Clarifying the Options for Long-Term Care

Given the growing need for long-term care, more advisors are talking to clients about LTC insurance, hybrid life, and other funding options. Fewer advisors, however, are discussing the specific options for care. To many clients – particularly those who’ve never dealt with an aging parent’s LTC – the whole thing seems hazy and unpredictable.

From in-home help to full-time nursing care, a wide range of services are available, each with pros, cons and varying costs. By educating your clients on the specifics, you can steer them towards sounder funding strategies – and perhaps finally convince them that LTC coverage is worth the cost. Ultimately, if you’re going to talk about LTCI, you need to be able to discuss what care will actually entail. What are your clients really preparing to pay for?

In-home care

According to the AARP, nearly 90 percent of people 65 and older want to remain in their homes as long as possible, and 80 percent believe they’ll stay the rests of their lives.

“I have found, from dealing with institutions and custodial caregivers, that we can retain a much higher dignity and quality of life in the home,” says Roger Bell, president of Roger R. Bell & Company.

For these folks, in-home services make it possible to age in place – at least for a time. Custodial or non-skilled care helps with cooking, bathing and other basic tasks. Caregivers often visit for a few hours per day, but some situations require they live on-site to provide around-the-clock care. This option is common among clients who suffer from Alzheimer’s or dementia, but who have no other pressing medical concerns.

The other in-home option is nursing or skilled care, provided by licensed medical professionals through home health agencies. These providers can manage oxygen, give medications, administer therapy and more. They’re state-licensed and (usually) Medicare-certified, and their services may be covered by Medicare, Medicaid and other forms of health insurance.

However, the waters become murky for clients who require medical assistance and help around the house, which may require service from different providers and funding from different insurers.

Both options average between $3,500 and $4,000 per month, but costs vary wildly depending upon location and the amount of care required.

“In a non-metropolitan area, residential caregivers might start around $14 per hour,” says Bell. In upstate New York or downtown Chicago, on the other hand, rates are closer to $22 – $25 per hour, and they may rise substantially for certain types of skilled care.

Overall, in-home care can be an attractive option, but it’s not always the cost-cutter clients assume it to be. A few hours of daily in-home help may be covered in full by a modest LTCI policy. For dependent clients who need constant monitoring and medical attention, however, the costs could exceed those of residential care.

Residential care

When it comes to facility-based care, the least involved option is assisted living, which combines housing, meals, support services and limited medical care.

“The costs are usually based à la carte on what services are needed,” says Bell.

Some residents essentially pay room and board, while others pay more for medication management, apartment cleanup and other extras.

Typically a shorter-term arrangement, nursing care is for clients with greater medical needs and little to no independence.

“Nobody wants to talk about it, but it doesn’t have to be permanent,” says Adam Hyers of Hyers & Associates. “You might break a hip, receive nursing care for a few months, and then go back to assisted living or even back home.”