What to Expect from End-of-Life Care

by Emily Guy Birken · 5 comments

Death isn’t a subject that many of us like to think about. But the fact of the matter is that we all must plan for that eventuality, including how we want our final days to play out.

According to Amanda Bennet, author of “The Cost of Hope,” “From the 1970s to the 1990s, one study suggests, the cost of adding a single year of life for an individual over age 65 more than tripled, to $145,000 from $46,800 — and health-care costs have been rising ever since. In 2008, researchers from Stanford and Wharton business schools studied dialysis patients and concluded that the average cost of one ‘quality’ extra year of life was about $129,000.”

These huge costs are often incurred in attempting to prolong a life when death is imminent, inevitable, and in some cases, even desired. After all, the terminally ill are often still suffering from the emotional and physical pain that comes with the underlying disease. And as modern medicine becomes better at sustaining the terminally ill, it may be unnecessarily prolonging the inevitable.

Plus, the majority of Americans state that they’d prefer to die at home, yet about 75% pass away in a hospital or a nursing home. So for those who want to have a comfortable time living the tail end of his/her life in relatively peace, it means that end-of-life care should not be put off.

Here’s what you need to know about end-of-life care, so that you can be prepared to make decisions for yourself and your family members when the time comes.

Living Wills

Living wills, also known as advanced medical directives, state your preferences for what should be done to prolong your life should you be unable to make those decisions for yourself. These documents are an important part of end-of-life planning, because they make it much easier for your family and doctors to determine the best course of action should you be unable to.

Living wills can also help to keep medical costs lower, since many life-prolonging technologies are extraordinarily expensive.

Every individual ought to have both a living will and a conversation with a family member about what kind of life-extending care is preferred. Since living wills can’t predict every possible scenario facing a family in a medical crisis, discussing the issue with a trusted family member or friend will help to make difficult decisions much easier.

In addition, younger individuals should broach this subject with their parents or other elderly relatives, who should also be encouraged to make living wills.

Hospice Care

This type of care is given to terminal patients who have a prognosis of six months of less. The focus is on palliative care and emotional support of both the patient and family. Most patients who enter into hospice care, which can be provided at home or at a hospital or nursing home, are very close to the end. In fact, the median time spent in hospice care is usually measured in days and weeks.

Nearly all hospice care is covered by Medicare and Medicaid, and many insurers also broadly cover hospice services. Some patients are nervous about signing up for hospice, thinking it indicates a loss of hope or that it will hasten death. But hospice is a tool for patients to improve their quality of life, so they can enjoy whatever time remains. In addition, hospice offers a great deal of support to families during a difficult time.

What About Long Term Care Coverage?

Speaking of end of life care, do you need long term care coverage?

My husband and I are only in our early 40s, but we’re still interested in the idea of long-term care. This is mainly because we’ve already decided that we don’t want to live in our own home as we age. We’d rather live in a retirement community, particularly those that offer some sort of assisted-living services.

However, we know that living in such communities can get expensive, especially if some sort of care is needed. Indeed, according to what I read in Consumer Reports Money Adviser, the cost of living in an assisted-living facility is more than $3,400 a month at the low end. At the high end, it can be more like $10,000 a month.

A long-term care policy might help with that, but can you rely on it to be there when you need it?

Problems with Long-Term Care Insurance Policies

Money Adviser points out that there are problems arising in the area of long-term care. One of the issues is that insurers are having a hard time building up the kind of reserves they need to make good on policies. With people living longer, this situation isn’t exactly a positive one for insurance companies that want to make profits.

So, many of the insurers that offered long-term care insurance are no longer providing those policies. And those that still do offer long-term care policies are raising premiums. By a lot.

If you’re looking to buy a long-term care policy, you could be in trouble as you might get stuck with huge premiums. While there are some companies that will refund part of your premium if you don’t end up needing long-term care, for the most part, you’re stuck. And, if your premiums rise and you can’t afford them, you either have to scale back your coverage. You can cancel the policy, but you could possibly lose all the money you’ve paid in over the years.

Even hybrid policies that combine life insurance coverage with long-term care coverage may not be the best choice. Indeed, those can be even more expensive in the long run than a regular long-term care policy, depending on the benefits you can expect.

What Should You Do Instead?

Consider your options. Look at your retirement situation. As you figure out how much you’ll need in retirement, consider the cost of long-term care. Realize there are some situations where Medicare won’t cover your long-term care, so don’t rely on that program to keep you solvent. If you plan carefully, there won’t be a need to buy a long-term care policy because you’ll have arranged for the cash flow you need during retirement.

The first step is saving up and using your retirement investment accounts to build wealth. But you can also look for ways to generate regular income during retirement through an income portfolio, rental properties, a business, or some sort of online venture. You can also consider saving up enough to buy an immediate annuity that will pay you enough to cover your long-term care costs. (Be careful, though. Annuities aren’t for everyone, and they have their own problems.)

Don’t assume that long-term care insurance is the way to go. Consider your individual situation and plan ahead. You can’t count on long-term care insurance to cover all your bases.

The Bottom Line

Dying with dignity and under your own terms is something everyone should have the opportunity to experience. Planning ahead for this eventuality will save you and your family money, heartache, and stress.

Have you planned your end-of-life care?

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  • Jim Geuin says:

    When we could see an end for my Mary, we liquidated several different savings and investment accounts, anticipating Memory care would run about $50,000 per year. As it turned out, she died peacefully, at home, in bed, overnight. The work we did on the savings and investment accounts does in fact make it much easier to settle her estate.

  • Holly Thrifty says:

    Keep in mind that hospice provides SUPPORT and in most cases, not direct care unless you are at a hospice facility. You have to pay for nurses or other care givers on an hourly basis. If the family can’t care for the patient, it’s more cost effective, and Medicare AND insurance will pay for some nursing home care–but not in the home.

    I went through this with my mother and unless we put her in a nursing home, there was no way we could financially afford the same level of care at home.

    The doctors suggested that the family take care of her. My 84 y/o dad couldn’t do it all and the “children” all were the breadwinners in the family. I would have lost my health insurance and job taking all that time off. It’s a horrible trade off, but if I cared for her, I wouldn’t be able to care for my family after died.

    Sounds like an easy choice but it’s not.

  • Jerry says:

    I think long-term care insurance is a necessity these days. We are having more longer lasting and debilitating diseases and we’re living longer. It’s not an extra, unfortunately. I hope this is a wake up call to people to try and live differently and more healthfully while they can.

  • Marbella says:

    I understand that this is a major problem in the U.S., but we in most countries in Europe have it automatically in our free healthcare system. U.S. should switch to the same system and the people had been feeling much better.

    • KT says:

      It sounds good but the Euro is an inch from collapsing due to extensive social programs (including free healthcare) and Great Britain is struggling mightily to reform/support its nationalized health care system. Where is the money going to come from when more people take out than put back into the system?
      When people don’t take responsibility for their own health (and there is no financial incentive to do so when it’s “free”) that type of healthcare system is just not sustainable over the long run.

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