In surveys, many older people say they are more afraid of ending up needing care for a long period of time than anything else in retirement, including death. The fear applies to both physical and mental infirmity. With physical infirmity, the main worries are loss of ability to do the things one likes or needs to do and, as a result, being dependent on others (especially family, whether as a financial or a caregiving burden, or both). With mental infirmity, the same issues exist, but are compounded by a visceral fear of losing one's mind or memory, perhaps even to the point of not really being oneself any more.
These fears are perfectly legitimate, and medical science is not likely to help. In fact, medical science is making the problem worse.
The good news is that most of us are living longer, sometimes a lot longer, on account of improvements in hygiene, diet, emphasis on reducing smoking and other addictive behaviors, and medical advances.
The bad news, at least as far as the need for long-term care goes, is that we are dying more slowly. It's becoming less common for people to die in late middle age from heart attacks or strokes, because we are better at preventing them, and because when they do happen, someone calls 911 from a cell phone and the EMTs are there is a matter of minutes with life-saving technology, which only gets better once you get to the hospital.
Instead, people nowadays tend to live healthier and longer – until, eventually, they do develop a potentially fatal disease, with powerful medicines and other techniques keeping them alive indefinitely in a slow, possibly painful, decline. Most people say, at least in the abstract, that they prefer a quick death to one that is long and dragged out, but fewer and fewer of them get it.
So the likelihood that you will die from some lingering illness, or that your mind gives out before your body does, has increased significantly. Nor is there any reason to expect this trend to reverse itself soon.
The upshot: it may take a lot longer before you need long-term care, but you are more likely to need it than your parents were.
Even so, a majority of people do not spend very long periods in assisted living facilities or nursing homes. Although many cannot take care of themselves in their last months of life, this often happens after a hospitalization, and the patient may spend a few days, weeks, or months receiving professional care. Medicare, furthermore, covers the first 100 days of nursing care following a hospitalization, as well as hospice care.
In addition, most people can afford to pay for at least a few months of care out of pocket – especially if they are in their final illness, and no longer need to worry about making their assets last for years into the future.
There are two financial scenarios that are more unpleasant than this, however, and they are not at all uncommon.
One is that the disability, whether mental or physical or both, goes on for an extended period of time, perhaps for several years. Many diseases have this pattern. Parkinson’s disease and ALS (Lou Gehrig’s disease) come quickly to mind. Alzheimer’s and other forms of dementia also can persist for years, if the body is otherwise reasonably healthy. The average person does not have the financial resources to pay for care for many years.
Fortunately, if you do run out of assets, Medicaid (as opposed to Medicare) will pay for nursing care (though not assisted living). You may not have your choice of facilities, and if you had a private room, you can kiss it good-bye. But you won’t be out on the street. And if you are not married and have no other dependents, that really might be good enough. After all, you won’t be living the high life anyway.
But that brings up the second risky scenario: you do have a spouse or other dependent, and your care in assisted living or nursing care impoverishes not only you, but your family. Your spouse would not be required to spend assets that were in her or his own name, but if the house and other assets are jointly owned, they all have to be spent down before you can qualify for Medicaid. Then your spouse or other dependent is stuck trying to squeak by on whatever Social Security or other ongoing income arrives on a monthly basis in her or his name, if any.
And the spouse could have years, maybe decades, to live. I know one woman who has had to live this way for about thirty years, after her husband broke the bank spending 11 years in a nursing home before dying there, while still in late middle age. Fortunately, she has children who have been kind to her.
So what’s the answer? There is no answer, if you are an average middle class family. You can buy long-term care insurance, unless you are seriously unhealthy, but if you are already in your fifties or sixties or older, it’s pretty expensive, and “pretty” expensive becomes “very" expensive if you want to insure against the worst case scenario. You can go broke paying premiums, too – or if not go broke, have to cut back your lifestyle more than you might be willing to do.
Still, long-term care insurance can help, and if you can afford some level of coverage, it might be a decent choice. It’s a complicated decision, though, and in a future posting, we can examine this option more carefully together.
Chuck Yanikoski is a retirement adviser who lives and works in Harvard. For more about him, visit http://www.ChuckYRetirement.com.