Hello wealth builders I am Edward R. Williams host of the wealth building for beginners show and author of the book wealth building for beginners. I’m excited to be your coach today. I believe substantial financial growth is not sustainable without the interior work of personal growth and personal growth without financial freedom yields limitations. So with constant growth in both holistic wellness and financial education, it’s going to lead to us having extraordinary lives. That’s why I started my company, Edwardrwilliams.com. It’s an online holistic wellness and financial education platform, where you get me every week, coaching you and keeping you accountable and driven to build wealth. We can all use positive reinforcement in the world today that aligns us with the liveliness and financial freedom that we deserve. So if you’re not a member yet, go ahead and sign up for free at EdwardrWilliams.com and join our worldwide community of wealth builders. It’s no secret that web skilled guidance and an inspired community and life changing tools will bring us closer to building your wealth goals. So let’s roll into today’s episode, try to take some notes if you can, and share this episode with your family and friends. As it’s a responsibility of each of us to share our wealth building solutions throughout our communities. Please also tag or DM me on Instagram, at EdwrWilliams, and join our community of wealth builders on Instagram. Let’s get started.
Today we’re going to talk about something that’s very near and dear to my heart, special to me because I have two parents, both of them, they cannot get it because they waited too late in their lives. It’s called long term care. And so we’re going to learn what it is, why everyone needs a long term care plan, how it differs from health insurance, and how you pay for it? So yeah, I mean, you heard me say how special this is to me. And so I’m going to go very deliberately through our conversation today. So let’s just start by addressing what is long term care. It sounds like health care, but it’s not. The best way I can articulate the difference is if you get sick, you go to the doctor, and it’s healthcare. But the doctor will treat your illness, and then send you home. Now when a doctor sends you home for maintenance, he’s not going to come with you or she’s not going to come with you. So who’s going to take care of you? So healthcare is when you get it, you have an illness, you go to the doctor, the doctor treats that illness, but long term care is after they send you home who’s going to maintain that either in your home, or a facility, right, like a nursing home or something along those lines. So long term care is just services that help people live independently and safely as possible when they can no longer perform everyday activities on their own. Now, these everyday activities, it’s seven of them. And it’s bathing, dressing, eating, transferring on their own, toileting on their own, memory care, and walking. So if you can do the seven things, then you need long term care. Now it sounds like people who need long term care are unhealthy people or elderly people, right? Wrong.
Everyone, everyone needs to have a long term care plan. I’m going to give you a let’s give you an example. Alright, so let’s imagine you have someone who’s healthy, physically fit in everything and get in a car, driving down a beltway and you have some kid who’s texting and driving, runs into the back of you and bam. You don’t die or whatever the doctors say they put you back together. But imagine that now you can’t go to the bathroom on your own. You need someone to help you just lift you off to toilet seat because you can’t do that on your own. Who’s going to help you do that? Most people, they’ll save that the name of a loved one, you know, let me just end conveniences love one five times a day for the rest of my life, right? Let’s say guys, let’s everybody needs a long term care plan. And wealth builders, you know, all of our listeners and viewers, we’re gonna figure out how to build one because most people don’t have it, they would just simply put that burden on a loved one, if they’re fortunate enough to even have a loved one, but we’re gonna build plans on our own. Everyone needs long term care. It’s our emergency plan. If something happens, you know, well, we can’t do one of those seven types of activities mentioned, then we need to have a plan. I’m gonna tell you a little bit about my dad. So my dad suffers with diabetes and he had an operation on his foot due to complications of diabetes. And yeah, these complications include vomiting, constantly fatigue, nausea, you know, and he can’t walk. And so the doctor, he treated the foot, right, he went to the hospital, the doctor treated the foot, but, the doctor said, “Hey, listen, Mr. Williams, we’re going to let you go home. But now you’re going to have to wear a PICC line for six weeks, because the infection is gotten to the bone.” So guys, listen, when infection gets to the bone, it’s pretty serious that a doctor, gave him these orders to wear picc line for six weeks, and he just has to change it. But at home it is only him and mom there. And mom is suffering with her own illnesses that, you know, she’s not able to change a PICC line. Those who don’t know what a picc line is, it’s a device that’s connected to your central vein that will allow you to receive antibiotics daily. So when the infection gets to your bone, you’ve got to get antibiotics through this line because a pill is just not strong enough. So my dad’s option is not to have treatment at home. One because he doesn’t have long term care and mom can’t change the line. So he has to go to a nursing home.
Okay, so his only choice is to go to a nursing home and try to have Medicare pay for the nursing home. Now listen, wealth builders, Medicare does not pay for long term care. Alright, Medicare does not pay for long term care. My dad he had some other health issues and so he managed to go to the nursing home and have Medicare pay for those issues but here’s what happened. So I visit him in a nursing home. And this place is rundown, overcrowded, poorly managed, you know, I mean, a staff that see them on their cell phones, arguing with each other, I mean this is a hot mess. You have shared patient rooms, far from a comfortable environment. And this is where my dad was. And you know, this thing is not a hotel. Listen, guys, you know, not every nursing home is like that. I can I can tell you, you know, until I moved my dad, I had to literally move him to another establishment. But you know, if he had long term care, then he would be in his home. He will be in his home watching his favorite show Judge Judy, and Maury, he loves to watch those kind of shows. But he would be getting this care in his home because this process takes two hours a day and mom just can’t do it. So everybody, you need to have a long term care plan.
Most people think, well, it’s not gonna happen to me. I don’t need long term care. Oh, yeah, I’m good. I’m not gonna have an accident. I’m gonna throw out some statistics for you. So that you’ll, you’ll know a little bit about it is estimated that 47% of men over 65 will need long term care in their lifetime. 58% of women over 65 will need long term care in their lifetime. So just do that average. That average is about I don’t know, one out of every two people over the age of 65 is going to need long term care. So if you plan to live over 65 you’re probably going to have a 50% chance of needing it unless you create a plan now. Let’s create a plan now so that we don’t have to burden our loved ones if we’re fortunate enough to have loved ones. So, you know, let’s recap wealth builders, let’s recap because our wealth building for beginners community is all about holistic wellness, and financial education. So I’m going to provide three ways to pay for long term care. All right, I’m gonna show you I’m gonna tell you these three ways to pay for it and recapping, so long term care, it’s your services that the people need to live independently and safely as possible when they can no longer perform everyday activities. It’s probably about a 50% chance and needing it, so we’re going to plan for it now.
One of the biggest misconceptions is that Medicare is going to cover it. Medically, Medicare will not cover long term care. And it’s easy to get confused because Medicare Part A is just hospital insurance. All right, you know, it’s going to cover an inpatient skilled nursing facility or home health care, which are both common settings of long term care. So it’s very easy to get this confused. But here’s the major difference, okay, is a major difference. I know a lot of people probably wondering, okay, so a person they move into a nursing home because they need long term care, or a home agency sends an aide to their home to help with bathing, or any other those you know, those seven activities, why won’t Medicare pay? Here’s the thing. Medicare pays for care that is skilled. All right, meaning, if it’s skilled, a skilled person has to perform these duties, a registered nurse, a physical therapists, a speech pathologists, if the average person, you know, the average non medical person can can provide this care without training, then is not skilled. You know, you don’t have to be skilled to change a picc line, this is what Medicare says, you know, you don’t have to be skilled to pick someone up off the off the toilet seat, you don’t have to be skilled to help someone walk in and walk around their houses and leave, you know, you don’t have to be skilled to help someone transfer so Medicare won’t pay for it. So if Medicare is not going to pay for it, how can we pay for long term care since no 50% of us are going to need it over the age of 65. So it varies from state to state. Some states long term care costs roughly $500 a day. Yeah, the average Long Term Care claim is 28 months now this is according to the National Center of Assisted Living. So let’s just do the math here who has $400,000 just laying around that they put aside for long term care? Not many people have that you know especially if you wait until last minute to formulate a plan.
So let’s let’s talk about some ways of paying this Wealth Builders we can all set up plans on our own. There are three ways of paying for long term care. First is you can just simply pay out of pocket if you got it like that I gave you that $400,000 number and some states you know for 28 months if you got it in your bank account go ahead and pay for it out of pocket. Now I hope that you’re not pulling from you know retirement assets so assets that you use for you know, you got in place for other avenues and life you know, whether or not it’s your retirement or you’re buying a house money or something else so you can either pay for it out of pocket, which I’m not going to spend much time talking about because that’s that’s rare. You can also purchase insurance for it. Okay, and so insurance, there’s two different direct different directions you can go there’s that there’s a standalone insurance policy where you just pay premiums now in case you need long term care later, and the insurance company will cover everything based on that long term care claim. You can go ahead and contact various different companies who have long Long Term Care standalone policies and you can also have a hybrid policy, a lot of people have these long term care riders that are built in a life insurance plan. So you will purchase a life insurance plan and you would add a long term care additional into it. That gives you the privilege of using this for your death benefit, accelerating your death benefit so that you can use the long term care while you’re living. These plans are good. But then it takes away from you know, what if you plan on leaving a legacy behind, you know, with your your life insurance, and now you have to use this money while you’re living. So it depends. I mean, some people like the hybrid approach, because if you’re going to use that money regardless, right, so if you have a life insurance plan, you’re going to either use it while you’re living and you can pull out the cash value while you’re living, if you need the cash, you can pull out a portion of the death benefit if you have a long term care need. Or when you die, you can give the death benefit to your beneficiaries. A lot of people like the hybrid approach, it doesn’t do as much as the long term as the standalone policy. But the standalone policy, if you don’t use it, you lose it. And that might not be too glamorous to people either.
All right, and then you have Medicaid. Now Medicaid will also cover long term care. This is by far what most people use to cover long term care. Now be careful because not everybody can qualify for Medicaid. You know, Medicaid is offered to people who don’t have the means of paying for long term care. And so people have to spend down their assets, you know, to pay for it to qualify for Medicaid. So it’s not always easy to get Medicaid. Okay. So, basically, to pay for long term care, you need to be really rich and pay for it out of pocket, really poor and pay for it with with Medicaid, or middle class, you might want to try insurance and pay for that way. But either way, you’ve got to have a situation set up so that you can make sure that you are prepared for that long term care need because I’m telling you all this because I want no one no one to be in the shoes of my my parents right now who need it and can’t get it and didn’t plan for it earlier in their lives. They’re great people. But now we have the knowledge we have the education to plan for long term care. So listen wealth builders, I hope that you gained something from this podcast and as always, I’m looking forward to serving you and offering us some great tips so that we can always maintain holistic wellness, while we gain financial education.