Life Times Newsletter

Summer 2008
Vol. 10, No. 3

Plan today for long-term care

Sandra McKinnon, MS

Financial Education Specialist

The risk of changing health and independence, or the risk of needing long-term care, can affect a family’s ability to achieve or maintain financial security. Begin today to make informed decisions about managing these risks. Share your wishes, expectations, realities, and concerns with family members who may also be affected.

What is the risk of needing long-term care?

Long-term care is a risk across the lifecycle. Of those receiving long-term care today, 43 percent are below the age of 65, and 57 percent are over age 65.

There is greater risk of needing long-term care than many other life events that we tend to protect ourselves against. For example, in a lifetime, the chance of losing a home to fire is 1 in 1200, and having a car accident is 1 in 240. On the other hand, 1 in 2 people will need some type of long-term care; 1 in 5 will need care for more than five years.

How do you define long-term care?

Because of old age, mental or physical illness, or injury, some people find themselves in need of help with Activities of Daily Living (ADLs) like eating, bathing, dressing, toileting or continence, and/or transferring (e.g., getting out of a chair or out of bed). In general, if you can’t do two or more of these activities, or if you have a cognitive impairment, you are said to need “long-term care.”

Long-term care may be provided in a nursing home, an adult day care center, or an assisted living facility, but most is provided at home. Some people who need ADL services might need them only for a few months or less.

Assistance with ADLs, called “custodial care,” may be provided in the same place as (and therefore is sometimes confused with) “skilled care.” Skilled care means medical, nursing, or rehabilitative services, including help taking medicine, undergoing testing (e.g. blood pressure), or other similar services. This distinction is important because Medicare and most private health insurance pay only for skilled care—not
custodial care.


Who pays for long-term care?

Be aware what options will, or will not, cover long-term care costs. Financing long-term care may take a combination of alternatives.

·   Personal assets

·   Medicaid, a needs-based government program, pays the medical and long-term care expenses of poor people. Income/asset rules apply; you may have to spend down to qualify. Be aware of transfer rules and other possible penalties. Spouses are protected from poverty.

·   Long-term care insurance

·   Medicare is a federal program that pays for some short-term, health-related costs, but not long-term care.

·   Medicare supplement insurance is designed to cover only the gaps in short-term health care needs.

·   Very few existing health insurance policies will pay if you need long-term care.

·   Disability insurance protects against the loss of income, not the costs of care.

How do you decide what to do?

Understanding financing alternatives and consequences can be overwhelming. However, there are trustworthy resources.

·   Free Long-Term Care Planning Kit, National Clearinghouse for Long-Term Care Information: In Missouri, 1-800-390-3330;

·   State-specific information:

·   Medicare's Long-Term Care Planning Tool:


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University of Missouri Extension Editor: Roxanne T. Miller