Our Session Today
YOUR FINANCIAL
SECURITY
Other Topics in the Program:
• Your Home & Community
• Your Health
• Your Wishes: Expressing Your
Health Care Decisions
Today, We’ll Explore:
• Cost of long-term care in your area
• What government programs do and do not pay for
• Personal options for paying for long-term care
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Which Costs More?
• 1 year’s tuition, fees,
room and board at
a public university
• One year of nursing
home care
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The Answer:
In 2010:
In 2010:
• 1 year’s tuition and fees
• 1 year in a nursing home
• Room and board
• Private room
• Public 4-year university
• National average
• National average
$16,000
$75,000
Source: College Board
Source: Genworth Financial
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What Does Long-Term Care Cost in Our Area?
• Nursing home – $82,000, $72,000, $62,000 per year
• Assisted living residence – $28,000, $38,000, $48,000 per year
• Adult day care – $60, $70, $80 per day
• Home health aide – $16, $18, $20 per hour
• Homemaker – $17, $19, $21 per hour
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Why Are Women at Greater Financial Risk?
• Need to cover more years in retirement
• Often take off years or cut back on work
for family caregiving (average 13 years),
which hurts Social Security, savings,
and pension amounts
• Many women are in jobs without benefits
• More likely to need long-term care from
paid provider
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Which of These Is Not a Source for Paying
For daily long-term care that lasts 3 months or more?
A. Long-term Care Insurance
B. Personal savings and investments
C. Medicare
D. Medicaid
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What Medicare Does and Doesn’t Cover
Most long-term care is help with daily activities like
bathing or eating. Medicare is not designed to cover this.
It will cover skilled or rehabilitative care in a nursing home when:
• Your doctor orders “skilled nursing” or rehabilitation,
such as physical, occupational, or speech therapy.
• You have been in the hospital at least 3 days for a
related condition.
• You are admitted to a Medicare-certified nursing
home generally within 30 days of the hospitalization.
• Medicare pays 100% for days 1-20, you pay co-pays
for days 21-100, after 100 days you pay all costs.
*Medicare coverage for home health care also has restrictions.
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How Do People Pay for Long-Term Care?
Most people use a combination of resources,
most often unpaid help from family and friends.
• Personal resources (savings, investments, home)
• Medicaid (largest payer of nursing home care in the U.S.)
• Public and voluntary programs and services
• Long-term care insurance (private and new public
option available in late 2012 or early 2013)
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What Does Medicaid Cover?
• Covers long-term care costs for people with low incomes
and few assets, or those with very high medical costs
who drain savings
• Must meet the state’s requirements, which usually
includes the inability to care for oneself according
to established guidelines
• Services and benefits can vary depending on the
state you live in
• You can be covered by both Medicaid and Medicare
if you are eligible
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Does Your State or Community
Offer Any Types of Assistance?
Use the Eldercare Locator to find out about
services near you. Go to www.eldercare.gov or
call 800-677-1116.
Explore state and local programs:
• Some programs are in most communities, while
others are unique to an area or state
• Different eligibility rules (such as age, income,
level of disability, or any combination)
• Some have waiting lists or limited amounts of support
11
More Options for Paying Some
of the Costs of Long-Term Care
• Department of Veterans Affairs (VA)
• Local housing authority
• Faith-based programs
• Health- or disease-based programs
12
CLASS – New National, Voluntary Long-Term
Care Insurance Program
Helps cover part of the cost of long-term care:
• Anyone age 18 or older who is employed
• Opportunity to have premiums deducted
from your paycheck if your employer
participates. You can also enroll on your own
• You get cash to help pay for things like a
ramp or visiting home care aide. You can
pay a family member to provide care, too
• Benefit lasts as long as you are disabled and
qualify for the program
• Before benefits begin, you must have paid premiums
for 5 years (working a certain number of those years)
• You can’t be turned down for a pre-existing condition
• Program start date, premiums, and benefits
will be set by the federal government
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Is Long-Term Care Insurance Right for You?
Some people buy it to:
• Be able to live independently at home longer
• Potentially save assets for heirs
• Keep family from having to provide all of the care
• Make it easier to get in to the nursing home
or assisted living residence of their choice
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Before You Buy
Consider whether:
• You can afford the premiums both now and well into the future
• The company is financially stable
• You can rely on family or friends for some of your support
• You already have enough money to pay out-of-pocket
• Your income is low or will be low in the
years ahead and you have few assets
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10 Questions to Ask If You Buy
• Is the company
financially stable?
• What services are
covered? In what settings?
• How much will it cost?
• How often and by how
much have premiums
increased?
• When will benefits begin?
• How will the policy work
with the new public
insurance program?
• Will benefits keep pace
with inflation?
• Are there coverage
exclusions?
• How much will the
policy pay?
• How do I qualify for
benefits?
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What Will Your Expenses Be in Retirement?
• Use our retirement worksheet
• What will my income be in retirement?
• What will my expenses be in retirement?
• How much do I have to spend on long-term care?
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Next Steps for Completing Your
Long-Term Care Plan
• Complete the retirement
income worksheet provided
Or
• Use the online calculator
www.aarp.org/retirementcalculator
• Use the Social Security
Administration calculator
http://www.ssa.gov/planners/calculators.htm
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Thank You
• What is of value to you now?
• What will be helpful to you in the future?
• What questions do you have?
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