It's a hard fact: The high cost of long-term care has made planning a critically important issue for most middle class seniors and their families. Sadly, many of them are unprepared for the significant financial burdens that it places on their family’s hard-earned savings. Financial devastation looms large for a family facing ongoing care at a rate of up to $10,000 a month! Roughly 50% of healthy Americans age 65 will eventually require some form of long-term care. This care can be nursing home care, assisted living or home care. Whatever the setting, this kind of care becomes quickly and extremely expensive. So how does one exactly pay for long-term care? Below are the following five methods:
(1) PRIVATE PAY: The first way is called private pay; you simply write the provider a check for the monthly bill from your hard-earned life's savings.
(2) LONG-TERM CARE INSURANCE: The second but better way to plan ahead and pay for long-term care is to purchase long-term care insurance. However, only about 8% of Americans have purchased long-term care insurance. By age 65, 25% of individuals are no longer insurable, making this less of a viable option for most people.
(3) MEDICARE: The third way to pay for long-term care is through Medicare. Medicare pays for some home care for people who are homebound, and it pays part of a maximum of 100 days in a nursing home if that person is receiving skilled care.
(4) VETERANS ADMINISTRATION: For those who served in the military and their spouses, there is a fourth option. The Veterans Administration helps pay for long-term care, but the benefit is very limited. Statistically, VA programs pay for less than 1% of all of the long-term care provided in the United States.
(5) MEDICAID: The fifth way is Medicaid, which to be clear, is entirely seperate from Medicare. Medicaid pays for over half of all the long-term care expenses in the United States. For all practical purposes, in the United States, the only “insurance” plan for long-term institutionalized care is Medicaid.
Medicare only pays for approximately 2% of skilled nursing care in the United States, and private insurance pays for even less. The result is that when Medicare is exhausted, most people proceed to needlessly pay out of their own pockets for long-term care until their funds are nearly depleted and they then become financially eligible for Medicaid. This is often referred to as a 'spend-down' by the department of social services or the nursing home. This process naturally impoverishes a person and their spouse if married, since BOTH person's assets are counted in a married couple situation.
As you can see, without proper planning, nursing home residents will quickly deplete their savings! Many of our clients are interested in protecting their assets from the rising cost of long-term care: We can help! Please call our office to schedule a consultation and see how we can help you and your family protect what is important for the future!