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Long-Term Care: Are You Prepared?

If you're a woman, probably not — even though you're more likely to need it than your husband

People want to live long lives, they know that they might require care, but they aren't planning for it. Why?

Fear, mistrust, confusion and denial, says Ken Dychtwald, chief executive of Age Wave, a consulting firm that studies the aging population. To most people, long-term care solely means a nursing home — and people fear nursing homes. When it comes to planning financially, they don't know whom to trust. They are confused by what Medicare, Medicaid and long-term care insurance will and won't cover, often thinking they have coverage when they don't. And lastly, they are in denial that they'll ever need that level of care.

"Long-term care is something far better dealt with years, even decades, before you need it," Dychtwald says. "Denial is unfortunately not a useful reaction."

Long-term care insurance enrollment rates highlight this disconnect. The sooner you purchase, the sooner you'll be able to lock in the lowest possible rate. After all, annual increases are expected to be anywhere from 10 to 40 percent in 2011, according to the Wall Street Journal. However, only 7 percent of Americans have long-term care coverage.

Consider, too, recent news from MetLife Inc. that it will stop selling coverage as of Dec. 30. The company is one of "a parade" of insurers to leave the market recently, says the Wall Street Journal. Those who secure policies before then will be covered, but no long-term care applications will be accepted in 2011. Fewer insurers could cause rates to rise, so the sooner you buy, the more insurers you'll have to choose from.

A government-run long-term care insurance program, to be rolled out in 2012 as part of health care reform, will be paid for through payroll deductions. The program might help you if you plan on remaining in the workforce through at least 2017, as you must be paying premiums for five years to qualify for coverage.

The roots of denial

For women, Dychtwald surmises that their denial is rooted in their roles as caregivers. They are so used to taking care of everyone else that they don't think about the day when they will need help themselves. In addition, the marital division of labor still has husbands more likely to be responsible for financial matters. "So women may not necessarily feel as confident or certain about making major financial decisions than they'd like to be or need to be," Dychtwald says.

The lack of planning, as shown in the AARP study, could also simply be a reflection of the age of those polled (45 to 64), says Kathy Black, assistant professor with the Manatee School of Social Work at the University of South Florida, whose research focuses on health and aging.

"At that age, people are just caught up in their day-to-day lives and not really thinking about tomorrow or 'Who will take care of me?' " says Black. "People have this sense of themselves where they're independent and it's hard to imagine what life is going to be like without that."

There are also cultural issues to consider. "There are some cultures where you just don't talk about this kind of stuff," Black says. "People have this inner belief that bringing it up is a bad omen."

But if you can get past all these reasons why people don't plan for their futures, you can start ensuring that you maintain control over your elder years.

Creating your long-term care plan

Any long-term care plan should include four components, says Burns:

  • A plan to make your home safe and comfortable once mobility becomes impaired;

  • A financial plan for paying for long-term care;

  • Learning your family medical history so you can take charge of your health;

  • Taking care of the legal work: wills, powers of attorney and communicating your final wishes to your loved ones.

"We know that the two biggest triggers for creating a long-term plan are becoming a caregiver and dealing with a chronic illness," says Burns. "But don't wait for an emergency to happen. Try to start planning now and you'll have great peace of mind when the time comes that you have to deal with a life challenge."

And if you can't do it for yourself, do it for your family. "Plan now because you care about your children and grandchildren," says Dychtwald. "Because if you don't have a plan, if you don't have a financing program in place, it's going to fall on them, and it will be your family that gets damaged by your absence of a plan."

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