How many of you reading this know someone living in a nursing home? Do they like it there? Would they rather be in a different, perhaps nicer facility — or maybe even at home? And most of all, if you were in their shoes, what would you want?
Too often, we only confront this question when it’s too late. If you get to the point of needing this kind of care, you’d probably do anything to avoid the nursing home, instead staying in the comfort of your own home getting the care you need — but will you take the steps necessary to make this possible?
The reality is there is indeed a coming storm. As we live longer and have better treatments for more and more diseases, the more trivial difficulties of getting older will eclipse more serious medical issues when it comes to what most folks will need help with later on in life.
Custodial Care: Plan Ahead of the Storm
What is custodial care?
Custodial care is simply assistance with activities of daily living; these are formally defined as ambulating, feeding, dressing, personal hygiene, continence, and toileting. In simpler terms, they are the tasks you do as you go about your day — bathing, dressing, transferring, meals, etc.
As you can see, these are non-medical tasks that do not require licensing or training to perform, an important distinguishing factor when it comes to the types of care covered by Medicare, Medicare Supplements, or other private health insurance.
Skilled care, on the other hand, is performed by medical professionals and must be ordered by a doctor. It is covered by Medicare but only for up to 100 days and only under certain conditions.
Where and how you receive custodial care can vary. There are a number of different types of and settings for long-term care — from home health care to nursing homes and assisted living. We discussed all of these options at length in a previous blog.
Who pays for custodial care?
People head into old age believing that whatever care they might need — medical or help with daily activities — will of course be covered by Medicare or other health insurance.
Unfortunately, one of the biggest — and most harmful — myths about long-term or custodial care is that it will be covered by Medicare. It is not.
The fact is, the help you might need with these essential tasks will not be paid for by Medicare. Ultimately, it will be paid for by you or your family.
For most folks who need custodial care, it will be for years. The median cost of home health care is over $50,000 per year; that cost doubles for nursing homes (median cost of over $105,000 for a private room). Today, over 20% of 65-year-olds will need custodial care for more than 5 years, which could mean hundreds of thousands of dollars.
Who needs custodial care?
For a long time, the long-term care industry has cited outdated statistics on how many people will require long-term care — about 7 in 10 people. However, the accuracy of these estimates has improved quite drastically over the years and estimates have become far more specific.
It is now known that 91% of 65-year-old couples will require long-term care for either one or both people. Women are also far more likely to need long-term care, which is in part due to their longer life expectancies.
For 65-year olds, 64% of men and 75% of women will eventually need custodial care for a period of 90 days or more.
The conditions that typically require custodial care may also surprise you.
When recovery is either delayed or not expected at all, long-term care is usually required. Some of these conditions include Alzheimer’s or dementia, severe or moderate stroke, Parkinson’s, and crippling arthritis.
Heart attacks, cancer, minor strokes, and fractures or joint replacements are conditions from which you are expected to make a normal recovery in around 3 months or less and do not typically require custodial care.
Listen to learn more about the coming storm of long-term care:
Who are the caregivers?
For most folks, the people they envision caring for them is family — e.g., a spouse, child, sibling, or other relative. This is frequently the reason stated when declining to invest in long-term care. However, the scope and scale of the work required when providing custodial care are underestimated; there is a significant physical and emotional toll to being the sole or primary source of care.
Couples may realize they won’t be able to care for one another when the time comes; in this case, the plan often is for children to do so. Around 50% of caregivers are adult children.
The time required to provide adequate care can be substantial — an average of 24 hours per week; over 20% of caregivers will spend 41+ hours per week providing care.
Parents may not realize just how great a demand this is placing on their children, who may in fact still be taking care of children of their own — members of the so-called “sandwich generation”. Additionally, we see a lot of adult children taking care of parents while having already retired themselves — not exactly the golden years of retirement they envisioned.
There is also the matter of the financial cost to adult-child caregivers. This not only includes the tangible expenses — buying the necessary supplies, equipment, etc. — but also the loss of income. It has been shown that work performance suffers when serving as a caregiver. For some, this could mean being passed up for greater and higher-paying workplace opportunities.
It is also true that with this much of a time commitment, caregivers are forced to choose between work and providing care, resulting in lost wages.
Finally, there is the issue of “elder orphans” — those who have no family or other caregiver available to care for them. For these individuals, securing long-term care insurance is of the utmost importance.
While not the most glamorous topic, long-term care insurance will likely be one of the best investments you’ll make for your retirement. The cost of custodial care is substantial, and most people do not have the savings to cover such an expense. This results in burning through any savings or receiving subpar care in a setting that you don’t like.
Those of you who have taken excellent care of yourselves are the most likely to need long-term care and for much longer. Why not invest in a future where you can live in comfort with the care you need?
Long-term care insurance is not one-size-fits-all either. Cardinal can help you find the best plan for your unique situation.