A long term care plan is an important component of any financial plan. Any type of long term care, whether it is in a nursing home, at home, or adult day care, it is very expensive. Because of this you need to plan in advance. In this article, we will go over several reasons why you need a long term care plan.
Large Need for a Long Term Care Plan
American are now living longer, but it does not mean we are living healthier or more active lives. In fact, seven out of ten Americans over the age of 65 will require some form of long term care. Out of the individuals that will need long term care, 40% of them will need care for two years or more. With such a high probability of needing such extensive care, it puts into perspective the large nee for having a long term care plan.
The Expense of Long Term Care
Another reason you need a long term care plan is because long term care is very expensive. For 2018, the average annual cost in the United States for a private nursing home room is $92,376. But the cost can differ greatly depending on the geographic region you live in. For example, the average annual cost for a private room in Alaska is $292,020. Whereas the annual cost in Oklahoma is $63,516. A semi-private room is less expensive, but not much. In the next 20 years, the average annual cost for a private room is projected to go up to $166,845.
Effect on Family
If you are expecting to rely on your family to provide you with long term care you may want to carefully consider the effect that it can have on them. For example, one out of three family caregivers provide care for 30 or more hours a week and 77% miss time from work. You must ask yourself, do you have family members that have that kind of spare time? Also, can they afford to give up work time to care for you? Not to mention the emotional and mental toll it takes. Due to the large affect it has on your family, it is important to discuss all of this with them and make a pan to see what level of care is feasible.
Lack of Help From Medicare
Many have the misconception that Medicare will help to cover their long term care expenses. Medicare is not purposed to provide for long term care. Part A is really designed to provide coverage for a prolonged hospital stay. You also need to be careful if you are considering Medicaid as your principal coverage. Medicare has a five year look back period, so if your assets were over their limits you might be denied coverage. So you will really need to plan ahead.
Your Long Term Care Plan
Now that you understand some of the topics you need to take into consideration when making your long term care plan, you also need to think about long term care insurance. A qualified insurance agent can help you to look at your options and find out what will work best for you.
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