The Continuum Of Long-Term Care

By Bill Monte, CLU, ChFC, CLTC, LTCP, RICP

Many people receive long-term care at their homes, community centers, or adult day care centers. Institutionalized living is not always necessary, and proper long-term care planning may allow one to remain at home longer than otherwise possible. For many, staying at home is the preferred choice when increased long-term care assistance is needed. But what happens when that’s no longer an option? What if more help is needed? The many options available for long-term care tend to fall on a continuum, and each level requires different resources, commitments, and plenty of research and decisions. Here is an overview of your long-term care options to guide you as you create your long-term care strategy. 

Long-Term Care Options

Though not everyone follows this continuum exactly, help for long-term care needs generally progresses along these lines: 

1. Assistance provided by friends and families
2. Home visits from healthcare aides
3. Adult day care centers
4. Assisted living
5. Nursing home
6. Hospice

It is important to distinguish between two types of care: skilled and custodial. Skilled care is for when intensive medical attention is needed, typically for less than 100 days, as it results from a short-term medical condition from which the patient is expected to recover. Both private insurance and Medicare may cover short-term skilled care needs when certain conditions are met.

Custodial care, also known as non-skilled care, is for patients with a chronic condition from which recovery is not expected. This care is mostly for help with activities of daily living (ADLs), rather than providing specific medical treatments. Most long-term care falls into the category of custodial care, as such care is expected to last longer than 100 days.

Health insurance and Medicare do not cover custodial care, as they are reserved for care relating to acute medical conditions with expected recovery. Custodial care must be funded by other means, such as personal savings, Medicaid, or long-term care insurance. Let’s look at some of the levels on the continuum so you can become familiar with the type of aid associated with each option. 

Home Care

The starting point for long-term care is usually receiving some assistance at home, especially with proper planning to make funding for this possible. Home care is typically provided by unpaid family members, though care from paid providers such as home health aides is also a common and viable approach. Many businesses offer home care services, making the option to stay at home more available today than in the past. Even with family members available to provide care, enlisting paid support can reduce family stress and help family members focus more on social interactions and less on specific care needs.

The “aging in place” movement has become popular from growing recognition that it will ultimately be cheaper for society if individuals can stay at home longer rather than live in an institution. Several resources are available to support aging in place. Homes can be retrofitted in many ways to allow for better support and increased safety during this time when it may become more difficult to climb stairs or get into a bathtub. Community services are available that provide meals, social interaction, and transportation to doctor appointments.

Adult Day Care, Community Centers, And Other Respite Support

When unpaid family members serve as primary long-term care providers, services such as adult day care centers can give caregivers the freedom to go to work or otherwise take a break from the ongoing demands of this task. Visits to such centers can also benefit the patient, as regular social interaction can help sustain the patient’s ability to live at home longer, thus delaying the transition to a more institutionalized living environment. Such services are becoming more popular to help facilitate the growing demands of the aging population.

Assisted Living And Continuing Care Retirement Communities (CCRCs)

Assisted living facilities and continuing care retirement communities (CCRCs) often provide a range of services that allow for any desired level of independence, with the option to increase care as needed over time. They involve formal commitments and contracts to move into a new facility and receive certain levels of care over time. Individual living spaces are generally provided, but a variety of community spaces and social opportunities are available for residents who wish to stay active.

Conditions vary widely among different assisted living facilities, but they usually provide meals, housekeeping, transportation, daily assistance for ADLs, and recreational and social activities. Many assisted living facilities are equipped to provide varying degrees of care up to the point that one must transition into full-time nursing care. CCRCs, on the other hand, generally provide a wider array of services ranging from purely independent living up to and including nursing home care.

In most cases, one must pay out of pocket to live at an assisted living facility, especially if the move is made before the requirements to trigger benefits from long-term care insurance have been met. Costs may involve an up-front fee as well as ongoing monthly fees. 

When considering a move to an assisted living facility, be sure to ask what these monthly fees cover and how they may change in the future. In terms of non-financial questions, it’s important to inquire about the following: 

• Who assesses what care is needed and how needs may change over time?
• What limits are placed on the amount of care that can be received?
• What is the process for determining when conditions have worsened to the point that care can no longer be provided at the facility?
• What happens if the resident runs out of funds to pay the ongoing fees?
• How are grievances handled concerning issues about joining meals, taking medication, moving around inside or outside the community, and so on?
• What is the housekeeping schedule, and how is assistance for various daily living activities scheduled?
• Is the staff properly trained, and what qualifications do they hold?
• Does the facility have resources to provide sufficient support to residents who may show initial signs of dementia or confusion about their circumstances?

Most CCRCs also require an entrance fee and monthly payments. These entrance fees can be high, some up to $400,000. The fees can be structured as all-inclusive or paid on a fee-for-service basis as needed with a smaller up-front fee. The initial contract should state the nature of housing and long-term care services to be provided for life.

An important distinction for CCRCs is that future nursing home care services are included as part of the initial package, which reduces the need to find a new facility in the future if and when nursing care is needed. Some CCRCs require the purchase of a group long-term care insurance contract as a condition for entering the facility. 

If a move to a CCRC is on the horizon, consider asking these questions: 

• What is the entrance fee, and is it refundable?
• What do the monthly fees cover?
• What are the other expenses to be expected over time, in addition to monthly fees?
• What is the nature of accommodations, and do these accommodations change if one member in a couple transitions to a nursing home?
• Can monthly fees increase and under what circumstances?
• What types of long-term care services are provided, and what is the cost for additional services?
• Does the facility require the purchase of long-term care insurance?

With both types of facilities, the user is asked to trust that the company will remain in business to provide the contracted services over the long term. This is a reasonable concern, so it is acceptable and important to vet the financial strength of the facility to help determine if it is on a sustainable trajectory. Having a well-qualified elder care attorney review the stipulations in any contract is crucial.

Nursing Homes

When most people think of long-term care, they think of nursing homes, which are near the end of the spectrum of care choices. As I mentioned earlier, more options are available today for home care and assisted living, which will help many avoid ever having to use the nursing home option. Nursing homes serve as a last resort for those requiring extensive long-term and medical care services in the final years of life. The quality and costs of nursing homes vary, and those who can pay through means other than Medicaid may find they can receive a higher quality of service.

Do You Have A Plan For Your Continuum Of Care?

Planning for your future long-term care cannot be ignored. It’s the one event that could cripple even the most solidly built retirement income plan. If you haven’t yet focused on this important planning issue, let’s connect and have a serious discussion about it. Contact me at (585) 721-2385 or [email protected] to schedule a free consultation.  

About Bill

Bill Monte is the president of The Estate, Legacy & Long-Term Care Planning Center of Western NY, with 33 years of experience in the financial industry. Bill is the leading legacy, tax-efficient wealth transfer and long-term care planning expert in the area and has helped hundreds of Rochester area residents implement personalized plans that help solidify their legacy and long-term care planning. As an independent financial professional, Bill prides himself on putting his clients first and always working in their best interest, designing plans that are tailored to each person’s specific financial situation and planning objectives. Bill holds multiple professional designations, including Chartered Life Underwriter® (CLU®), Chartered Financial Consultant® (ChFC®), Certification for Long-Term Care (CLTC®), Long-Term Care Professional (LTCP), and Retirement Income Certified Professional (RICP®). To learn more about Bill, connect with him on LinkedIn or schedule a free consultation by contacting him at (585) 721-2385 or [email protected]. You can also register for his recent webinar “How Your Kids Can Inherit Your IRA 100% Tax-Free” here.