The good news: we’re living longer. The average life expectancy rate is 77.5 years (it was a mere 49.2 years at the turn of the twentieth century). The bad news: chronic disease is the leading cause of death and disability in the United States. It is therefore likely that you or your parents will have an illness or debility that necessitates long-term care.
THA Group works tirelessly to find practices that reduce health care costs while creating value-driven, outcome-producing, patient-centered care. That’s our commitment to you. Unfortunately we cannot shield you from long-term care financial burden. However, we can tell you how YOU can protect yourself with proactive planning. You’ve seen the data – the odds are that if you or your parent’s golden years are still ahead, so are the bulk of health care costs. Purchasing long-term care insurance after a certain age is therefore a low-risk investment. The chances are favorable that you will need significantly greater health care financial resources in the future.
Because the odds are good that people in our country will need long-term insurance, it is not inexpensive. Therefore, purchase it only in the age bracket where your health care needs risk becomes significant. You don’t need to run out at age forty and purchase it. If you’ve hit sixty, however, and retirement is no longer a pie in the sky dream but is close at hand, you need to plan for how you are going to finance the next, non-income generating, phase of your life.
If you are a Gen Xer, push your parents to get long-term care insurance, if they haven’t already. The Baby Boomer Generation is nearly double the size of Generation X. Baby Boomers need to be financially responsible for their health care needs so that they don’t bankrupt health care for the next generation. It has been said that the greater financial crisis facing Generation X isn’t how to finance their children’s college education; it is how to pay for their aging parents’ care.
An average annual premium for a sixty-year old is approximately $2,170. The younger a person is, the less expensive the premium, but obviously the longer the likely time to pay on it. Age sixty is a good insurance premium “sweet spot” as far as premium payment to insurance benefit ratio. According to the National Center for Health Statistics, the average person will need 4-6 years of long term care. In Georgia and South Carolina, the average daily rate of skilled nursing is $150. For five years of care, that’s over a 1/4 million dollars. Paying on a policy now while you are still generating an income will be much easier than trying to figure out how to finance expensive assisted care when you are living on a fixed amount.
If you need additional guidance with preparing for the best possible golden years, speak to a Geriatric Care Manager. These are health care professionals with specific certification related to eldercare issues such as financial planning, living arrangements, and a variety of senior psychosocial issues. Be sure to read our two previous blogs about Geriatric Care Managers and finding living arrangements for an aging parent.