The Long Term Care Puzzle

The long term care puzzle has always been an interesting part of financial planning to me.

Personally, I think the ultimate form of independence is being able to choose who provides your long term care.  Unfortunately, most of us will have to rely on the government to make this decision for us.  It’s sad, but it can very well be our future reality if we don’t plan for it.

First, let’s go ahead and take care of the main myth that surrounds long term care.

long term careThe government will not cover the entire cost of your long term care.  Yes, they can help, but there is a maze of rules that must be navigated before you qualify.  You’ll definitely want to consult an attorney well before it is time for you to move into a facility.

It’s not a fun topic, but we have a responsibility to our families to start thinking about long term care.  If not, you may be required to use all of your resources before qualifying for any government assistance programs, such as Medicaid.

Medicaid is where I think we are all misinformed.  I used to believe the government, or Medicaid, would cover all of my long term care needs as a person with a disability.  Yes, they are helpful, but by no means do they cover 100% of my needs.

Looking back, my childhood belief that I could be like everyone else by getting educated, employed, and becoming an independent adult while Medicaid handled the medical needs is pretty laughable.  Please don’t feel bad about that.  Being normal is so boring.

As Garth Brooks said, “Some of God’s greatest gifts are unanswered prayers.”  Perhaps my naivety was a blessing allowing me to focus on the future.  And now that song is in your head, so you’re welcome!

A responsible financial planner should make sure your long term care wishes are included in your goals.

I’ve always been driven by goals because they give us a reason to move forward.  By having no goals, we allow ourselves to stew in our problems.  Then we can begin to focus only on our troubles instead of searching for solutions.

The reality of my situation, or anyone else with a disability, can be very disheartening if we only focus onlong term care our limitations.  When I played wheelchair hockey, I wanted all of my teammates to work toward college.  One recruit thought that was pointless because “all we can do is live on Social Security and Medicaid.”  That mindset is heartbreaking to me.  I wanted my teammates to look forward to possibilities instead of stewing in their reality.

Perhaps that’s why I focus on goal-oriented planning in my practice?  We can talk all day about anticipated returns or look at charts showing our portfolio’s past performance.  Unfortunately, we’ll be wasting our time if there are no clearly defined goals.

The long term care discussion should happen sooner than later.

What I’ve noticed over the years with family and friends is that we wait too long to have the long term care discussion.  This is because we love each other and believe we can handle the care for our family members.  For a period of time this may be possible, but our needs change.

For many of us, we will reach a point where we are not qualified to provide the level of care our loved ones need.  That’s when the guilt hits you, unfortunately.  I think guilt goes both ways though and we need to realize that.  Yes, it’s sad that you are unable to give them the help they need, but it’s also hard for our loved ones to know they need help.

We have been dealing with a similar situation in our family.  My dad has Parkinson’s Disease and caring for him and me has become too much for my mom.  I know it is disheartening to him that he cannot physically care for me any longer as well.

Sure, my sisters help where they can, but they have their own families.  Of course, after all my parents have done for me, I would love to provide for all of their needs, but I can’t do it.  Dwelling on what I cannot do is unproductive, so I try to avoid that habit.

The long term care puzzle takes time to solve.

I prefer to find solutions and one solution is long term care planning.  You may feel less guilt by taking the time to research different facilities.  Not to mention research can help you feel better about the decision overall.  There are many different options for providing long term care.

I’ve learned that quality of life is much more important than quantity of life, especially if you know where you’re going.  I know that because of Jesus I have a place in Heaven when my time is up here.  I’ll live the greatest possible life here, but I know I’ll be “living my best life” in Heaven.  I would love for you to be there too!

long term careBy waiting without planning, we risk having our loved ones placed in the “first place with an available bed.”  It happens all of the time.  Someone becomes sick, goes to the hospital, then they are placed in a rehabilitation facility.  This normally leads to a long term care stay at a location chosen by someone other than your family.  Quality of life can suffer when we lose the ability to choose.

We are an aging society.  With the medical advances of today, we are living longer.  No, that doesn’t mean we’re all guaranteed 80 years, nor does it mean we’ll always be healthy.  It does, however, increase the odds that we, or one of our loved ones, will need long term care.

Long term care insurance may not solve every puzzle.

The simple solution is to purchase a long term care insurance policy, but these can be too expensive for many people.  I think that will only get worse because insurance companies know it will be extremely likely that they will have to pay out benefits.  Insurance companies make their money by not having to pay out the benefits of their policies.

We pay our premiums each year hoping we’ll never need the insurance companies help.  For example, they accept the risk of your house burning down because they know the odds of that happening are low.  The odds of a person living long enough to need long term care are high, so why would an insurance company want to accept that much risk?

It’s pretty obvious they’ll have to continue raising premium rates in order to compensate for their higher level of risk.  They are already making adjustments by creating hybrid policies combining life and long term care policies.  These benefit the consumer by making the premium more affordable while lowering the risk level for the insurance company.

Another consideration should be how much the long term care policy, or even Medicaid, would be paying of your total bill.

Currently, a skilled nursing long term care facility in eastern North Carolina can cost $84,000 a year.  A long term care insurance policy may pay $1,500 a month, which may only be a quarter of the total bill.  The remainder is paid by the resident’s other benefits, such as a pension or Social Security.

Financial planning becomes extremely valuable here.  Let’s say your dad moves into a facility, but your mom stays at home.  Normally, the household expenses were covered by both of their Social Security checks, but now his check pays the facility and she has to readjust her budget.

Yes, it’s easy to say spend less today and save more for tomorrow, but even your relationship can make a difference.  Perhaps you decide one person should work while the other stays home with the children.  Are you married?  If so, the spouse at home can qualify for half of the working spouse’s Social Security monthly check.  If not, the spouse at home may only be able to count their work experience, leading to a lower payment.

Our Social Security payment is based on work history.  If you’re not working, then you’re not building

long term care

that work history.  Social Security can be treated as an investment product just like your other retirement accounts.  By putting more money into it now, you’re hoping to reap the benefits in the future.

It may seem cool to get “paid under the table” and avoid taxes now, but it could very well cost you thousands of dollars in the future.  A financial planner can help you work through this and many other scenarios.

The long term care puzzle is one puzzle within the larger puzzle that is our financial plan.  I enjoy the challenge of figuring out a puzzle, but it’s more fun when someone does the work with me.  Financial plans may look similar, but they are different for everyone.  There is no easy magic solution that completely solves all financial puzzles, but I would love to help you work through yours.  Email me.


Jonathan Greeson is located west of 117 and south of E. Main St.
Jonathan Greeson is located west of 117 and south of E. Main St.

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100 West Main St.
Pikeville, NC 27863