So what does this all mean? We live longer and when you live long you get old! Yes, headline news here, but we all now have to plan to live to older and older ages than generations before us. This means more and more of us need extended care, otherwise known as long-term care. This is just not an old age issue since 40% of all people who need long-term care are under the age of 65! We just don’t die as easily as people did in the past and this has a huge impact on your family and your finances.
Finances? Impact on family? Doesn’t health insurance pay for all this? The fast answer is NO. Health insurance that you have today and Medicare and any Medicare Supplement you may have after age 65 will only pay a handful of days for long-term care and ONLY if you need skilled care and your doctor says you are getting better. A “Nursing Home”, which nobody wants to be in, costs around $50 to 60 thousand dollars a year! Assisted live, adult day care and care in your own home is not cheap either!
What happens is unless you PLAN ahead for this YOU will pay or your family will have to take turns providing care for you. Let me tell you, your family are not caregivers. They have their own things they must do and this burden should not be placed on them. The physical part of care-giving is also problematic. Studies have shown the fastest way to get someone into a nursing home is a plan that has the family as the caregiver. From both personal and professional experience this does not work!
Now let’s talk about money. How would your lifestyle change if you added $40, 50, 60 thousand dollars a year or more IN TODAY’s DOLLARS in bills? Even if you are rich this type of cost would have a huge impact especially if it went on for a few years or more. Your savings help provide you current or future lifestyle and if that is spent down that would create many problems.
You might ask “well, how about the government”? Nope ….. other than Medicaid the medical welfare program and they require a spend-down of your assets. The Deficit Reduction Act of 2005 says you can no longer hide assets or give it away in order to qualify for Medicaid. Medicaid only pays for care in a nursing home and most of us would rather be at home.
The government (both federal and state) have tax incentives to help you plan ahead. How? With long-term care insurance. Many states have partnership plans in place that provide for dollar for dollar asset protection IF you have a long-term care insurance policy in place. You must have reasonable health in order to qualify and most people start looking at planning in their mid 40’s. The average age of a policy holder is 55.
You need to work with a long-term care insurance specialist who understands this coverage and can recommend appropriate and affordable coverage. I have arranged for a long term care specialist to answer your questions. She works with all the top companies such as John Hancock, Genworth, MetLife, Prudential, Equitable, Transamerica, Mutual of Omaha and many others. This will help you determine if you health qualify for it, whether you need it and if so, what it pays for, what it doesn't and the cost.