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Life Health > Long-Term Care Planning

Giving A Push To LTC As A Benefit

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This is important to boomers who care for older relatives

Among the many significant challenges baby boomers will face as they enter the ranks of midlife are the important stresses and health issues they may encounter when holding down a job and caring for an older relative at the same time. What can be done to help these employees avoid the pitfalls associated with this situation?

Employee Assistance Program personnel should become familiar with the “nuts and bolts” issues surrounding long term care. While EAPs are trained and available to provide interpersonal support for working caregivers, the role of practical advisor on LTC would be a welcome addition to the EAP repertoire of services for current and future caregivers, as well as for boomer employees who may someday need such care themselves. This is an issue that is relevant, and potentially critical, for both current employees with frail parents and, eventually, for employees themselves.

It is estimated that 25% of all households have one adult providing care for an elderly person. If this means caring for a dependent adult in the home, it can be especially stressful physically, financially and emotionally. If this means providing assistance with Activities of Daily Living, this can require full-time effort and constant supervision. It also can put increased financial hardship on families covering care expenses not covered by medical insurance.

For this reason, baby boomers often are referred to as the “sandwich generation,” caught between caring for children and parents at the same time.

For working caregivers, the strain of balancing work and providing care can hurt job performance and productivity. Working adults caring for elders in their home have more unscheduled absences and unexpected emergencies that interrupt their work during the day or require them to adjust their schedules. In addition, many are forced to reduce their hours or turn down additional responsibilities.

Eventually many of today’s employees and caregivers will be in a position to need this care for themselves. Unfortunately, many Americans do not understand the financial implications of long term care. While some receive eldercare from family members, this resource may be much reduced in the future due to factors such as fewer children upon whom to rely, divorced families and physical separation between extended family members becoming more common.

Most Americans prefer not to think about needing long term care. The concept of physical dependence is contrary to our self-sufficient culture and ideals. Most Americans are shockingly underinformed or have misconceptions about the probability of needing LTC. Individuals convince themselves that “I won’t need long term care,” “My kids will take care of me,” or that “I would rather shoot myself than end up in a nursing home.” These feelings prevent individuals and families from planning for future LTC needs.

The average life expectancy of a 65-year-old today is 17.9 years. The longer life expectancy increases the prevalence of chronic conditions associated with aging and the need for assistance with activities of daily living. Forty-three percent of seniors will require some LTC and 9% can expect to spend 5 years or more in a nursing home.

The average annual cost of a semi-private room in a nursing home is $57,765. This is more than most Americans can afford to pay out of pocket. Medicaid requires that families exhaust their assets before a family member is eligible for nursing home coverage, and the majority of nursing home residents have had to do this. This sequence of events is catastrophic for a spouse who is left at home with limited assets. However, as the need for services outpaces the available funding and the government starts reimbursing at lower rates and tightening qualification requirements, even this option may go away.

Long term care can mean several types of care. While most people are familiar with the concept of nursing home care, many are not aware that other options exist.

Nursing Home Care–Nursing homes provide institutional care for people requiring professional help with activities of daily living. Nursing homes usually provide three levels of care: skilled, intermediate and custodial.

Skilled care is comprised of nursing and rehabilitation services performed by skilled medical personnel such as registered nurses, licensed practical nurses and physical therapists. Generally, skilled care is used as a step down from a hospital in-patient stay. Intermediate care includes some skilled care and/or requires such treatment to be performed by professional medical personnel. Custodial care is provided to assist an individual in carrying out activities of daily living including personal care services that do not necessarily require trained medical personnel. This can include bathing and feeding residents, for example.

Assisted Living Facility–ALFs are residential facilities that provide some support for residents but less than that of a nursing home in terms of the skilled nursing support. They are typically more like group homes with support for ADLs while still allowing residents more freedom to take care of themselves and more privacy. ALFs have grown very popular in recent years. Because of their newness, the definition from state to state is not always consistent.

Home Health Care–If it is possible, patients often prefer remaining at home and receiving services there. This often can be accommodated for those individuals with a lesser degree of impairment. Home health care may be comprised of several different kinds of services including visits from nurses, therapists, home health aides and personal care aides. In some cases, services also can include meals, chores and homemaker services.

Adult Day Care–This is daytime care provided to seniors who are unable to be left alone. This is helpful for individuals living with working caregivers. It is also useful to provide a social outlet.

Educating employees as to the likelihood of needing LTC and the options available is a much needed service that employers and EAPs could facilitate. The important facts could be imparted directly, or a collection of educational resources could be assembled and employees could be encouraged to access them.

Financing LTC can be a daunting prospect. It is very expensive, and only will be funded by Medicaid upon impoverishment. Medicare does not cover long term care services. Another downside to relying upon Medicaid to step in is that this will lead to a decrease in flexibility. For many Medicaid recipients, only nursing home care is covered. The more palatable services such as home health care or assisted living facility care are not. Furthermore, not all nursing home facilities accept payment from Medicaid. Medicaid facilities are necessarily less expensive due to the low rates paid by this program. A recent article in the Wall Street Journal put it rather bluntly, saying, “You could wind up in a dump.”

This issue potentially is devastating to families. Planning for this need in advance will avoid a myriad of financial woes later on. While people can plan for these expenses via savings, a more effective method is by obtaining LTC coverage either through the employer or through the individual LTC insurance market.

Financially, it is advantageous for LTC coverage to be offered through employers because they can pay for it on a pretax basis. In addition, by designing the coverage consistent with true group principles, employers can offer LTC for a cost as low as a group dental plan, while providing a significant benefit to their long-term employees.

Ultimately, EAPs could perform an important role in helping employees understand their options, enabling them to negotiate successfully the finances and practical decisions that surround their family’s long term care needs.

The authors, Jon Shreve, FSA, and Jill Van Den Bos, MA, are health care benefits consultants from the Denver office of Milliman, Inc.

Working adults caring for elders in their home have more unscheduled absences and unexpected emergencies that interrupt their work during the day or require them to adjust their schedule.

Employee Assistance Program personnel should become familiar with the “nuts and bolts” issues surrounding long term care


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