Will You Need Long-Term Care? How to Plan for the Unexpected

More than half of all adults will require long-term care, and unfortunately, few are prepared to pay the high costs. Will you need long-term care, and if so, how will you pay for it? Here’s what you need to know.

Assessing the Likelihood of Long-Term Care

There’s no way to know for certain if you’ll need long-term care. However, there are a few factors that increase a person’s likelihood of requiring long-term care:

Gender: On average, women live longer than men, which makes women more likely to require long-term care.
Social connection: Adults who live alone or who are socially isolated are more likely to require paid care as they age.
Health status: Chronic health conditions or history of major illness increases risk of requiring long-term care. Obesity also increases the risk of health problems, even if you lose weight before old age.
Lifestyle: Smoking, drug use, heavy drinking and poor diet and exercise habits increase risk of disability, as do high-risk recreational activities and physically demanding jobs.
Family history: If you have close family members with health conditions including certain cancers, heart disease, diabetes and some forms of dementia, you may have a genetic predisposition to the same health issues. A family history of long lives also increases the odds of requiring long-term care, because older adults have increased rates of disability.

If you’re concerned you’ll need long-term care, it’s never too late to make lifestyle changes. By adopting a healthier lifestyle and stopping high-risk activities, you can reduce your likelihood of late-life disability. Aging adults should also assess risks within their home. According to the World Health Organization, individuals disabled by falling “are at major risk for subsequent long-term care and institutionalization.” Creating a safe home environment is key to reducing fall risk.

Assessing the Likelihood of Long-Term Care

There’s no way to know for certain if you’ll need long-term care. However, there are a few factors that increase a person’s likelihood of requiring long-term care:

Gender: On average, women live longer than men, which makes women more likely to require long-term care.
Social connection: Adults who live alone or who are socially isolated are more likely to require paid care as they age.
Health status: Chronic health conditions or history of major illness increases risk of requiring long-term care. Obesity also increases the risk of health problems, even if you lose weight before old age.
Lifestyle: Smoking, drug use, heavy drinking and poor diet and exercise habits increase risk of disability, as do high-risk recreational activities and physically demanding jobs.
Family history: If you have close family members with health conditions including certain cancers, heart disease, diabetes and some forms of dementia, you may have a genetic predisposition to the same health issues. A family history of long lives also increases the odds of requiring long-term care, because older adults have increased rates of disability.

Paying for Long-Term Care: Savings, Insurance, and More

While Medicare covers many health needs in old age, it doesn’t cover costs associated with long-term care. For that reason, it’s important that adults plan ahead.

The best time to plan for long-term care is when you are young and employed. By setting aside extra money for your retirement years, you can build a nest egg adequate to cover living expenses, medical care and long-term care. However, not everyone is able to save enough to cover the high cost of long-term care. According to Morningstar, 57.5 percent of adults turning 65 between 2015 and 2019 will spend less than $25,000 on long-term care during their lifetime. However, 15.2 percent will need more than $250,000 to cover their long-term care costs.

For most people, paying for long-term care insurance is more feasible than paying for care out-of-pocket. Don’t wait to enroll in a long-term care insurance policy. By enrolling before you reach retirement age, you lock in lower premiums and save money.

Long-term care insurance premiums can be paid with funds from a Health Savings Account. The older you are, the more HSA funds you can withdraw to pay long-term care premiums. However, only adults enrolled in a high deductible health plan, or HDHP, are eligible to open an HSA. Because HDHPs offer limited health coverage, they’re best for healthy young adults. If you contribute to an HSA while you’re young, you can roll over the funds even if you switch health plans later on.

If you’re nearing or past retirement age and don’t have a long-term care insurance policy or funds to pay for long-term care, you may be wondering how you’ll meet your health care needs. If you have a life insurance policy, you have an asset that can be tapped for funds. Rather than continue to pay premiums on an unneeded policy, you can sell a life insurance policy to free up funds for long-term care expenses. For many aging adults, this is a more attractive option than selling a home or applying for a reverse mortgage.

Whether you’re 30 or 60, it’s important to plan for your long-term care needs. Failing to plan for long-term care threatens your health and financial security in old age and puts financial strain on your family. While it’s never too late to start thinking about long-term care, the earlier you begin saving and planning, the better off you’ll be.

Author

June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.