The subject of longterm care is plagued with costly misperceptions. With longevity increasing, costs for nursing care, assisting living, and personal care represent the single greatest threat to hard-earned savings as people age.
Genworth’s 2016 Cost of Care Survey reports a national average cost for care in a nursing home at $82,125 per year and in a recent article, The Motley Fool, multimedia financial- services company that provides financial information and insight, took on some of the most common myths surrounding longterm care. Here are two of the most common:
I won’t need it. According to the US Department Health and Human Services, 70% of people turning 65 this year will use long-term care. Of those using long-term care, 50% will need it for a year or longer. For that group, the average total length of stay is 3.9 years.
My insurance will cover it. Long-term care insurance is specifically designed to cover these expenses, though such policies often include initial elimination periods and maximums. In addition, many companies have exited the long-term care insurance business in recent years, and the majority of those remaining passed significant increases in premiums onto clients. Medicare and Medigap insurance may cover a limited number of days of skilled nursing care, provided certain conditions are met, but long-term nursing care stays, personal care and assisted living are not covered. Medicaid, a government-provided public assistance program, covers long-term stays in nursing care. Eligibility varies from state to state, but individuals must “spend down” until they have little or no assets before they can qualify, often an emotionally challenging process for those who have spent decades building their nest eggs to ensure self-sufficiency.
Through its Lifecare program, Willow Valley Communities offers those 55 and older the opportunity to practice good stewardship with their savings and to create a plan for the future. With Lifecare, residents of Willow Valley Communities—the only exclusively Lifecare community in Lancaster County—are provided skilled nursing, assisted living, and memory support accommodations and care for no increase in the monthly service fee. Residents are simply required to maintain Medicare and Medicare Supplemental Insurance or the equivalent throughout their residency. In contrast, a move to the nursing care environment in a “fee-for-service” community can result in increases of 500% or more in monthly fees. And if the stay is temporary, residents are often charged for their independent living residence as well as any care days not covered by Medicare and Medicare Supplemental Insurance. Any significant stay accelerates a depletion of assets that eventually leads to a need for assistance.
The lovely residences and environments, innovative programming, and warm and friendly connections found at Willow Valley Communities would be enough to make it one of the best values around. For many, the additional aspect of Lifecare is the key factor influencing their selection of a senior living community. Seniors looking for the right next step owe it to themselves and their families to explore and understand how Lifecare is a choice that provides protection against one of the biggest potential obstacles to a secure financial future.
By Kim Daly Nobbs, Chief Marketing Officer for Willow Valley Communities
A Significant Benefit at Tax Time. Because the Lifecare Agreement includes a long-term care insurance component, residents of Willow Valley Communities are entitled to use a significant portion of the original entrance fee paid and ongoing monthly service fees paid as medical expense deductions. For the year ending December 31, 2015, that amount was $37,300 – $39,000 of the Entrance Fee, based on the number of people covered by the Agreement. The portion of Monthly Service Fees designated as a medical expense ranged from $1,330 to $2,485 monthly or $15,960 to $29,820 for the year.
Most residents find that they pay substantially less in federal income taxes. Many are pleasantly surprised when they move in to Willow Valley to find that they can stop sending a check with their income tax returns and start receiving refunds.