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 2

Which Costs More?

• 1 year’s tuition, fees, room and board at a public university • One year of nursing home care 3

The Answer:

In 2010:

•

1 year’s tuition and fees

• Room and board • Public 4-year university • National average

$16,000

Source: College Board

In 2010:

•

1 year in a nursing home

• Private room • National average

$75,000

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 5

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 6

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 7

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) 9

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 10

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 13

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 14

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 15

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?

• How much will the policy pay? • How do I qualify for benefits?

• 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?

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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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