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16 LIVE IT UP! THURSDAY, JULY 30, 2015 SANTA CRUZ SENTINEL The Long Term Care Dilemma E very day there is a new statistic about the cost of long term care in America and the devastating effect it can have on people's assets. Most people don't need to see a statistic, they likely know a family member or close friend who has experienced the costs of long term care either with a spouse or parent. The Facts Every year, Genworth Financial releases a comprehensive study on the cost of long term care throughout the United States for different levels of care needed (i.e. home health care, assisted living, nursing home). For 2015, the median annual rates for varying levels of care were as follows: Home Health Aide: $45,760, Assisted Living: $43,200, Nursing Home (Semi- Private Room) $80,300, and Nursing Home (Private Room): $91,250. When you look at Santa Cruz County in particular, the annual amount only increases: Home Health Aide: $54,912, Assisted Living: $58,200, Nursing Home (Semi-Private Room): $95,265, Nursing Home (Private Room): $103,295 . It's also important to note that these rates will likely increase annually between 1-4% or more. With numbers like that, it's easy to see how a long term care stay can have a devastating effect on even a well-designed portfolio of assets. The Myth Even seeing the staggering costs associated with long term care, there are persistent myths that don't seem to be going away anytime soon. Perhaps the biggest myth is the belief that Medicare will pay for all long term care expenses. That is just not true. Put simply, Medicare will pay for up to 100 days of skilled nursing home care provided you meet certain strict criteria. Even then, if you stay in a skilled nursing home for more than 20 days, there will be daily co-pays you will be expected to pay and after 100 days you are on your own. What You Can Do Protect your assets by planning early. Sticking your head in the sand and thinking that you or anyone in your family will never experience some sort of long term care need just isn't being realistic. Statistically, about 70% of people over the age of 65 will require some form of long term care support . There are choices when it comes to planning for potential long term care expenses. Because they may be able to afford it, those with significant assets may choose to self-insure. Others may choose to assume part of the potential risk while sharing a portion with an insurance company. Still others may want to hand off all of the risk to an insurance company. Others may simply choose to do nothing. Whatever your choice, make it a knowledgeable one given your individual circumstances. 1 Genworth 2015 Cost of Care Survey. Genworth Life Insurance Company. 20 March 2015. Web. 8 June 2015 2 Medicare and You. National Medicare Handbook, Center for Medicare & Medicaid Services. September 2014. Web. 9 June 2015. Gary Croxall and Soren Croxall are Certified Financial Planning Practitioners™ and are available for a free consultation to discuss your personal situation at (831) 661-4006. Securities and Advisory Services offered through National Planning Corporation (NPC), member FINRA/SIPC, a Registered Investment Advisor. Consulting and Investment Management offered through Croxall Capital Planning (CCP), a Registered Investment Advisor. CCP and NPC are separate and unrelated companies. NPC and CCP do not provide tax or legal advice. The information contained herein is for general education and is not intended as specific advice or a recommendation to any person or entity. The opinions expressed in this article do not necessarily reflect those of NPC. by Gary E. Croxall, CFP® & Soren E. Croxall, CFP®