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Wealth & Well-Being

How Does COVID-19 Affect Your Planning For Long Term Care

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The destructive sweep of the COVID-19 virus which is disrupting our lifestyle and daily lives is significantly impacting those in the throes of a long term care event. They are especially vulnerable. But that is just the short term. 

If you fortunately still have your health and can only contemplate having a major health change down the road, will you be impacted? The answer is YES!

I recently completed a White Paper that addresses the impact of COVID-19 on long term care planning. To obtain this information, I surveyed numerous top people in the  industry - those with insider information. The paper is an overview of what they shared. (A link to the Executive Summary is provided at the end of this article.)

Here are four important facts that will impact your planning.

Fact 1 - Nursing Homes. The impact on the nursing home industry has been catastrophic! With occupancy rates plummeting, this industry is in deep financial trouble. 

  • Two-thirds of nursing homes operators say they won’t make it another year given current operating pace due to increased operating costs. 
  • 90% of nursing homes are currently operating at a loss or less than 3% profit margin.
  • 65% are currently operating at a loss.

At the same time, revenues are taking a beating. Facilities are suffering from the loss of lucrative post-acute rehabilitation and other care for patients recovering from surgery, strokes and the like. Potential residents are reluctant to move in.

Fact 2 - Assisted Living. Occupancy rates for assisted living facilities have significantly declined due to COVID.

  • Half of assisted living facilities are operating at a loss.
  • 66% of assisted living providers said they won’t be able to sustain operations another year at the current pace of increased costs and revenue loss.
  • These facilities are facing increased costs in personal protection equipment (PPE) expenses, staff pay, and cleaning supplies.
  • Assisted living facilities - unlike nursing homes - have not received any direct federal funding.

Fact 3 - Home Health Care. Americans want to stay at home and age in place. Even before COVID-19, claims data shows that most care is already received at home. The pandemic is definitely accelerating the trend to age in place. Expect this trend to continue to accelerate as a result of the COVID-19 impact on nursing homes and assisted living facilities.

A survey of family caregivers showed these results:

  • 65% said COVID-19 has completely changed their opinions about the best way to care for older adults.
  • 68% said they don’t agree that quality care can be provided in assisted living and other congregate care settings.
  • 78% are concerned their loved one will contract COVID-19 in a facility.
  • Looking to a time after the pandemic, two-thirds of family caregiver respondents said they plan to use in-home care rather than facility-based care.

Fact 4 - Caregiving Burden On The Family. With most of the care shifting to home, this increases the burden on the family for caregiving. 

The Good News - If you have a long term policy, you have a plan in place that will go a long way in providing protection. If you have not done your long term care planning yet, this may be the time todiscuss this protection with your NorthStar Wealth Advisor.

Here is a personal perspective - I am a daughter whose mother needed long term care. 

It’s one thing to have intellectual knowledge about long term care. It’s another challenge totally to be the one responsible for making sure that your loved one has the best care possible. It was a huge reality check! 

Thank goodness Mom had long term care insurance. She died last March at age 99. During the last eight years of her life, she had four nursing home stays and months and months of home care. 

Her policy paid for most of her care. We never had to liquidate any assets. And I could supervise the care rather than having to provide hands-on care myself. Plus, she lived 1000 miles away until the last year of her life, when she finally agreed to move near me. 

Why am I including my personal information? 

The Wall Street Journal, in a recent article, printed this: “The pandemic is reshaping the way Americans care for their elderly, prompting family decisions to avoid nursing homes and keep loved ones in their own homes for rehabilitation and other care.” 

Yes, I agree - we all want to stay at home. But who will provide the care? Perhaps the child - usually a daughter - works full time or has young children or other obligations. Even without other responsibilities, the stress of being a caregiver is well documented. And if we hire somebody to provide the care, how will we pay for it? 

That’s why long term care protection is so important - it provides the income stream to pay the thousands of dollars needed. Thank goodness my mother had this insurance. 

One of the lessons from COVID-19 is that we all need to discuss with our families our plan for when we need help. And long term care insurance should be on that list. 

Click Here for the Executive Summary.Screen Shot 2021 03 01 at 11.29.11 AM

A nationally recognized Long Term Care (LTC) expert, Margie has worked as an agent specializing in Long term care planning since 1990. Margie has been named as one of the industry's top ten power people by Senior Market Advisor Magazine and as one of the top 25 most creative people in the insurance industry by LifeHealthPro Magazine. She is also co-founder of the Executive Study Council, a group of the top 20 women leaders in the LTC industry.

Since 2000, she has been writing her popular monthly column "LTCI Insider.” She is the author of two books. 

Margie is presently a long term care planning specialist with ACSIA Partners, the largest long term care planning agency in the country.

Written by Margie Barrie

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