Life can change in an instant! While that may sound theoretical to you those of us who have experienced a life-changing event such as a debilitating stroke know that those words are far from theoretical – THEY ARE REAL!
When recovering from a stroke or other debilitating health issue, paying for assistance can be a weighty concern. Here is some practical advice for planning and paying for long-term care should you or a loved one need to live in an assisted living facility or nursing home.
About Medicare
For those of us who are over sixty-five there is Medicare. But there are caveats. Many seniors expect to rely on Medicare for help should the need arise for care in an assisted living or nursing home facility. It’s important to understand that while Medicare is invaluable, it provides minimal coverage in the event you require long-term care. As Paying for Senior Care [1] explains, although Medicare does pay for most medical costs associated with care in an assisted living facility, it does not pay for help with custodial concerns such as dressing, eating and bathing. For those who receive care at a skilled nursing facility, up to 100 percent of care is covered the first 20 days following inpatient care at a hospital. About 80 percent of the next 80 days is also covered.
What does long-term care cost?
Long-term care is expensive, with the median price [2] of a private room hitting $97,455 annually. About a third of seniors receiving care spend from 1 to 3 years in long-term care facilities. For an estimate, you can use a long-term care online calculator [3] to figure your approximate expenses.
What about the rest?
That leaves a large margin of expense not covered by Medicare. You should evaluate your personal circumstances to decide how to best cover costs. If you are wealthy, you can potentially pay for your long-term care needs out of pocket. Some people liquidate assets to pay for care, such as stocks, vacation homes, or extra vehicles. Discuss your individual circumstances with an elder care attorney [4] to find out what might best suit your needs.
Here are some other options for paying for care:
- Supplemental insurance. Supplemental Medicare Advantage plans can help seniors deal with expenses associated with prescriptions, vision, hearing and dental care. All Medicare Advantage [5] plans include original Medicare coverage. Some Medicare Advantage plans also cover wellness programs.
- Convalescent insurance. Also termed short-term care insurance, convalescent insurance is a viable alternative, often paying for long-term care costs [6] for those who are turned down for long-term care insurance. Premiums are lower, and coverage is a year or less.
- Annuities with long-term care riders. This is another option for those who are turned down for traditional long-term care insurance policies. Medical underwriting is less strict for these kinds of policies, but policies require prepayment, meaning a substantial payment upfront. In addition, you need to be mindful that many of these plans come with quite high fees which are not necessarily beneficial.
- Critical-care insurance. Critical-care insurance is also referred to as critical-illness insurance. This is an alternative to other long-term care payment methods [7]. This kind of plan offers a lump sum cash payout to those diagnosed with stroke or other serious illnesses.
- Pre-pay care. Some care communities allow you to pre-purchase living arrangements. With prepaid care communities, you pay a lump sum upfront, followed by a monthly fee. The arrangement is meant to cover your lifetime; however, some experts warn [8] facilities with unstable finances might not be able to fulfill their obligation to you.
- Veterans benefits. If you are a veteran or surviving spouse of a veteran, you are eligible for assistance through the Veterans Administration.
- Reverse mortgage. Some people elect to sell a home if they are moving into a long-term care facility. However, as advised by some professionals [9], if you have a spouse still living in the home or you expect to move back, a reverse mortgage could be another option worth considering.
- Community connections. There are often numerous resources available at a local level. You can reach out to area faith organizations, government agencies and charities.
Plan so you can pay
For those of us who are younger and not yet eligible for Medicare – you might want to give consideration to the issues raised in this blog post and address them at as young an age as possible.
When you need long-term care, how to pay for it can be a stressful concern. Planning ahead can make a world of difference. Discuss options with your loved ones so you can meet your personal needs and rest easy.
References:
- https://www.payingforseniorcare.com/longtermcare/resources/medicare.html
- https://www.forbes.com/sites/nextavenue/2017/09/26/the-staggering-prices-of-long-term-care-2017/#3ae138d12ee2
- https://www.aarp.org/caregiving/financial-legal/info-2017/long-term-care-calculator.html
- https://www.care.com/c/stories/5460/elder-care-attorney-questions/
- https://www.medicareadvantage.com/humana/humana-medicare-advantage-plans
- https://www.investopedia.com/articles/personal-finance/100515/4-best-alternatives-longterm-care-insurance.asp
- https://www.lifehealth.com/examine-new-alternatives-ltci-new-year/
- https://www.thebalance.com/alternatives-to-long-term-care-insurance-2388726
- https://www.nextavenue.org/pay-long-term-care-without-long-term-care-insurance/
Hazel Bridges
Hazel Bridges is the creator of AgingWellness.org, a website that aims to provide health and wellness resources for aging seniors. She’s a breast cancer survivor. She challenges herself to live life to the fullest and inspire others to do so as well.
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