The media is unrelenting with its depressing news about the downturn in the economy. Headlines tell us that the stock market is down, portfolios are down, banks are closing and merging, people are losing jobs, government programs are being cut, and less tax money is going into the government treasury.
At the same time, congress has approved $700 billion in bail out funds for the financial industry. Some of this money will also be used to rescue the auto industry. There is a “stimulus package” in the works, but how much of it will benefit the economy as a whole is difficult to tell.
But what about the rest of us? What about retirees on fixed incomes, who may need long term care in the not too distant future. What about us baby boomers, who will begin to turn 65 in the next two years. It is likely that there will be less government money to help the average person. With people living much longer, and the ageing of baby boomers, the long term care system will continue to be overburdened. The government’s answer has been to cut benefits, such as with the Federal Deficit Reduction Act, which will make Medi-Cal more difficult to obtain, once it comes into effect in California over the next several months. Also, California is in dire financial straights, has laid off Medi-Cal eligibility workers, but at the same time has an aggressive Medi-Cal recovery program.
The long term care system in California is a maze. Government laws and rules are complex. As we have shown in case studies in past Elder Law Today newsletters, people who are ill prepared and unaware of the rules, suffer greatly.
So, what can we do to minimize this impact and protect ourselves? The answer is to be armed with a long term care plan, which is put in place before we need it, and while we are still healthy.
It is time for people to address these issues head on and to help themselves. For those of us who are married, we think about what would happen if we had a catastrophic illness. With no plan in place, you could spend almost all of your savings before the government would provide any help, leaving your spouse destitute. If you are single, you do not want to run out of money and out of options, as you grow older. If you have a special needs child and you would like to be able to leave your estate to care for that child, you may not be able to. If you get sick first, you may need to spend all of that money for your care.
We see children spending their own money to keep Mom and Dad in their home, with no end in sight. The children exhaust their own savings which they will need for their own long term care. An endless cycle is created.
These situations do not need to occur, but happen every day because of a lack of planning. Long Term Care Planning today may save yourself and your family a lot of money and headaches tomorrow.