By John J. Checki Jr., CPA, CFP®, CRC® and J.J. Checki III
One of the biggest concerns of people approaching Medicare age is health care costs, especially LTC (long-term care.) It’s scary at first glimpse, wouldn’t you agree? It’s right up there with being helpless, old, sick, broke and abandoned. It’s bad enough being older, well-seasoned, and having health and balance challenges without having to worry about: Who will take care of us? How on earth do we pay for it? And, how do we not run out of money while we are losing our health and perhaps some of our mental marbles?
How will health care and long-term care impact our long term next stage plan and flexibility? It depends on us, our plans, the preparation we have made in advance, our current and future health, our resources, our insurance, company plans and insurance, whether we are married or not, who survives whom, our pension, social security level, and cash flow. Other than those factors, there is always the “whoops!” that comes from surprise turns of health, balance, mental attitude and stability.
So, what are some of the anticipated costs? Again it depends. We have clients who are in their 80s and 90s who do not need care and we have other clients who did not live all the way through their 70s. A nice long look at our family (health and state of mind as they aged), our habits (both good and bad), where we live, how we live, and perhaps some research into our projected life span and thoughts on passing would be helpful and meaningful to our plan on health care and long-term care costs.
One group, which gives seminars on the subject, anticipates or projects that during the last 18 months of life, health care costs without long-term care to be around $250,000. Yet, one M.D. who is also a Certified Financial Planner discounted that projection based on a case-by-case basis, simply observing from a schooled, licensed set of eyes armed with experience and statistics that the costs vary. They vary based on how we use health care and treatments. Literally those who don’t go to the doctor much thanks to being blessed with good health, may or may not develop a chronic condition later in life. We may just simply complain of not feeling well while on a long airplane flight and pass away quietly that very day. A very healthy and fit friend of mine, who worked out regularly, worried a lot, worked to help his in-laws like no one I have ever seen, looked to his wife and said, “I think I am having a heart attack” and was gone. Another Bible study group member was out taking a walk along Greenville Avenue and he died along the way, at age 64. Come to think of it, the other fellow was only 64 years old as well. So, not everyone gets to live into their 70s, 80s, 90s and dementia stages.
How about people who have health challenges, or lead stressful lives, or have weight issues, addiction histories, or simple bad luck associated with families that just did not do well with genetics? That is more expensive if addressed. Some people do have great insurance and use it and others don’t. Meaning the others may or may not have great insurance, yet ignore the aches and pains and signs of misuse or abuse of one’s body, mind, and health. Their costs usually are in the emergency room, now commonly called ER, and from the stories we hear, ER is particularly busy on the weekend. Personally, ER looks like a scary place to receive treatment. I will leave the details of that thought to you.
The biggest problem with LTC and health care costs boils down to the caregiving healthy husband or wife, who suffers through the disease and can physically and mentally wear down during this cycle of life. This is a great time to have a support network close by (such as a caring family, an active church group, friends, associates, etc.). So, if we are young enough to get to work on that support network, and plan, let’s do it.
The Obstacles?
Obstacles usually start with the fear of knowing (the dollars and cents, probability, timing, availability). Not to mention, how on earth can we pay for this care long and short term? Medicare does cover some but not much of the LTC, and lots of health care, depending on what it is. Supplementing Medicare with the appropriate plan might be a fine idea. Planning ahead by analyzing our situation can be helpful and comforting when the numbers work out, and motivating when they do not. Plan ahead and take appropriate action.
Possible Solutions
Do a case study review of our personal situation such as our health history, insurance review, asset review, resource analysis. Analyze and run numbers with software designed to inform us. Summarize the results for review and possible actions to take to address the situation.
Illustrate the Issue
We like case studies and analysis of the individual situation and consult with a team of experts who specialize in Medicare and long-term care planning. Why? There’s nothing like talking to experts once we have identified the problem and the desire for a solution. One case study: 95-year-old client with an Advantage Plan (zero premiums and a health club membership card) generated a $135,000 medical bill. Her out of pocket expense? $1,350.
Summary
Some folks fear being old, sick and broke. Plan ahead and be informed of our situation and take action to address the possible and probable situations that come with being alive and not young. Having a plan is great, taking action is essential. Our family has gone through and still is going through the dementia care stages and it is a great time to show love and caring to my mom who is 94 and sneaking up on 95.
Securities are offered through Securities America Inc., member FINRA and SIPC, Advisor services offered through Securities America Advisors., an SEC Registered Investment Advisor. John Checki, Jr. Representative. This is not a CPA Firm.
John and his firm have been helping some of the nicest families in North Dallas, Richardson, Plano, and Frisco for about 30 years. We specialize in Baby Boomers Wealth Management and have a unique and complete Wealth Management Process. You can read the rest of our story on my website. My proudest accomplishment is my family: Children, Grandchildren and Wife. We love to travel, scuba dive, take pictures, study, and attend family and church gatherings.
