It’s not usually an easy conversation, but it’s a necessary one: the possibility of long-term care for you or a loved one. Medicare is a wonderful thing, but when nursing homes or assisted living are in the picture, it does little good. That’s why planning ahead and figuring out how you will pay for long-term care is important. Here are some factors to consider when you’re planning for the possibility of needing long-term care in the future.
What Medicare Does Not Cover
You want to first understand exactly what Medicare does and does not cover. Many people confuse long-term care with medical care, and that is why they assume that any future long-term care will be covered. However, a lot of long-term care is classified as custodial care, which includes assistance with everyday tasks (cooking, cleaning, personal hygiene, etc.). In other words, these are things that come with assisted living and nursing home care. When custodial care is all you need, Medicare will not cover it. However, it may cover some of those costs when they are included in a medical care arrangement.
What Medicare Does Cover
There are situations associated with long-term care where Medicare will cover the costs. For instance, if you or a loved one is admitted to a long-term care hospital for more than one serious condition — or if it is expected that you will get well at some point — your costs should be taken care of. Anything to do with medications, medical services and supplies, therapy, counseling, and other instances are also typically covered. Furthermore, Medicare will usually cover eligible part-time home health services and hospice care.
Signing Up For LTC Insurance
When it comes to paying for long-term care, long-term care (LTC) insurance can be a great option. Whether it is beneficial for your circumstances depends on a few factors, such as:
- The lifestyle you lead
- Family history and genetics
- They type and level of care you need
- Whether you can afford it
- The likelihood of actually using your policy
The premiums can be quite high for LTC insurance. The earlier you purchase a policy, the better the rate will be. Each year you wait, you can expect an increase. In your 50s, rates typically increase 2 to 4 percent each year, while it’s more like 6 to 8 percent in your 60s. Even with high premiums, LTC insurance can be worth the investment, as it can help you afford care, maintain independence, and experience less stress in the event that you need long-term care.
Other Options For Paying
Most Americans over 65 will need some form of long-term care in some capacity. Therefore, even if your lifestyle, family history, and other factors have you in a good place, it is best to be prepared. If you do not think LTC insurance is for you, there are other options. If you’re a veteran, the Veteran Aid and Attendance (A&A) program can provide $1,830 per month for veterans and $1,176 for their spouses.
You can also see if any of these methods are a plausible way to pay:
- Using your Social Security or pension
- Withdrawing from IRA
- Adding a rider to an existing life insurance policy
- Getting a reverse mortgage
- Opening a Health Savings Account (HSA)
Chances are, you or someone close to you will need long-term care at some point. In the event that you do need it, it can save you a lot of psychological stress to have a plan in place. That said, make sure you are clear on what Medicare will and will not pay for concerning long-term care. Also, consider long-term care insurance, and remember that the earlier in life you purchase it, the less you will pay. Finally, do your research and mull over other options for paying for the costs associated with long-term care.
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