The single biggest threat to your retirement is not tax, bad investments or probate. It is high long-term care costs. However, what exactly is long-term care? Clearly, long term for a twenty year old is different than a ninety year old. A ninety year old likely considers six months of life remaining as optimistic.
We are talking about money now rather than life, although many people consider the two related. Medicare has a specific definition of long-term care. Remember, Medicare is a national health insurance program. It is not that different than the health insurance plan you may have had at your work or purchased yourself when you were younger.
Medicare considers anything skilled nursing care over one hundred days as long term. This is important because Medicare does not pay for long term care. Thus, even if you met the “skilled nursing” requirement of Medicare, financing is only available for a limited time and even then Medicare does not pay for 100% of the cost of skilled nursing, just a portion.
Another point is that Medicare only pays for “skilled nursing.” Most people do not and may never meet Medicare’s limited definition of long-term care.
For the rest of us, long-term means care for the rest of our lives, however long that might be. It also means anything but skilled nursing. A Skilled Nursing Facility is just another way of saying “nursing home”. The last place any of us want to be is a nursing home.
Generally: long-term care occurs in one of the following environments: 1) home care or home health; 2) independent living communities and assisted living facilities; 3) adult family homes; 4) memory care units and 5) nursing homes. There are variations. One twist is a Continuing Care Retirement Community which includes independent and assisted living, memory care units and skilled nursing. One could literally move into a CCRC at age 60, relatively young and healthy and over time move to different levels of care without leaving the same campus.
Hospice is a type of care for terminally ill patients. Hospice can be provided in a nursing home or hospital or a at home for those would rather spend their last days of life in their own homes.
Adult Day Care is a variation in which a person lives at home but spends the day at a community in professionally staffed, group setting.