Having “The Talk” About Long Term Care

Few people are fully comfortable thinking about getting older.  Whether we are contemplating ourselves getting older or our loved ones, most would prefer not to think about the aging process and the various physical and cognitive deteriorations that tend to accompany that process.  As life expectancy has increased over time, the portion of people who will require long term care of some sort at some point in their lives has steadily increased as well.  According to a United States Department of Health and Human Services website, 70% of people turning age 65 can expect to use some form of long-term care during their lives.  See http://longtermcare.gov/the-basics/who-needs-care/

That long term care will not come without some staggering costs.  In April 2014, the State of Connecticut Office of Policy and Management issued the “Cost of Long-Term Care in Connecticut” (“Report”) which provided the average costs for different types of care in Connecticut as of September 2013. 

According to the Report, the average daily cost for home care provided by a live-in companion was $211 per day.  For 24-hour care that equates to about $6,425 per month.  Even in the short term those costs are significant.  Yet many individuals will require some degree of assistance for many years.  Nursing home care is even more expensive.  The daily cost for residency in a semi-private room in a skilled nursing facility was $390 per day, which works out to about $11,870 per month.  Furthermore, as the Report clarifies, those averages are merely that - the actual costs can be even higher since the published average daily rates do not include things for which facilities may charge extra such as physical therapy, cable television service, linen service, and hair care. And with the lag time in gathering and publishing data, the Report reflects figures that are now a year and a half old.  The Report states that the average annual inflation rate for care cost increases between 1988 and 2013 was 5.5%.  A link to the Report in its entirety can be found at:

 http://www.ct.gov/opm/lib/opm/hhs/ltc/cost_of_ltc_in_ct_-_2014.pdf

These long term care costs can be enough to exhaust the net worth of most individuals or couples.  There are very few families with sufficient net worth to handle those costs long-term without planning and assistance of some sort.  The bottom line is, sooner or later it is crucial for everyone to have a frank, thoughtful discussion about long term care issues and planning with spouses and other loved ones.  But being willing to have “The Talk,” or even to broach the subject with those unwilling to think about it, can be difficult.  Recently the insurance company Genworth produced a short video where a number of big name celebrities shared their own perspectives based on personal experiences:

Clearly Genworth’s aim in producing that video was to try to spur folks to engage in long term care planning that includes the purchase of their products.  We believe that comprehensive planning using the legal tools available combined with an integrated financial plan will produce the best results for our clients. In many cases the purchase of long term care insurance or related products would be a wise part of the planning for many clients. However, there is no single panacea; there is no single legal document or insurance product that is right for every client.  We think it is worthwhile for everyone to watch the Genworth video for purposes of considering how to have “The Talk” with their own loved ones, even though it may be incredibly uncomfortable.  The personal anecdotes and observations shared in that video do tend to resonate with our own insecurities and anxieties about the topics presented.

Please call us at 860-769-6938 if you have any questions about the issues presented above or if you care to discuss any other planning issues with us.

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