Here is another in our series of "greatest hits". This article is from 2006 but is very timely even today.
A large majority of the American public still believes thatthe government will provide long term care when needed. It is thismisconception that most likely prevents people from planning care forthemselves. In fact, a recent study revealed that many people believe they cangive away assets prior to the need for long term care and qualify for Medicaid.The study supports the premise that this knowledge prevents people fromconsidering buying long term care insurance as a way to fund the cost of futurecare.
Indeed it may be possible to use the system and allowMedicaid to cover care but at what cost? Why would anyone want to plan to spendhis remaining years in a nursing home--which is the preferred livingarrangement of Medicaid. And why go through the expense and effort of trying tomanipulate the system to get welfare care, when a little preplanning at anearlier age would be a better option?
In our practice we hear frequent objection to long term careplanning from people who think Medicare or the Veterans Administration willtake care of them. These people simply don't understand the limitations ofgovernment systems. Below are quotes taken from individuals who, over theyears, have voiced have these misconceptions.
"Uncle Jim got along just fine with the governmentpaying his care"
"I can give away my assets and have the government payfor it"
"We have a trust and all of our assets will go to ourfamily so the government will pay for our care"
"I'm not interested in home care or assisted living,just stick me in a nursing home and Medicaid will pay the bill"
"Long term care insurance is too expensive"
Government could be more involved in providing care but ourantiquated system of delivery prevents this from happening. The National Aging Network, agovernment-sponsored program, is in the best position to help people receivelong-term care in their homes. And studies have shown that the cost ofproviding this kind of care is significantly less than the cost of providingnursing home care through government programs.
Unfortunately, for every dollar that supports a personthrough the aging network the government spends about $270 supporting a personin a nursing home. Because it has inadequate funding, the aging network mustconfine its valuable services to people who have little income or for socialreasons are disadvantaged. Moderate and middle income Americans can receivesome services from the network but are mostly excluded or must pay their fairshare of the cost.
We believe the public's misunderstanding of Government longterm care programs is an impediment to proper long term care planning. Whenpeople understand the limitations of relying on government programs they aremost likely to be more motivated to plan for the future by making provisions inadvance and providing advance funding to pay for care. Prior planning also allowspeople to have a choice in their care setting and in the type of services theyreceive.
For more information on this and otherestate planning subjects, contact IdahoEstate Planning and schedule aconsultation. Remember,good planning is no accident.