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By Tiffany Hill
Jody Mishan feels paralyzed when it comes to financial planning for her long-term-care. “I don’t know what I’m going to do, to be honest,” says the 58-year-old. “I know something could happen to me where I might need a lot of care and it’s really serious.”
Mishan is not alone. According to Terri Byers, the state Department of Health’s long-term-care project manager, Hawai‘i has the highest life expectancy rates in the country, combined with an aging population that is growing at two and a half times the average national rate. And many of the people are in a classic head-in-the-sand situation.
“No one wants to think about a time when they might need long-term-care, yet about 70 percent of people over the age of 65 require services,” says Byers. “Planning ahead provides great independence should you need care.”
We all like to think we will be relatively healthy for our entire lives, at least enough to take care of ourselves. But smooth skin, agile limbs and a strong immune system won’t last forever. Even if you’re young, it’s still a good idea to peer into the future and make a financial plan for your long-term-care needs.
“I think people need to start thinking about retirement security, health and long-term-care as soon as they start working,” says Barbara Stanton, state director of AARP. “I know it sounds really early, but as soon as you have income, pay yourself first. You owe it to yourself to make sure you have the best life possible, to make sure you have real choices.”
Saving money is a no-brainer move, but for a lot of us, it’s easier said than done. Stanton recommends meeting with a trusted and reputable financial advisor to go over your assets and organize how planning for long-term healthcare fits into financial goals that suit you and your household.
For those on fixed incomes, such as employee pensions and Social Security, it is even more essential to save and to make the most of what you have in terms of establishing a long-term-care plan.
“The most important thing to do is save, especially if you’ll be on a fixed income after you retire. Costs will go up but your pension won’t,” says Kathryn Braun, director of the Center on Aging Research and Education at the University of Hawai‘i and a public health professor.
If you’re still working, continue to invest in your company’s retirement policies, including 401(k), traditional IRA and Roth IRA to build up your nest egg for long-term-care.
In addition, know the details of your current health insurance plan, including dental and vision, and what your policy does and does not cover. “Many mistakenly believe that Medicare, health insurance or supplemental health policies will cover their long-term-care needs,” says Byers. These programs and policies often omit long-term-care coverage.
Aside from having robust health insurance coverage, the next best long-term-care planning option is, of course, purchasing a long-term-care insurance policy. Long-term-care insurance isn’t a one-size-fits-all kind of deal and plans can vary extensively, from the types and duration of coverage to the premiums.
“Long-term-care insurance [policies] are varied, you can get a bicycle or you can get a Cadillac,” says Pamela Cunningham, the program director of Sage PLUS, a federally funded state program, whose 65 volunteers counsel hotline callers about long-term-care insurance policies, as well as Medicare and Medicaid.