Long-Term Health Care A Top Financial Blindspot, Consultant Says

Routine annual personal financial reviews that many people are undertaking now in the year's first quarter, oftentimes overlook a key financial need  -- long-term health care planning, according to Larry Rosenthal, a widely sought financial consultant and president of Rosenthal Wealth Management Group.

"Expenditures for Long-Term Health Care (LTHC) have skyrocketed over sevenfold from 2000 to 2015. Make no mistake, LTHC is a financial freight train roaring down the tracks. While everyone does not have the same financial wherewithal to hop on board that train, they do need to at least take the blinders off and consider the options their financial situation affords them," Rosenthal said.

LTHC expenditures in the U.S. were estimated to be about $30 billion in 2000 and have soared to about $225 billion in 2015. Further, according to a report from AARP, the chances of becoming disabled in at least two activities of daily living or of being cognitively impaired is almost 70 percent for people age 65 and older.

While every situation is unique, Rosenthal says that individual LTHC expenditures can vary greatly, from a mere hundreds of dollars per year to over $100,000. According to the Family Caregiver Alliance, in 2004, the AVERAGE daily rate for a private room in a skilled nursing facility was $192 for a private room, or $70,080 annually, and $169, or $61,685 annually, for a semi-private room. The hourly rate for a home health aide was $18.12.

"Baby boomers are aging and their health needs are an ever-expanding part of their life story. What the baby boomers and/or their ultimate caregivers have to do is look at the realities of LTHC and not fall into the common trap of avoiding dealing with them," Rosenthal said.

Rosenthal says that about 12 million Americans needed long-term care in 2007 and that by 2050, that number is expected to increase to about 27 million. In that same vein, the U.S. Census Bureau says that there were an estimated 5.9 people over 85 in 2012, with that figure expected to more than triple to 19.4 million by 2050.

When researching either LTHC insurance options or nursing home options, Rosenthal said there are dozens, if not hundreds, of questions to ask, but he says there are a few key questions for either circumstance:

Regarding nursing home options:

1. Is the facility Medicare and Medicaid Certified – how long ago was it certified?
2. Is the facility convenient for family members to visit and is visiting encouraged?
3. Does the facility have the capability to deal with any special needs that can be anticipated … i.e., Alzheimer's?
4. What is the cost of care?
5. Have the owner, administrator and director of the facility been in place long or have there been numerous ownership/management changes?
6. How many residents share a bathroom and how are assisted showers handled?
7. Are there events planned and scheduled for the residents? Ask to see the schedule.
8. What is the ratio of staff to residents during each shift? (Ideally, a facility will have one nurse's aide for every five or six residents between 7 a.m. and 11 p.m.)

Regarding LTHC insurance, courtesy Senior Living:

1. What is the elimination period (how many days does a person have to receive care BEFORE the policy kicks in)?
2. What is the maximum payout of the policy?
3. What types of care are included or excluded?
4. How long does the coverage last? Does the policy ever expire?

As a much sought-after financial advisor, Rosenthal has appeared regularly on Fox Business News and has been quoted in The Wall Street Journal, CNNMoney, U.S. News and World Report, CNBC's The Nightly Business Report, The Washington Post, USA Today, Money, Bloomberg, The Chicago Tribune, The Fiscal Times, Kiplinger's Retirement Report, Consumer Report's Money Advisor, The Washington Times, Financial Planning, Financial Advisor and others.

Rosenthal has been providing financial counseling for about three decades. He presently has offices in McLean, Manassas and Stafford, Virginia, and Baltimore, Maryland. Additionally, he has co-authored the book "Financial Success in the Year 2000 and Beyond." His next book is expected out in mid-2019.

Rosenthal is also the host of "Making Money Sense," a radio show that has aired every Saturday morning on D.C.'s WAVA from 9–10 a.m. since 2004 and is now nationally simulcast via satellite on SiriusXM channel 131.

Investment advisor representative and registered representative of, and securities and investment advisory services offered through Voya Financial Advisors Inc. (member SPIC). Rosenthal Wealth Management Group is not a subsidiary of, nor controlled by, Voya Financial Advisors Inc.

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SOURCE Rosenthal Wealth Management Group