To our readers: Two events are converging this month. National Long-term Care Awareness Month begins Nov. 1, and on Nov. 4, the United States elects a new president.
These events are not unconnected.

According to a recent poll conducted by Genworth Financial, Inc., a Fortune 500 global insurance company, 84 percent of the Baby Boomers surveyed said the presidential candidates’ positions on long-term care issues and funding will be an important factor in determining how they vote on Nov. 4. The national survey was conducted in mid-September; 800 registered voters between the ages of 45 and 64 took part.

Not unsurprisingly, given the fact that women live longer than men, more women than men (88 percent versus 79 percent) said they considered the issue of long-term care at least somewhat important in determining how they will vote. And, voters with lower household incomes found long-term care policy and funding issues more important in their election decisions than those with higher incomes.

Long-term care issues were not so important 50 years ago, when Americans died at younger ages, and incapacitated persons were cared for far differently than today. In those days, we didn’t see nursing homes and assisted living facilities on every corner. When a person needed care for a chronic condition, family members generally provided it at home. But times have changed, and without proper planning, long-term care can decimate an estate and potentially leave the “well spouse” destitute, especially given today’s shaky economy and the significant losses of wealth.

First, a definition: Long-term care planning is the process of preparing for the medical, nonmedical, custodial, and housing needs of chronically ill, disabled, or incapacitated individuals who can’t function independently at home, but whose level of care requirement is sub-acute – that is, not requiring hospitalization.

Given the fact that the U.S. Department of Health and Human Services says that 70 percent of Americans who reach their 65th birthday will have to pay for some kind of long-term care services during their lifetime, we recommend that our readers begin early to look at long-term care options.

To be successful, a long-term care plan must begin as early as possible and must address the potential level of care required, where that care can best be provided, who should provide that care, how the care should be funded, and how to preserve assets for future needs.

Generally, funding for long-term care (at a nursing home, a residential care/assisted living facility, or at home) comes from just three sources: private pay (from assets and income), long-term care insurance, and Medicaid. While Medicare, Medicare Supplement (Medigap) insurance, and Veterans Administration Benefits may provide some assistance, these sources of coverage are generally limited and short term.

The most obvious disadvantage to private pay is that most families can’t afford the $5,000 to $8,000 per month to maintain someone in a nursing home. For an assisted living facility, depending on where you live, it can cost between $2,500 and $4,500 monthly. While Medicaid doesn’t cover assisted living expenses, most long-term care insurance policies do, depending on the policy language.

Long-term care insurance, a comparatively new insurance product, works in a manner similar to life insurance. While comparatively few Americans (an estimated 8 million) have purchased long-term care insurance, this product is gaining in popularity. The younger you are, the lower the premium; you can lower the premium by not purchasing certain policy options you may not need. This product does have its disadvantages, however: only people in relatively good health can quality. And while it is much less expensive than a nursing home if you purchase early enough, it is not cheap. If the cost is difficult to afford, it may be a good idea to speak to adult children and ask them to help fund the premium. Otherwise, should you need long-term care, your assets will probably be liquidated and your estate lessened or depleted.

Medicaid will pay the full cost of nursing home care, including the cost of medications and doctors, so long as an individual is eligible for the program. While the Medicaid recipient’s estate may have to repay some of the Medicaid benefits received depending on the assets after death, the repayment will be at a daily rate lower than private-pay care. But there are disadvantages: it is a difficult and time-consuming process to apply for, and stay qualified for, Medicaid; most people will have to spend or divest themselves of most of their assets before they are eligible for Medicaid; it may be difficult to get into a nursing home with Medicaid as your source of pay; the facilities accepting Medicaid may be limited, as may the services for which Medicaid pays; Medicaid recipients will not have private rooms, and will have to meet the minimum level of care necessary under government requirements.

Especially in today’s uncertain economic times, we urge our readers to become educated about long-term care issues.

Taking the Next Step: To see the Genworth survey mentioned above and other important websites on planning visit http://www.nextsteps.net and click on “useful links”.