What exactly is long-term care? In general, it’s the broad range of medical and personal services that provide ongoing care for people with chronic disabilities. It’s designed specifically for those who have lost the ability to function independently. These services include helping with the basic daily activities such as feeding, bathing, dressing, and toiletry needs.
Long-term care is divided into three levels:
Skilled care – this would be the continuous “around -the-clock” care for those with a medical condition that is ordered by a physician and performed by skilled personnel such as registered nurses or professional therapists.
Intermediate care – Here nursing and rehabilitative care is provided by registered nurses, licenses practical nurses, and nurse’s aides under the supervision of a physician on an intermittent basis.
Custodial care – Here care is designed to help one perform the daily living activities, such as bathing, eating, and dressing and can be provided by someone without professional medical sills. It is also supervised by a physician.
One common financial solution is to purchase long-term-care insurance (LCTI), but the premiums can be quite expensive depending on the benefit levels. Private insurance plays a small role in financing long-term services. In 2012, those services cost nearly $220 billion, or 9 percent of all health spending. The sad news for most is it was paid by*:
• 51% was paid by Medicaid
• 22% was out-of-pocket
• 13% was covered by private insurance and other sources
Fortunately, State policy makers have taken steps to promote the purchase of private LTCI. Their aim is to take the pressure off of out-of-pocket payors. These priorities are growing more urgent as the U.S. population ages. With the majority of LTCI policies being sold on the individual market, the voluntary LTCI market lacks the broader risk pool that the employer-sponsored market has historically provided for health insurance.
When purchasing LTCI, factors such as age when purchasing the policy, your health, the length of coverage, the amount of daily benefits provided and whether or not purchased inflation protection will affect the price. This insurance protection will play a part in events that might happen in the future. But you must buy enough protection to cover daily expenses for your estimated length of time needed. Note that if you purchase a qualified policy, part (or all) of the premiums you pay may be deductible on your federal income tax return. However, the policy must meet certain federal standards to be considered qualified if issued after January 1, 1997.
Before purchasing LCTI, consult your wealth advisor who can point you in the right direction so that you have the coverage you anticipate you’ll need in the future for long-term care insurance.
*Source: O’Shaughnessy Report 2014
In the Word
Better a little with righteousness than much gain with injustice.
Proverbs 16:8 (NIV)
In a world that constantly tempts us with the allure of wealth and success, Proverbs 16:8 provides a profound truth. It reminds us that the pursuit of righteousness is far more valuable than accumulating vast riches through unjust means.
The verse urges us to reevaluate our priorities and that contentment springs from a heart aligned with God’s ways. This alignment brings peace and fulfillment that cannot be measured by worldly standards.
Let us remember that the true measure of wealth lies in our character and relationship with God. May we find joy in following God’s ways, knowing that His eternal approval far surpasses any temporary material gain.
Sources: Broadridge Investment Management Solutions
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