GovernmentExecutive.com

There's a lot of buzz these days about the need to consider purchasing long-term care insurance as part of retirement planning. Before buying any kind of insurance, it is important to be clear about exactly what is being insured. So this week, I'll focus on what long-term care is, and when it becomes necessary. Next week, I'll cover the insurance aspect of the equation.

Long-term care is a subject we tend to push to the back of our minds until it comes crashing down in front of us in the form of a loved one who needs help. Here I speak from personal experience.

Years ago, my father began suffering from "transient ischemic attacks," which the doctors described as mini-strokes. They seemed to systematically shut down parts of his brain over a long period of time. Such attacks can be the precursor to a major stroke, but in Dad's case, the condition progressed more gradually.

Over a six-year period, Dad's condition worsened. In time, he was unable to remember everyday things like how to get dressed or what a fork is used for. My mom became his caregiver, in addition to her first role of being his wife. It was difficult to watch her struggle, but she believed that providing for his care was her responsibility. Mom didn't have much help, and sometimes was on duty around the clock. Occasionally, Dad awoke at night reliving his days in World War II -- more than 50 years earlier.

Where my parents lived in Pennsylvania, various services were available to provide assistance, but all had their drawbacks. Transportation to adult day care was unpredictable and in-home help often was unreliable. There were mornings when Mom had everything ready for Dad's shower in anticipation of the arrival of a caregiver, only to be left waiting until she realized she was on her own.

Once, Dad became so weak with an infection that he had to be hospitalized. The day before he was scheduled to be discharged, a social worker at the hospital delivered the bad news to Mom: Dad's condition required the assistance of three shifts of full-time care. She told Mom the obvious -- she couldn't do this on her own. We needed to find a nursing home for Dad immediately.

That was the beginning of a long odyssey. First, we had to find a facility that would admit Dad, who had limited savings and an average retirement income. We hoped Medicare would provide some help, but Medicare pays only for medically necessary care that leads toward recovery. Dad was going to get progressively worse, not better. We were on our own. The cost of nursing home care would come out of Dad's savings.

Those savings wouldn't last long, so we had to apply for assistance from Medicaid. Since Dad was a veteran, we also explored VA facilities. But we soon realized the number of World War II veterans exceeds the ability of the VA to provide for their care, and Dad didn't meet the requirements to be accepted for care in a VA facility.

Then, in the worst part of this whole nightmare, Mom passed away less than three months after we got Dad settled in the nursing home. The caregiver, who was so loyal and faithful to her husband of 50 years, finally gave out after caring for him for six years. Dad spent another two years in the facility before dying at the age of 78.

Terms of Care

Unfortunately, Dad's situation is far from uncommon. The need to provide for the care of a loved one for a long period of time can sap the strength of the most loyal family and friends. So it's important to understand the terminology used when health care professionals begin to speak about the need for long-term care:

• Custodial or Personal Care: Care that does not require medical skills. Although certain kinds of training are helpful, they are not required. The goal is to provide assistance with bathing, dressing, eating, taking medications and other personal needs.
• Activities of Daily Living: A scale measuring the ability of a person to perform basic functions of living. This is the typical assessment tool used to qualify to use of long-term care insurance benefits. ADLs usually include bathing, transferring (the ability to move from one location to another without assistance), eating, dressing and using the toilet.
• Home Health Care: This covers a wide variety of services brought to the home: skilled nursing care, physical and occupational therapy, speech therapy and personal care.
• Homemaker Services: Assistance in the home with common household tasks such as cleaning, cooking and laundry.

More than 80 percent of long-term care is provided in the home or in adult day care facilities.

The Costs

Long-term care comes with emotional, physical and monetary costs.

Taking on the job of providing informal care at home can lead to a great deal of stress. The caregiver may have to leave his or her job. Then there's the emotional toll of spending hard-earned savings on long-term care. Decisions must be made about when is the right time for family members to hire outside help and which assets will be used to pay for it.

According to the Department of Health and Human Services, a significant number of family caregivers describe their own health as "fair to poor." Recent research findings suggest that:

• The combination of loss, prolonged distress and the physical demands of providing care hurts the health of caregivers, resulting in vulnerability to infectious diseases, such as colds and flu, and chronic diseases, such heart disease, diabetes, and cancer.
• Symptoms of depression are twice as common among caregivers as among the general population.
• In 2003, 22.4 million households were involved in providing care to persons aged 50 and older. The number of such households is expected to increase to 39 million by 2007.
• Over half of all caregivers also have full-time jobs. Caregivers of people 65 and over, usually adult children, spend an average of 20 hours per week providing care. More than half of all employed caregivers experience a conflict between work and caregiving.
• The value of the care provided by family caregivers was estimated at $257 billion in 2000.

Each year, the MetLife Mature Market Institute conducts a market survey of nursing home and home care costs in the United States. In 2005, the survey found:

• The average daily rate for a private room in a nursing home is $203, or $74,095 annually.
• The average daily rate for a semi-private room in a nursing home is $176, or $64,240 a year.
• The average hourly rate for home health aides is $19.
• The average hourly rate for homemakers/companions is $17.

Over the next few decades, the demand for family and informal caregivers will continue to increase as the population ages, medical science continues to extend life, and workforce shortages persist in the long-term care sector. Long-term care will become a catastrophic expense for many people in our society.

Next week, I'll present a list of resources for long-term care information and insurance.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

VIEW ALL COMMENTS POST COMMENT

COMMENTS

• This was an excellent, excellent article. I could relate through my current experience with my 85-year-old father and it has opened my eyes as to what I may need to do so that I can help my children help my husband and I, if and when needed. I plan to retire within the next two-plus years and I look forward to every article written by Tammy. Thanks so much for bringing this much needed information to us. Patty Duvernay Posted July 28, 2006 9:37 AM
• Tammy, You have set the stage very well in opening this discussion. My parents went through the same progression, except that my mother died first (Alzheimers) and Dad is still alive (TIAs/Heart Condition). The pressure on Dad was not apparent until Mom was hospitalized with a broken hip. She left the hospital and went straight to a nursing home setting. The good news was that Dad had bought a private LTC policy for Mom. It covered about half her expenses for the 6 months until she died of pneumonia two years ago. The bad news was that he'd cancelled the LTC he had originally taken out for himself, thinking the VA was a fall-back if he ever needed it. As you point out, VA is usually not an option -- even for combat injured vets who have less than 100 percent disability. Now Dad is in a nursing home setting. His CSRS and Military Reserve pensions cover about 80 percent of the cost, and thankfully his savings are enough to make up the difference, and will last a long time. The imponderable is how long will Dad live? He's 91. His mother lived to 99. His grandfather lived to 97. There is no family within 1,400 miles of my father, so as the eldest son I'm overseeing most of this from long distance, with periodic visits to see him. Do I and my wife have LTC? You bet we do. Allen R. Thuring Posted July 28, 2006 9:47 AM
• When the government first offered long-term care insurance, my husband and I sat down and discussed both our own and our families' medical histories. We came to the conclusion that since both of our families had long histories of good health right up to the end with (more or less) sudden deaths, it would not pay us to take the insurance. Anyone can, of course, have an accident that could make this insurance necessary, but we're taking our chances against that. In other words, people should take the time to check both their own medical pasts as well as their families', it could save you heartache later or it could lead to just pouring money down a rathole for years. GovExec.com reader Posted July 28, 2006 10:54 AM

VIEW ALL COMMENTS