The Goodale Company, Inc.

Cohasset Insurance Agency, Ltd.

781 383 0787

Long Term Care

Because our life expectancy has increased so greatly many of us will sooner or later require "substantial assistance" with Activities of Daily Living (ADLs) or will suffer some form of cognitive impairment such as Alzheimer’s Disease. Substantial assistance with Bathing, Dressing, Transferring (getting from place to place), Toileting, Continence and Eating involves a great deal of patience, strength and compassion. The dignity of both the care-receiver and the care-giver must be preserved.

Notice how the ADLs match the steps in a baby’s development and you can appreciate how much is involved. As we age it appears that we lose the ability to perform these activities pretty much as we gain the ability in the progression from infancy to early childhood.

If you or I eventually require substantial assistance with these activities, the questions are: who will provide it?, what will it cost? and what funds will be used to pay the cost?

We will probably want to remain in our own home as long as possible, then perhaps move to an Assisted Living Facility and finally move into a Nursing Home.

A caregiver in your own home setting, most likely a family member, assumes a terrific burden and perhaps doesn’t have the necessary training to assist with all of the ADLs. The cost to hire professional help, which would be a great boon to the caregiver, can reach $12,000 to $15,000 annually.

Assisted Living Facilities provide a wonderful alternative between home care and nursing homes but the annual cost in such a facility is much more than at home care.

The cost of Nursing Homes is probably between $50,000 to $75,000 annually and it is logical to assume that these costs will continue to go up.

There are only three sources for funds to pay these costs; your own funds, government funds or insurance company funds. If the first option is selected then when these funds are pretty much exhausted Medicaid (not Medicare) will take over. Since Medicaid is primarily a program for the indigent I don’t think that most people should elect this option.

Medicare does provide some limited benefits but certainly not for a long term situation. It is pretty clear that the federal government has no intention of funding an all inclusive program for those who will need long term care; the cost would be prohibitive. Recent changes in the income tax law are indications of this decision.

The other alternative is insurance company funds. If the costs of Long Term Care are projected over a ten or fifteen year period then it makes sense to explore the possibility of transferring the risk of these costs to an insurance company. If you can prepay these costs by buying an insurance policy, is that a more realistic avenue to take then to exhaust your assets and hope for the best?

What are the possibilities that Long Term Care will be needed? Studies suggest that there is a 40% chance that LTC will be needed. If you decide to rely on a spouse or family member as a caregiver what about the possibility of the caregiver also needing Long Term Care?

When is the proper time to consider Long Term Care Insurance? If you are doing financial planning the planning would be incomplete without weighing the cost of a policy against the potential expenses involved in long term care. The time to investigate and decide on an insurance policy is before the policy is needed and while you are still qualified for coverage.

Please call us if you would like to discuss this in the privacy of your own home. We will develop a proposal including various options for your consideration. Or please provide your name and telephone number in the box below.