Why Is A Long-Term Care Plan Important?
Studies show over half the population over age 65 will need some form of long term care (New England Journal of Medicine)
The number of seniors as a percentage of the population is growing. This will put pressure on all aspects of health care.
Currently, half of Canadian workers have elder care responsibilities that impact on time and/or financial resources (CARNET, 1998)
Access to care facilities in Canada is steadily becoming more difficult and more expensive.
Your Current Plan
You might not have purchased Long-Term Care Insurance, but you already have a long-term care plan for when you are older and unable to take care of yourself.
Your plan is to use your accumulated assets to pay for needed care.
Usually one spouse needs care before the other, so your plan involves enlisting the help of your healthy spouse and/or your children and grandchildren.
Very often, it is the unhealthy spouse who needs care, who gets a better deal out of this arrangement. The healthy spouse and the children bear an emotional and financial load that is in many ways worse than being in poor health and needing care.
Consider:
The healthy spouse needs to balance their financial, lifestyle and wellness needs with the need to pay for care, or perform care duties, for the other spouse. There are many families where the healthy spouse had to give up all normal activities in order to care for her husband. (“Husband” because normally, but not always, it is the man who needs care first.)
All studies on care among seniors shows that a healthy spouse will:
Take on unreasonable care duties instead of spending retirement money on caregivers.
Deprive themselves to look after the unwell spouse.
Try to provide care at a level beyond their physical capabilities.
It’s well documented that an older person providing care to a family member is very likely to harm their own health in doing so.
Providing care can be expensive, and the caregiving spouse can find themselves in the horrible position of facing a long life expectancy themselves, yet watching their funds dwindle away while caring for their ill spouse.
If one spouse goes into a Care Facility the cost of retirement can double! That’s because on top of running the family household, there are now care expenses for the other spouse. In other words, if one person goes into a Care Facility, should it be assumed that the other spouse should give up their home, lifestyle, friends, and activities?
Children, when faced with paying for care for an aging parent, are spending their future inheritance. That sounds cold-hearted but it is true. Care decisions can become financial decisions.
Inevitably, children and/or the healthy spouse will disagree on how to spend money for care. That is not a “might” – it is a “will”. If there is any financial discrepancy between the children of the person needing care, the disagreements will be amplified. This care plan scenario almost guarantees your family will have disputes and disagreements!
In addition, there is extreme stress resulting from the sheer physical and time demands of providing care, particularly care for a family member exhibiting dementia-induced behaviour.
People are living longer due to the progress made by doctors. Due to increased longevity, care needs might be compromised.
Due to increased longevity, children might have to say at some point “mom and dad, that’s all the money there is”.
Children feel a moral obligation to provide adequate care. But if they have their own children, will that obligation fit their family’s needs? The phrase “sandwich generation” (people caring for both parents and children) does not have positive connotations for a reason – it is an extremely difficult situation. (see the video link at long-term care useful links on this web site)
If depending on children, will one or all of the children live in the same town as the person needing care? The burden often falls unfairly on one child. Have you picked the child who will be responsible for your care? Have you told that child?
Financial Implications
Currently, Canadians can spend up to almost $5000 per month out of their own pocket for facility care that’s subsidized by government programs. (Province of Alberta health care website)
The cost for private non-subsidized retirement homes ranges from $2500 to $7000 per month. (Canadian Senior Year)
If a patient chooses to stay at home, there are costs:
RN = $30 to $38 per hour
Medical Services Aid = $14 to $19 per hour.
Personal Support Worker = $19.50 per hour. (helps patient move, assists with bathing, prepares meals, shops, housekeeping, transportation)
The Long-Term Care Insurance Alternative
The alternative to the “assets and family” care plan is Long-Term Care (LTC) Insurance.
LTC Insurance is like disability insurance for seniors. A LTC policy pays when someone is unable to do certain of the activities of daily living, or suffers a mental or cognitive impairment.
LTC Insurance pays a daily dollar amount, when the insured person qualifies. It pays for care at home, and care at a facility.
LTC Insurance brings money into the family that will only be spent for care. If the family is receiving LTC Insurance money, it encourages them to focus on finding the best care, instead of cost-effective care!
With Long-Term Care Insurance in place, other family members are able to continue to lead normal lives.
Is Long-Term Care Insurance Expensive?
Paying for adequate long-term care could jeopardize your entire net worth.
On the other hand, the annual premium for Long-Term Care Insurance is likely to be a very small percentage of your net worth.
For all of the above reasons, Long-Term Care Insurance is an excellent and affordable solution to protect the whole family:
For the person needing care, it provides money to pay for it.
For the spouse or children who may take on hands-on caregiving in the absence of insurance, it relieves the burden.
For the spouse and children, it encourages them to seek out the best care.
Your Plan or the Long-Term Care Insurance Plan?
Every time you read the newspaper, you are told about the increasing cost of care for seniors. It’s expected to worsen, due to the growing number of seniors, and the expected shortage of care facilities and qualified care workers.
Therefore, in addition to easing the physical and emotional burden on the family, money will play a huge role in determining the level of care available to any one person, regardless of whether the care is at home, or at a live-in facility.
With statistics saying that half of us will need care at some level, this is a topic that cannot be ignored!