.). For example, the person may be able to dress him or herself, but may not remember to take medications.

It isn’t a subject that most of us care to dwell on. However, the failure to discuss or plan for the high cost of long term care is causing American families to be unprepared. That's why lack of long term care insurance has become a major cause of bankruptcy in the United States.

2. Who should consider long term care insurance?

Those rich enough to self-insure can get along without long term care insurance. And coverage may not be appropriate for those whose lifestyles would be seriously compromised by the monthly premiums. For everyone else -- the vast majority of Americans -- long term care insurance is vital. That's why the government has introduced tax incentives (see Tax Incentives section) to make the insurance more affordable and universally accepted, like auto insurance.

3. What types of care are there?

> Acute Versus Chronic Care: Acute care is the type usually provided in hospitals and emergency rooms: treatment of stroke, heart attack, and pneumonia, for example. Health insurance and Medicare will likely cover some or all of these expenses. Chronic care is usually for conditions that are treatable but generally not curable: arthritis, diabetes, hypertension, and alzheimers, for example. Health insurance and Medicare may not cover these expenses when care needs extend over longer periods. Long term care for chronic conditions is usually provided in one's home, a nursing home, or assisted living facility.

> Skilled Care: Skilled care is the type that is usually delivered in skilled nursing homes, but can be received in one's home as well. If the skilled care meets strict criteria set forth by Medicare, then the provider is referred to as a skilled nursing facility (SNF). Medicare defines skilled care as services and rehabilitation that require the technical or professional personnel such as registered nurses, licensed practical nurses, and physical or occupational therapists.

Example: Bob recently had his hip replaced. Although he is expected to recover fully, he needs physical therapy to be able to walk again. He is admitted to a skilled nursing facility and will remain there as long as he needs therapy on a daily basis and is getting better.

> Non-Skilled Care: Non-skilled care is defined as the type that is provided to persons who need help on a regular basis with their activities of daily living because of a physical limitation, chronic problem, or a cognitive problem. This type of care can be provided by non-skilled person such as a family member. Non-skilled care is also known as custodial care.

Example: Ruby is suffering from rheumatoid arthritis. She has difficulty dressing herself and getting in and out of the bathtub. Her daughter comes to her house in the morning and evening to take care of her mother’s needs.

Long term care insurance may be appropriate for all these types of care except acute care that is covered by health insurance or Medicare. BUT BE SURE to get the exact coverage you need through an independent, state-certified agent such as us, who can guide you to the right policy from the right A-rated carrier.

4. Where is long term care provided?

Long term care can be received in a variety of settings:

> Skilled Nursing Facilities: Also known as nursing homes, these institutions are usually comprised of two separate components, a unit that provides skilled nursing care (which may be covered by Medicare), and non-skilled on custodial care (which may be covered by long term care insurance). The goal of the “Medicare” section of the skilled nursing facility is to provide services needed to rehabilitate the patient so they can return home. However, many times patients are unable to return home and are moved over to the non-skilled or custodial section of the facility.

Example: Mary Ann had a stroke 12 months ago. Immediately after her stroke she was admitted to a skilled nursing facility in the Medicare section and received rehabilitative therapy on a daily basis. After about 45 days, her therapists determined that she was not getting better and would need help with her activities of daily living for the rest of her life. Because she did not have anyone to take care of her at home, she was transferred to the non-skilled wing of the skilled nursing facility where she will live the rest of her life.

> In one's own home: Most long term care recipients live with their families. About 1.3 million are cared for at home by paid helpers, who provide skilled or unskilled care with basic personal activities. Another 5.5 million Americans receive unpaid help at home from family members. Home care is generally considered appropriate at the custodial and non-skilled care levels. When skilled care is provided in the home, it can be very expensive.

Example: Verna was diagnosed with Parkinson’s disease two years ago. Now she is unable to walk without assistance. She cannot bathe or dress herself. Her daughter, Shirley, is currently helping her with these needs. Her daughter has to go back to work in order to save money for her two children that will be going to college in the next two years. Verna is now going to have to tap into her life savings and pay for a caregiver to come in and help her, instead of her daughter, so that she can stay at home.

Care can be right at home, among loved ones.

> Assisted-Care Living Facilities: Also known as assisted-living facilities or residential care facilities, these institutions provide non-skilled care for people who need help with daily living but can also provide much of their own care. Usually, skilled care is not provided in assisted-living facilities. These institutions are an excellent alternative to nursing homes. The residents may live in apartments that they can personalize. Meals are usually provided in a community dining room, and there are lots of activities and social events.

Example: Sara was 87 years old and living in her own home. She was not getting out of the house and not socializing with anybody. Her daughter, Joan, arranged to have her mother move to an Assisted Living Facility after she realized that she was forgetting to take her medications and was not able to handle her own hygiene issues. She didn’t need skilled nursing care, but she did need help with her activities of daily living. Now Joan will not worry as much since there will be caregivers ensuring her mother gets her medications and assistance with her personal hygiene. Her mother will be able to participate in the weekly activities so she will remain active socially.

> Adult Day Care centers: These community-based services were developed to help people stay at home rather than moving prematurely into nursing homes. Adult day care facilities offer custodial care during weekdays and sometimes on weekends too. This care is appropriate for people with moderate impairment who need minimal assistance, such as Alzheimer’s or senile dementia patients.

Example: Lyle lives with his daughter, Sandy, who works full time. Lately, Sandy has noticed that Lyle has been forgetting to prepare and eat his meals when she is away at work. One day she is called at work by a neighbor who found Lyle wandering down the street. Sandy wants to take care of her father after work and on the weekends, but she needs help during the day. An adult day care would provide an ideal solution.

5. What does long term care cost, and who pays?

The cost of long term care varies greatly depending on state of residence and type of care received (nursing home, in-home care, etc.). Services in a nursing home currently run close to $70,000 per year on average. Costs are projected to rise dramatically in the years ahead. (See Future Costs section.)

There are four options for paying for long term care services. The individual needing care may --

1. Rely on family (spouse, children, etc) to provide the help needed. This option is only available to those with a support system in place and when the amount and type of care required is possible for family members to provide.

2. Self-insure and pay for long term care with one's own assets and income. This is recommended only for the very wealthy.

3. Spend down all assets and then qualify for Medicaid. (Medi-Cal in California). New federal legislation passed in 2005 makes this option much more difficult and less attractive than it was in the past. Before selecting this option, you would be wise to arrange a meeting between your financial advisor and an independent long term care insurance specialist such as us.

4. Transfer a predetermined amount of the long term care risk to an insurance company. In other words, buy a long term care insurance polity. This is the best option for most Americans.

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