According to the U.S. Department of Health and Human Services (HHS), approximately 70 percent of people turning age 65 will require long term care at some point in their lives. For individuals who can no longer perform Activities of Daily Living (ADLs) — everyday activities such as eating, bathing, and dressing — by themselves, having access to a range of robust services and support systems is essential. Other common long term care services provide assistance with Instrumental Activities of Daily Living (IADLs), including:

• Housework,
• Managing money,
• Taking medication,
• Preparing and cleaning up after meals,
• Shopping for groceries or clothes,
• Using the telephone or other communication devices,
• Caring for pets,
• Responding to emergency alerts (i.e., fire alarms),
• ...and more.

In other words, long term care readiness can mean all the difference in the world when it comes to quality of life — and in order to prepare for all possibilities, it’s important that you adjust your retirement plans and discuss your wishes with family members long before the need for long term care ever arises.

Okay, so the need for long term care may be a very real possibility in the future — but for now, you’re still a bit too young to be thinking about it, right? Wrong. While it may primarily be a consideration for older individuals, the truth is, the need for long term care can arise from various conditions besides aging. These include:

• Injury,
• Diseases,
• Developmental disabilities,
• Disabling chronic conditions, and
• Cognitive impairment.

In other words, anyone might need long term care at any point their lives; in fact, according to a 2007 study, nearly 42 percent of long term care is provided to people under age 65. The truth is, car accidents, illnesses, and other debilitating events can happen to anyone — and while we can’t prevent life from taking its course, we can make sure that we’re prepared for the worst if and when it happens.

Kids are always going to love their parents, but let’s face it: in today’s hectic world, adult children are further away from their parents and living increasingly busy lives of their own. Providing long term care for a family member, however, is essentially a full-time job: a commitment that demands a significant amount of time and energy, often from multiple members of the family. And even if your family does manage to carve out the requisite caregiving time, there are still the cost considerations — providing long term care often means lost wages, pension benefits, and Social Security. Thus, while depending on family might be a viable option for you, it may be apt to consider alternative forms of assistance.

“Well, can’t I just depend on Medicare to cover my long term care costs?” you might be asking. It’s true: some public programs cover a portion of costs under certain circumstances. However, every program has specific rules regarding coverage, qualification, time limitations, and costs. Medicare, for instance, only covers medically necessary care and focuses on medical acute care, such as physician visits, drugs, and hospital stays. It also centers on short-term services for conditions that are expected to improve — for example, physical therapy to help regain function after a fall or stroke.

What it doesn’t cover, however, is the bulk of long term care services (i.e., help with bathing, custodial care). Medicare only pays for the first 100 days (100% coverage for the first 20 days and then 80% up to 100 days) of skilled care in a nursing facility, hospice care, or home health care if you meet the following conditions:

• You’ve had a recent prior hospital stay of at least 3 days
• You’re admitted to a Medicare-certified nursing facility within 30 days of your prior hospital stay
• You need skilled care (e.g., skilled nursing services, physical therapy)

In addition, when a physician deems them necessary, Medicare will cover the following services for a limited time:

• Part-time or intermittent skilled nursing care
• Physical therapy, occupational therapy, and speech-language pathology
• Medical social services to help cope with the social, psychological, cultural, and medical issues resulting from illness
• Medical supplies and durable medical equipment (e.g., wheelchairs, hospital beds, oxygen, walkers)

Finally, Medicare covers hospice care if you have a terminal illness and are not expected to live more than 6 months. In other words, successful long term care planning requires comprehensive knowledge or what is and isn’t covered — for more information, visit www.medicare.gov.

So what other programs have you covered? Some might be inclined to turn toward Medicaid; Once your state determines that you are eligible for Medicaid, it will make an additional determination of whether you qualify for long term care services; however, eligibility rules and covered services vary by state, and personal income prevents many individuals from qualifying for Medicaid in the first place.

There’s also health insurance — but many forms of insurance, such as FEHB, TRICARE, and TRICARE for Life, follow the same general rules as Medicare with regard to long term care services: coverage are generally limited to skilled, short-term, and medically necessary care:

• Stay in a skilled nursing facility is limited to 100 days and must follow a recent hospitalization for the same condition.
• Coverage of home care only extends to medically necessary skilled care.
• Most forms of private insurance don’t cover custodial or personal care services.

I’m a responsible saver — can’t I just save enough over time to protect myself down the road? It’s a thought that crosses many of our minds, but experts say it can have damaging consequences down the road.

While personal savings may go some way toward covering long term care costs, you should consider some of the current national averages for long term care services before throwing all your eggs in one basket:

• $21 per hour for a home health aide
• $79 per day for care in an adult day care center
• $3,922 per month for care in an assisted living facility
• $251 per day for a semiprivate room in a nursing home
• $282 per day for a private room in a nursing home

It’s true that home care is generally more affordable than nursing home care. However, the national average for the cost of a 6-hour visit by a home health aide is $126. That amounts to $32,760 per year for a home health aide visiting 6 hours per day, 5 days a week. It’s possible your personal savings can cover those kind of costs, but do you really want to risk it? By considering other options, including long term care insurance, you can better position yourself for stable care and services that will last you through the ups and downs of your financial journey.

Before rushing headlong into a long term care insurance program, it’s good to take a step back and survey your options. At the end of the day, don’t lose track of what’s essential: the right long term care insurance plan should cover you in a variety of settings for both personal and custodial services.Here are some tips:

• Don’t buy more insurance than you think you need — personal savings and family may be able to supplement your care needs.
• Don’t buy too little insurance — while you can usually decrease coverage, it’s harder to increase coverage, especially if your health has declined.
• Research and consider different policies and options before making a decision.
• If you choose a policy that only pays for stay in a facility, plan for other expenses (e.g., supplies, medications, linens, services, etc.) that your policy may not cover.
• It costs less to buy coverage when you’re younger. Yes, millennials, we’re looking at you!
• Make sure you can afford the insurance over time — the market has been seeing rate increases, so plan for these as you determine an accessible premium.
• Don’t feel pressured into making a decision!

At the same time, sometimes it’s not in one’s best interest to buy long term care insurance. For example, you should really only consider long term care insurance if you have assets totaling $70,000 or more (not including your home). Likewise, buying long term care may not make sense until you can afford the premiums, particularly if the premiums amount to 7% or more of your current income. And if the Social Security of Supplemental Security Income (SSI) is your main source of income or you’re simply struggling to live paycheck-to-paycheck, buying long term care insurance can wait until you’ve established some financially independence down the road.