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Avoiding long-term care dilemma

There are many financial uncertainties in the future but there is one thing that most people know will happen. They will become old and ultimately need health care or assistance with performing their activities of daily living. While polls show that 64 percent of adults do not have a will, individuals should engage in long-term planning to finance their medical expenses and other future necessities.

Most individuals want to stay at their home or in a residence as long as possible. This contingency can include the possibility of an unpaid family member or friend assisting or moving in with relatives. Other options require money including visits by a nurse or home health care aide. Adult-day-care services can also assist during the day.

The average stay in a health care facility is 386 days. The average yearly cost of for a nursing home is $96,725 and for a semi-private room is $87,600 in Florida, according to the Florida Health Care Association. The length of these stays and related expenses are rising as people live longer.

These costs reveal that long-term insurance or savings may be essential for long-term care. The costs of this care may rapidly deplete savings.

Medicare does not pay for all long-term expenses. Medicaid will pay for most long-term services. However, a recipient must have income and assets that do not exceed a specified level.

Long-term care insurance may meet these needs. However, this option faces uncertainty and may not help many people.

Insurance companies have struggled with pricing insurance that is profitable to the insurers, keeps the same level of benefits and remains affordable to the insured. Many major insurance companies have filed requests for premium increases of up to 50 percent this year after receiving significant increases in earlier years.

Other planning should also address end-of-life matters. A person may not have the capacity to decide health and other matters which can lower the risk of prolonging painful and extended illnesses.

An attorney can help provide financial and other options to address these matters. An experienced attorney can also help draft a power of attorney and other estate documents that comply with Michigan law and meet these needs.

Source: Investopedia, "What will your long-term care look like?," By Bob Rall, CFP, Dec. 8, 2017

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