By Thomas "Greg" Darden, CLTC | November 22, 2019
The decision to be prepared for long-term care is often influenced by looking at the wrong issue. Many people view long-term care through the lens of risk, thinking that they might fall in that part of the population that reaches the end of their lives and never needs it. What colors their decision is the thought that it might turn out to be unnecessary to have factored it into your long-term planning. But there is another way to think about it, and that is in the context of consequences: if you think you will live long and possibly need help at some point, have you thought about how it will affect your family or friends who might have to care for you? Let’s look at the possible consequences of long-term care after a quick review.
A Review of Long-Term Care
Long-term care (LTC), sometimes referred to as ‘extended care,’ is a continuum of care types and settings, usually starting in the home and transitioning through other settings, which might include assisted living and skilled nursing facilities, also known as nursing homes.
The need for LTC will be triggered by some form of LTC event, which could be a chronic physical or cognitive impairment. A chronic physical impairment will limit your ability to perform basic daily routines known as “Activities of Daily Living.” These include transferring (for example, bed to chair), toileting, eating, bathing, dressing, and continence. A cognitive impairment, such as Alzheimer’s disease, is one that compromises your safety through its effects on memory, orientation (as to person, place, or time), reasoning, and judgment.
As a physical or cognitive impairment begins to compromise a person’s safety, typically a spouse, partner, or child will start helping the person with the basic routines to get through the day safely. Such help is known as custodial care and is not paid for by your health insurance or by Medicare. The cost of any care required going forward, including in facilities, will have to be borne by you or by your loved ones.
The exception is that Medicaid will ultimately cover care in a nursing home. However, you and your loved ones will still bear a burden because you will have to spend down your assets and income to minimal levels. And it’s important to realize that you will have no control over your care in that setting.
The Consequences of a Long-Term Care Event
Even the earliest form of care – day-to-day custodial care – will gradually have significant physical, emotional, and financial impacts on the caregiver and family. It can:
- Alter the lifestyle of the caregiver.
- Be both physically and emotionally demanding, taking a toll on a caregiver’s health, sometimes causing them to develop chronic illnesses themselves.
- Affect their job performance, as they might have to take time off from work or reduce hours, as well as their income.
- Force them to curtail or postpone plans they’ve made for their own life (such as career and education).
- Impact their finances since they might pay for some of the day-to-day expenses.
- Affect women disproportionately, as they make up the majority of caregivers and may be juggling a job with the care of their own families.
- Risk creating conflict and resentment within the family if someone is providing most of the care (a dynamic that can be exacerbated by the geographic dispersion of families).
- Have a potentially devastating financial impact on an otherwise well-planned retirement due to the ever-escalating costs of LTC.
A closer look at the impact of LTC costs on retirement shows that money that you had planned for desired spending (travel, hobbies, helping children/grandchildren with education, charitable giving, and other wishes) might have to be redirected to pay for care.
You might have to tap assets that you have otherwise preserved for income generation to fund your retirement. Depleting those assets can compromise your ability to maintain enough cash flow to fund your planned spending throughout retirement. And the impact may well extend beyond you to your spouse, who is also counting on that well-planned retirement.
In short, the possible consequences of long-term care can be formidable. But having a plan to fund it can alleviate the personal and financial effects that providing custodial care has on a family. And that, in turn, allows them to focus more on managing that care, rather than being the sole providers of it. By reducing stress on your family, you will enable them to direct their energy where it belongs: towards giving you the ongoing emotional support you need.