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Learn the Ins and Outs of Long-Term Care

Bob Edwards talks about one of the smartest decisions you can make for you and your family

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Bob Edwards: Hello. I’m Bob Edwards with An AARP Take on Today.

Here’s a sobering thought:  One in four people now age 65 will face over 50,000 dollars in out-of-pocket long-term care expenses. And, depending on the state you live in, it could be a whole lot more. Most Americans haven’t even factored the possibility of needing these resources that Medicare doesn’t cover into their financial future.

Chalk it up to a “this won’t happen to me” mentality or just confusion on what options exist. But, when it comes to your home, health and finances, you should be in the driver’s seat. Planning for long-term care is one of the smartest decisions you can make for yourself and your family.

Joining us today is AARP’s Jean Accius who will explain why it’s so important to starting planning now and what you need to get started.

Jean Accius: Well, thank you, Bob. Thank you very much for the conversation that we're about to have on planning for long-term care.

Bob Edwards: What is long-term care and what does it entail?

Jean Accius: Well, first of all, I think that it's extremely important as you mentioned today, the need to actually think about planning for the future. Long-term care is assistance with daily activities such as bathing, dressing, eating or managing your finances or household tasks. And, the likelihood of needing long-term care actually increases with age. In fact, roughly about 52%, more than half of the people who are turning 65 today, would develop a severe disability where they would need assistance with long-term care. That amount of time can vary from a couple of months to a couple of years to even a lifetime. We know that from talking to people across the country and talking to our own members that this is an area of great concern and the need to start having these conversations, which is why AARP is so involved and engaged is so critical in giving people optimal choice.

Bob Edwards: But, even people over 50 think, "Oh, that's way down the road. I don't need long-term care." Why plan now?

Jean Accius: A couple of reasons. One I think is important to realize that planning for long-term care is really an opportunity for you to be in the driver's seat. I love the fact that this called take on today. And I think that many listeners and many consumers want to be in the driver's seat and especially as they age and decide exactly how they want to live as they age. So, it's critically important whether you are 50, whether you are 40, whether you are 65, 75 or 85, to really kind of think about exactly what will your needs be as you get older and what are the possibilities of actually ensuring that your preferences and what you value are not just realized but it actually happens because you've planned ahead.

It really is a gift not just to your yourself but it's also a gift to your families. We hear all the time how people are having to make some very tough decisions in a period of crisis whether it's a tragic accident or there was a fall that led into the need for long-term care. All of a sudden, families are trying to figure out exactly what my mom wants, what would my dad want? What would my uncle or neighbor want? How do I go about actually doing and getting those resources and services to meet their needs? So, the extent to which we can actually have these conversations.

Bob Edwards: What are the different pieces that people should consider?

Jean Accius: There's a host of factors. One I think is extremely important to think about exactly, what resources or services are available in your community? What I mean by that is the fact that often times, we get so overwhelmed with the cost of long-term care. It is true that the average cost of long-term care in this country, nationally, is around $97,000 a year, if you need nursing home care. If you need assisted living, it's around $45,000 a year. If you need home care and you need someone to come into your home and provide you with about 30 hours of care a week, you’re going to be looking at about $34,000 a year to get that type of service.

It's also true that the average household, particularly for someone over the age of 65 is roughly around $40,000. So that, if you look at those numbers, long-term care, the cost of it exceeds what many families can actually afford. The other aspect I think is extremely important is to know that family caregivers are on the frontlines providing this type of care each and every day.

They may start off by taking their mom or their dad or their uncle or neighbor to a doctor's appointment and then over time, the needs become such that they're providing more intense care. There's over 40 million family caregivers in this country. Many are probably some of the listeners today trying to figure out exactly how do I juggle working and my caregiver responsibilities? What type of services and resources are available for me? So, I share those two daunting points for a specific reason. That there is some things that we can actually start doing today. What that means is the fact that we can actually look and kind of think through exactly what are my options?

Bob Edwards: How does technology affect long-term care?

Jean Accius: Yeah. I think technology is one of those areas that we're seeing a lot of opportunity particularly to meet the needs of individuals as they age. The ability to address connectivity is critically important and the other aspect of this too is the ability to kind of think about how technology can be supportive of the needs of family caregivers. The ability to be able to identify a potential caregiver to help meet your family's needs especially if you're a long-distance caregiver. The ability to be able to monitor and track whether or not mom or dad or your spouse or partner is actually taking their medications or to be getting some notification that there was a missed medication.

Bob Edwards: Well, when I stay home, regardless of what happens, it's not always an option. So, what other options are available?

Jean Accius:  Well, this is one of the things that we're excited about, that there's a range of different options that are available to meet people where they are. I think part of that includes the village movement. It's village to village. It's really grassroots, neighbors helping neighbors. It's the opportunity for individuals, through these different village networks, to help support each other, particularly as they age, realizing that intensity and need might increase, but more importantly, that to the extent to which we can help individuals and support them in their desires to stay at home for as long as possible, that's a viable option.

The other aspect of this, too, is ensuring that we have these conversations much earlier before there's a crisis, and part because of the fact that we know from talking to members and talking to people 50 plus that often times, there's a big fear around what some of these other alternatives might.

As someone who works in this space, but also as a son, also as a nephew, I am constantly concerned about, what will happen when my family needs long-term care, and what services and supports would be available for them? The other aspect of that, too, is, what is the quality of the care that's being delivered, and how can we ensure that we have a lot of information to make informed decisions? But what that means, Bob, is the fact that we actually have to have these conversations before there's a crisis, before you get that phone call that your mom or dad is being transitioned out of a hospital, and you need to figure out exactly where they're going go.

Bob Edwards: You mentioned the high cost of long-term care. So, should we get insurance?

Jean Accius: A couple of things -- one is the fact that private long-term care insurance is viable and sufficient for those who can actually afford it. What I mean by that is the fact that roughly about 7.5 million people in this country have a private long-term care insurance policy, but we also know that the insurance industry, particularly with respects to private long-term care insurance, is undergoing significant transformation. As a result, you are seeing that many individuals that actually have private long-term care insurance, their premiums are going up significantly. So, you have that issue.

The other aspect, too, there is an issue in terms of the number of carriers that are offering this type of product. Over the last 12 to 15 years, that number has gone significantly down from about maybe 100 back in the early 2000s to now, I think we're hoping around maybe 10 because the challenge of the market. However, for those who actually have private long-term care insurance, what we're actually seeing is the fact that they're holding on to these benefits, and that the insurance industry is paying out a significant amount of claims, and that those who actually have private long-term care insurance are generally satisfied with the coverage for the exception of, again, as I've said before, the significant rising premiums.

I think that as part of the planning process, it's extremely important to kind of think about, what are your options? Because private long-term care insurance has a viable role. It's a niche product, but nevertheless, it is something that is available for people to consider.

Bob Edwards: We going get any help from Medicare or Medicaid?

Jean Accius: Well, Medicare doesn't cover long-term care insurance, and I think one of the biggest misconceptions is the fact that I don't need to worry about this because Medicare, or my health insurance, will actually cover my long-term care needs, and in fact, Medicare does not cover your long-term care needs. What actually tends to happen is the fact that individuals rely heavily on family caregivers who provide about $470 billion worth of care a year. They utilize their savings and resources, and then should their needs intensify for a long duration of time, what we see is that they tend to spin down on to Medicaid. Medicaid is the primary public payer of long-term care, paying about over $160 billion most recently, providing these type of services. However, there are restrictions in terms of the eligibility for Medicaid, meaning the fact that you have to really be impoverished in order to qualify.

Bob Edwards: Sounds like I might get there with this cost of long care.

Jean Accius: Which is one of the reasons why AARP has been so vocal about preserving and protecting Medicaid, because it's such a significant safety net for millions of individuals who need long-term care. It is the primary public payer. The other aspect of this, too, where AARP has been extremely involved and engaged is the fact that with Medicaid, should you need long-term care, there's a possibility you may get that care in your home. I use those words intentionally.

Bob Edwards: Possibility?

Jean Accius: A possibility, and part because of the fact that with respects to Medicaid, nursing home care is an entitlement, meaning the fact that if you qualify today, Bob, for long-term care through Medicaid, you are automatically eligible for nursing home care. However, we know that the vast majority of people want home care, which is an optional benefit, meaning the fact that states don't necessarily have to offer that benefit, and if they do, there's restrictions in terms of the amount, duration, and the geographic location.

Bob Edwards: So, what are some financial strategies for covering long-term care?

Jean Accius: Well, that is a great question, as we talked about today that the cost exceeds what many families can actually afford. I believe that clearly with the work that we're doing at AARP with respects to planning, that it's part of the solution. When we think about our retirement, we have to think about long-term care, in part because long-term care is the biggest risk to your retirement security. Part of the financial strategies, if you will, would be doing some of the assessments that we've talked about today. There are some low-cost things that we can actually do today, whether it's a home assessment to see how age-friendly my home is, and what can I actually start doing today to ensure that I'm able to live in this home for as long as possible? It may have met my needs today, but should I develop a severe disability, would I be able to still reside there?

So, going back to what we’ve talked about today in terms of some of the strategies is the fact that how do we ensure that where we live can accommodate our needs?

Bob Edwards: What does the community offer?

Jean Accius: What does the community offer, and that needs to be part of the financial planning process. I think that we're seeing a lot of innovation, a lot of disruption, if you will, in transportation with regards to a range of different options. But again, thinking through exactly what does that actually mean for me as I age? So, I think there's an aspect of both having the plan. I think the other aspect is ensuring that we've had a conversation with our families about exactly what our preferences are.

Bob Edwards: Right. And where do you start this conversation? Ready to start planning. Where do I go?

Jean Accius: So, there's a couple of places. One is the fact that we would highly recommend that you go to aarp.org/caregiving. There you will actually find a lot of information throughout the planning process to help guide you. The other aspect of that, too, is the fact that you can actually find local information. You can put in your zip code, put in the city, and find out exactly what's the list of providers that are available in your community? What's the list of resources that's available so you can actually start planning?

So, I would recommend aarp.org/caregiving as a great resource for you to look at to explore your options. The other resource I would actually recommend is the eldercare locator. This is a locator that is funded by the federal government. You can call them at 1-800-677-116. I'll say that one more time. 1-800-677-1116. Or, you can go online and just type in elder care locator. This allows you to connect to local resources similar to what we have at AARP with providers in your local community. Having that type of information is a significant step forward in giving you a sense of peace of mind, and also allows you to continue to be in that driver seat.

Bob Edwards: Thank you, Jean.

Jean Accius: Thank you, Bob.

Bob Edwards: That was AARP’s Jean Accius. Visit aarp.org/caregiving to create a plan that works for you and share it with your loved ones.

"I love filing my tax return," said no one ever.

But believe it or not, a lot of people, like the 35,000 AARP tax aid volunteers feel tremendous satisfaction helping others prepare their taxes.

Beginning tomorrow, Friday, February 1st through April 15th, AARP Foundation is providing free tax assistance and preparation through its Tax-Aid program. The Tax Aid program has helped some 50 million low- and moderate-income taxpayers with free tax service and tax form preparation. Last year, volunteers helped generate one point $1.3 billion in tax refunds and $212 billion in earned income tax credits for taxpayers.

The volunteers have all completed tax preparation training and IRS certification, and most of the 5,000 Tax Aid preparation sites are located in senior citizen centers, community centers, public libraries, and shopping malls, making them easy to get to.

Taxpayers do not need to be a member of AARP, or a retiree, to use Tax Aid. To find an AARP Foundation Tax-Aid location, go to aarp.org/tax aid.

For more, visit aarp.org/podcast. Become a subscriber, and be sure to rate our podcast on Apple Podcast, Google Play, Stitcher, and other podcast apps. Thanks for listening. I'm Bob Edwards.

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When it comes to your home, health and finances, you should be in the driver’s seat. AARP’s Jean Accius talks about planning for long-term care is one of the smartest decisions you can make for yourself and your family.

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