Long-Term Care Insurance
Long-term care refers to a host of services that aren’t covered by regular health insurance. This includes assistance with routine daily activities, like bathing, dressing or getting in and out of bed.
Should I Wait?
Considering long-term care costs is an important part of any long-range financial plan, especially in your 50s and beyond. Waiting until you need care to buy coverage is not an option. You won’t qualify for long-term care insurance if you already have a debilitating condition. Most people with long-term care insurance buy it in their mid-50s to mid-60s.
When and Where
A long-term care insurance policy helps cover the costs of that care when you have a chronic medical condition, a disability or a disorder such as Alzheimer’s disease. Most policies will reimburse you for care given in a variety of places, such as:
A nursing home.
An assisted living facility.
An adult day care center.
Maybe It Won’t Happen to Me?
About half of 65-year-olds today will eventually develop a disability and require some long-term care services, according to a study revised in 2016 by the Urban Institute and the U.S. Department of Health & Human Services. Most will need services for less than two years, but about 14% will require care for more than five years.
What Are My Options?
Regular health insurance doesn’t cover long-term care. And Medicare won’t come to the rescue, either; it covers only short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks.
If you don’t have insurance to cover long-term care, you’ll have to pay for care yourself. If your option is to get help through Medicaid, the federal and state health insurance program for those with low incomes, You can, but only after you’ve exhausted most of your savings.
Reasons to Buy?
People buy long-term care insurance for two reasons:
To protect savings. Long-term care costs can deplete a retirement nest egg quickly. The median cost of care in a semi-private nursing home room is $89,297 a year, according to Genworth’s 2018 Cost of Care Survey.
To give you more choices for care. The more money you can spend, the better the quality of care you can get.
Long Term Care is not something that most people think about until the need arises But If you ever do need it, the planning you made makes all the difference.
If you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program and the quality of care you receive will then be determined.
Medicaid does not pay for Assisted Living in many states.