LONG TERM CARE INSURANCE
Long Term Care Insurance is an often forgotten financial tool. With the high cost of long term care, it is not something that should be taken lightly. Consider these statistics:
$82,125– The average cost per year for a private room at a nursing home in Phoenix.
$14,657.04– The average yearly income from Social Security.
$67,967.96– The remaining cost you have to figure out how to pay for.
Where can you find the money to make up for the difference?
The Shortcomings of Medicare
Many people do not worry about Long Term Care Insurance because they think Medicare will cover their expenses. Part A may cover some of the expenses related to a skilled nursing or home health care, but it is not designed to pay for long-term care. Consider this, your coverage is broken down into benefit periods. You have a certain amount of coverage per benefit period.
Your benefit period begins the day you are admitted into a hospital or other care facility and ends after you have had no care for 60 consecutive days. You have coverage for 90 days. Then after you use the 90 days you have to start using your “lifetime reserve” days, which you only have 60 of. After you have used those you are out of coverage. If you are expecting to need care for the rest of your life, you will run out of benefits very quickly. See the chart below for a breakdown of the costs you can expect to occur by relying solely on Medicare.
| Medicare Part A Coverage | |
| Days 1-60 | $1,632 deductible, no co-insurance |
| Days 61-90 | $408/day co-insurance |
| Days 91-150 | $816/day co-insurance |
| Total: | $62,832 |
What About Medicaid?
Other people think that Medicaid will come in and help them. But qualifying is not as simple as deeding your home into a trust. The government has a 5-year look-back period to see if you qualify. There are many other complex rules regarding your income and assets. If you ever are approved, you have no choice over where you are placed for care. Medicaid-covered long term care facilities are well-known for being second rate.
Paying for Long Term Care Out of Pocket
So where does this leave you? If you want to choose where you are to stay or to have help brought into your home, you are looking at incurring a great expense (See Chart Below).
| Type of Care | Cost Per Year (Phoenix Metro Area) |
| Nursing Home (Private Room) | $82,125 |
| Nursing Home (Semi-Private Room) | $67,890 |
| Assisted Living (Private Room) | $36,000 |
| Home Health Aid (30 Hours a Week) | $32,682 |
Do you really want to leave the burden to your children to pay? Do you want to exhaust all your estate to pay medical bills instead of passing it on to your loved ones?
Utilize Long Term Care Insurance
Long Term Care Insurance is there to fill the gap. Long Term Care Insurance can cover the costs related to nursing home care, assisted living, adult day care, and home health care. There are many different policies that cover a variety of services. Also, you have several options regarding the different methods through which you receive your benefits. It can be hard to find the perfect policy to fit your needs. Wealth Guardian Financial can help. We have the tools to help you compare policies to find you the right coverage for the right price.
Sources:
http://www.aarp.org/relationships/caregiving-resource-center/LTCC.html
www.ssa.gov/policy/docs/quickfacts/stat-snapshot/
http://www.aarp.org/relationships/caregiving-resource-center/LTCC.html
8 Types of Long Term Care Facilities
8 Types of Long Term Care Facilities We are living longer lives, but this increases the need of long term care for most adults later in life. According to the Administration for Community Living, adults that are 65 now have a 70% chance of needing long term care. Of these 20% will need care for 5 years or longer. In this article, we will go over 8 types of long term care facilities that [...]
8 Things You Should Know About Long Term Care Insurance
8 Things You Should Know About Long Term Care Insurance Long term care insurance is a special type of insurance that can cover you financially in the instance that you require costly long term care. In this article, we will go over 8 things you should know about long term care insurance. 1. You Will Receive a Set Benefit Your long term care insurance policy will have a maximum daily or monthly benefit. This is [...]
Strategies to Help Pay for Long Term Care
Strategies to Help Pay for Long Term Care Implementing strategies to help pay for long term care can help you to prevent a lot of stress and trouble. It also can help to preserve funds for the benefit of your spouse or other loved ones. In this article, we will review 4 strategies to help pay for long term care. 1. Long Term Care Insurance Long term care insurance is a special type of [...]
Pros and Cons of Long Term Care Insurance
Pros and Cons of Long Term Care Insurance The pros and cons of long term care insurance need to be weighed before a policy is purchased. In this article, we will go over several pros and cons of long term care insurance to help you when making a decision about purchasing a policy. Pros Long term care insurance helps you to prepare for unexpected hardships due to a decline in your health. The first [...]
Group Long Term Care Insurance
Group Long Term Care Insurance Group long term care insurance is a form in which you can purchase long term care coverage. However, the only way to enroll is through your employer. In this article, we will briefly go over how group long term care insurance works for employers and employees. If you would like an explanation of Long Term Care Insurance you can visit one of our other blogs here. Benefits of Group [...]
Medicaid and Long Term Care Insurance Basics
Medicaid and Long Term Care Insurance Medicaid and long term care insurance both provide coverage for those who need advanced care. Typically, you would utilize one of these when you need help with daily tasks like dressing, bathing, eating, or using the bathroom. However, there are many misconceptions about both. In this article, we will go over the differences between Medicaid and long term care insurance, what they cover, and help you determine [...]