Protect Your Assets and Have a Choice with Long-Term Care

One of the most common Long-Term Care scenarios is for wives to become the primary caregiver for their husband, only to find that they lack a source of care when their own Long-Term Care needs arise? About 60 percent of individuals over the age of 65 that will require Long-Term Care will exhaust their life savings and assets to pay for their Long-Term Care coverage. The costs are so high that you will be limited on your choices of where you will receive care.

Long-Term Care insurance is probably not for everyone, but—with soaring health care costs, insurers increasingly restricting coverage and eligibility, and people’s need to stretch retirement savings through more years—it’s a good idea to consider it seriously. Your goals should be to protect your assets, minimize your dependence on other family members, and control where and how you receive Long-Term Care services.

When is the right time to buy a policy? The best time to buy a policy is in your late 40s to mid-50s. At this time, you have the highest likelihood of being eligible for a policy and the premium costs will be lower. If you wait until your 60s or 70s, you may be too high of a risk for an insurer to cover you; or if you do qualify, the premiums can be astronomical. Most individual health insurance plans, Medicare and/or Medicaid DO NOT cover Long-Term Care costs, and if they do, they only cover a certain amount per year or lifetime.

Medicare is a federal health insurance program for people age 65 or older and for some people with disabilities under the age of 65. Medicare will cover the first 100 days of care in a nursing home if: 1) you are receiving skilled care, and 2) you enter the nursing home immediately following a hospital stay of at least 3 days and you have to pay part of the cost. DO NOT count on Medicare to pay for your Long-Term Care needs.

Medicaid is a state-based program supplemented by federal funds to provide health services to the poor and impoverished. Medicaid covers Long-Term Care if you meet your state’s poverty criteria and usually not until you have exhausted all of your assets and savings. It also means receiving care from a limited number of state-approved caregivers (mostly institutions like nursing homes) that are willing to accept Medicaid payments.

If you don’t have much in the way of assets and income, Medicaid is probably your best bet for Long-Term Care. If you can afford Long-Term Care, want to protect your assets, and control the type of care and location of where you receive care, you should strongly consider Long-Term Care insurance.